Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 07, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Allegiance Bancshares, Inc. | ||
Trading Symbol | abtx | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 13,284,655 | ||
Entity Public Float | $ 434 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,642,081 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 133,124 | $ 94,073 |
Interest-bearing deposits at other financial institutions | 48,979 | 48,025 |
Total cash and cash equivalents | 182,103 | 142,098 |
Available for sale securities, at fair value | 309,615 | 316,455 |
Loans held for investment | 2,270,876 | 1,891,635 |
Less: allowance for loan losses | (23,649) | (17,911) |
Loans, net | 2,247,227 | 1,873,724 |
Accrued interest receivable | 12,194 | 9,007 |
Premises and equipment, net | 18,477 | 18,340 |
Other real estate owned | 365 | 1,503 |
Federal Home Loan Bank stock | 12,862 | 13,175 |
Bank owned life insurance | 22,422 | 21,837 |
Goodwill | 39,389 | 39,389 |
Core deposit intangibles, net | 3,274 | 4,055 |
Other assets | 12,303 | 11,365 |
TOTAL ASSETS | 2,860,231 | 2,450,948 |
Deposits: | ||
Noninterest-bearing | 683,110 | 593,751 |
Interest-bearing | ||
Demand | 215,499 | 114,772 |
Money market and savings | 554,051 | 483,266 |
Certificates and other time | 761,314 | 678,394 |
Total interest-bearing deposits | 1,530,864 | 1,276,432 |
Total deposits | 2,213,974 | 1,870,183 |
Accrued interest payable | 610 | 285 |
Borrowed funds | 282,569 | 285,569 |
Subordinated debt | 48,659 | 9,196 |
Other liabilities | 7,554 | 5,898 |
Total liabilities | 2,553,366 | 2,171,131 |
COMMITMENTS AND CONTINGENCIES (See Note 15) | ||
SHAREHOLDERS’ EQUITY: | ||
Preferred stock, $1 par value; 1,000,000 shares authorized; there were no shares issued and outstanding of Series A or Series B, each has a $1,000 liquidation value | 0 | 0 |
Common stock, $1 par value; 40,000,000 shares authorized; 13,226,826 shares issued and outstanding at December 31, 2017 and 12,958,341 shares issued and outstanding at December 31, 2016 | 13,227 | 12,958 |
Capital surplus | 218,408 | 212,649 |
Retained earnings | 74,894 | 57,262 |
Accumulated other comprehensive income (loss) | 336 | (3,052) |
Total shareholders’ equity | 306,865 | 279,817 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 2,860,231 | $ 2,450,948 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 13,226,826 | 12,958,341 |
Common stock, shares outstanding | 13,226,826 | 12,958,341 |
Series A Preferred Stock | ||
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, liquidation value (in dollars) | $ 1,000 | $ 1,000 |
Series B Preferred Stock | ||
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, liquidation value (in dollars) | $ 1,000 | $ 1,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INTEREST INCOME: | |||
Loans, including fees | $ 110,331 | $ 93,356 | $ 85,443 |
Securities: | |||
Taxable | 2,111 | 1,807 | 1,122 |
Tax-exempt | 6,334 | 5,044 | 2,002 |
Deposits in other financial institutions | 662 | 571 | 239 |
Total interest income | 119,438 | 100,778 | 88,806 |
INTEREST EXPENSE: | |||
Demand, money market and savings deposits | 3,159 | 2,437 | 2,001 |
Certificates and other time deposits | 9,060 | 7,044 | 5,272 |
Borrowed funds | 2,922 | 945 | 789 |
Subordinated debt | 629 | 488 | 578 |
Total interest expense | 15,770 | 10,914 | 8,640 |
NET INTEREST INCOME | 103,668 | 89,864 | 80,166 |
Provision for loan losses | 13,188 | 5,469 | 5,792 |
Net interest income after provision for loan losses | 90,480 | 84,395 | 74,374 |
NONINTEREST INCOME: | |||
Nonsufficient funds fees | 685 | 661 | 703 |
Service charges on deposit accounts | 783 | 677 | 680 |
Gain on sale of branch assets | 0 | 2,050 | 0 |
Gain (loss) on sale of securities | 18 | 30 | (37) |
Gain (loss) on sale of other real estate | 6 | 266 | (5) |
Gain on sale of loans | 0 | 0 | 235 |
Bank owned life insurance income | 585 | 626 | 604 |
Rebate from correspondent bank | 1,327 | 650 | 254 |
Other | 2,457 | 2,308 | 1,558 |
Total noninterest income | 5,861 | 7,268 | 3,992 |
NONINTEREST EXPENSE: | |||
Salaries and employee benefits | 44,745 | 38,858 | 35,324 |
Net occupancy and equipment | 5,452 | 4,944 | 4,826 |
Depreciation | 1,637 | 1,627 | 1,614 |
Data processing and software amortization | 4,047 | 2,633 | 3,044 |
Professional fees | 2,926 | 2,234 | 1,671 |
Regulatory assessments and FDIC insurance | 2,273 | 1,581 | 1,346 |
Core deposit intangibles amortization | 781 | 785 | 830 |
Communications | 983 | 1,055 | 1,290 |
Advertising | 1,289 | 945 | 781 |
Other | 5,829 | 4,596 | 4,079 |
Total noninterest expense | 69,962 | 59,258 | 54,805 |
INCOME BEFORE INCOME TAXES | 26,379 | 32,405 | 23,561 |
Provision for income taxes | 8,747 | 9,554 | 7,775 |
NET INCOME | 17,632 | 22,851 | 15,786 |
