Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CBTX, Inc. | |
Entity Central Index Key | 1,473,844 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
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 | 25,946,584 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and due from banks | $ 41,513 | $ 59,255 |
Interest-bearing deposits at other financial institutions | 238,402 | 266,944 |
Total cash and cash equivalents | 279,915 | 326,199 |
Time deposits in other banks | 600 | 600 |
Debt securities | 221,183 | 223,208 |
Equity investments | 12,675 | 12,226 |
Loans held for sale | 113 | 1,460 |
Loans, net of allowance for loan loss of $25,349 and $24,778 at March 31, 2018 and December 31, 2017, respectively | 2,330,704 | 2,286,766 |
Premises and equipment, net | 53,135 | 53,607 |
Goodwill | 80,950 | 80,950 |
Other intangible assets, net of accumulated amortization of $14,185 and $13,930 at March 31, 2018 and December 31, 2017, respectively | 6,521 | 6,770 |
Bank-owned life insurance | 70,161 | 68,010 |
Deferred tax asset, net | 6,050 | 5,780 |
Repossessed real estate and other assets | 295 | 705 |
Other assets | 12,488 | 14,802 |
Total assets | 3,074,790 | 3,081,083 |
Liabilities | ||
Noninterest-bearing deposits | 1,120,521 | 1,109,789 |
Interest-bearing deposits | 1,479,181 | 1,493,183 |
Total deposits | 2,599,702 | 2,602,972 |
Repurchase agreements | 861 | 1,525 |
Junior subordinated debt | 6,726 | 6,726 |
Other liabilities | 15,930 | 23,646 |
Total liabilities | 2,623,219 | 2,634,869 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued | ||
Common stock, $0.01 par value; 90,000,000 shares authorized, 25,731,504 shares issued at March 31, 2018 and December 31, 2017, 24,833,232 shares outstanding at March 31, 2018 and December 31, 2017 | 257 | 257 |
Additional paid-in capital | 343,641 | 343,249 |
Retained earnings | 126,213 | 118,353 |
Treasury stock, at cost (898,272 shares held at March 31, 2018 and December 31, 2017) | (15,256) | (15,256) |
Accumulated other comprehensive loss, net of tax of $874 and $104 at March 31, 2017 and December 31, 2017, respectively. | (3,284) | (389) |
Total shareholders' equity | 451,571 | 446,214 |
Total liabilities and shareholders' equity | $ 3,074,790 | $ 3,081,083 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Allowance of loan loss | $ 25,349 | $ 24,778 |
Accumulated amortization | $ 14,185 | $ 13,930 |
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 25,731,504 | 25,731,504 |
Common stock, shares outstanding | 24,833,232 | 24,833,232 |
Treasury stock, shares | 898,272 | 898,272 |
Accumulated other comprehensive loss, tax | $ 874 | $ 104 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest income | ||
Interest and fees on loans | $ 28,462 | $ 25,953 |
Debt securities | 1,436 | 1,303 |
Federal Funds and interest-bearing deposits | 1,187 | 742 |
Total Interest Income | 31,085 | 27,998 |
Interest expense | ||
Deposits | 1,948 | 1,838 |
Repurchase agreements | 1 | 2 |
Note payable | 4 | 251 |
Junior subordinated debt | 93 | 74 |
Total interest expense | 2,046 | 2,165 |
Net interest income | 29,039 | 25,833 |
Provision for loan losses | 865 | 960 |
Net interest income after provision for loan losses | 28,174 | 24,873 |
Noninterest income | ||
Deposit account service charges | 1,478 | 1,500 |
Net gain on sale of assets | 130 | 364 |
Card interchange fees | 927 | 832 |
Earnings on bank-owned life insurance | 451 | 326 |
Other | 375 | 426 |
Total noninterest Income | 3,361 | 3,448 |
Noninterest expense | ||
Salaries and employee benefits | 12,695 | 11,424 |
Net occupancy expense | 2,265 | 2,233 |
Regulatory fees | 545 | 610 |
Data processing | 683 | 642 |
Printing, stationery and office | 411 | 347 |
Amortization of intangibles | 255 | 278 |
Professional and director fees | 919 | 625 |
Correspondent bank and customer related transaction expenses | 67 | 74 |
Loan processing costs | 118 | 72 |
Advertising, marketing and business development | 506 | 179 |
Repossessed real estate and other asset expense | 57 | 118 |
Security and protection expense | 302 | 372 |
Telephone and communications | 386 | 354 |
Other expenses | 1,075 | 1,099 |
Total noninterest Expense | 20,284 | 18,427 |
Net income before income tax expense | 11,251 | 9,894 |
Income tax expense | 2,139 | 3,032 |
Net income | $ 9,112 | $ 6,862 |
Earnings per common share | ||
Basic | $ 0.37 | $ 0.31 |
Diluted | $ 0.37 | $ 0.31 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Net income | $ 9,112 | $ 6,862 |
Unrealized gains (losses) on debt securities available for sale arising during the period, net | (3,665) | 366 |
Change in related deferred income tax | 770 | (128) |
Other comprehensive income (loss), net of tax | (2,895) | 238 |
Total comprehensive income | $ 6,217 | $ 7,100 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2016 | $ 230 | $ 278,501 | $ 95,274 | $ (15,446) | $ (922) | $ 357,637 |
Beginning balance, shares at Dec. 31, 2016 | 22,971,504 | (909,432) | ||||
Net income | 6,862 | 6,862 | ||||
Dividends on common stock | (1,103) | (1,103) | ||||
Stock-based compensation expense | 9 | 9 | ||||
Other comprehensive income, net of tax | 238 | 238 | ||||
Ending balance at Mar. 31, 2017 | $ 230 | 278,510 | 101,033 | $ (15,446) | (684) | 363,643 |
Ending balance, shares at Mar. 31, 2017 | 22,971,504 | (909,432) | ||||
Beginning balance at Dec. 31, 2017 | $ 257 | 343,249 | 118,353 | $ (15,256) | (389) | 446,214 |
Beginning balance, shares at Dec. 31, 2017 | 25,731,504 | (898,272) | ||||
Net income | 9,112 | 9,112 | ||||
Dividends on common stock | (1,252) | (1,252) | ||||
Stock-based compensation expense | 392 | 392 | ||||
Other comprehensive income, net of tax | (2,895) | (2,895) | ||||
Ending balance at Mar. 31, 2018 | $ 257 | $ 343,641 | $ 126,213 | $ (15,256) | $ (3,284) | $ 451,571 |
Ending balance, shares at Mar. 31, 2018 | 25,731,504 | (898,272) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) | ||
Dividends on Common Stock | $ 0.05 | $ 0.05 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 9,112,000 | $ 6,862,000 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Provision for loan losses | 865,000 | 960,000 |
Depreciation | 825,000 | 818,000 |
Deferred income tax provision | 499,000 | 252,000 |
Amortization of intangibles | 255,000 | 278,000 |
Valuation adjustments on repossessed real estate and other assets | 51,000 | |
Net realized gains on debt securities | (6,000) | (6,000) |
Net gains on sales of assets | (130,000) | (364,000) |
Earnings on bank-owned life insurance | (451,000) | (326,000) |
Amortization of premiums on securities | 291,000 | 313,000 |
Stock-based compensation expense | 392,000 | 9,000 |
Change in operating assets and liabilities: | ||
Loans held for sale | 1,464,000 | 40,000 |
Other assets | 2,312,000 | 564,000 |
Other liabilities | (7,726,000) | 1,377,000 |
Total adjustments | (1,410,000) | 3,966,000 |
Net cash provided by operating activities | 7,702,000 | 10,828,000 |
Cash flows from investing activities: | ||
Purchases of debt securities | (85,675,000) | (99,387,000) |
Proceeds from sales, calls and maturities of debt securities | 78,890,000 | 79,628,000 |
Principal repayments of debt securities | 4,861,000 | 4,760,000 |
Net (contributions to) dividends from equity investments | (449,000) | 79,000 |
Net increase in loans | (45,514,000) | (69,318,000) |
Sales of loan participations | 7,500,000 | 5,934,000 |
Purchases of loan participations | (7,000,000) | (205,000) |
Sales of U.S. Small Business Administration loans | 237,000 | 568,000 |
Purchase of bank-owned life insurance | (1,700,000) | |
Proceeds from sales of repossessed real estate and other assets | 393,000 | 1,668,000 |
Purchases of premises and equipment | (354,000) | (479,000) |
Proceeds from sales of premises and equipment | 580,000 | |
Net cash used in investing activities | (48,811,000) | (76,172,000) |
Cash flows from financing activities: | ||
Net increase (decrease) in noninterest-bearing deposits | 10,732,000 | (31,586,000) |
Net decrease in interest-bearing deposits | (14,002,000) | (10,729,000) |
Net increase (decrease) in securities sold under agreements to repurchase | (664,000) | 121,000 |
Repayments of note payable | (1,107,000) | |
Dividends paid on common stock | (1,241,000) | (1,103,000) |
Net cash used in financing activities | (5,175,000) | (44,404,000) |
Net decrease in cash, cash equivalents and restricted cash | (46,284,000) | (109,748,000) |
Cash, cash equivalents and restricted cash, beginning | 326,199,000 | 382,103,000 |
Cash, cash equivalents and restricted cash, ending | $ 279,915,000 | $ 272,355,000 |
BASIS OF PRESENTATION, NATURE O
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | NOTE 1: BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations CBTX, Inc., or the Company, was formed on January 26, 2007, and through its subsidiary, CommunityBank of Texas, N.A., or the Bank, operates 33 locations in the Houston and Beaumont/East Texas market areas. The Company’s primary sources of revenue are from investing funds received from depositors and from providing loan and other financial services to its customers. The Bank operates under a national charter and therefore is subject to regulation by the Office of the Comptroller of the Currency, or OCC and the Federal Deposit Insurance Corporation, or FDIC. The Company is subject to regulation by the Federal Reserve Board. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank, a wholly owned subsidiary of the Company. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2018 and December 31, 2017, consolidated results of operations for the three months ended March 31, 2018 and 2017, consolidated shareholders’ equity for the three months ended March 31, 2018 and 2017 and consolidated cash flows for the three months ended March 31, 2018 and 2017. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included within our Annual Report on Form 10-K. Accounting Standards Recently Adopted Accounting Standards Update, or ASU, 2014‑09, Revenue from Contracts with Customers (Topic 606): ASU 2014‑09 requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU 2014-09 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements as the Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014‑09 and noninterest income. The Company’s revenue recognition for revenue streams within the scope of ASU 2014-09, including but not limited to service charges on deposits accounts, did not materially change from previous practice. ASU, 2016‑01, Financial Instruments‑Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016‑01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) clarifies that entities use the exit price notion when measuring the fair value of loans for disclosure purposes and not use a practicability exception, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument‑specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available‑for‑sale investments. ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10) clarifies certain aspects of ASU 2016-01. The Company implemented ASU 2016-01 and ASU 2018-03 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements. See Note 12 – Fair Value Disclosures. ASU 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016‑15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. The Company implemented ASU 2016‑15 effective January 1, 2018. The Company has elected to use the nature of distribution approach to determine the nature of distribution approach to determine whether income received from equity investments is operating or investing on the cash flow statement. Based on the nature of previous income streams from our equity investments, we expect these amounts will continue to be reported in cash provided by operating activities on the cash flow statement and the other items in ASU 2016-15 will be considered if such items arise. ASU 2016‑16, Income Taxes (Topic 740): Intra‑Entity Transfers of Assets Other Than Inventory . ASU 2016‑16 provides guidance stating that an entity should recognize the income tax consequences of an intra‑entity transfer of an asset other than inventory when the transfer occurs. The Company implemented ASU 2016‑16 effective January 1, 2018. As we have not historically transferred assets between entities, we expect no impact on the consolidated financial statements. ASU 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016‑18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. The Company implemented ASU 2016‑18 effective January 1, 2018. The only cash the Company has considered to be restricted is the amount of our Federal Bank reserves, which we had already included in cash and equivalents in the consolidated financial statements. ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017‑01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU 2017‑01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company implemented ASU 2017‑01 effective January 1, 2018 and will follow this guidance for any future acquisitions or dispositions. ASU 2017‑09, Compensation—Stock Compensation (Topic 718): ASU 2017-09 provides guidance about which changes in terms or conditions of a share‑based award require application of modification accounting. The Company implemented ASU 2017‑09 effective January 1, 2018 and will follow this guidance for any future modifications of share-based awards. Accounting Standards Not Yet Adopted ASU 2016‑02 , Leases (Topic 842): ASU 2016‑02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right‑of‑use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016‑02 does not significantly change lease accounting requirements applicable to lessors. Certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers .” ASU 2016‑02 will be effective for the Company on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016‑02 on the consolidated financial statements. ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016‑13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016‑13 amends the accounting for credit losses on available‑for‑sale debt securities and purchased financial assets with credit deterioration. ASU 2016‑13 will be effective on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016‑13 on the consolidated financial statements. ASU 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, ASU 2017‑04 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the potential impact of this pronouncement. Revenue Recognition The Company records revenue from contracts with customers in accordance with ASU 2014-09, as applicable. A majority of the Company’s revenue-generating transactions are not subject to ASU 2014-09, such as interest and fees on loans, income from debt securities, income from federal funds and interest-bearing deposits. Our revenue-generating activities that are within the scope of ASU 2014-09, are included in our condensed consolidated income statements in noninterest income. See table below. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed and charged either on a periodic basis or based on activity. Three Months Ended March 31, (Dollars in thousands) 2018 2017 Deposit account service charges $ 1,478 $ 1,500 Net gain on sale of assets 130 364 Card interchange fees 927 832 Deposit account service charges — – this is comprised of fees from our customers for deposit related services, such as monthly account maintenance and activity or transaction-based fees. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. Net gain on sale of assets — – this is comprised of gains on sales of fixed assets, gains on sales of loans and gains on sales of other real estate owned, or OREO. Gains on sales of loans are excluded from ASU 2014-09. The performance obligation in the sale of OREO or fixed assets is delivery of control over the property to the buyer. The Company does not typically provide financing and the transaction price is identified in the purchase and sale agreement. If the Company provides financing, the Company must determine a transaction price depending on if the sales contract is at market terms and taking into account the credit risk inherent in the sale agreement. Card interchange fees — – this is comprised of fees generated from debit card transactions. Revenue is recognized when our performance obligation is completed generally when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. Cash Flow Reporting Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank. The reserve requirements for the Bank were approximately $15.6 million and $15.8 million at March 31, 2018 and December 31, 2017, respectively and cash and due from banks balances were restricted to that extent. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 1,960 1,866 Cash paid for interest on notes payable — 256 Cash paid for interest on junior subordinated debt 87 74 Supplemental disclosures of non-cash flow information: Dividends accrued for restricted stock 10 — Real estate acquired through foreclosure — 166 |
DEBT SECURITIES
DEBT SECURITIES | 3 Months Ended |
Mar. 31, 2018 | |
DEBT SECURITIES. | |
DEBT SECURITIES | NOTE 2: DEBT SECURITIES The amortized cost and fair values of investments in debt securities as of the dates shown below were as follows: Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2018 Debt securities available for sale: State and municipal securities $ 59,319 $ 468 $ (649) $ 59,138 U.S. agency securities: Debt securities 17,315 — (556) 16,759 Collateralized mortgage obligations 65,948 37 (1,376) 64,609 Mortgage-backed securities 81,616 176 (2,223) 79,569 Other securities 1,110 — (35) 1,075 Total $ 225,308 $ 681 $ (4,839) $ 221,150 Debt securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 December 31, 2017 Debt securities available for sale: State and municipal securities $ 60,861 $ 1,173 $ (118) $ 61,916 U.S. agency securities: Debt securities 17,315 — (370) 16,945 Collateralized mortgage obligations 61,878 50 (675) 61,253 Mortgage-backed securities 82,510 330 (866) 81,974 Other securities 1,104 — (17) 1,087 Total $ 223,668 $ 1,553 $ (2,046) $ 223,175 Debt securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 The amortized cost and estimated fair value of debt securities, by contractual maturity, as of the dates shown below are as follows: Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value March 31, 2018 Amounts maturing in: 1 year or less $ 3,379 $ 3,355 $ — $ — 1 year through 5 years 25,445 25,054 — — 5 years through 10 years 10,730 10,768 — — After 10 years 185,754 181,973 33 35 $ 225,308 $ 221,150 $ 33 $ 35 December 31, 2017 Amounts maturing in: 1 year or less $ 6,203 $ 6,194 $ — $ — 1 year through 5 years 26,811 26,635 — — 5 years through 10 years 9,215 9,348 — — After 10 years 181,439 180,998 33 35 $ 223,668 $ 223,175 $ 33 $ 35 Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. There were no security sales during the three months ended March 31, 2018 and 2017. At March 31, 2018 and December 31, 2017, debt securities with a carrying amount of approximately $60.9 million and $58.7 million, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. The Company held 52 and 52 debt securities at March 31, 2018 and December 31, 2017, that were in a gross unrealized loss position for 12 months or more as illustrated in the table below. The unrealized losses are attributable primarily to changes in market interest rates relative to those available when the debt securities were acquired. The fair value of these debt securities is expected to recover as the debt securities reach their maturity or re‑pricing date, or if changes in market rates for such investments decline. Management does not believe that any of the debt securities are impaired due to reasons of credit quality. Accordingly, as of March 31, 2018 and December 31, 2017, management believes the unrealized losses detailed in the table below are temporary and no impairment loss has been recorded in the Company’s condensed consolidated statements of income for the three months ended March 31, 2018 and 2017. Debt securities with unrealized losses as of the dates shown below, aggregated by category and the length of time were as follows: Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2018 Debt securities available for sale: State and municipal securities $ 20,267 $ (359) $ 6,323 $ (290) U.S. agency securities: Debt securities 4,410 (108) 12,349 (448) Collateralized mortgage obligations 51,847 (941) 9,518 (435) Mortgage-backed securities 38,533 (849) 30,958 (1,374) Other securities — — 1,075 (35) $ 115,057 $ (2,257) $ 60,223 $ (2,582) December 31, 2017 Debt securities available for sale: State and municipal securities $ 2,494 $ (3) $ 6,516 $ (115) U.S. agency securities: Debt securities 4,464 (55) 12,481 (315) Collateralized mortgage obligations 44,116 (380) 9,938 (295) Mortgage-backed securities 22,079 (123) 32,538 (743) Other securities — — 1,087 (17) $ 73,153 $ (561) $ 62,560 $ (1,485) |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2018 | |