Preferred stock dividends | 0 | 0 | 559 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 17,632 | $ 22,851 | $ 15,227 |
EARNINGS PER COMMON SHARE: | |||
Basic (in dollars per share) | $ 1.34 | $ 1.78 | $ 1.45 |
Diluted (in dollars per share) | $ 1.31 | $ 1.75 | $ 1.43 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 17,632 | $ 22,851 | $ 15,786 |
Unrealized gain (loss) on securities: | |||
Change in unrealized holding gains (losses) on available for sale securities during the period | 5,213 | (7,799) | 2,234 |
Reclassification of amount realized through the sale of securities | (18) | (30) | 37 |
Total other comprehensive income (loss) | 5,195 | (7,829) | 2,271 |
Deferred tax (expense) benefit related to other comprehensive income | (1,807) | 2,760 | (803) |
Other comprehensive income (loss), net of tax | 3,388 | (5,069) | 1,468 |
Comprehensive income | $ 21,020 | $ 17,782 | $ 17,254 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Private Placement | IPO | Preferred Stock | Common Stock | Common StockPrivate Placement | Common StockIPO | Capital Surplus | Capital SurplusPrivate Placement | Capital SurplusIPO | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Treasury StockPrivate Placement |
Balance (in shares) at Dec. 31, 2014 | 0 | 7,477,309 | ||||||||||||
Balance at Dec. 31, 2014 | $ 131,778 | $ 0 | $ 7,477 | $ 104,568 | $ 19,184 | $ 549 | $ 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income | 15,786 | 15,786 | ||||||||||||
Other comprehensive Income (loss) | 1,468 | 1,468 | ||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards (in shares) | 3,983 | |||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards | 11 | $ 4 | 7 | |||||||||||
Repurchase of treasury stock | (52) | (52) | ||||||||||||
Issuance of common stock (in shares) | 4,884 | 2,990,000 | ||||||||||||
Issuance of common stock in initial public offering, net of offering expenses | $ 122 | $ 57,138 | $ 5 | $ 2,990 | $ 103 | $ 54,148 | $ 14 | |||||||
Common stock issued in connection with the acquisition of F&M Bancshares, Inc. (in shares) | 2,338,520 | |||||||||||||
Common stock issued in connection with the acquisition of F&M Bancshares, Inc. | 51,447 | $ 2,339 | 49,108 | |||||||||||
Preferred stock issued in connection with the acquisition of F&M Bancshares, Inc. (in shares) | 11,550 | |||||||||||||
Preferred stock issued in connection with the acquisition of F&M Bancshares, Inc. | 11,550 | $ 11,550 | ||||||||||||
Redemption of preferred stock (in shares) | (11,550) | |||||||||||||
Redemption of preferred stock | (11,550) | $ (11,550) | ||||||||||||
Preferred stock dividends | (559) | (559) | ||||||||||||
Stock based compensation expense | 1,351 | 1,351 | ||||||||||||
Balance (in shares) at Dec. 31, 2015 | 0 | 12,814,696 | ||||||||||||
Balance at Dec. 31, 2015 | 258,490 | $ 0 | $ 12,815 | 209,285 | 34,411 | 2,017 | (38) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income | 22,851 | 22,851 | ||||||||||||
Other comprehensive Income (loss) | (5,069) | (5,069) | ||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards (in shares) | 143,645 | |||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards | 2,006 | $ 143 | 1,863 | |||||||||||
Issuance of treasury stock | 38 | 38 | ||||||||||||
Stock based compensation expense | 1,501 | 1,501 | ||||||||||||
Balance (in shares) at Dec. 31, 2016 | 0 | 12,958,341 | ||||||||||||
Balance at Dec. 31, 2016 | 279,817 | $ 0 | $ 12,958 | 212,649 | 57,262 | (3,052) | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income | 17,632 | 17,632 | ||||||||||||
Other comprehensive Income (loss) | 3,388 | 3,388 | ||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards (in shares) | 268,485 | |||||||||||||
Common stock issued in connection with the exercise of stock options and restricted stock awards | 4,248 | $ 269 | 3,979 | |||||||||||
Stock based compensation expense | 1,780 | 1,780 | ||||||||||||
Balance (in shares) at Dec. 31, 2017 | 0 | 13,226,826 | ||||||||||||
Balance at Dec. 31, 2017 | $ 306,865 | $ 0 | $ 13,227 | $ 218,408 | $ 74,894 | $ 336 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 17,632 | $ 22,851 | $ 15,786 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and core deposit intangibles amortization | 2,418 | 2,412 | 2,444 |
Provision for loan losses | 13,188 | 5,469 | 5,792 |
(Gain) loss on the sale of securities | (18) | (30) | 37 |
Deferred income tax expense (benefit) | 427 | (1,608) | (446) |
Net amortization of premium on investments | 3,427 | 2,785 | 1,209 |
Excess tax benefit related to the exercise of stock options | (1,149) | (371) | (40) |
Bank owned life insurance | (585) | (626) | (604) |
Net accretion of premium on loans | (632) | (1,487) | (3,492) |
Net amortization of discount on subordinated debentures | 108 | 107 | 218 |