LOANS | |
LOANS | NOTE 3: LOANS Loans by portfolio segment as of the dates shown below are summarized as follows: (Dollars in thousands) March 31, 2018 December 31, 2017 Commercial and industrial $ 559,070 23.7 % $ 559,363 24.1 % Real estate: Commercial real estate 767,108 32.5 % 738,293 31.9 % Construction and development 436,260 18.5 % 449,211 19.4 % 1-4 family residential 260,580 11.0 % 258,584 11.2 % Multi-family residential 236,000 10.0 % 220,305 9.5 % Consumer 40,869 1.7 % 40,433 1.7 % Agriculture 8,807 0.4 % 11,256 0.5 % Other 52,382 2.2 % 40,344 1.7 % Total gross loans 2,361,076 100.0 % 2,317,789 100.0 % Less deferred loan fees (4,682) (4,555) Less unearned discount on retained portion of loans sold (228) (230) Less allowance for loan loss (25,349) (24,778) Total loans, net 2,330,817 2,288,226 Less loans held for sale 113 1,460 Loans, net $ 2,330,704 $ 2,286,766 Accrued interest receivable for loans is $6.1 million and $6.1 million at March 31, 2018 and December 31, 2017, respectively and is included in other assets in the condensed consolidated balance sheets. Loan Participations Purchased and Sold From time to time, the Company will acquire and dispose of interests in loans under participation agreements with other financial institutions. Loan participations purchased and sold during the three months ending March 31, 2018 and 2017, by loan class, are summarized as follows: Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2018 Commercial and industrial $ 7,000 $ — Commercial real estate — 7,500 $ 7,000 $ 7,500 March 31, 2017 Commercial real estate $ — $ 5,934 Construction and development 205 — $ 205 $ 5,934 Loans Guaranteed by the Small Business Administration The Company participates in the Small Business Administration, or SBA, loan program. When advantageous, the Company will sell the guaranteed portions of these loans with servicing retained. SBA loans that were sold with servicing retained during the three months ended March 31, 2018 and 2017 were totaled $237,000 and $568,000, respectively. |
LOAN PERFORMANCE
LOAN PERFORMANCE | 3 Months Ended |
Mar. 31, 2018 | |
LOAN PERFORMANCE | |
LOAN PERFORMANCE | NOTE 4: LOAN PERFORMANCE Nonaccrual loans, segregated by loan class, as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2018 2017 Commercial and industrial $ 2,533 $ 3,280 Real estate: Commercial real estate 2,217 3,216 Construction and development 233 252 1-4 family residential 765 898 Consumer 21 — Total $ 5,769 $ 7,646 Interest income that would have been earned under the original terms of the nonaccrual loans was $99,000 and $38,000 for the three months ended March 31, 2018 and 2017, respectively. The following is an aging analysis of the Company’s past due loans, segregated by loan class, as of the dates shown below. 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2018 Commercial and industrial $ 116 $ 24 $ 2,507 $ 2,647 $ 556,423 $ 559,070 $ — Real estate: Commercial real estate 74 36 1,865 1,975 765,133 767,108 — Construction and development — — — — 436,260 436,260 — 1-4 family residential 482 100 36 618 259,962 260,580 — Multi-family residential — — — — 236,000 236,000 — Consumer 4 — — 4 40,865 40,869 — Agriculture — — — — 8,807 8,807 — Other — — — — 52,382 52,382 — Total loans $ 676 $ 160 $ 4,408 $ 5,244 $ 2,355,832 $ 2,361,076 $ — 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2017 Commercial and industrial $ 943 $ 1,071 $ 2,535 $ 4,549 $ 554,814 $ 559,363 $ — Real estate: Commercial real estate 337 841 1,866 3,044 735,249 738,293 — Construction and development 400 — — 400 448,811 449,211 — 1-4 family residential 807 — 143 950 257,634 258,584 — Multi-family residential — — — — 220,305 220,305 — Consumer 3 25 — 28 40,405 40,433 — Agriculture — — — — 11,256 11,256 — Other — — — — 40,344 40,344 — Total loans $ 2,490 $ 1,937 $ 4,544 $ 8,971 $ 2,308,818 $ 2,317,789 $ — Loans, segregated by loan class, which were restructured due to the borrower’s financial difficulties during the three months ended March 31, 2018 and 2017, which remain outstanding at the end of those periods are as follows: Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate March 31, 2018 Commercial and industrial 3 $ 983 $ 983 $ — $ — $ — Commercial real estate 4 2,434 2,434 — — — Total 7 $ 3,417 $ 3,417 $ — $ — $ — March 31, 2017 Commercial and industrial 4 $ 2,203 $ 2,019 $ — $ 184 $ — Commercial real estate 1 276 276 — — — Total 5 $ 2,479 $ 2,295 $ — $ 184 $ — Typical modifications primarily relate to extending the amortization periods of the loans, converting the loans to interest only, or adjusting payment amounts for principal and interest. A significant portion of the loans modified as troubled debt restructurings by the Company were previously on nonaccrual status and reported as impaired loans prior to restructuring and as a result, the modifications did not impact the Company’s determination of the allowance for loan losses. At March 31, 2018, the Company has an outstanding commitment to potentially fund $64,700 on a line of credit of $7.5 million on a loan restructured in 2016. At December 31, 2017, the Company had no commitments to loan additional funds to borrowers with loans classified as troubled debt restructuring. The recorded investment in troubled debt restructurings was $18.0 million and $18.2 million as of March 31, 2018 and December 31, 2017, respectively. There were no loans modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. For purposes of this disclosure, a default is a loan modified as a troubled debt restructuring where the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral. |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2018 | |
ALLOWANCE FOR LOAN LOSSES | |
ALLOWANCE FOR LOAN LOSSES | NOTE 5: ALLOWANCE FOR LOAN LOSSES For purposes of determining the allowance for loan losses, the Company considers the loans in its portfolio by segment, class and risk grade. Management uses judgment to determine the estimation method that fits the credit risk characteristics of each portfolio segment or class. To facilitate the assessment of risk, management reviews reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. The Company utilizes an independent third-party loan review service to review the credit risk assigned to loans on a periodic basis and the results are presented to management for review. Activity in the allowance for loan losses segregated by loan class for the three months ended March 31, 2018 and 2017 and the year ended December 31, 2017 are as follows. Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss 479 364 (126) 5 101 (51) (15) 108 865 Charge-offs (469) — — (3) — — — — (472) Recoveries 172 3 — 1 — 2 — — 178 Net (charge-offs) recoveries (297) 3 — (2) — 2 — — (294) Ending balance $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Period-end amount allocated to: Specific reserve $ 845 $ 55 $ — $ 107 $ — $ — $ — $ — $ 1,007 General reserve 6,594 10,687 3,356 1,222 1,520 517 53 393 24,342 Total $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 1,454 (266) (453) (177) (116) 235 (16) 299 960 Charge-offs (508) — — — — — — — (508) Recoveries 391 3 — 2 — 27 — — 423 Net (charge-offs) recoveries (117) 3 — 2 — 27 — — (85) Ending balance $ 7,746 $ 10,507 $ 4,145 $ 1,111 $ 800 $ 615 $ 63 $ 894 $ 25,881 Period-end amount allocated to: Specific reserve $ 364 $ 52 $ — $ — $ — $ 84 $ — $ — $ 500 General reserve 7,382 10,455 4,145 1,111 800 531 63 894 25,381 Total $ 7,746 $ 10,507 $ 4,145 $ 1,111 $ 800 $ 615 $ 63 $ 894 $ 25,881 Allocation of a portion of the allowance to one category of loans in the tables above does not preclude its availability to absorb losses in other categories. In addition to the amounts indicated in the tables above, the Company has an accumulated reserve for loan losses on unfunded commitments of $378,000 and $378,000 recorded in other liabilities as of March 31, 2018 and December 31, 2017, respectively. Risk Grading As part of the on‑going monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for loan losses, management assigns and tracks loan grades to be used as credit quality indicators. The following is a general description of the loan grades the Company used as of March 31, 2018 and December 31, 2017: Pass —Credits in this category are considered “pass ” which indicates prudent underwriting and a normal amount of risk. The range of risk within these credits can vary from little to no risk with cash securing a credit, to a level of risk that requires a strong secondary source of repayment on the debt. Pass credits with a higher level of risk may be to borrowers that are higher leveraged, less well capitalized or in an industry or economic area that is known to carry a higher level of risk, volatility, or susceptibility to weaknesses in the economy. This higher risk grade may be assigned due to out of date credit information, as well as collateral information which may need to be updated for current market value in order to allow a credit quality analysis of the credit. Special Mention —Credits in this category contain more than the normal amount of risk and are referred to as “special mention” in accordance with regulatory guidelines. These credits possess clearly identifiable temporary weaknesses or trends that, if not corrected or revised, may result in a condition that exposes the Company to higher level of risk of loss. Substandard —Credits in this category are “substandard” in accordance with regulatory guidelines and of unsatisfactory credit quality with well‑defined weaknesses or weaknesses that jeopardize the liquidation of the debt. Credits in this category are inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. These credits are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Often, the assets in this category will have a valuation allowance representative of management’s estimated loss that is probable to be incurred. Substandard loans may also be placed on nonaccrual status as deemed appropriate by management. Loans substandard and on nonaccrual status are considered impaired and are evaluated for impairment. Doubtful —Credits in this category are considered “doubtful” in accordance with regulatory guidelines, are placed on nonaccrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near‑term event which lacks certainty. Generally, these credits will have a valuation allowance based upon management’s best estimate of the losses probable to occur in the liquidation of the debt. Loss —Credits in this category are considered “loss” in accordance with regulatory guidelines and are considered uncollectible and of such little value as to question their continued existence as assets on the Company’s financial statements. Such credits are to be charged off or charged down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. This category does not intend to imply that the debt or some portion of it will never be paid, nor does it in any way imply that the debt will be forgiven. The Company had no loans graded Loss or Doubtful at March 31, 2018 and December 31, 2017. The following tables present loans by risk grades and loan class as of the dates shown below. Special (Dollars in thousands) Pass Mention Substandard Total Loans March 31, 2018 Commercial and industrial $ 538,484 $ 7,841 $ 12,745 $ 559,070 Real estate: Commercial real estate 755,816 2,862 8,430 767,108 Construction and development 435,217 540 503 436,260 1-4 family residential 254,464 — 6,116 260,580 Multi-family residential 228,651 7,349 — 236,000 Consumer 40,565 246 58 40,869 Agriculture 8,776 — 31 8,807 Other 43,913 — 8,469 52,382 Total loans $ 2,305,886 $ 18,838 $ 36,352 $ 2,361,076 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2017 Commercial and industrial $ 535,589 $ 8,403 $ 15,371 $ 559,363 Real estate: Commercial real estate 722,503 2,951 12,839 738,293 Construction and development 448,124 565 522 449,211 1-4 family residential 252,317 — 6,267 258,584 Multi-family residential 212,899 7,406 — 220,305 Consumer 40,144 246 43 40,433 Agriculture 11,223 — 33 11,256 Other 33,109 — 7,235 40,344 Total loans $ 2,255,908 $ 19,571 $ 42,310 $ 2,317,789 Loan Impairment Assessment The Company’s recorded investment in impaired loans, as of the dates shown below by loan class and disaggregated based on the Company’s impairment methodology was as follows: Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2018 Commercial and industrial $ 11,390 $ 4,693 $ 2,169 $ 6,862 $ 845 $ 7,072 Real estate: Commercial real estate 7,006 4,279 2,523 6,802 55 6,902 Construction and development 282 234 — 234 — 238 1-4 family residential 4,833 2,878 1,862 4,740 107 4,802 Consumer 21 21 — 21 — 21 Other 8,387 8,387 — 8,387 — 8,077 Total loans $ 31,919 $ 20,492 $ 6,554 $ 27,046 $ 1,007 $ 27,112 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2017 Commercial and industrial $ 11,921 $ 6,100 $ 1,192 $ 7,292 $ 852 $ 12,090 Real estate: Commercial real estate 9,646 8,626 667 9,293 64 9,438 Construction and development 296 251 — 251 — 323 1-4 family residential 5,003 3,050 1,874 4,924 119 3,369 Multi-family residential — — — — — 2 Consumer — — — — — 21 Agriculture — — — — — 1 Other 7,152 7,152 — 7,152 — 7,616 Total loans $ 34,018 $ 25,179 $ 3,733 $ 28,912 $ 1,035 $ 32,860 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2017 Commercial and industrial $ 15,821 $ 9,340 $ 2,475 $ 11,815 $ 364 $ 12,090 Real estate: Commercial real estate 6,564 4,504 1,866 6,370 52 6,408 Construction and development 405 414 — 414 — 430 1-4 family residential 1,503 1,427 — 1,427 — 1,524 Multi-family residential 10 5 — 5 — 5 Consumer 84 — 84 84 84 56 Agriculture 278 6 — 6 — 14 Other 8,673 8,670 — 8,670 — 8,481 Total loans $ 33,338 $ 24,366 $ 4,425 $ 28,791 $ 500 $ 29,008 Interest income earned on impaired loans was $254,000 and $321,000 for the three months ended March 31, 2018 and 2017, respectively. The Company’s recorded investment in loans as of the dates shown below related to the balance in the allowance for loan losses based on the Company’s impairment methodology was as follows: March 31, 2018 December 31, 2017 Individually Collectively Individually Collectively Evaluated for Evaluated for Total Evaluated for Evaluated for Total (Dollars in thousands) Impairment Impairment Loans Impairment Impairment Loans Commercial and industrial $ 6,862 $ 552,208 $ 559,070 $ 7,292 $ 552,071 $ 559,363 Real estate: Commercial real estate 6,802 760,306 767,108 9,293 729,000 738,293 Construction and development 234 436,026 436,260 251 448,960 449,211 1-4 family residential 4,740 255,840 260,580 4,924 253,660 258,584 Multi-family residential — 236,000 236,000 — 220,305 220,305 Consumer 21 40,848 40,869 — 40,433 40,433 Agriculture — 8,807 8,807 — 11,256 11,256 Other 8,387 43,995 52,382 7,152 33,192 40,344 Total $ 27,046 $ 2,334,030 $ 2,361,076 $ 28,912 $ 2,288,877 $ 2,317,789 An impairment analysis is performed for all loans graded substandard and placed on nonaccrual status. If management determines a loan is impaired, the loan is written down to its estimated realizable value through a charge to the allowance for loan losses. At March 31, 2018 and December 31, 2017, the allowance allocated to specific reserves for loans individually evaluated for impairment was $1.0 million and $1.0, respectively. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2018 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 6: PREMISES AND EQUIPMENT Premises and equipment are summarized as follows as of the dates shown below: March 31, December 31, (Dollars in thousands) 2018 2017 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 51,819 51,664 Furniture and equipment 15,085 14,887 Vehicles 202 202 80,572 80,219 Less accumulated depreciation and amortization (27,437) (26,612) Premises and equipment, net $ 53,135 $ 53,607 Depreciation expense was $825,000 and $818,000 for the three months ended March 31, 2018 and 2017, respectively, which is included in net occupancy expense on the Company’s condensed consolidated statements of income. Net gains and losses on dispositions of premises and equipment of $63,000 for the three months ended March 31, 2017, were recognized and are included in net gain on sale of assets in the condensed consolidated statements of income. There were no dispositions of premises and equipment in the three months ended March 31, 2018. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is not amortized and there have been no changes in goodwill during the three months ended March 31, 2018 or the year ended December 31, 2017. The Company’s other intangibles are being amortized over their estimated useful lives of seven to 20 years. Based on the results of the Company’s assessment, management does not believe any impairment of goodwill or other intangible assets existed at March 31, 2018 or December 31, 2017. Other intangibles, net of accumulated amortization, were as follows as of the dates shown below: Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets March 31, 2018 Other intangible assets, net Core deposits 5.9 years $ $ (12,187) $ 1,563 Customer relationships 10.8 years 6,629 (1,878) 4,751 Servicing assets 17.2 years 327 (120) 207 Total other intangible assets, net $ $ (14,185) $ 6,521 December 31, 2017 Other intangible assets, net Core deposits 6.2 years $ $ (12,051) $ 1,699 Customer relationships 11.0 years 6,629 (1,767) 4,862 Servicing assets 17.3 years 321 (112) 209 Total other intangible assets, net $ $ (13,930) $ 6,770 Servicing Assets A summary of the changes in the related servicing assets are as follows: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Balance at beginning of year $ 209 $ 186 Increase from loan sales 6 — Amortization (8) (8) Balance at end of period $ 207 $ 178 |
DEPOSITS
DEPOSITS | 3 Months Ended |
Mar. 31, 2018 | |
DEPOSITS | |
DEPOSITS | NOTE 8: DEPOSITS Deposits are summarized as of the dates shown below as follows: March 31, December 31, (Dollars in thousands) 2018 2017 Interest-bearing demand accounts $ 345,378 $ 363,015 Money market accounts 717,548 702,299 Saving accounts 95,603 95,842 Certificates and other time deposits, $100,000 or greater 161,777 172,469 Certificates and other time deposits, less than $100,000 158,875 159,558 Total interest-bearing deposits 1,479,181 1,493,183 Noninterest-bearing deposits 1,120,521 1,109,789 Total deposits $ 2,599,702 $ 2,602,972 At March 31, 2018 and December 31, 2017, the Company had $41.0 million and $45.3 million in deposits from public entities and brokered deposits of $88.3 million and $88.3 million, respectively. The Company had no major concentrations of deposits at March 31, 2018 or December 31, 2017 from any single or related groups of depositors. |
NOTES PAYABLE AND LINES OF CRED
NOTES PAYABLE AND LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2018 | |
NOTES PAYABLE AND LINES OF CREDIT | |