Net amortization of discount on certificates of deposit | (3) | (247) | (739) |
Net (gain) loss on sale or write down of premises, equipment and other real estate | 0 | (60) | 5 |
Net gain on sale of branch assets | 0 | (2,050) | 0 |
Net gain on sale of loans | 0 | 0 | (235) |
Federal Home Loan Bank stock dividends | (273) | (101) | (2) |
Stock based compensation expense | 1,780 | 1,501 | 1,351 |
Increase in accrued interest receivable and other assets | (6,018) | (259) | (1,366) |
Increase (decrease) in accrued interest payable and other liabilities | 3,130 | (851) | 503 |
Net cash provided by operating activities | 33,432 | 27,435 | 20,421 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from maturities and principal paydowns of available for sale securities | 2,007,842 | 2,566,082 | 2,226,000 |
Proceeds from sales of available for sale securities | 39,125 | 2,500 | 16,943 |
Purchase of available for sale securities | (2,038,323) | (2,730,524) | (2,307,331) |
Net change in total loans | (386,059) | (229,286) | (273,648) |
Proceeds from sale of loans | 0 | 0 | 2,074 |
Purchase of bank premises and equipment | (2,133) | (1,511) | (1,939) |
Proceeds from sale of bank premises, equipment and other real estate | 1,138 | 0 | 0 |
Purchase of bank owned life insurance | 0 | 0 | (10,000) |
Net redemptions (purchases) of Federal Home Loan Bank stock | 586 | (10,505) | (2,101) |
Net cash paid for sale of branch assets | 0 | (5,250) | 0 |
Net cash and cash equivalents acquired in the purchase of F&M Bancshares, Inc. | 0 | 0 | 106,486 |
Net cash used in investing activities | (377,824) | (408,494) | (243,516) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net increase (decrease) in noninterest-bearing deposits | 89,359 | (20,041) | 60,996 |
Net increase in interest-bearing deposits | 254,435 | 157,723 | 75,380 |
Paydowns on borrowed funds | (3,000) | (20,000) | (45,500) |
Proceeds from borrowed funds | 0 | 255,000 | 68,000 |
Proceeds from issuance of subordinated notes, net of issuance costs | 39,355 | 0 | 0 |
Preferred stock dividends | 0 | 0 | (559) |
Redemption of preferred stock | 0 | 0 | (11,550) |
Proceeds from initial public offering | 0 | 0 | 57,138 |
Proceeds from the issuance of common stock, stock option exercises, restricted stock awards and the ESPP | 4,248 | 2,006 | 133 |
Issuance (repurchase) of treasury stock | 0 | 38 | (52) |
Net cash provided by financing activities | 384,397 | 374,726 | 203,986 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 40,005 | (6,333) | (19,109) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 142,098 | 148,431 | 167,540 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 182,103 | 142,098 | 148,431 |
NONCASH ACTIVITIES: | |||
Acquired loans transferred to loans held for sale | 0 | 0 | 33,409 |
Acquired premises and equipment and accrued interest receivable transferred to branch assets held for sale | 0 | 0 | 1,662 |
SUPPLEMENTAL INFORMATION: | |||
Income taxes paid | 7,850 | 11,400 | 7,500 |
Interest paid | $ 15,442 | $ 10,500 | $ 7,820 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations and Principles of Consolidation- The consolidated financial statements include Allegiance Bancshares, Inc. (“Allegiance”) and its wholly-owned subsidiary, Allegiance Bank (the “Bank”, and together with Allegiance, collectively referred to as the “Company”) provide commercial and retail loans and commercial banking services. Intercompany transactions and balances are eliminated in consolidation under U.S. generally accepted accounting principles (“GAAP”). The Company derives substantially all of its revenues and income from the operation of the Bank. Allegiance Bank is a Texas banking association which began operations in October 2007. The Company is focused on delivering a wide variety of relationship-driven commercial banking products and community-oriented services tailored to meet the needs of small to mid-sized businesses, professionals and individuals through its 16 offices and one loan production office in Houston, Texas and the surrounding region, as of the year ended December 31, 2017 . The Bank provides its customers with a variety of banking services including checking accounts, savings accounts and certificates of deposit and its primary lending products are commercial, personal, automobile, mortgage and home improvement loans. The Bank also offers safe deposit boxes, automated teller machines, drive-through services and 24-hour depository facilities. Use of Estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the reporting of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Initial Public Offering (IPO) – In October 2015, Allegiance completed the Initial Public Offering of its Common Stock. In connection with Allegiance's Initial Public