NOTES PAYABLE AND LINES OF CREDIT | NOTE 9: NOTES PAYABLE AND LINES OF CREDIT Note Payable In conjunction with an acquisition, the Company entered into a loan agreement on February 1, 2015 for $31.0 million. On November 13, 2017, the Company paid the then remaining outstanding balance in full. Frost Line of Credit On December 13, 2017, the Company entered into a loan agreement, or the Loan Agreement, with Frost Bank, which provides for a $30.0 million revolving line of credit, or Line of Credit. The Company can make draws on the Line of Credit for a period of 12 months beginning on the date of the Loan Agreement, after which the Company will not be permitted to make further draws and the outstanding balance will amortize over a period of 60 months. Interest accrues on outstanding borrowings at a rate equal to the maximum “Latest” U.S. prime rate of interest per annum and payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months. The entire outstanding balance and unpaid interest is payable in full on December 13, 2023. The Company may prepay the principal amount of any loan under the Loan Agreement without premium or penalty. The obligations of the Company under the Loan Agreement are secured by a valid and perfected first priority lien on all of the issued and outstanding shares of capital stock of the Bank. Covenants made under the Loan Agreement include, among other things, the Company maintaining tangible net worth of not less than $240 million, the Company maintaining free cash flow coverage ratio of not less than 1.25 to 1.00, the Bank’s Texas Ratio (as defined under the Loan Agreement) not to exceed 15%, the Bank’s Total Capital Ratio (as defined under the Loan Agreement) of not less than 12% and restrictions on the ability of the Company and its subsidiaries to incur certain additional debt. The Company was in compliance with these covenants at March 31, 2018. As of March 31, 2018, there were no outstanding borrowings on this line and the Company did not draw on this line during the period from December 13, 2017, when the Company entered the agreement, to March 31, 2018. Additional Lines of Credit The Federal Home Loan Bank System, or FHLB, allows us to borrow on a blanket floating lien status collateralized by certain loans. As of March 31, 2018 and December 31, 2017, total borrowing capacity of $843.7 million and $793.3 million, respectively, was available under this arrangement. As of March 31, 2018 and December 31, 2017, there were no outstanding borrowings on this line and the Company did not draw on this line during these periods. As of March 31, 2018 and December 31, 2017, we maintained four federal funds lines of credit with commercial banks that provide for the availability to borrow up to an aggregate of $75.0 million, in federal funds. There were no funds under these lines of credit outstanding as of March 31, 2018 or December 31, 2017. |
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT | 3 Months Ended |
Mar. 31, 2018 | |
JUNIOR SUBORDINATED DEBT | |
JUNIOR SUBORDINATED DEBT | NOTE 10: JUNIOR SUBORDINATED DEBT Crosby Statutory Trust I Prior to being acquired in 2008 by the Company, Crosby Bancshares, Inc. received proceeds of junior subordinated debt held by a trust that is funded by common securities purchased by Crosby Bancshares, Inc. and trust preferred securities in the amount of $5.0 million that are held by other investors. Funds raised by the trust totaling $5.2 million were loaned to Crosby Bancshares, Inc. in the form of junior subordinated debt. This debt was assumed by the Company at the date of acquisition. This debt is generally subordinated to other debt and deposits reflected on the consolidated balance sheets. The subordinated debt securities have a due date of December 15, 2035 and interest is payable quarterly. The interest rate of the debt is equal to the London Interbank Offered Rate of U.S. Dollar deposits in Europe, or LIBOR, plus 1.44%, reset quarterly, which was 3.56% at March 31, 2018 and 3.03% at December 31, 2017. The Company has the right to redeem these debt securities in whole, or from time to time in part, provided that all accrued and unpaid interest has been paid. County Bancshares Trust I Prior to being acquired in 2007 by the Company, County Bancshares, Inc. received proceeds of junior subordinated debt held by a trust that is funded by common securities, all of which were purchased by County Bancshares, Inc. and trust preferred securities in the amount of $5.5 million that are held by other investors. Funds raised by the trust totaling $5.7 million were loaned to County Bancshares, Inc. in the form of junior subordinated debt. This debt was transferred to the Company at the date of acquisition. In 2015, the Company purchased approximately $4.1 million of the outstanding preferred securities, reducing the outstanding preferred securities to $1.6 million. This debt is generally subordinated to other debt and deposits reflected on the consolidated balance sheets presented. The subordinated debt securities have a due date of April 7, 2035 and interest is payable quarterly. The interest rate of the debt is equal to LIBOR, plus 2% and is reset quarterly. The rate of interest was 3.72% at March 31, 2018 and 3.36% at December 31, 2017. The Company has the right to redeem these debt securities in whole or from time to time in part, provided that all accrued and unpaid interest has been paid . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11: RELATED PARTY TRANSACTIONS In the ordinary course of business, the Company, through the Bank, has and expects to continue to conduct routine banking business with related parties, including its executive officers and directors. Related parties also include stockholders, and their affiliates in which they directly or indirectly have 5% or more beneficial ownership in the Company. Loans —In the opinion of management, loans to related parties were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable transactions with other persons and did not involve more than a normal risk of collectability or present any other unfavorable features to the Company. The Company had approximately $197.9 million and $205.8 million in loans to related parties at March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018 and December 31, 2017, there were no loans made to related parties deemed nonaccrual, past due, restructured or classified as potential problem loans. Unfunded Commitments —At March 31, 2018 and December 31, 2017, the Company had approximately $77.7 million and $69.7 million in unfunded loan commitments to related parties, respectively. Deposits —The Company held related party deposits of approximately $258.4 million and $224.4 million at March 31, 2018 and December 31, 2017, respectively. Advertising —The Company incurred advertising expenses of approximately $0 and $24,000 for the three months ended March 31, 2018 and 2017, respectively, to a vendor that is solely owned by a director of the Company. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2018 | |
FAIR VALUE DISCLOSURES | |
FAIR VALUE DISCLOSURES | NOTE 12: FAIR VALUE DISCLOSURES The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction occurring in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In estimating fair value, we use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Such valuation techniques are consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Valuation inputs are categorized in a three-level hierarchy, from highest to lowest level of observable inputs. The highest level of inputs are prices in active markets for identical assets or liabilities and the lowest level of inputs are unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs —Inputs are based upon unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs —Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 2 investments consist primarily of obligations of U.S. government sponsored enterprises and agencies, obligations of state and municipal subdivisions, corporate bonds and mortgage‑backed securities. Level 3 Inputs —Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. During the three months ending March 31, 2018 and the year ended December 31, 2017, there were no transfers of assets or liabilities within the levels of the fair value hierarchy. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use observable market‑based parameters as inputs. Valuation adjustments may be made to ensure that assets and liabilities are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Financial Instruments Recorded at Fair Value Assets and liabilities measured at fair value on a recurring basis include the following: Debt Securities Available for Sale: Debt securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For those debt securities classified as Level 2, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things. The other securities in the table below are mutual funds and the fair value is determined by using unadjusted quoted market prices which are considered Level 1 inputs. Interest Rate Swaps with Customers: For interest rate swaps with customers classified as Level 2, the Company obtains fair value measurements from an independent pricing service which uses the income approach. The income approach calls for the utilization of valuation techniques to convert future cash flows as due to be exchanged per the terms of the financial instrument, into a single present value amount. Measurement is based on the value indicated by the market expectations about those future amounts as of the measurement date. The proprietary curves of the independent pricing service utilize pricing models derived from industry standard analytic tools, considering both Level 1 and Level 2 inputs. Interest Rate Swaps with Financial Institutions: For interest rate swaps with financial institutions classified as Level 2, the Company obtains fair value measurements from an independent pricing service which uses the income approach. The income approach calls for the utilization of valuation techniques to convert future cash flows as due to be exchanged per the terms of the financial instrument, into a single present value amount. Measurement is based on the value indicated by the market expectations about those future amounts as of the measurement date. The proprietary curves of the independent pricing service utilize pricing models derived from industry standard analytic tools, taking into account both Level 1 and Level 2 inputs. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of the dates shown below, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value. March 31, 2018 December 31, 2017 (Dollars in thousands) Fair Value Fair Value Financial assets: Level 1 inputs: Debt securities available for sale Other securities $ 1,075 $ 1,087 Level 2 inputs: Debt securities available for sale State and municipal securities 59,138 61,916 U.S. Agency Securities: Debt securities 16,759 16,945 Collateralized mortgage obligations 64,609 61,253 Mortgage-backed securities 79,569 81,974 Interest rate swaps with customers 87 340 Interest rate swaps with financial institutions 1,111 426 Total financial assets $ 222,348 $ 223,941 Financial liabilities: Level 2 inputs: Interest rate swaps with customers $ 1,111 $ 426 Interest rate swaps with financial institutions 87 340 Total financial liabilities $ 1,198 $ 766 Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis as they are subject to fair value adjustments in certain circumstances, such as evidence of impairment. Financial assets measured at fair value on a non‑recurring basis during the reported periods include certain impaired loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Repossessed real estate and other assets as well as collateral values are estimated using Level 2 inputs based on observable market data, typically in the case of real estate collateral, or Level 3 inputs based on customized discounting criteria, typically in the case of non‑real estate collateral such as inventory, accounts receivable, equipment or other business assets. Certain assets measured at fair value on a non‑recurring basis as of the dates shown below are as follows: March 31, 2018 December 31, 2017 Level 3 Level 3 (Dollars in thousands) Inputs Inputs Impaired loans: Commercial and industrial $ 1,324 $ 340 Commercial real estate 2,468 603 1-4 family residential 1,755 1,755 Total impaired loans $ 5,547 $ 2,698 Non‑Financial Assets and Non‑Financial Liabilities The Company does not have any non‑financial assets or non‑financial liabilities measured at fair value on a recurring basis. Certain non‑financial assets measured at fair value on a non‑recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non‑financial assets and non‑financial liabilities measured at fair value in the second step of a goodwill impairment test and intangible assets and other non‑financial long‑lived assets measured at fair value for impairment assessment. Non‑financial assets measured at fair value on a non‑recurring basis during the reported periods include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge‑off to the allowance for loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write‑down included in other non‑interest expense. The fair value of a foreclosed asset is estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. During the three months ended March 31, 2018 and during 2017, we used Level 2 inputs for our fair value measurements for foreclosed assets. Foreclosed assets that were remeasured subsequent to initial recognition and reported at fair value as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2018 2017 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 881 Charge-offs recognized in the allowance for loan losses — — Fair value $ — $ 881 Foreclosed assets remeasured subsequent to initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 227 Write-downs included in other noninterest expense — (51) Fair value $ — $ 176 Fair Value Disclosure for all Financial Instruments The Company is required to disclose the fair value of all financial instruments, including those financial assets and financial liabilities not recorded at fair value in its consolidated balance sheets, for which it is practicable to estimate fair value. The table below summarizes the fair market values and carrying amount of all financial instruments of the Company as of the dates shown below. March 31, 2018 December 31, 2017 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 41,513 $ 41,513 $ 59,255 $ 59,255 Interest bearing deposits in banks 238,402 238,402 266,944 266,944 Debt securities available for sale 1,075 1,075 1,087 1,087 Level 2 inputs: Time deposits in other banks 600 600 600 600 Debt securities available for sale 220,075 220,075 222,088 222,088 Debt securities held to maturity 35 33 35 33 Bank-owned life insurance 70,161 70,161 68,010 68,010 Servicing asset 207 207 209 209 Accrued interest receivable 7,082 7,082 7,429 7,429 Interest rate swaps with customers 87 87 340 340 Interest rate swaps with financial institutions 1,111 1,111 426 426 Level 3 inputs: Equity investments 12,675 12,675 12,226 12,226 Loans, including held for sale, net 2,335,572 2,330,817 2,299,742 2,288,226 Total financial assets $ 2,928,595 $ 2,923,838 $ 2,938,391 $ 2,926,873 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,120,521 $ 1,120,521 $ 1,109,789 $ 1,109,789 Level 2 inputs: Interest-bearing deposits 1,401,500 1,479,181 1,437,013 1,493,183 Repurchase agreements 861 861 1,525 1,525 Junior subordinated debt 6,726 6,726 6,726 6,726 Accrued interest payable 368 368 374 374 Interest rate swaps with customers 1,111 1,111 426 426 Interest rate swaps with financial institutions 87 87 340 340 Total financial liabilities $ 2,531,174 $ 2,608,855 $ 2,556,193 $ 2,612,363 The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair value of loans is determined using a discounted cash flow analyses and includes such factors as credit and prepayment risk and economic forecasts for interest rates in accordance with ASU 2016-01. Equity Investments — The Company has unconsolidated investments that are considered equity securities meaning they represent ownership interests (such as common or preferred stock). Our equity investments do not have readily determinable fair values and are shown in the table below for the dates indicated. March 31, December 31, (Dollars in thousands) 2018 2017 Federal Reserve stock $ 9,271 $ 9,271 FHLB stock 1,194 1,189 TIB stock 141 141 CRA investments 2,069 1,625 Total $ 12,675 $ 12,226 Banks that are members of the Federal Home Loan Bank, or FHLB, are required to maintain a stock investment in the FHLB calculated as a percentage of aggregate outstanding mortgages, outstanding FHLB advances and other financial instruments. Banks that are members of the Federal Reserve System are required to annually subscribe to Federal Reserve Bank stock in specific ratios to the Bank’s equity. Although FHLB and Federal Reserve Bank Stock are considered equity securities, they do not have readily determinable fair values because ownership is restricted and they lack a market. These investments can be sold back only at their par value of $100 per share can only be sold to the Federal Home Loan Banks or Federal Reserve Banks or to another member institution. In addition, the equity ownership rights are more limited than would be the case for a public company, because of the oversight role exercised by regulators in the process of budgeting and approving dividends. As a result, these investments are carried at cost and evaluated for impairment. The Company also holds an investment in the stock of The Independent Bankers Financial Corporation, or TIB. This investment has limited marketability. As a result, these investments are carried at cost and evaluated for impairment. The Company has investments in two private investment funds and a limited partnership. These investments are qualified Community Reinvestment Act, or CRA, investments under the Small Business Investment Company, or SBIC, program of the SBA. There are limited to no observable price changes in orderly transactions for identical investments or similar investments from the same issuers that are actively traded and as a result, these investments are stated at cost. Our equity investments are evaluated for impairment based on an assessment of qualitative indicators. Impairment indicators to be considered include, but are not limited to (i) a significant deterioration in the earnings, performance, credit rating, asset quality or business prospects of the investee, (ii) a significant adverse change in the regulatory, economic or technological environment of the investee, (iii) a significant adverse change in the general market conditions of either the geographical area or the industry in which the investee operates, (iv) a bona fide offer to purchase, an offer by the investee to sell, or completed auction process for the same or similar investment for an amount less that the carrying amount of that investment. There were no such qualitative indicators as of March 31, 2018. |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | 3 Months Ended |