Offering, Allegiance issued and sold 2,990,000 shares of Common Stock at $21 per share resulting in total proceeds received by Allegiance net of offering costs of $57.1 million . Cash and cash equivalents —Cash and cash equivalents include cash, deposits with other financial institutions with maturities not greater than one year . Net cash flows are reported for customer loan and deposit transactions. Securities —Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value. Unrealized gains and losses are excluded from earnings and reported, net of tax, as a separate component of shareholders’ equity until realized. Securities within the available for sale portfolio may be used as part of the Company’s asset/liability strategy and may be sold in response to changes in interest rate risk, prepayment risk or other similar economic factors. Interest earned on these assets is included in interest income. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income, net of applicable taxes. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The previous amortized cost bases less the OTTI recognized in earnings shall become the new amortized cost basis of the security. Loans held for Sale —Loans held for sale are carried at lower of aggregate cost or fair value. During 2015, the Company purchased F&M Bancshares, Inc. At December 31, 2015, loans held for sale consisted of loans at two former F&M Bancshares branches in Central Texas that were for sale. On January 31, 2016, the Company completed the sale of these two branches. Loans Held for Investment —Loans held for investment are those that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Loans are typically secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Interest income is accrued on the unpaid principal balance. Nonrefundable Fees and Costs Associated with Lending Activities — Loan commitment and loan origination fees, and certain direct origination costs, are deferred and recognized in interest income as an adjustment to yield without anticipating prepayments using the interest method over the related loan life or; if the commitment expires unexercised, balances are recognized in income upon expiration of the commitment. Nonperforming and Past Due Loans —The Company has several procedures in place to assist it in maintaining the overall quality of its loan portfolio. The Company has established underwriting guidelines to be followed by its officers, and monitors its delinquency levels for any negative or adverse trends. There can be no assurance, however, that the Company’s loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions or other factors. Past due status is based on the contractual terms of the loan. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The Company generally classifies a loan as nonperforming, automatically places the loan on nonaccrual status, ceases accruing interest and reverses all unpaid accrued interest against interest income, when, in management’s opinion, the borrower may be unable to meet payment obligations, when the payment of principal or interest on a loan is delinquent for 90 days, as well as when required by regulatory provisions, unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. Any payments received on nonaccrual loans are applied first to outstanding loan amounts. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan. Nonaccrual loans and loans past due 90 days include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. When available information confirms that specific loans, or portions thereof, are uncollectible, these amounts are charged-off against the allowance. All loan types are considered delinquent after 30 days past due and are typically charged-off or charged-down no later than 120 days past due, with consideration of, but not limited to, the following criteria in determining the need and optional timing of the charge-off or charge-down: (1) the Bank is in the process of repossession or foreclosure and there appears to be a likely deficiency, (2) the collateral securing the loan has been sold and there is an actual deficiency, (3) the Bank is proceeding with lengthy legal action to collect its balance, (4) the borrower is unable to be located or (5) the borrower has filed bankruptcy. Charge-offs occur when the Company confirms a loss on a loan. Troubled debt restructurings (TDRs) —Loans on which terms have been modified resulting in a concession have been granted because of a borrower’s financial difficulty are considered troubled debt restructurings and classified as impaired. The restructuring of a loan is considered a troubled debt restructuring if both (1) the borrower is experiencing financial difficulties and (2) the creditor has granted a concession that it would not otherwise