Mar. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | NOTE 13 COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF‑BALANCE‑SHEET RISK Unfunded Loan Commitments The Company is party to various financial instruments with off‑balance‑sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit for loans in process, commercial lines of credit, overdraft protection lines, and standby letters of credit at both fixed and variable rates of interest. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement the Company has in particular classes of financial instruments. The Company’s 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 notional amount of those instruments. The Company uses the same credit policies in making these commitments and conditional obligations as it does for on‑balance‑sheet instruments. The Company evaluates each customer’s credit worthiness on a case‑by‑case basis. The amount of collateral obtained, if considered necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Commitments to extend credit and standby letters of credit as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2018 2017 Commitments to extend credit, variable $ 665,082 $ 626,441 Commitments to extend credit, fixed 63,396 61,608 $ 728,478 $ 688,049 Standby letters of credit $ 26,136 $ 28,977 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers. Derivative Financial Instruments The Company has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments for mitigating interest rate risk of the Bank. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap transaction, the Bank agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Bank agrees to pay a third‑party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. Because the Bank acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact the Company’s operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties. At March 31, 2018 and December 31, 2017, no such deterioration was determined by management. At March 31, 2018 and December 31, 2017, the Company had 14 interest rate swap agreements outstanding with borrowers, with a corresponding number outstanding with correspondent financial institutions. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Fair value amounts are included in other assets and other liabilities. Derivative instruments outstanding as of as of the dates listed shown were as follows: Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity March 31, 2018 Interest rate swaps with customers Other Assets $ 8,029 $ 87 5.35% - 7.25% LIBOR 1M + 3.00% - 3.20% 4.30 years Interest rate swaps with financial institution Other Assets 33,994 1,111 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 8.51 years Interest rate swaps with customers Other Liabilities 33,994 (1,111) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 4.30 years Interest rate swaps with financial institution Other Liabilities 8,029 (87) 5.35% - 7.25% LIBOR 1M + 3.00% - 3.20% 8.51 years Total derivatives not designated as hedging instruments $ 84,046 $ — Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2017 Interest rate swaps with customers Other Assets $ 25,882 $ 340 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.83 years Interest rate swaps with financial institution Other Assets 16,579 426 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 8.12 years Interest rate swaps with customers Other Liabilities 16,579 (426) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 7.83 years Interest rate swaps with financial institution Other Liabilities 25,882 (340) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 8.12 years Total derivatives not designated as hedging instruments $ 84,922 $ — Repurchase Agreements At March 31, 2018 and December 31, 2017, the Company had outstanding funds amounting to $861,000 and $1.5 million respectively, received from the sale of securities that were sold under agreements to repurchase. Securities subject to the transfer of ownership under the repurchase agreements are included in pledged securities, and the carrying value of these securities is disclosed in Note 2. The Company transacts these repurchase agreements with its customers and pays interest rates on these funds according to the terms of each repurchase agreement. Contingent Liabilities The Company is committed to contribute capital into two private investment funds and a limited partnership under the Small Business Investment Company program of the SBA. At March 31, 2018 and December 31, 2017, the Company had $3.4 million and $3.8 million, respectively, in outstanding unfunded commitments to these funds which are subject to call. Cumulative capital contributions to these funds of $2.1 million and $1.6 million are included in other investments in the Company’s condensed consolidated balance sheets at March 31, 2018 and December 31, 2017, respectively. The Company is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Company, it is the opinion of management that the disposition or ultimate determination of such claims and lawsuits will not have a material adverse effect on the financial position or results of operations of the Company. Lease Commitments The Company leases several of its banking facilities under operating leases. Total rent expense for operating leases of premises and equipment was approximately $465,000 and $513,000 for the three months ended March 31, 2018 and 2017, respectively, and is reflected in net occupancy expense on the condensed consolidated statements of income. |
EMPLOYEE BENEFIT PLANS AND DEFE
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | NOTE 14: EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS Employee Benefit Plans The Company maintains a 401(k) employee benefit plan in which substantially all employees that complete three months of service may participate. The Company, at its discretion, may match a portion of each employee’s contribution. The Company, also at its discretion, may make additional contributions during the Plan year. For the three months ended March 31, 2018 and 2017, the Company contributed $659,000 and $586,000 to the plan, respectively. Executive Deferred Compensation Arrangements The Company established an executive incentive compensation arrangement with several officers of the Bank, in which these officers are eligible for performance based incentive bonus compensation. As part of this compensation arrangement, the Company will contribute one‑fourth of the incentive bonus amount into a deferred compensation account. The deferred amounts accrue a market rate of interest and are payable to the employees upon separation from the Bank provided the Plan’s vesting arrangements have been met. At March 31, 2018 and December 31, 2017, the amount payable, including interest, for this deferred plan was approximately $2.4 million and $2.4 million respectively, and is included in other liabilities in the condensed consolidated balance sheets. Salary Continuation Agreements The Company entered into a salary continuation arrangement in 2008 with the Company’s then President and CEO that calls for payments of $100,000 per year for a period of 10 years commencing at age 65. Payments under the plan began during 2014. The Company’s liability was approximately $483,000 and $503,000 at March 31, 2018 and December 31, 2017, respectively, determined using discounted cash flows and is included in other liabilities in the condensed consolidated balance sheets. In October 2017, the Company entered into a salary continuation arrangement with the Company’s President and CEO that calls for payments of $200,000 per year payable for a period of 10 years commencing at age 70. Payments under the plan will begin in 2024. The Company’s liability was approximately $86,000 and $32,000 at March 31, 2018 and December 31, 2017, determined using discounted cash flows and is included in other liabilities in the condensed consolidated balance sheets. Change of Control Agreements In 2017, the Company entered into employment agreements with certain executive officers. These agreements provide for severance benefits if we terminate the executive without “cause” or the executive resigns with “good reason” (as those terms and benefits are defined in the agreements). In addition, upon a “change of control” (as that term is defined in the agreements), these employees, in accordance with the terms of their respective agreements, will be entitled to an aggregate amount of approximately $2.2 million. No compensation has been recorded to date as a change of control condition is not deemed probable. VB Texas, Inc. and Vista Bank Texas entered into change of control and non‑competition agreements with certain employees of VB Texas, Inc., who are now employees of the Bank. The Company’s initial public offering completed November 10, 2017 triggered the change of control provisions of these agreement and we paid these employees an aggregate amount of $2.5 million during the three months ended March 31, 2018. |
STOCK OPTION PLANS
STOCK OPTION PLANS | 3 Months Ended |
Mar. 31, 2018 | |
STOCK OPTION PLANS. | |
STOCK OPTION PLANS | NOTE 15: STOCK-BASED COMPENSATION The Company acquired a stock option plan which originated under VB Texas, Inc. as a part of a merger of the two companies. The options granted to employees must be exercised within 10 years from the date of grant and vesting schedules are determined on an individual basis. At the merger date, all outstanding options became fully vested and were converted to options of the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. No options were granted under this plan after October 24, 2016. The Company also acquired a stock option plan that originated in May 2011 under VB Texas, Inc., or the 2011 Plan. At the merger date, all outstanding options became fully vested and were converted to options of the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. The 2011 Plan was terminated on August 7, 2017 and as of that date, there were no options outstanding under this plan. In May 2014, the Company adopted the 2014 Stock Option Plan, or the 2014 Plan. The 2014 Plan was approved by the Company’s shareholders and limits the number of shares that may be optioned to 1,127,200. The 2014 Plan provides that no options may be granted after May 20, 2024. Options granted under the 2014 Plan expire 10 years from the date of grant and become exercisable in installments over a period of one to five years, beginning on the first anniversary of the date of grant. At March 31, 2018, 959,200 options were available for future grant under the 2014 Plan. On September 13, 2017, the Company’s shareholders approved the Company’s 2017 Omnibus Incentive Plan, or the 2017 Plan. The 2017 Plan authorizes the Company to grant options and restricted stock awards as well as various other types of stock-based and other awards that are not stock-based to eligible employees, consultants and non‑employee directors up to an aggregate of 600,000 shares of common stock. At March 31, 2018, 385,920 share-based awards were available for future grant under the 2017 Plan. Stock option activity for the periods shown below was as follows: For the Three Months Ended March 31, 2018 2017 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise (Dollars in thousands, except per share data) Options Price Options Price Outstanding at beginning of period 260,322 $ 16.00 248,314 $ 12.80 Granted — $ — — $ — Forfeited — $ — (2,000) $ 16.80 Exercised — $ — — $ — Outstanding at end of period 260,322 $ 16.00 246,314 $ 12.77 The following tables summarizes our stock options as of the dates shown below. March 31, 2018 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 141,122 119,200 260,322 Weighted-average exercise price per share $ 12.92 $ 19.66 $ 16.00 Aggregate intrinsic value (in thousands) $ 2,332 $ 1,166 $ 3,498 Weighted-average contractual term (years) 4.6 8.5 6.4 Restricted stock activity for the periods shown below was as follows: For the Three Months Ended March 31, 2018 2017 Weighted Weighted Average Average Number of Grant Date Number of Grant Date (Dollars in thousands, except per share data) Shares Fair Value Shares Fair Value Outstanding at beginning of period 212,580 $ 27.27 — $ — Granted 1,500 $ 29.27 — $ — Forfeited — $ — — $ — Vested — $ — — $ — Outstanding at end of period 214,080 $ 27.29 — $ — Restricted stock grants will vest over the service period in equal increments over a period of two to five years, beginning on the first anniversary of the date of grant. The market value of the Company’s common stock at the date of grant is used as the estimate of fair value of restricted stock. The shares of the restricted stock are fully issued at the time of the grant and the grantee becomes the record owner of the restricted stock and has voting, dividend and other shareholder rights. The shares of restricted stock are non-transferable and subject to forfeiture until the restricted stock vests and any dividends with respect to the restricted stock are subject to the same restrictions, including the risk of forfeiture. At March 31, 2018, $21,000 was accrued for dividends payable to restricted stock holders. These dividends will be paid upon vesting of the restricted stock. The following tables summarizes our restricted stock awards as of the date shown below. March 31, 2018 Restricted stock Exercisable Unvested Outstanding Number of shares underlying restricted stock — 214,080 214,080 Weighted-average grant date fair value per share $ — $ 27.29 $ 27.29 Aggregate grant date fair value (in thousands) $ — $ 5,842 $ 5,842 Weighted-average contractual term (years) — 4.2 4.2 Stock-based compensation expense is recognized in the condensed consolidated statements of income based on their fair values on the date of the grant. For the three months ended March 31, 2018 and 2017, stock compensation expense was $392,000 and $9,000, respectively. As of March 31, 2018, there was approximately $5.8 million of total unrecognized compensation expense related to the stock‑based compensation arrangements, which is expected to be recognized in the Company’s consolidated statements of income over a weighted-average period of 2.9 years. |
REGULATORY MATTERS
REGULATORY MATTERS | 3 Months Ended |
Mar. 31, 2018 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE 16: REGULATORY MATTERS Regulatory Capital Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off‑balance‑sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. The Company and Bank’s Common Equity Tier 1 capital includes common stock and related capital surplus, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, the Company and Bank elected to opt‑out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1. Common Equity Tier 1 for both the Company and Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities, and subject to transition provisions. When fully phased in on January 1, 2019, the Basel III Capital Rules will require the Company and Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk‑weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk‑weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will be phased in over a four‑year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company and Bank. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk‑weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk‑weighted assets below the effective minimum (4.5% plus the capital conservation buffer and, if applicable, the countercyclical capital buffer) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following table presents actual and required capital ratios as of the dates shown below for the Company and Bank. Minimum Minimum Capital Required Capital Required Required to be for Capital Adequacy Basel III Considered Well Actual Purposes Fully Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio March 31, 2018 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 368,675 14.1 % $ 117,463 4.5 % $ 182,720 7.0 % N/A N/A Bank Only $ 329,156 12.6 % $ 117,353 4.5 % $ 182,549 7.0 % $ 169,509 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 375,075 14.4 % $ 156,617 6.0 % $ 221,874 8.5 % N/A N/A Bank Only $ 329,156 12.6 % $ 156,470 6.0 % $ 221,666 8.5 % $ 208,627 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 400,802 15.4 % $ 208,822 8.0 % $ 274,079 10.5 % N/A N/A Bank Only $ 354,882 13.6 % $ 208,627 8.0 % $ 273,823 10.5 % $ 260,784 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 375,075 12.6 % $ 119,237 4.0 % $ 119,237 4.0 % N/A N/A Bank Only $ 329,156 11.0 % $ 119,237 4.0 % $ 119,237 4.0 % $ 149,046 5.0 % December 31, 2017 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 361,322 14.2 % $ 114,628 4.5 % $ 178,310 7.0 % N/A N/A Bank Only $ 322,414 12.7 % $ 114,252 4.5 % $ 178,150 7.0 % $ 165,425 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 367,722 14.4 % $ 152,837 6.0 % $ 216,519 8.5 % N/A N/A Bank Only $ 322,414 12.7 % $ 152,700 6.0 % $ 216,325 8.5 % $ 203,600 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 392,878 15.4 % $ 203,782 8.0 % $ 267,464 10.5 % N/A N/A Bank Only $ 347,569 13.7 % $ 203,600 8.0 % $ 267,726 10.5 % $ 254,501 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 367,722 12.3 % $ 119,769 4.0 % $ 119,769 4.0 % N/A N/A Bank Only $ 322,414 10.8 % $ 119,403 4.0 % $ 119,403 4.0 % $ 149,253 5.0 % As of March 31, 2018 and December 31, 2017, the Company and its bank subsidiary, CommunityBank of Texas, National Association, were “well capitalized” based on the ratios presented above. The Company and Bank are subject to the regulatory capital requirements administered by the Federal Reserve Board and, for the Bank, the Office of the Comptroller of Currency, or OCC. Regulatory authorities can initiate certain mandatory actions if Company or Bank fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. Management believes, as of March 31, 2018 and December 31, 2017, that the Company and Bank meet all capital adequacy requirements to which they are subject. Dividend Restrictions In the ordinary course of business, the Company may be dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
INCOME TAXES | |
INCOME TAXES | NOTE 17: INCOME TAXES The provision for income tax expense and effective tax rates for the periods shown below were as follows: For the Three Months Ended March 31, 2018 2017 Provision for income tax expense $ 2,139 $ 3,032 Effective tax rate 19.0 % 30.7 % The Tax Cuts and Jobs Act of 2017 was enacted December 22, 2017 and lowered the corporate federal income tax rate in the U.S. from 35% to 21%. The differences between the federal statutory rate of and the effective tax rates presented in the table above were primarily attributable to permanent differences primarily related to tax exempt interest and bank‑owned life insurance. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 18: EARNINGS PER SHARE Basic earnings per common share is computed as net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted‑average number of shares determined for the basic earnings per common share computation plus the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method. The following table illustrates the computation of basic and diluted earnings per share for the dates shown below. Three Months Ended March 31, (Dollars in thousands, except per share data) 2018 2017 Net income for common shareholders $ 9,112 $ 6,862 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,833 22,062 Dilutive effect of outstanding stock options and unvested restricted stock awards 121 100 Diluted weighted-average shares outstanding 24,954 22,162 Earnings per share: Basic $ 0.37 $ 0.31 Diluted $ 0.37 $ 0.31 |
BASIS OF PRESENTATION, NATURE27
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank, a wholly owned subsidiary of the Company. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2018 and December 31, 2017, consolidated results of operations for the three months ended March 31, 2018 and 2017, consolidated shareholders’ equity for the three months ended March 31, 2018 and 2017 and consolidated cash flows for the three months ended March 31, 2018 and 2017. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included within our Annual Report on Form 10-K. |
Accounting Standards Recently Adopted | Accounting Standards Recently Adopted Accounting Standards Update, or ASU, 2014‑09, Revenue from Contracts with Customers (Topic 606): ASU 2014‑09 requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU 2014-09 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements as the Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014‑09 and noninterest income. The Company’s revenue recognition for revenue streams within the scope of ASU 2014-09, including but not limited to service charges on deposits accounts, did not materially change from previous practice. ASU, 2016‑01, Financial Instruments‑Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016‑01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) clarifies that entities use the exit price notion when measuring the fair value of loans for disclosure purposes and not use a practicability exception, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument‑specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available‑for‑sale investments. ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10) clarifies certain aspects of ASU 2016-01. The Company implemented ASU 2016-01 and ASU 2018-03 effective January 1, 2018 with no significant impact to the Company’s consolidated financial statements. See Note 12 – Fair Value Disclosures. ASU 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016‑15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. The Company implemented ASU 2016‑15 effective January 1, 2018. The Company has elected to use the nature of distribution approach to determine the nature of distribution approach to determine whether income received from equity investments is operating or investing on the cash flow statement. Based on the nature of previous income streams from our equity investments, we expect these amounts will continue to be reported in cash provided by operating activities on the cash flow statement and the other items in ASU 2016-15 will be considered if such items arise. ASU 2016‑16, Income Taxes (Topic 740): Intra‑Entity Transfers of Assets Other Than Inventory . ASU 2016‑16 provides guidance stating that an entity should recognize the income tax consequences of an intra‑entity transfer of an asset other than inventory when the transfer occurs. The Company implemented ASU 2016‑16 effective January 1, 2018. As we have not historically transferred assets between entities, we expect no impact on the consolidated financial statements. ASU 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016‑18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. The Company implemented ASU 2016‑18 effective January 1, 2018. The only cash the Company has considered to be restricted is the amount of our Federal Bank reserves, which we had already included in cash and equivalents in the consolidated financial statements. ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017‑01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU 2017‑01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company implemented ASU 2017‑01 effective January 1, 2018 and will follow this guidance for any future acquisitions or dispositions. ASU 2017‑09, Compensation—Stock Compensation (Topic 718): ASU 2017-09 provides guidance about which changes in terms or conditions of a share‑based award require application of modification accounting. The Company implemented ASU 2017‑09 effective January 1, 2018 and will follow this guidance for any future modifications of share-based awards. Accounting Standards Not Yet Adopted ASU 2016‑02 , Leases (Topic 842): ASU 2016‑02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right‑of‑use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016‑02 does not significantly change lease accounting requirements applicable to lessors. Certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers .” ASU 2016‑02 will be effective for the Company on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016‑02 on the consolidated financial statements. ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016‑13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016‑13 amends the accounting for credit losses on available‑for‑sale debt securities and purchased financial assets with credit deterioration. ASU 2016‑13 will be effective on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016‑13 on the consolidated financial statements. ASU 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, ASU 2017‑04 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the potential impact of this pronouncement. |
Revenue Recognition | Revenue Recognition The Company records revenue from contracts with customers in accordance with ASU 2014-09, as applicable. A majority of the Company’s revenue-generating transactions are not subject to ASU 2014-09, such as interest and fees on loans, income from debt securities, income from federal funds and interest-bearing deposits. Our revenue-generating activities that are within the scope of ASU 2014-09, are included in our condensed consolidated income statements in noninterest income. See table below. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed and charged either on a periodic basis or based on activity. Three Months Ended March 31, (Dollars in thousands) 2018 2017 Deposit account service charges $ 1,478 $ 1,500 Net gain on sale of assets 130 364 Card interchange fees 927 832 Deposit account service charges — – this is comprised of fees from our customers for deposit related services, such as monthly account maintenance and activity or transaction-based fees. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. Net gain on sale of assets — – this is comprised of gains on sales of fixed assets, gains on sales of loans and gains on sales of other real estate owned, or OREO. Gains on sales of loans are excluded from ASU 2014-09. The performance obligation in the sale of OREO or fixed assets is delivery of control over the property to the buyer. The Company does not typically provide financing and the transaction price is identified in the purchase and sale agreement. If the Company provides financing, the Company must determine a transaction price depending on if the sales contract is at market terms and taking into account the credit risk inherent in the sale agreement. Card interchange fees — – this is comprised of fees generated from debit card transactions. Revenue is recognized when our performance obligation is completed generally when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. |
Cash Flow Reporting | Cash Flow Reporting Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank. The reserve requirements for the Bank were approximately $15.6 million and $15.8 million at March 31, 2018 and December 31, 2017, respectively and cash and due from banks balances were restricted to that extent. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 1,960 1,866 Cash paid for interest on notes payable — 256 Cash paid for interest on junior subordinated debt 87 74 Supplemental disclosures of non-cash flow information: Dividends accrued for restricted stock 10 — Real estate acquired through foreclosure — 166 |
BASIS OF PRESENTATION, NATURE28
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
Revenue Recognition | Three Months Ended March 31, (Dollars in thousands) 2018 2017 Deposit account service charges $ 1,478 $ 1,500 Net gain on sale of assets 130 364 Card interchange fees 927 832 |
Supplemental disclosures of cash flow information | Three Months Ended March 31, (Dollars in thousands) 2018 2017 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 1,960 1,866 Cash paid for interest on notes payable — 256 Cash paid for interest on junior subordinated debt 87 74 Supplemental disclosures of non-cash flow information: Dividends accrued for restricted stock 10 — Real estate acquired through foreclosure — 166 |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
DEBT SECURITIES. | |
The amortized cost and estimated fair values of investments in securities | Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2018 Debt securities available for sale: State and municipal securities $ 59,319 $ 468 $ (649) $ 59,138 U.S. agency securities: Debt securities 17,315 — (556) 16,759 Collateralized mortgage obligations 65,948 37 (1,376) 64,609 Mortgage-backed securities 81,616 176 (2,223) 79,569 Other securities 1,110 — (35) 1,075 Total $ 225,308 $ 681 $ (4,839) $ 221,150 Debt securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 December 31, 2017 Debt securities available for sale: State and municipal securities $ 60,861 $ 1,173 $ (118) $ 61,916 U.S. agency securities: Debt securities 17,315 — (370) 16,945 Collateralized mortgage obligations 61,878 50 (675) 61,253 Mortgage-backed securities 82,510 330 (866) 81,974 Other securities 1,104 — (17) 1,087 Total $ 223,668 $ 1,553 $ (2,046) $ 223,175 Debt securities held to maturity: Mortgage-backed securities $ 33 $ 2 $ — $ 35 |
Schedule of amortized cost and estimated fair value of securities by contractual maturities | Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value March 31, 2018 Amounts maturing in: 1 year or less $ 3,379 $ 3,355 $ — $ — 1 year through 5 years 25,445 25,054 — — 5 years through 10 years 10,730 10,768 — — After 10 years 185,754 181,973 33 35 $ 225,308 $ 221,150 $ 33 $ 35 December 31, 2017 Amounts maturing in: 1 year or less $ 6,203 $ 6,194 $ — $ — 1 year through 5 years 26,811 26,635 — — 5 years through 10 years 9,215 9,348 — — After 10 years 181,439 180,998 33 35 $ 223,668 $ 223,175 $ 33 $ 35 |
Information pertaining to securities with gross unrealized losses | Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2018 Debt securities available for sale: State and municipal securities $ 20,267 $ (359) $ 6,323 $ (290) U.S. agency securities: Debt securities 4,410 (108) 12,349 (448) Collateralized mortgage obligations 51,847 (941) 9,518 (435) Mortgage-backed securities 38,533 (849) 30,958 (1,374) Other securities — — 1,075 (35) $ 115,057 $ (2,257) $ 60,223 $ (2,582) December 31, 2017 Debt securities available for sale: State and municipal securities $ 2,494 $ (3) $ 6,516 $ (115) U.S. agency securities: Debt securities 4,464 (55) 12,481 (315) Collateralized mortgage obligations 44,116 (380) 9,938 (295) Mortgage-backed securities 22,079 (123) 32,538 (743) Other securities — — 1,087 (17) $ 73,153 $ (561) $ 62,560 $ (1,485) |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
LOANS | |
Loans held for sale, by portfolio segment | (Dollars in thousands) March 31, 2018 December 31, 2017 Commercial and industrial $ 559,070 23.7 % $ 559,363 24.1 % Real estate: Commercial real estate 767,108 32.5 % 738,293 31.9 % Construction and development 436,260 18.5 % 449,211 19.4 % 1-4 family residential 260,580 11.0 % 258,584 11.2 % Multi-family residential 236,000 10.0 % 220,305 9.5 % Consumer 40,869 1.7 % 40,433 1.7 % Agriculture 8,807 0.4 % 11,256 0.5 % Other 52,382 2.2 % 40,344 1.7 % Total gross loans 2,361,076 100.0 % 2,317,789 100.0 % Less deferred loan fees (4,682) (4,555) Less unearned discount on retained portion of loans sold (228) (230) Less allowance for loan loss (25,349) (24,778) Total loans, net 2,330,817 2,288,226 Less loans held for sale 113 1,460 Loans, net $ 2,330,704 $ 2,286,766 |
Loan participations purchased and sold | Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2018 Commercial and industrial $ 7,000 $ — Commercial real estate — 7,500 $ 7,000 $ 7,500 March 31, 2017 Commercial real estate $ — $ 5,934 Construction and development 205 — $ 205 $ 5,934 |
LOAN PERFORMANCE (Tables)
LOAN PERFORMANCE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
LOAN PERFORMANCE | |
Nonaccrual loans, segregated by loan class | March 31, December 31, (Dollars in thousands) 2018 2017 Commercial and industrial $ 2,533 $ 3,280 Real estate: Commercial real estate 2,217 3,216 Construction and development 233 252 1-4 family residential 765 898 Consumer 21 — Total $ 5,769 $ 7,646 |
Aging analysis of loans past due segregated by loan class | 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2018 Commercial and industrial $ 116 $ 24 $ 2,507 $ 2,647 $ 556,423 $ 559,070 $ — Real estate: Commercial real estate 74 36 1,865 1,975 765,133 767,108 — Construction and development — — — — 436,260 436,260 — 1-4 family residential 482 100 36 618 259,962 260,580 — Multi-family residential — — — — 236,000 236,000 — Consumer 4 — — 4 40,865 40,869 — Agriculture — — — — 8,807 8,807 — Other — — — — 52,382 52,382 — Total loans $ 676 $ 160 $ 4,408 $ 5,244 $ 2,355,832 $ 2,361,076 $ — 90 days or Total 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing December 31, 2017 Commercial and industrial $ 943 $ 1,071 $ 2,535 $ 4,549 $ 554,814 $ 559,363 $ — Real estate: Commercial real estate 337 841 1,866 3,044 735,249 738,293 — Construction and development 400 — — 400 448,811 449,211 — 1-4 family residential 807 — 143 950 257,634 258,584 — Multi-family residential — — — — 220,305 220,305 — Consumer 3 25 — 28 40,405 40,433 — Agriculture — — — — 11,256 11,256 — Other — — — — 40,344 40,344 — Total loans $ 2,490 $ 1,937 $ 4,544 $ 8,971 $ 2,308,818 $ 2,317,789 $ — |
Loans segregated by loan class, which were restructured due to the borrower’s financial difficulties | Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate March 31, 2018 Commercial and industrial 3 $ 983 $ 983 $ — $ — $ — Commercial real estate 4 2,434 2,434 — — — Total 7 $ 3,417 $ 3,417 $ — $ — $ — March 31, 2017 Commercial and industrial 4 $ 2,203 $ 2,019 $ — $ 184 $ — Commercial real estate 1 276 276 — — — Total 5 $ 2,479 $ 2,295 $ — $ 184 $ — Typical |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ALLOWANCE FOR LOAN LOSSES | |
Allowance for loan losses on the basis of the Company’s impairment methodology | Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss 479 364 (126) 5 101 (51) (15) 108 865 Charge-offs (469) — — (3) — — — — (472) Recoveries 172 3 — 1 — 2 — — 178 Net (charge-offs) recoveries (297) 3 — (2) — 2 — — (294) Ending balance $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Period-end amount allocated to: Specific reserve $ 845 $ 55 $ — $ 107 $ — $ — $ — $ — $ 1,007 General reserve 6,594 10,687 3,356 1,222 1,520 517 53 393 24,342 Total $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 1,454 (266) (453) (177) (116) 235 (16) 299 960 Charge-offs (508) — — — — — — — (508) Recoveries 391 3 — 2 — 27 — — 423 Net (charge-offs) recoveries (117) 3 — 2 — 27 — — (85) Ending balance $ 7,746 $ 10,507 $ 4,145 $ 1,111 $ 800 $ 615 $ 63 $ 894 $ 25,881 Period-end amount allocated to: Specific reserve $ 364 $ 52 $ — $ — $ — $ 84 $ — $ — $ 500 General reserve 7,382 10,455 4,145 1,111 800 531 63 894 25,381 Total $ 7,746 $ 10,507 $ 4,145 $ 1,111 $ 800 $ 615 $ 63 $ 894 $ 25,881 |
Presentation of risk grades and classified loans by loan class | Special (Dollars in thousands) Pass Mention Substandard Total Loans March 31, 2018 Commercial and industrial $ 538,484 $ 7,841 $ 12,745 $ 559,070 Real estate: Commercial real estate 755,816 2,862 8,430 767,108 Construction and development 435,217 540 503 436,260 1-4 family residential 254,464 — 6,116 260,580 Multi-family residential 228,651 7,349 — 236,000 Consumer 40,565 246 58 40,869 Agriculture 8,776 — 31 8,807 Other 43,913 — 8,469 52,382 Total loans $ 2,305,886 $ 18,838 $ 36,352 $ 2,361,076 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2017 Commercial and industrial $ 535,589 $ 8,403 $ 15,371 $ 559,363 Real estate: Commercial real estate 722,503 2,951 12,839 738,293 Construction and development 448,124 565 522 449,211 1-4 family residential 252,317 — 6,267 258,584 Multi-family residential 212,899 7,406 — 220,305 Consumer 40,144 246 43 40,433 Agriculture 11,223 — 33 11,256 Other 33,109 — 7,235 40,344 Total loans $ 2,255,908 $ 19,571 $ 42,310 $ 2,317,789 |
Loan Impairment Assessment | Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2018 Commercial and industrial $ 11,390 $ 4,693 $ 2,169 $ 6,862 $ 845 $ 7,072 Real estate: Commercial real estate 7,006 4,279 2,523 6,802 55 6,902 Construction and development 282 234 — 234 — 238 1-4 family residential 4,833 2,878 1,862 4,740 107 4,802 Consumer 21 21 — 21 — 21 Other 8,387 8,387 — 8,387 — 8,077 Total loans $ 31,919 $ 20,492 $ 6,554 $ 27,046 $ 1,007 $ 27,112 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2017 Commercial and industrial $ 11,921 $ 6,100 $ 1,192 $ 7,292 $ 852 $ 12,090 Real estate: Commercial real estate 9,646 8,626 667 9,293 64 9,438 Construction and development 296 251 — 251 — 323 1-4 family residential 5,003 3,050 1,874 4,924 119 3,369 Multi-family residential — — — — — 2 Consumer — — — — — 21 Agriculture — — — — — 1 Other 7,152 7,152 — 7,152 — 7,616 Total loans $ 34,018 $ 25,179 $ 3,733 $ 28,912 $ 1,035 $ 32,860 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2017 Commercial and industrial $ 15,821 $ 9,340 $ 2,475 $ 11,815 $ 364 $ 12,090 Real estate: Commercial real estate 6,564 4,504 1,866 6,370 52 6,408 Construction and development 405 414 — 414 — 430 1-4 family residential 1,503 1,427 — 1,427 — 1,524 Multi-family residential 10 5 — 5 — 5 Consumer 84 — 84 84 84 56 Agriculture 278 6 — 6 — 14 Other 8,673 8,670 — 8,670 — 8,481 Total loans $ 33,338 $ 24,366 $ 4,425 $ 28,791 $ 500 $ 29,008 |
Allowance for loan losses on the basis of the Company’s impairment methodology | March 31, 2018 December 31, 2017 Individually Collectively Individually Collectively Evaluated for Evaluated for Total Evaluated for Evaluated for Total (Dollars in thousands) Impairment Impairment Loans Impairment Impairment Loans Commercial and industrial $ 6,862 $ 552,208 $ 559,070 $ 7,292 $ 552,071 $ 559,363 Real estate: Commercial real estate 6,802 760,306 767,108 9,293 729,000 738,293 Construction and development 234 436,026 436,260 251 448,960 449,211 1-4 family residential 4,740 255,840 260,580 4,924 253,660 258,584 Multi-family residential — 236,000 236,000 — 220,305 220,305 Consumer 21 40,848 40,869 — 40,433 40,433 Agriculture — 8,807 8,807 — 11,256 11,256 Other 8,387 43,995 52,382 7,152 33,192 40,344 Total $ 27,046 $ 2,334,030 $ 2,361,076 $ 28,912 $ 2,288,877 $ 2,317,789 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
PREMISES AND EQUIPMENT | |
Schedule of premises and equipment | March 31, December 31, (Dollars in thousands) 2018 2017 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 51,819 51,664 Furniture and equipment 15,085 14,887 Vehicles 202 202 80,572 80,219 Less accumulated depreciation and amortization (27,437) (26,612) Premises and equipment, net $ 53,135 $ 53,607 |
GOODWILL AND OTHER INTANGIBLE34
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of intangible assets | Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets March 31, 2018 Other intangible assets, net Core deposits 5.9 years $ $ (12,187) $ 1,563 Customer relationships 10.8 years 6,629 (1,878) 4,751 Servicing assets 17.2 years 327 (120) 207 Total other intangible assets, net $ $ (14,185) $ 6,521 December 31, 2017 Other intangible assets, net Core deposits 6.2 years $ $ (12,051) $ 1,699 Customer relationships 11.0 years 6,629 (1,767) 4,862 Servicing assets 17.3 years 321 (112) 209 Total other intangible assets, net $ $ (13,930) $ 6,770 |
Schedule of changes in related servicing assets | Three Months Ended March 31, (Dollars in thousands) 2018 2017 Balance at beginning of year $ 209 $ 186 Increase from loan sales 6 — Amortization (8) (8) Balance at end of period $ 207 $ 178 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
DEPOSITS | |
Schedule of deposits | March 31, December 31, (Dollars in thousands) 2018 2017 Interest-bearing demand accounts $ 345,378 $ 363,015 Money market accounts 717,548 702,299 Saving accounts 95,603 95,842 Certificates and other time deposits, $100,000 or greater 161,777 172,469 Certificates and other time deposits, less than $100,000 158,875 159,558 Total interest-bearing deposits 1,479,181 1,493,183 Noninterest-bearing deposits 1,120,521 1,109,789 Total deposits $ 2,599,702 $ 2,602,972 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
FAIR VALUE DISCLOSURES | |
Summary financial assets and financial liabilities measured at fair value on a recurring basis | March 31, 2018 December 31, 2017 (Dollars in thousands) Fair Value Fair Value Financial assets: Level 1 inputs: Debt securities available for sale Other securities $ 1,075 $ 1,087 Level 2 inputs: Debt securities available for sale State and municipal securities 59,138 61,916 U.S. Agency Securities: Debt securities 16,759 16,945 Collateralized mortgage obligations 64,609 61,253 Mortgage-backed securities 79,569 81,974 Interest rate swaps with customers 87 340 Interest rate swaps with financial institutions 1,111 426 Total financial assets $ 222,348 $ 223,941 Financial liabilities: Level 2 inputs: Interest rate swaps with customers $ 1,111 $ 426 Interest rate swaps with financial institutions 87 340 Total financial liabilities $ 1,198 $ 766 |
Summary of certain assets measured on a non‑recurring basis | March 31, 2018 December 31, 2017 Level 3 Level 3 (Dollars in thousands) Inputs Inputs Impaired loans: Commercial and industrial $ 1,324 $ 340 Commercial real estate 2,468 603 1-4 family residential 1,755 1,755 Total impaired loans $ 5,547 $ 2,698 |
Summary of foreclosed assets that were remeasured subsequent to initial recognition | March 31, December 31, (Dollars in thousands) 2018 2017 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 881 Charge-offs recognized in the allowance for loan losses — — Fair value $ — $ 881 Foreclosed assets remeasured subsequent to initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 227 Write-downs included in other noninterest expense — (51) Fair value $ — $ 176 |
Summary of fair market values of all financial instruments | March 31, 2018 December 31, 2017 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 41,513 $ 41,513 $ 59,255 $ 59,255 Interest bearing deposits in banks 238,402 238,402 266,944 266,944 Debt securities available for sale 1,075 1,075 1,087 1,087 Level 2 inputs: Time deposits in other banks 600 600 600 600 Debt securities available for sale 220,075 220,075 222,088 222,088 Debt securities held to maturity 35 33 35 33 Bank-owned life insurance 70,161 70,161 68,010 68,010 Servicing asset 207 207 209 209 Accrued interest receivable 7,082 7,082 7,429 7,429 Interest rate swaps with customers 87 87 340 340 Interest rate swaps with financial institutions 1,111 1,111 426 426 Level 3 inputs: Equity investments 12,675 12,675 12,226 12,226 Loans, including held for sale, net 2,335,572 2,330,817 2,299,742 2,288,226 Total financial assets $ 2,928,595 $ 2,923,838 $ 2,938,391 $ 2,926,873 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,120,521 $ 1,120,521 $ 1,109,789 $ 1,109,789 Level 2 inputs: Interest-bearing deposits 1,401,500 1,479,181 1,437,013 1,493,183 Repurchase agreements 861 861 1,525 1,525 Junior subordinated debt 6,726 6,726 6,726 6,726 Accrued interest payable 368 368 374 374 Interest rate swaps with customers 1,111 1,111 426 426 Interest rate swaps with financial institutions 87 87 340 340 Total financial liabilities $ 2,531,174 $ 2,608,855 $ 2,556,193 $ 2,612,363 |
Schedule of equity investments that do not have readily determinable fair values | March 31, December 31, (Dollars in thousands) 2018 2017 Federal Reserve stock $ 9,271 $ 9,271 FHLB stock 1,194 1,189 TIB stock 141 141 CRA investments 2,069 1,625 Total $ 12,675 $ 12,226 |
COMMITMENTS AND CONTINGENCIES37
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
Summary of the various financial instruments whose contract amounts represent credit risk | March 31, December 31, (Dollars in thousands) 2018 2017 Commitments to extend credit, variable $ 665,082 $ 626,441 Commitments to extend credit, fixed 63,396 61,608 $ 728,478 $ 688,049 Standby letters of credit $ 26,136 $ 28,977 |
Schedule of the derivative instruments outstanding | Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity March 31, 2018 Interest rate swaps with customers Other Assets $ 8,029 $ 87 5.35% - 7.25% LIBOR 1M + 3.00% - 3.20% 4.30 years Interest rate swaps with financial institution Other Assets 33,994 1,111 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 8.51 years Interest rate swaps with customers Other Liabilities 33,994 (1,111) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 4.30 years Interest rate swaps with financial institution Other Liabilities 8,029 (87) 5.35% - 7.25% LIBOR 1M + 3.00% - 3.20% 8.51 years Total derivatives not designated as hedging instruments $ 84,046 $ — Notional Fair Weighted-Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2017 Interest rate swaps with customers Other Assets $ 25,882 $ 340 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.83 years Interest rate swaps with financial institution Other Assets 16,579 426 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 8.12 years Interest rate swaps with customers Other Liabilities 16,579 (426) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 7.83 years Interest rate swaps with financial institution Other Liabilities 25,882 (340) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 8.12 years Total derivatives not designated as hedging instruments $ 84,922 $ — |
STOCK OPTION PLANS (Tables)
STOCK OPTION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock option plans | |
STOCK OPTION PLANS | |
Schedule of summary of activity under the stock option plans | For the Three Months Ended March 31, 2018 2017 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise (Dollars in thousands, except per share data) Options Price Options Price Outstanding at beginning of period 260,322 $ 16.00 248,314 $ 12.80 Granted — $ — — $ — Forfeited — $ — (2,000) $ 16.80 Exercised — $ — — $ — Outstanding at end of period 260,322 $ 16.00 246,314 $ 12.77 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | March 31, 2018 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 141,122 119,200 260,322 Weighted-average exercise price per share $ 12.92 $ 19.66 $ 16.00 Aggregate intrinsic value (in thousands) $ 2,332 $ 1,166 $ 3,498 Weighted-average contractual term (years) 4.6 8.5 6.4 |
Restricted Stock | |
STOCK OPTION PLANS | |
Schedule of summary of activity under the stock option plans | For the Three Months Ended March 31, 2018 2017 Weighted Weighted Average Average Number of Grant Date Number of Grant Date (Dollars in thousands, except per share data) Shares Fair Value Shares Fair Value Outstanding at beginning of period 212,580 $ 27.27 — $ — Granted 1,500 $ 29.27 — $ — Forfeited — $ — — $ — Vested — $ — — $ — Outstanding at end of period 214,080 $ 27.29 — $ — |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | March 31, 2018 Restricted stock Exercisable Unvested Outstanding Number of shares underlying restricted stock — 214,080 214,080 Weighted-average grant date fair value per share $ — $ 27.29 $ 27.29 Aggregate grant date fair value (in thousands) $ — $ 5,842 $ 5,842 Weighted-average contractual term (years) — 4.2 4.2 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
REGULATORY MATTERS | |
Summary of actual and required capital ratios for the Company and Bank under the Basel III Capital Rules | Minimum Minimum Capital Required Capital Required Required to be for Capital Adequacy Basel III Considered Well Actual Purposes Fully Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio March 31, 2018 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 368,675 14.1 % $ 117,463 4.5 % $ 182,720 7.0 % N/A N/A Bank Only $ 329,156 12.6 % $ 117,353 4.5 % $ 182,549 7.0 % $ 169,509 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 375,075 14.4 % $ 156,617 6.0 % $ 221,874 8.5 % N/A N/A Bank Only $ 329,156 12.6 % $ 156,470 6.0 % $ 221,666 8.5 % $ 208,627 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 400,802 15.4 % $ 208,822 8.0 % $ 274,079 10.5 % N/A N/A Bank Only $ 354,882 13.6 % $ 208,627 8.0 % $ 273,823 10.5 % $ 260,784 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 375,075 12.6 % $ 119,237 4.0 % $ 119,237 4.0 % N/A N/A Bank Only $ 329,156 11.0 % $ 119,237 4.0 % $ 119,237 4.0 % $ 149,046 5.0 % December 31, 2017 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 361,322 14.2 % $ 114,628 4.5 % $ 178,310 7.0 % N/A N/A Bank Only $ 322,414 12.7 % $ 114,252 4.5 % $ 178,150 7.0 % $ 165,425 6.5 % Tier I Capital to Risk-Weighted Assets: Consolidated $ 367,722 14.4 % $ 152,837 6.0 % $ 216,519 8.5 % N/A N/A Bank Only $ 322,414 12.7 % $ 152,700 6.0 % $ 216,325 8.5 % $ 203,600 8.0 % Total Capital to Risk-Weighted Assets: Consolidated $ 392,878 15.4 % $ 203,782 8.0 % $ 267,464 10.5 % N/A N/A Bank Only $ 347,569 13.7 % $ 203,600 8.0 % $ 267,726 10.5 % $ 254,501 10.0 % Tier 1 Leverage Capital to Average Assets: Consolidated $ 367,722 12.3 % $ 119,769 4.0 % $ 119,769 4.0 % N/A N/A Bank Only $ 322,414 10.8 % $ 119,403 4.0 % $ 119,403 4.0 % $ 149,253 5.0 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
INCOME TAXES | |
Schedule of provision for income tax expense and effective tax rates | For the Three Months Ended March 31, 2018 2017 Provision for income tax expense $ 2,139 $ 3,032 Effective tax rate 19.0 % 30.7 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | Three Months Ended March 31, (Dollars in thousands, except per share data) 2018 2017 Net income for common shareholders $ 9,112 $ 6,862 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,833 22,062 Dilutive effect of outstanding stock options and unvested restricted stock awards 121 100 Diluted weighted-average shares outstanding 24,954 22,162 Earnings per share: Basic $ 0.37 $ 0.31 Diluted $ 0.37 $ 0.31 |
BASIS OF PRESENTATION, NATURE42
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)location | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Number of locations | location | 33 | ||
Reserve required at federal reserve bank | $ 15,600 | $ 15,800 | |
Supplemental disclosures of non-cash flow information: | |||
Dividends accrued for restricted stock | 10 | ||
Real estate acquired through foreclosure | $ 166 | ||
Notes payable. | |||
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 256 | ||
Junior subordinated debt. | |||
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 87 | 74 | |
Deposits and repurchase agreements | |||
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | $ 1,960 | $ 1,866 |
BASIS OF PRESENTATION, NATURE43
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Deposit account service charges | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 1,478 | |
Net gain on sale of assets | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 130 | |
Card interchange fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 927 | |
Calculated under Revenue Guidance in Effect before Topic 606 | Deposit account service charges | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 1,500 | |
Calculated under Revenue Guidance in Effect before Topic 606 | Net gain on sale of assets | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 364 | |
Calculated under Revenue Guidance in Effect before Topic 606 | Card interchange fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 832 |
DEBT SECURITIES - Amortized cos
DEBT SECURITIES - Amortized cost and estimated fair values of investments in securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Available-for-sale Securities [Abstract] | ||
Amortized cost | $ 225,308 | $ 223,668 |
Fair Value | 221,150 | 223,175 |
Held-to-maturity Securities [Abstract] | ||
Amortized cost | 33 | 33 |
Fair Value | 35 | 35 |
Securities Available for Sale | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 225,308 | 223,668 |
Unrealized Gains | 681 | 1,553 |
Unrealized Losses | (4,839) | (2,046) |
Fair Value | 221,150 | 223,175 |
Securities Available for Sale | State and municipal securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 59,319 | 60,861 |
Unrealized Gains | 468 | 1,173 |
Unrealized Losses | (649) | (118) |
Fair Value | 59,138 | 61,916 |
Securities Available for Sale | Debt securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 17,315 | 17,315 |
Unrealized Losses | (556) | (370) |
Fair Value | 16,759 | 16,945 |
Securities Available for Sale | Collateralized mortgage obligations | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 65,948 | 61,878 |
Unrealized Gains | 37 | 50 |
Unrealized Losses | (1,376) | (675) |
Fair Value | 64,609 | 61,253 |
Securities Available for Sale | Mortgage-backed securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 81,616 | 82,510 |
Unrealized Gains | 176 | 330 |
Unrealized Losses | (2,223) | (866) |
Fair Value | 79,569 | 81,974 |
Securities Available for Sale | Other securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 1,110 | 1,104 |
Unrealized Losses | (35) | (17) |
Fair Value | 1,075 | 1,087 |
Securities Held to Maturity | Mortgage-backed securities | ||
Held-to-maturity Securities [Abstract] | ||
Amortized cost | 33 | 33 |
Gross Unrealized Gains | 2 | 2 |
Fair Value | $ 35 | $ 35 |
DEBT SECURITIES - Amortized c45
DEBT SECURITIES - Amortized cost and estimated fair values of securities by contractual maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Available for Sale - Amortized Cost | ||
Amortized cost, 1 year or less | $ 3,379 | $ 6,203 |
Amortized cost, 1 year through 5 years | 25,445 | 26,811 |
Amortized cost, 5 years through 10 years | 10,730 | 9,215 |
Amortized cost, After 10 years | 185,754 | 181,439 |
Available-for-sale Securities, Amortized Cost Basis, Total | 225,308 | 223,668 |
Available for Sale - Estimated Fair Value | ||
Estimated fair value, 1 year or less | 3,355 | 6,194 |
Estimated fair value, 1 year through 5 years | 25,054 | 26,635 |
Estimated fair value, 5 years through 10 years | 10,768 | 9,348 |
Estimated fair value, After 10 years | 181,973 | 180,998 |
Available-for-sale Securities, Total | 221,150 | 223,175 |
Held to Maturity - Amortized Cost | ||
Amortized cost, After 10 years | 33 | 33 |
Held-to-maturity Securities, Total | 33 | 33 |
Held to Maturity - Estimated Fair Value | ||
Estimated fair value, After 10 years | 35 | 35 |
Held-to-maturity Securities, Fair Value, Total | $ 35 | $ 35 |
DEBT SECURITIES - Securities ca
DEBT SECURITIES - Securities carrying amount (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)item | |
DEBT SECURITIES. | |||
Securities sold during the year | $ 0 | $ 0 | |
Carrying value of securities pledged | $ 60,900 | $ 58,700 | |
Securities held in a gross unrealized loss position | item | 52 | 52 | |
Impairment loss on securities | $ 0 | $ 0 |
DEBT SECURITIES - Securities wi
DEBT SECURITIES - Securities with gross unrealized losses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investment securities | ||
Fair value - Less than twelve months | $ 115,057 | $ 73,153 |
Gross Unrealized loss - Less than twelve months | (2,257) | (561) |
Fair value - Twelve months or more | 60,223 | 62,560 |
Gross Unrealized loss - Twelve months or more | (2,582) | (1,485) |
State and municipal securities | ||
Investment securities | ||
Fair value - Less than twelve months | 20,267 | 2,494 |
Gross Unrealized loss - Less than twelve months | (359) | (3) |
Fair value - Twelve months or more | 6,323 | 6,516 |
Gross Unrealized loss - Twelve months or more | (290) | (115) |
Debt securities | ||
Investment securities | ||
Fair value - Less than twelve months | 4,410 | 4,464 |
Gross Unrealized loss - Less than twelve months | (108) | (55) |
Fair value - Twelve months or more | 12,349 | 12,481 |
Gross Unrealized loss - Twelve months or more | (448) | (315) |
Collateralized mortgage obligations | ||
Investment securities | ||
Fair value - Less than twelve months | 51,847 | 44,116 |
Gross Unrealized loss - Less than twelve months | (941) | (380) |
Fair value - Twelve months or more | 9,518 | 9,938 |
Gross Unrealized loss - Twelve months or more | (435) | (295) |
Mortgage-backed securities | ||
Investment securities | ||
Fair value - Less than twelve months | 38,533 | 22,079 |
Gross Unrealized loss - Less than twelve months | (849) | (123) |
Fair value - Twelve months or more | 30,958 | 32,538 |
Gross Unrealized loss - Twelve months or more | (1,374) | (743) |
Other securities | ||
Investment securities | ||
Fair value - Twelve months or more | 1,075 | 1,087 |
Gross Unrealized loss - Twelve months or more | $ (35) | $ (17) |
LOANS - By portfolio segment (D
LOANS - By portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Loans | ||||
Total | $ 2,361,076 | $ 2,317,789 | ||
Percentage of loan | 100.00% | 100.00% | ||
Less deferred loan fees | $ (4,682) | $ (4,555) | ||
Less unearned discount on retained portion of loans sold | (228) | (230) | ||
Less allowance for loan loss | (25,349) | (24,778) | $ (25,881) | $ (25,006) |
Total loans, net | 2,330,817 | 2,288,226 | ||
Loans held for sale | 113 | 1,460 | ||
Total loans | 2,330,704 | 2,286,766 | ||
Accrued interest receivable | 6,100 | 6,100 | ||
Commercial and industrial | ||||
Loans | ||||
Total | $ 559,070 | $ 559,363 | ||
Percentage of loan | 23.70% | 24.10% | ||
Less allowance for loan loss | $ (7,439) | $ (7,257) | (7,746) | (6,409) |
Commercial real estate | ||||
Loans | ||||
Total | $ 767,108 | $ 738,293 | ||
Percentage of loan | 32.50% | 31.90% | ||
Less allowance for loan loss | $ (10,742) | $ (10,375) | (10,507) | (10,770) |
Construction and development | ||||
Loans | ||||
Total | $ 436,260 | $ 449,211 | ||
Percentage of loan | 18.50% | 19.40% | ||
Less allowance for loan loss | $ (3,356) | $ (3,482) | (4,145) | (4,598) |
1-4 family residential | ||||
Loans | ||||
Total | $ 260,580 | $ 258,584 | ||
Percentage of loan | 11.00% | 11.20% | ||
Less allowance for loan loss | $ (1,329) | $ (1,326) | (1,111) | (1,286) |
Multi‑family residential | ||||
Loans | ||||
Total | $ 236,000 | $ 220,305 | ||
Percentage of loan | 10.00% | 9.50% | ||
Less allowance for loan loss | $ (1,520) | $ (1,419) | (800) | (916) |
Consumer | ||||
Loans | ||||
Total | $ 40,869 | $ 40,433 | ||
Percentage of loan | 1.70% | 1.70% | ||
Less allowance for loan loss | $ (517) | $ (566) | (615) | (353) |
Agriculture | ||||
Loans | ||||
Total | $ 8,807 | $ 11,256 | ||
Percentage of loan | 0.40% | 0.50% | ||
Less allowance for loan loss | $ (53) | $ (68) | (63) | (79) |
Other | ||||
Loans | ||||
Total | $ 52,382 | $ 40,344 | ||
Percentage of loan | 2.20% | 1.70% | ||
Less allowance for loan loss | $ (393) | $ (285) | $ (894) | $ (595) |
LOANS - Loan participation and
LOANS - Loan participation and Loan Guarantees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Loans | ||
Participations purchased during the period | $ 7,000 | $ 205 |
Participations Sold During the Period | 7,500 | 5,934 |
Net gains recognized on sales of loans | 237,000 | 568,000 |
Commercial and industrial | ||
Loans | ||
Participations purchased during the period | 7,000 | |
Commercial real estate | ||
Loans | ||
Participations Sold During the Period | $ 7,500 | 5,934 |
Construction and development | ||
Loans | ||
Participations purchased during the period | $ 205 |
LOAN PERFORMANCE - Nonaccrual l
LOAN PERFORMANCE - Nonaccrual loans, segregated by loan class (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Nonaccrual loans | ||
Nonaccrual loans | $ 5,769 | $ 7,646 |
Commercial and industrial | ||
Nonaccrual loans | ||
Nonaccrual loans | 2,533 | 3,280 |
Commercial real estate | ||
Nonaccrual loans | ||
Nonaccrual loans | 2,217 | 3,216 |
Construction and development | ||
Nonaccrual loans | ||
Nonaccrual loans | 233 | 252 |
1-4 family residential | ||
Nonaccrual loans | ||
Nonaccrual loans | 765 | $ 898 |
Consumer | ||
Nonaccrual loans | ||
Nonaccrual loans | $ 21 |
LOAN PERFORMANCE - Aging analys
LOAN PERFORMANCE - Aging analysis of loan past due (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Aging analysis | |||
Total past due | $ 5,244 | $ 8,971 | |
Total current loans | 2,355,832 | 2,308,818 | |
Total loans | 2,361,076 | 2,317,789 | |
Interest income that would have been earned under the original terms of the nonaccrual loans | 99,000 | $ 38,000 | |
30 to 59 days past due | |||
Aging analysis | |||
Total past due | 676 | 2,490 | |
60 to 89 days past due | |||
Aging analysis | |||
Total past due | 160 | 1,937 | |
90 days or greater past due | |||
Aging analysis | |||
Total past due | 4,408 | 4,544 | |
Commercial and industrial | |||
Aging analysis | |||
Total past due | 2,647 | 4,549 | |
Total current loans | 556,423 | 554,814 | |
Total loans | 559,070 | 559,363 | |
Commercial and industrial | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 116 | 943 | |
Commercial and industrial | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 24 | 1,071 | |
Commercial and industrial | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 2,507 | 2,535 | |
Commercial real estate | |||
Aging analysis | |||
Total past due | 1,975 | 3,044 | |
Total current loans | 765,133 | 735,249 | |
Total loans | 767,108 | 738,293 | |
Commercial real estate | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 74 | 337 | |
Commercial real estate | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 36 | 841 | |
Commercial real estate | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 1,865 | 1,866 | |
Construction and development | |||
Aging analysis | |||
Total past due | 400 | ||
Total current loans | 436,260 | 448,811 | |
Total loans | 436,260 | 449,211 | |
Construction and development | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 400 | ||
1-4 family residential | |||
Aging analysis | |||
Total past due | 618 | 950 | |
Total current loans | 259,962 | 257,634 | |
Total loans | 260,580 | 258,584 | |
1-4 family residential | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 482 | 807 | |
1-4 family residential | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 100 | ||
1-4 family residential | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 36 | 143 | |
Multi‑family residential | |||
Aging analysis | |||
Total current loans | 236,000 | 220,305 | |
Total loans | 236,000 | 220,305 | |
Consumer | |||
Aging analysis | |||
Total past due | 4 | 28 | |
Total current loans | 40,865 | 40,405 | |
Total loans | 40,869 | 40,433 | |
Consumer | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 4 | 3 | |
Consumer | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 25 | ||
Agriculture | |||
Aging analysis | |||
Total current loans | 8,807 | 11,256 | |
Total loans | 8,807 | 11,256 | |
Other | |||
Aging analysis | |||
Total current loans | 52,382 | 40,344 | |
Total loans | $ 52,382 | $ 40,344 |
LOAN PERFORMANCE - Restructured
LOAN PERFORMANCE - Restructured loans (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)loan | Mar. 31, 2017USD ($)loan | Dec. 31, 2017USD ($) | |
Restructured loans | |||
Number of loans | loan | 7 | 5 | |
Pre‑modification outstanding Recorded Investment | $ 3,417,000 | $ 2,479,000 | |
Commitment to loan additional funds | 7,500,000 | ||
Recorded investment | 18,000,000 | $ 18,200,000 | |
Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 3,417,000 | 2,295,000 | |
Extended Maturity and Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 184,000 | ||
Commercial and industrial | |||
Restructured loans | |||
Number of loans | loan | 3 | 4 | |
Pre‑modification outstanding Recorded Investment | $ 983,000 | $ 2,203,000 | |
Commercial and industrial | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 983,000 | 2,019,000 | |
Commercial and industrial | Extended Maturity and Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 184,000 | ||
Commercial real estate | |||
Restructured loans | |||
Number of loans | loan | 4 | 1 | |
Pre‑modification outstanding Recorded Investment | $ 2,434,000 | $ 276,000 | |
Commercial real estate | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | 2,434,000 | $ 276,000 | |
Other | |||
Restructured loans | |||
Commitment to loan additional funds | $ 64,700 |
ALLOWANCE FOR LOAN LOSSES - Seg
ALLOWANCE FOR LOAN LOSSES - Segregated by loan class (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Loan losses segregated by loan class | |||
Beginning balance | $ 24,778 | $ 25,006 | $ 25,006 |
Provision (recapture) for loan loss | 865 | 960 | (338) |
Charge-offs | (472) | (508) | (1,125) |
Recoveries | 178 | 423 | 1,235 |
Net (charge-offs) recoveries | (294) | (85) | 110 |
Ending balance | 25,349 | 25,881 | 24,778 |
Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,035 | ||
Ending balance | 1,007 | 500 | 1,035 |
General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 23,743 | ||
Ending balance | 24,342 | 25,381 | 23,743 |
Commercial and industrial | |||
Loan losses segregated by loan class | |||
Beginning balance | 7,257 | 6,409 | 6,409 |
Provision (recapture) for loan loss | 479 | 1,454 | 642 |
Charge-offs | (469) | (508) | (904) |
Recoveries | 172 | 391 | 1,110 |
Net (charge-offs) recoveries | (297) | (117) | 206 |
Ending balance | 7,439 | 7,746 | 7,257 |
Commercial and industrial | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 852 | ||
Ending balance | 845 | 364 | 852 |
Commercial and industrial | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 6,405 | ||
Ending balance | 6,594 | 7,382 | 6,405 |
Commercial real estate | |||
Loan losses segregated by loan class | |||
Beginning balance | 10,375 | 10,770 | 10,770 |
Provision (recapture) for loan loss | 364 | (266) | (284) |
Charge-offs | (120) | ||
Recoveries | 3 | 3 | 9 |
Net (charge-offs) recoveries | 3 | 3 | (111) |
Ending balance | 10,742 | 10,507 | 10,375 |
Commercial real estate | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 64 | ||
Ending balance | 55 | 52 | 64 |
Commercial real estate | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 10,311 | ||
Ending balance | 10,687 | 10,455 | 10,311 |
Construction and development | |||
Loan losses segregated by loan class | |||
Beginning balance | 3,482 | 4,598 | 4,598 |
Provision (recapture) for loan loss | (126) | (453) | (1,116) |
Ending balance | 3,356 | 4,145 | 3,482 |
Construction and development | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 3,482 | ||
Ending balance | 3,356 | 4,145 | 3,482 |
1-4 family residential | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,326 | 1,286 | 1,286 |
Provision (recapture) for loan loss | 5 | (177) | 35 |
Charge-offs | (3) | (8) | |
Recoveries | 1 | 2 | 13 |
Net (charge-offs) recoveries | (2) | 2 | 5 |
Ending balance | 1,329 | 1,111 | 1,326 |
1-4 family residential | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 119 | ||
Ending balance | 107 | 119 | |
1-4 family residential | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,207 | ||
Ending balance | 1,222 | 1,111 | 1,207 |
Multi‑family residential | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,419 | 916 | 916 |
Provision (recapture) for loan loss | 101 | (116) | 503 |
Ending balance | 1,520 | 800 | 1,419 |
Multi‑family residential | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,419 | ||
Ending balance | 1,520 | 800 | 1,419 |
Consumer | |||
Loan losses segregated by loan class | |||
Beginning balance | 566 | 353 | 353 |
Provision (recapture) for loan loss | (51) | 235 | 263 |
Charge-offs | (93) | ||
Recoveries | 2 | 27 | 43 |
Net (charge-offs) recoveries | 2 | 27 | (50) |
Ending balance | 517 | 615 | 566 |
Consumer | Specific reserve | |||
Loan losses segregated by loan class | |||
Ending balance | 84 | ||
Consumer | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 566 | ||
Ending balance | 517 | 531 | 566 |
Agriculture | |||
Loan losses segregated by loan class | |||
Beginning balance | 68 | 79 | 79 |
Provision (recapture) for loan loss | (15) | (16) | (63) |
Recoveries | 52 | ||
Net (charge-offs) recoveries | 52 | ||
Ending balance | 53 | 63 | 68 |
Agriculture | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 68 | ||
Ending balance | 53 | 63 | 68 |
Other | |||
Loan losses segregated by loan class | |||
Beginning balance | 285 | 595 | 595 |
Provision (recapture) for loan loss | 108 | 299 | (318) |
Recoveries | 8 | ||
Net (charge-offs) recoveries | 8 | ||
Ending balance | 393 | 894 | 285 |
Other | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 285 | ||
Ending balance | 393 | $ 894 | 285 |
Unfunded Loan Commitment | |||
Loan losses segregated by loan class | |||
Beginning balance | 378,000 | ||
Ending balance | $ 378,000 | $ 378,000 |
ALLOWANCE FOR LOAN LOSSES - Ris
ALLOWANCE FOR LOAN LOSSES - Risk Grading (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Risk Grading | ||
Risk rating of loans | $ 2,361,076 | $ 2,317,789 |
Pass | ||
Risk Grading | ||
Risk rating of loans | 2,305,886 | 2,255,908 |
Special Mention | ||
Risk Grading | ||
Risk rating of loans | 18,838 | 19,571 |
Substandard | ||
Risk Grading | ||
Risk rating of loans | 36,352 | 42,310 |
Loss or Doubtful | ||
Risk Grading | ||
Risk rating of loans | 0 | 0 |
Commercial and industrial | ||
Risk Grading | ||
Risk rating of loans | 559,070 | 559,363 |
Commercial and industrial | Pass | ||
Risk Grading | ||
Risk rating of loans | 538,484 | 535,589 |
Commercial and industrial | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 7,841 | 8,403 |
Commercial and industrial | Substandard | ||
Risk Grading | ||
Risk rating of loans | 12,745 | 15,371 |
Commercial real estate | ||
Risk Grading | ||
Risk rating of loans | 767,108 | 738,293 |
Commercial real estate | Pass | ||
Risk Grading | ||
Risk rating of loans | 755,816 | 722,503 |
Commercial real estate | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 2,862 | 2,951 |
Commercial real estate | Substandard | ||
Risk Grading | ||
Risk rating of loans | 8,430 | 12,839 |
Construction and development | ||
Risk Grading | ||
Risk rating of loans | 436,260 | 449,211 |
Construction and development | Pass | ||
Risk Grading | ||
Risk rating of loans | 435,217 | 448,124 |
Construction and development | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 540 | 565 |
Construction and development | Substandard | ||
Risk Grading | ||
Risk rating of loans | 503 | 522 |
1-4 family residential | ||
Risk Grading | ||
Risk rating of loans | 260,580 | 258,584 |
1-4 family residential | Pass | ||
Risk Grading | ||
Risk rating of loans | 254,464 | 252,317 |
1-4 family residential | Substandard | ||
Risk Grading | ||
Risk rating of loans | 6,116 | 6,267 |
Multi‑family residential | ||
Risk Grading | ||
Risk rating of loans | 236,000 | 220,305 |
Multi‑family residential | Pass | ||
Risk Grading | ||
Risk rating of loans | 228,651 | 212,899 |
Multi‑family residential | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 7,349 | 7,406 |
Consumer | ||
Risk Grading | ||
Risk rating of loans | 40,869 | 40,433 |
Consumer | Pass | ||
Risk Grading | ||
Risk rating of loans | 40,565 | 40,144 |
Consumer | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 246 | 246 |
Consumer | Substandard | ||
Risk Grading | ||
Risk rating of loans | 58 | 43 |
Agriculture | ||
Risk Grading | ||
Risk rating of loans | 8,807 | 11,256 |
Agriculture | Pass | ||
Risk Grading | ||
Risk rating of loans | 8,776 | 11,223 |
Agriculture | Substandard | ||
Risk Grading | ||
Risk rating of loans | 31 | 33 |
Other | ||
Risk Grading | ||
Risk rating of loans | 52,382 | 40,344 |
Other | Pass | ||
Risk Grading | ||
Risk rating of loans | 43,913 | 33,109 |
Other | Substandard | ||
Risk Grading | ||
Risk rating of loans | $ 8,469 | $ 7,235 |
ALLOWANCE FOR LOAN LOSSES - Loa
ALLOWANCE FOR LOAN LOSSES - Loan Impairment Assessment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Loan Impairment Assessment | |||
Unpaid contractual principal balance | $ 31,919,000 | $ 33,338,000 | $ 34,018,000 |
Recorded investment with no allowance | 20,492,000 | 24,366,000 | 25,179,000 |
Recorded investment with allowance | 6,554,000 | 4,425,000 | 3,733,000 |
Total recorded investment | 27,046,000 | 28,791,000 | 28,912,000 |
Related allowance | 1,007,000 | 500,000 | 1,035,000 |
Average recorded investment year‑to‑date | 27,112,000 | 29,008,000 | 32,860,000 |
Interest income earned on impaired loans | 254,000 | 321,000 | |
Commercial and industrial | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 11,390,000 | 15,821,000 | 11,921,000 |
Recorded investment with no allowance | 4,693,000 | 9,340,000 | 6,100,000 |
Recorded investment with allowance | 2,169,000 | 2,475,000 | 1,192,000 |
Total recorded investment | 6,862,000 | 11,815,000 | 7,292,000 |
Related allowance | 845,000 | 364,000 | 852,000 |
Average recorded investment year‑to‑date | 7,072,000 | 12,090,000 | 12,090,000 |
Commercial real estate | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 7,006,000 | 6,564,000 | 9,646,000 |
Recorded investment with no allowance | 4,279,000 | 4,504,000 | 8,626,000 |
Recorded investment with allowance | 2,523,000 | 1,866,000 | 667,000 |
Total recorded investment | 6,802,000 | 6,370,000 | 9,293,000 |
Related allowance | 55,000 | 52,000 | 64,000 |
Average recorded investment year‑to‑date | 6,902,000 | 6,408,000 | 9,438,000 |
Construction and development | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 282,000 | 405,000 | 296,000 |
Recorded investment with no allowance | 234,000 | 414,000 | 251,000 |
Total recorded investment | 234,000 | 414,000 | 251,000 |
Average recorded investment year‑to‑date | 238,000 | 430,000 | 323,000 |
1-4 family residential | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 4,833,000 | 1,503,000 | 5,003,000 |
Recorded investment with no allowance | 2,878,000 | 1,427,000 | 3,050,000 |
Recorded investment with allowance | 1,862,000 | 1,874,000 | |
Total recorded investment | 4,740,000 | 1,427,000 | 4,924,000 |
Related allowance | 107,000 | 119,000 | |
Average recorded investment year‑to‑date | 4,802,000 | 1,524,000 | 3,369,000 |
Multi‑family residential | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 10,000 | ||
Recorded investment with no allowance | 5,000 | ||
Total recorded investment | 5,000 | ||
Average recorded investment year‑to‑date | 5,000 | 2,000 | |
Consumer | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 21,000 | 84,000 | |
Recorded investment with no allowance | 21,000 | ||
Recorded investment with allowance | 84,000 | ||
Total recorded investment | 21,000 | 84,000 | |
Related allowance | 84,000 | ||
Average recorded investment year‑to‑date | 21,000 | 56,000 | 21,000 |
Agriculture | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 278,000 | ||
Recorded investment with no allowance | 6,000 | ||
Total recorded investment | 6,000 | ||
Average recorded investment year‑to‑date | 14,000 | 1,000 | |
Other | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 8,387,000 | 8,673,000 | 7,152,000 |
Recorded investment with no allowance | 8,387,000 | 8,670,000 | 7,152,000 |
Total recorded investment | 8,387,000 | 8,670,000 | 7,152,000 |
Average recorded investment year‑to‑date | $ 8,077,000 | $ 8,481,000 | $ 7,616,000 |
ALLOWANCE FOR LOAN LOSSES - L56
ALLOWANCE FOR LOAN LOSSES - Loan losses on the basis of Company's impairment methodology (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | $ 27,046 | $ 28,912 |
Loans collectively evaluated for impairment | 2,334,030 | 2,288,877 |
Total | 2,361,076 | 2,317,789 |
Allowance allocated to specific reserves for loans individually evaluated for impairment | 1,000 | 1,000 |
Commercial and industrial | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 6,862 | 7,292 |
Loans collectively evaluated for impairment | 552,208 | 552,071 |
Total | 559,070 | 559,363 |
Commercial real estate | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 6,802 | 9,293 |
Loans collectively evaluated for impairment | 760,306 | 729,000 |
Total | 767,108 | 738,293 |
Construction and development | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 234 | 251 |
Loans collectively evaluated for impairment | 436,026 | 448,960 |
Total | 436,260 | 449,211 |
1-4 family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 4,740 | 4,924 |
Loans collectively evaluated for impairment | 255,840 | 253,660 |
Total | 260,580 | 258,584 |
Multi‑family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 236,000 | 220,305 |
Total | 236,000 | 220,305 |
Consumer | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 21 | |
Loans collectively evaluated for impairment | 40,848 | 40,433 |
Total | 40,869 | 40,433 |
Agriculture | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 8,807 | 11,256 |
Total | 8,807 | 11,256 |
Other | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 8,387 | 7,152 |
Loans collectively evaluated for impairment | 43,995 | 33,192 |
Total | $ 52,382 | $ 40,344 |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 80,572,000 | $ 80,219,000 | |
Less accumulated depreciation and amortization | (27,437,000) | (26,612,000) | |
Premises and equipment, net | 53,135,000 | 53,607,000 | |
Depreciation | 825,000 | $ 818,000 | |
Net gains and losses on sale of assets | 0 | $ 63,000 | |
Land | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 13,466,000 | 13,466,000 | |
Buildings and leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 51,819,000 | 51,664,000 | |
Furniture and equipment | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 15,085,000 | 14,887,000 | |
Vehicles | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 202,000 | $ 202,000 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Changes in goodwill | $ 0 | $ 0 |
Other Intangible Assets, net | ||
Gross Intangible Assets | 20,706 | 20,700 |
Accumulated Amortization | (14,185) | (13,930) |
Net Intangible Assets | $ 6,521 | $ 6,770 |
Core deposits | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 5 years 10 months 24 days | 6 years 2 months 12 days |
Gross Intangible Assets | $ 13,750 | $ 13,750 |
Accumulated Amortization | (12,187) | (12,051) |
Net Intangible Assets | $ 1,563 | $ 1,699 |
Customer relationships | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 10 years 9 months 18 days | 11 years |
Gross Intangible Assets | $ 6,629 | $ 6,629 |
Accumulated Amortization | (1,878) | (1,767) |
Net Intangible Assets | $ 4,751 | $ 4,862 |
Servicing asset | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 17 years 2 months 12 days | 17 years 3 months 18 days |
Gross Intangible Assets | $ 327 | $ 321 |
Accumulated Amortization | (120) | (112) |
Net Intangible Assets | $ 207 | $ 209 |
Minimum | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 7 years | |
Maximum | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 20 years |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS - Servicing Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Servicing Assets | ||
Balance at beginning of year | $ 209 | $ 186 |
Increase from loan sales | 6 | |
Amortization | (8) | (8) |
Balance at end of period | $ 207 | $ 178 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
DEPOSITS | ||
Interest-bearing demand accounts | $ 345,378 | $ 363,015 |
Money market accounts | 717,548 | 702,299 |
Saving accounts | 95,603 | 95,842 |
Certificates and other time deposits, $100,000 or greater | 161,777 | 172,469 |
Certificates and other time deposits, less than $100,000 | 158,875 | 159,558 |
Total interest-bearing deposits | 1,479,181 | 1,493,183 |
Noninterest-bearing deposits | 1,120,521 | 1,109,789 |
Total deposits | 2,599,702 | 2,602,972 |
Deposits from public entities | 41,000 | 45,300 |
Brokered deposits | $ 88,300 | $ 88,300 |
NOTES PAYABLE AND LINES OF CR61
NOTES PAYABLE AND LINES OF CREDIT (Details) $ in Millions | Dec. 13, 2017USD ($) | Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | Feb. 01, 2015USD ($) |
NOTES PAYABLE AND LINES OF CREDIT | ||||
Capital to risk based assets ratio | 15.40% | 15.40% | ||
Notes payable. | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Loan amount | $ 31 | |||
Line of Credit | Frost Bank | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Revolving line of credit available | $ 30 | |||
Revolving line of credit draw period | 12 months | |||
Debt term | 60 months | |||
Line of credit payment terms | payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months | |||
Outstanding borrowings | $ 0 | |||
Line of Credit | Frost Bank | Minimum | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Tangible capital | $ 240 | |||
Free cash flow coverage ratio | 1.25% | |||
Capital to risk based assets ratio | 12.00% | |||
Line of Credit | Frost Bank | Maximum | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Capital to risk based assets ratio | 15.00% | |||
Line of Credit | Federal Home Loan Bank | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Outstanding borrowings | $ 0 | $ 0 | ||
Total borrowing capacity available | 843.7 | 793.3 | ||
Federal funds line of credit | Federal Home Loan Bank | ||||
NOTES PAYABLE AND LINES OF CREDIT | ||||
Revolving line of credit available | 75 | 75 | ||
Outstanding borrowings | $ 0 | $ 0 | ||
Number of federal funds line of credit | item | 4 | 4 |
JUNIOR SUBORDINATED DEBT (Detai
JUNIOR SUBORDINATED DEBT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2007 | Dec. 31, 2006 | |
Junior subordinated notes | |||||
Junior subordinate debt | $ 6,726 | $ 6,726 | |||
Crosby Statutory Trust I | |||||
Junior subordinated notes | |||||
Proceeds of trust preferred securities | $ 5,000 | ||||
Junior subordinate debt | $ 5,200 | ||||
County Bancshares Trust I | |||||
Junior subordinated notes | |||||
Proceeds of trust preferred securities | $ 5,500 | ||||
Junior subordinate debt | $ 5,700 | ||||
Purchase of trust preferred securities | $ 4,100 | ||||
Trust preferred securities | $ 1,600 | ||||
LIBOR | Crosby Statutory Trust I | |||||
Junior subordinated notes | |||||
Variable interest rate spread (as a percent) | 1.44% | ||||
Interest rate (as a percent) | 3.56% | 3.03% | |||
LIBOR | County Bancshares Trust I | |||||
Junior subordinated notes | |||||
Variable interest rate spread (as a percent) | 2.00% | ||||
Interest rate (as a percent) | 3.72% | 3.36% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |||
Loans to related parties | $ 197,900,000 | $ 205,800,000 | |
Deemed nonaccrual, past due, restructured or classified as potential problem loans | 0 | 0 | |
Unfunded loan commitments to related parties | 77,700,000 | 69,700,000 | |
Related party deposits | 258,400,000 | $ 224,400,000 | |
Advertising expense to related party | $ 0 | $ 24,000 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Financial Assets | ||
Debt securities available for sale | $ 221,150 | $ 223,175 |
Financial Liabilities | ||
Transfers from level 1 and level 2 | 0 | 0 |
Transfers from level 2 and level 1 | 0 | 0 |
Transfers from level 1 and level 2 | 0 | 0 |
Transfers from level 2 and level 1 | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers from level 3 | 0 | 0 |
Recurring basis | ||
Financial Assets | ||
Total financial assets | 222,348 | 223,941 |
Financial Liabilities | ||
Total financial liabilities | 1,198 | 766 |
Level 1 Inputs | Recurring basis | Other securities | ||
Financial Assets | ||
Debt securities available for sale | 1,075 | 1,087 |
Level 2 Inputs | Recurring basis | Interest rate swaps with customers | ||
Financial Assets | ||
Interest rate swaps assets | 87 | 340 |
Financial Liabilities | ||
Interest rate swaps liabilities | 1,111 | 426 |
Level 2 Inputs | Recurring basis | Interest rate swaps with financial institutions | ||
Financial Assets | ||
Interest rate swaps assets | 1,111 | 426 |
Financial Liabilities | ||
Interest rate swaps liabilities | 87 | 340 |
Level 2 Inputs | Recurring basis | State and municipal securities | ||
Financial Assets | ||
Debt securities available for sale | 59,138 | 61,916 |
Level 2 Inputs | Recurring basis | Debt securities | ||
Financial Assets | ||
Debt securities available for sale | 16,759 | 16,945 |
Level 2 Inputs | Recurring basis | Collateralized mortgage obligations | ||
Financial Assets | ||
Debt securities available for sale | 64,609 | 61,253 |
Level 2 Inputs | Recurring basis | Mortgage-backed securities | ||
Financial Assets | ||
Debt securities available for sale | $ 79,569 | $ 81,974 |
FAIR VALUE DISCLOSURES - Certai
FAIR VALUE DISCLOSURES - Certain assets measured on a non recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Impaired Loans | ||
Total loans | $ 2,330,704 | $ 2,286,766 |
Level 3 Inputs | Non-recurring basis | ||
Impaired Loans | ||
Total loans | 5,547 | 2,698 |
Level 3 Inputs | Non-recurring basis | Commercial and industrial | ||
Impaired Loans | ||
Total loans | 1,324 | 340 |
Level 3 Inputs | Non-recurring basis | Commercial real estate | ||
Impaired Loans | ||
Total loans | 2,468 | 603 |
Level 3 Inputs | Non-recurring basis | 1-4 family residential | ||
Impaired Loans | ||
Total loans | $ 1,755 | $ 1,755 |
FAIR VALUE DISCLOSURES - Non Fi
FAIR VALUE DISCLOSURES - Non Financial Assets and Non Financial Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Non‑Financial Assets and Non‑Financial Liabilities | |
Carrying value of foreclosed assets prior to measurement | $ 227 |
Charge-offs / Write-downs | (51) |
Fair value of foreclosed assets | 176 |
Previously reported | |
Non‑Financial Assets and Non‑Financial Liabilities | |
Carrying value of foreclosed assets prior to measurement | 881 |
Fair value of foreclosed assets | $ 881 |
FAIR VALUE DISCLOSURES - Fair m
FAIR VALUE DISCLOSURES - Fair market values of all financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Assets: | ||
Interest bearing deposits in banks | $ 238,402 | $ 266,944 |
Time deposits in other banks | 600 | 600 |
Debt securities available for sale | 221,150 | 223,175 |
Debt securities held to maturity | 33 | 33 |
Equity investments | 12,675 | 12,226 |
Loans, including held for sale, net | 113 | 1,460 |
Accrued interest receivable | 6,100 | 6,100 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,120,521 | 1,109,789 |
Interest-bearing deposits | 1,479,181 | 1,493,183 |
Repurchase agreements | 861 | 1,525 |
Junior subordinated debt | 6,726 | 6,726 |
Fair Value | ||
Financial Assets: | ||
Total financial assets | 2,928,595 | 2,938,391 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,120,521 | 1,109,789 |
Interest-bearing deposits | 1,401,500 | 1,437,013 |
Repurchase agreements | 861 | 1,525 |
Junior subordinated debt | 6,726 | 6,726 |
Accrued interest payable | 368 | 374 |
Total financial liabilities | 2,531,174 | 2,556,193 |
Carrying Amount | ||
Financial Assets: | ||
Total financial assets | 2,923,838 | 2,926,873 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,120,521 | 1,109,789 |
Interest-bearing deposits | 1,479,181 | 1,493,183 |
Repurchase agreements | 861 | 1,525 |
Junior subordinated debt | 6,726 | 6,726 |
Accrued interest payable | 368 | 374 |
Total financial liabilities | 2,608,855 | 2,612,363 |
Interest rate swaps with customers | Fair Value | ||
Financial Liabilities: | ||
Interest rate swaps liabilities | 1,111 | 426 |
Interest rate swaps with customers | Carrying Amount | ||
Financial Liabilities: | ||
Interest rate swaps liabilities | 1,111 | 426 |
Interest rate swaps with financial institutions | Fair Value | ||
Financial Liabilities: | ||
Interest rate swaps liabilities | 87 | 340 |
Interest rate swaps with financial institutions | Carrying Amount | ||
Financial Liabilities: | ||
Interest rate swaps liabilities | 87 | 340 |
Level 1 Inputs | Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 41,513 | 59,255 |
Interest bearing deposits in banks | 238,402 | 266,944 |
Debt securities available for sale | 1,075 | 1,087 |
Level 1 Inputs | Carrying Amount | ||
Financial Assets: | ||
Cash and due from banks | 41,513 | 59,255 |
Interest bearing deposits in banks | 238,402 | 266,944 |
Debt securities available for sale | 1,075 | 1,087 |
Level 2 Inputs | Fair Value | ||
Financial Assets: | ||
Time deposits in other banks | 600 | 600 |
Debt securities available for sale | 220,075 | 222,088 |
Debt securities held to maturity | 35 | 35 |
Bank-owned life insurance | 70,161 | 68,010 |
Servicing asset | 207 | 209 |
Accrued interest receivable | 7,082 | 7,429 |
Level 2 Inputs | Carrying Amount | ||
Financial Assets: | ||
Time deposits in other banks | 600 | 600 |
Debt securities available for sale | 220,075 | 222,088 |
Debt securities held to maturity | 33 | 33 |
Bank-owned life insurance | 70,161 | 68,010 |
Servicing asset | 207 | 209 |
Accrued interest receivable | 7,082 | 7,429 |
Level 2 Inputs | Interest rate swaps with customers | Fair Value | ||
Financial Assets: | ||
Interest rate swaps assets | 87 | 340 |
Level 2 Inputs | Interest rate swaps with customers | Carrying Amount | ||
Financial Assets: | ||
Interest rate swaps assets | 87 | 340 |
Level 2 Inputs | Interest rate swaps with financial institutions | Fair Value | ||
Financial Assets: | ||
Interest rate swaps assets | 1,111 | 426 |
Level 2 Inputs | Interest rate swaps with financial institutions | Carrying Amount | ||
Financial Assets: | ||
Interest rate swaps assets | 1,111 | 426 |
Level 3 Inputs | Fair Value | ||
Financial Assets: | ||
Equity investments | 12,675 | 12,226 |
Loans, including held for sale, net | 2,335,572 | 2,299,742 |
Level 3 Inputs | Carrying Amount | ||
Financial Assets: | ||
Equity investments | 12,675 | 12,226 |
Loans, including held for sale, net | $ 2,330,817 | $ 2,288,226 |
FAIR VALUE DISCLOSURES - Equity
FAIR VALUE DISCLOSURES - Equity Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Equity Investments | ||
Equity investments, total | $ 12,675 | $ 12,226 |
Federal Reserve stock | ||
Equity Investments | ||
Equity investments, total | 9,271 | 9,271 |
FHLB stock | ||
Equity Investments | ||
Equity investments, total | 1,194 | 1,189 |
TIB stock | ||
Equity Investments | ||
Equity investments, total | 141 | 141 |
CRA investments | ||
Equity Investments | ||
Equity investments, total | $ 2,069 | $ 1,625 |
COMMITMENTS AND CONTINGENCIES69
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | ||
Commitments to extend credit, variable | $ 665,082 | $ 626,441 |
Commitments to extend credit, fixed | 63,396 | 61,608 |
Total | 728,478 | 688,049 |
Standby letters of credit | $ 26,136 | $ 28,977 |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Derivative Financial (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | |
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Deterioration in the customer’s credit worthiness | $ 0 | $ 0 |
Number of interest rate swap agreements | item | 14 | 14 |
Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional Amount | $ 84,046 | $ 84,922 |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | 8,029 | 25,882 |
Fair value asset | $ 87 | $ 340 |
Weighted Average Maturity | 4 years 3 months 18 days | 7 years 9 months 29 days |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | $ 33,994 | $ 16,579 |
Fair value asset | $ 1,111 | $ 426 |
Weighted Average Maturity | 8 years 6 months 4 days | 8 years 1 month 13 days |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 33,994 | $ 16,579 |
Fair value liability | $ (1,111) | $ (426) |
Weighted Average Maturity | 4 years 3 months 18 days | 7 years 9 months 29 days |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 8,029 | $ 25,882 |
Fair value liability | $ (87) | $ (340) |
Weighted Average Maturity | 8 years 6 months 4 days | 8 years 1 month 13 days |
Minimum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.35% | 4.75% |
Minimum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.00% | 4.00% |
Minimum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.00% | 4.00% |
Minimum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.35% | 4.75% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.00% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.00% | |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 7.25% | 7.25% |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.37% | 5.15% |
Maximum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.37% | 5.15% |
Maximum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 7.25% | 7.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.20% | 3.20% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.25% | 3.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.25% | 3.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.20% | 3.20% |
COMMITMENTS AND CONTINGENCIES71
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Repurchase Agreements (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Repurchase Agreements | ||
Outstanding funds | $ 861,000 | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES72
COMMITMENTS AND CONTINGENCIES, INCLUDING FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK - Contingent Liabilities & Lease Commitments (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Contingent Liabilities | |||
Number of private investment funds under the Small Business Investment Company (SBIC) program | item | 2 | ||
Unfunded commitments | $ 3,400,000 | $ 3,800,000 | |
Cumulative capital contributions | 2,100,000 | $ 1,600,000 | |
Lease Commitments | |||
Rent expense | $ 465,000 | $ 513,000 |
EMPLOYEE BENEFIT PLANS AND DE73
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Employee Benefit Plans | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Term of service for 401K participation | 3 months | |||
Company's contributions to the 401K plan | $ 659,000 | $ 586,000 | ||
Executive Deferred Compensation Arrangements | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Employers contribution of incentive bonus (as a percent) | 25.00% | |||
Deferred plan liability | $ 2,400,000 | $ 2,400,000 | ||
2008 Salary Continuation Agreement | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | 483,000 | 503,000 | ||
Annual compensation payment amount | $ 100,000 | |||
Contractual term | 10 years | |||
Commencement age | 65 years | |||
2017 Salary Continuation Agreement 2017 | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | $ 86,000 | 32,000 | ||
Annual compensation payment amount | $ 200,000 | |||
Contractual term | 10 years | |||
Commencement age | 70 years | |||
Change of Control and Non‑Competition Agreements | VB Texas, Inc. | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Aggregate amount | $ 2,500,000 | |||
Change of Control and Non‑Competition Agreements | Executive Officers | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | 2,200,000 | |||
Deferred compensation expense | $ 0 |
STOCK OPTION PLANS - Narrative
STOCK OPTION PLANS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018shares | |
2006 Plan | |
STOCK OPTION PLANS | |
Vesting period | 10 years |
2006 Plan | Granted after October 24, 2016 | |
STOCK OPTION PLANS | |
Number of options granted | 0 |
2011 Plan | |
STOCK OPTION PLANS | |
Number of options outstanding | 0 |
2014 Plan | |
STOCK OPTION PLANS | |
Number of options authorized | 1,127,200 |
Option expiration term | 10 years |
Options available for future grant | 959,200 |
2014 Plan | Minimum | |
STOCK OPTION PLANS | |
Option expiration term | 1 year |
2014 Plan | Maximum | |
STOCK OPTION PLANS | |
Option expiration term | 5 years |
2014 Plan | Granted after May 20, 2024 | |
STOCK OPTION PLANS | |
Number of options granted | 0 |
2017 Plan | |
STOCK OPTION PLANS | |
Number of options authorized | 600,000 |
Options available for future grant | 385,920 |
STOCK OPTION PLANS - Stock opti
STOCK OPTION PLANS - Stock option activity (Details) - Stock option plans - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Number of Shares Underlying Options | ||
Outstanding, beginning of period | 260,322 | 248,314 |
Forfeited | (2,000) | |
Outstanding, end of period | 260,322 | 246,314 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period | $ 16 | $ 12.80 |
Forfeited | 16.80 | |
Outstanding, end of period | $ 16 | $ 12.77 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information - Stock Options (Details) - Stock option plans - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
STOCK OPTION PLANS | ||||
Number of shares underlying options exercisable | 141,122 | |||
Number of shares underlying options unvested | 119,200 | |||
Number of shares underlying options outstanding | 260,322 | |||
Weighted-average exercise price per share exercisable | $ 12.92 | |||
Weighted-average exercise price per share unvested | 19.66 | |||
Weighted-average exercise price per share outstanding | $ 16 | $ 16 | $ 12.77 | $ 12.80 |
Aggregate intrinsic value exercisable | $ 2,332 | |||
Aggregate intrinsic value unvested | 1,166 | |||
Aggregate intrinsic value outstanding | $ 3,498 | |||
Weighted-average contractual term exercisable (years) | 4 years 7 months 6 days | |||
Weighted-average contractual term unvested (years) | 8 years 6 months | |||
Weighted-average contractual term outstanding (years) | 6 years 4 months 24 days |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Outstanding, beginning of period | shares | 212,580 |
Granted | shares | 1,500 |
Outstanding, end of period | shares | 214,080 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning of period | $ / shares | $ 27.27 |
Granted | $ / shares | 29.27 |
Outstanding, end of period | $ / shares | $ 27.29 |
STOCK-BASED COMPENSATION - Ad78
STOCK-BASED COMPENSATION - Additional Information - Restricted stock (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 392,000 | $ 9,000 | |
Unrecognized compensation expense | $ 5,800,000 | ||
Weighted average period | 2 years 10 months 24 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Accrued dividends payable | $ 21,000 | ||
Number of shares of restricted stock granted | 1,500 | ||
Number of shares underlying restricted stock unvested | 214,080 | 212,580 | |
Number of shares underlying restricted stock outstanding | 214,080 | ||
Weighted-average grant date fair value per share unvested | $ 27.29 | ||
Weighted-average grant date fair value per share unvested outstanding | $ 27.29 | $ 27.27 | |
Aggregate grant date fair value unvested | $ 5,842,000 | ||
Aggregate grant date fair value outstanding | $ 5,842,000 | ||
Weighted-average contractual term unvested (years) | 4 years 2 months 12 days | ||
Weighted-average contractual term outstanding (years) | 4 years 2 months 12 days | ||
Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 2 years | ||
Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Regulatory matters | ||
Capital conversion buffer (as a percent) | 2.50% | |
Term of implementation of the capital conservation buffer | 4 years | |
Common Equity Tier I to Risk‑Weighted Assets | ||
Actual amount | $ 368,675 | $ 361,322 |
Common Equity Tier One Capital Ratio | 14.10% | 14.20% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 117,463 | $ 114,628 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 182,720 | $ 178,310 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 375,075 | $ 367,722 |
Actual ratio | 14.40% | 14.40% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 156,617 | $ 152,837 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 221,874 | $ 216,519 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 400,802 | $ 392,878 |
Actual ratio | 15.40% | 15.40% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 208,822 | $ 203,782 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 274,079 | $ 267,464 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Leverage Ratio | ||
Actual amount | $ 375,075 | $ 367,722 |
Actual ratio | 12.60% | 12.30% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 119,237 | $ 119,769 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 119,237 | $ 119,769 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Dividend restrictions term | 2 years | |
Bank Only | ||
Common Equity Tier I to Risk‑Weighted Assets | ||
Actual amount | $ 329,156 | $ 322,414 |
Common Equity Tier One Capital Ratio | 12.60% | 12.70% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 117,353 | $ 114,252 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 182,549 | $ 178,150 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Required to be Considered Well Capitalized, amount | $ 169,509 | $ 165,425 |
Required to be Considered Well Capitalized, ratio | 6.50% | 6.50% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 329,156 | $ 322,414 |
Actual ratio | 12.60% | 12.70% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 156,470 | $ 152,700 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 221,666 | $ 216,325 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Required to be Considered Well Capitalized, amount | $ 208,627 | $ 203,600 |
Required to be Considered Well Capitalized, ratio | 8.00% | 8.00% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 354,882 | $ 347,569 |
Actual ratio | 13.60% | 13.70% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 208,627 | $ 203,600 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 273,823 | $ 267,726 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Required to be Considered Well Capitalized, amount | $ 260,784 | $ 254,501 |
Required to be Considered Well Capitalized, ratio | 10.00% | 10.00% |
Leverage Ratio | ||
Actual amount | $ 329,156 | $ 322,414 |
Actual ratio | 11.00% | 10.80% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 119,237 | $ 119,403 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 119,237 | $ 119,403 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Required to be Considered Well Capitalized, amount | $ 149,046 | $ 149,253 |
Required to be Considered Well Capitalized, ratio | 5.00% | 5.00% |
Minimum | ||
Regulatory matters | ||
Capital conversion buffer (as a percent) | 0.625% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
INCOME TAXES | |||
Provision for income tax expense | $ 2,139 | $ 3,032 | |
Effective tax rate (as a percent) | 19.00% | 30.70% | |
Statutory rate (as a percent) | 21.00% | 35.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
EARNINGS PER SHARE | ||
Net income for common shareholders | $ 9,112 | $ 6,862 |
Weighted-average shares (thousands) | ||
Basic weighted-average shares outstanding | 24,833 | 22,062 |
Dilutive effect of outstanding stock options and unvested restricted stock awards | 121 | 100 |
Diluted weighted-average shares outstanding | 24,954 | 22,162 |
Earnings per share: | ||
Basic | $ 0.37 | $ 0.31 |
Diluted | $ 0.37 | $ 0.31 |