consider. Concessions may include reductions of interest rates to a below market interest rate: extension of the terms of the debt, principal forgiveness, restructuring the payment of the debt obligation; and other actions intended to minimize potential losses. Subsequent to identification as a troubled debt restructuring such loans are then evaluated for impairment on an individual basis whereby the loans are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan: the loan is reported, net, at the fair value of the collateral. Impaired Loans —On a continuous basis, loans are evaluated for impairment classification. Loans are considered impaired when based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case-by-case basis taking into consideration all of the circumstances surrounding the loan and the borrower including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Allowance for Loan Losses —The allowance for loan losses is a valuation allowance that is established through charges to earnings in the form of a provision for loan losses. The amount of the allowance for loan losses is affected by the following: (1) charge-offs of loans that decrease the allowance, (2) subsequent recoveries on loans previously charged off that increase the allowance and (3) provisions for loan losses charged to income that increase the allowance. Throughout the year, management estimates the probable incurred losses in the loan portfolio to determine if the allowance for loan losses is adequate to absorb such losses. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The Company follows a loan review program to evaluate the credit risk in the loan portfolio. Loans that have been identified as impaired are generally reviewed on a quarterly basis in order to determine whether a specific reserve is required. The general component covers non-impaired loans and is based on industry and Company specific historical loan loss experience, volume, growth and composition of the loan portfolio, the evaluation of the Company’s loan portfolio through its internal loan review process, general current economic conditions both internal and external to the Company that may affect the borrower’s ability to pay, value of collateral and other qualitative relevant risk factors. Based on a review of these estimates, the allowance for loan losses is adjusted to a level determined to be adequate. Estimates of loan losses are inherently subjective as it involves an exercise of judgment. It is the judgment of management that the allowance for loan losses reflected in the consolidated balance sheets is adequate to absorb probable losses that exist in the loan portfolio as of the reporting date. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The Company assesses the exposure for each modification, either by collateral discounting or by calculation of the present value of future cash flows, and determines if a specific allocation to the allowance for loan losses is needed. Once an obligation has been restructured because of such credit problems, it continues to be considered a troubled debt restructuring until paid in full. The Company returns troubled debt restructurings to accrual status only if (1) all contractual amounts due can reasonably be expected to be repaid within a prudent period and (2) repayment has been in accordance with the contract for a sustained period, typically at least twelve months. Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of loan losses expected to be realized over the remaining lives of the loans. Therefore no corresponding allowance for loan losses is recorded for these loans at acquisition. Methods utilized to estimate any subsequently required allowance for loan losses for acquired loans not deemed credit-impaired at acquisition are similar to originated loans. However, the estimate of loss is based on the unpaid principal balance and then compared to any remaining unaccreted purchase discount. To the extent that the calculated loss is greater than the remaining unaccreted purchase discount, an allowance is recorded for such difference. Premises and Equipment —Premises and equipment are carried at cost less accumulated depreciation. Depreciation expense is calculated principally using the straight-line method over the estimated useful lives of the assets which range from 3 to 40 years . Leasehold improvements are amortized using the straight-line method over the periods of the leases or the estimated useful lives, whichever is shorter. Land is carried at cost. Other Real Estate Owned —Assets acquired through or instead of loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions. At December 31, 2017 , the $365 thousand balance of other real estate owned was secured by a commercial real estate property for which there was no formal foreclosure in process. Federal Home Loan Bank (“FHLB”) Stock— The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Bank Owned Life Insurance— During 2015, the Company purchased bank owned life insurance policies on certain key executives and acquired life insurance policies in conjunction with the acquisition of F&M Bancshares. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value, which is the most reasonable estimate of fair value, adjusted for other charges or other amounts due that are probable at settlement. Goodwill —Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is determined to have an indefinite useful life and is not amortized, but is tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company performs its annual impairment test on October 1. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. Core Deposit Intangibles —Core deposit and acquired customer relationship intangibles arising from acquisitions are amortized using a straight-line amortization method over their estimated useful lives, which is seven to nine years . Borrowed Funds —The Company has a credit agreement with another financial institution. The Company pledged its shares in the Bank’s stock as collateral for the borrowing. Loan Commitments and Related Financial Instruments —Financial instruments include off-balance sheet credit instruments, such as commitments to extend credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Stock Based Compensation —Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. The expense associated with stock based compensation is recognized over the required service period, generally defined as the vesting period of each individual arrangement. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The fair value of stock options granted and employee stock purchase plan awards are estimated at the date of grant using the Black-Scholes option-pricing model and the market price of the Company’s common stock on the date of grant is used to value restricted stock awards. Employee Stock Purchase Plan —The cost of shares issued in the ESPP, but not allocated to participants, is shown as a reduction of shareholder’s equity. Compensation expense is based on the market price of the shares as they are committed to be released to participant accounts. Income Taxes —Income tax expense is the total of the current year income tax due and the change in deferred tax assets or liabilities. Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are recorded in other assets on the Company’s consolidated balance sheets. The Company records uncertain tax positions on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the related tax authority. For tax positions not meeting the more likely than not test, no tax benefit is recorded. Any interest and/or penalties related to income taxes are reported as a component of income tax expense. The Company files a consolidated federal income tax return. Comprehensive income —Comprehensive income consists of net income and other comprehensive income which includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity. Fair Value of Financial Instruments —Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. Operating Segments— While management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. All of the financial service operations are considered by management to be aggregated in one reportable operating segment. Reclassifications —Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. Earnings per Common Share —Basic earnings per common share is calculated as net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, restricted stock awards and the Employee Stock Purchase Plan. Loss Contingencies —Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements. Dividend Restrictions —Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Allegiance or by Allegiance to its shareholders. In addition, Allegiance's credit agreement with another financial institution also limits its ability to pay dividends. New Accounting Standards Adoption of New Accounting Standards On January 1, 2016, the Company adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09, all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. The Company elected to adopt the provisions of ASU 2016-09 in 2016 in advance of the required application date of January 1, 2017 without a significant impact on its financial statements. Newly Issued But Not Yet Effective Accounting Standards ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised 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 new standard was effective for the Company on January 1, 2018 and management has completed its analysis of the impact of the standard’s adoption. Adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements and related disclosures. The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of ASU 2014-09. The Company’s revenue recognition pattern for revenue streams within the scope of ASU 2014-09, including but not limited to service charges on deposit accounts and gains/losses on the sale of OREO, did not change significantly from current practice. The standard permits the use of either the full retrospective or modified retrospective transition method. The Company elected to use the modified retrospective transition method which requires application of ASU 2014-09 to uncompleted contracts at the date of adoption; however, periods prior to the date of adoption will not be retrospectively revised as the impact of the ASU on uncompleted contracts at the date of adoption was not material. ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities." ASU 2016-01 makes targeted amendments to fair value measurement and disclosure guidance. ASU 2016-01 requires equity investments (other than equity method investments) to be measured at fair value with changes in fair value recognized in net income. This change is only applied if a readily determinable fair value can be obtained. The update also requires the use of exit prices to measure fair value for disclosure purposes as well as other enhanced disclosure requirements. ASU 2016-01 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on its financial statements and related disclosures. 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; however, 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. Early application of this ASU is permitted for all entities. Adoption of ASU 2016-02 is not expected to have a material impact on the Company’s financial statements. The Company leases certain properties and equipment under operating leases that will result in the recognition of lease assets and lease liabilities on the Company’s balance sheet under the ASU. ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” Among other things, 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. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. 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 is effective for the Company on January 1, 2020 and must be applied using the modified retrospective approach with limited exceptions. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. While the Company is currently unable to reasonably estimate the impact of adopting ASU 2016-13, the Company expects that the impact of adoption will be significantly influenced by the composition, characteristics and quality of its loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date. 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. Among other things, the update clarifies the appropriate classification for proceeds from settlement of bank owned life insurance (BOLI) policies. Based on preliminary assessments, the Company expects to change the classification of proceeds from settlement of BOLI policies from operating activities to investing activities. Other changes in classification resulting from this update are not expected to be significant. ASU 2016-15 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on the Company's financial statements. ASU No. 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 which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2020, with earlier adoption permitted and is not expected to have a significant impact on the Company's financial statements. ASU 2017-08,“Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. Under prior guidance, entities were generally required to amortize premiums on individual, non-pooled callable debt securities as a yield adjustment over the contractual life of the security. ASU 2017-08 does not change the accounting for callable debt securities held at a dis |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Acquisitions are accounted for using the acquisition method of accounting. Accordingly, the assets and liabilities of an acquired entity are recorded at their fair value at the acquisition date. The excess of the purchase price over the estimated fair value of the net assets is recorded as goodwill. The results of operations for an acquisition have been included in the Company’s consolidated financial results beginning on the respective acquisition date. The measurement period for the Company to determine the fair values of acquired identifiable assets and assumed liabilities will end at the earlier of (1) twelve months from the date of the acquisition or (2) as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. The following acquisitions were completed on the dates indicated below: 2015 Acquisition Acquisition of F&M Bancshares, Inc. —On January 1, 2015, the Company completed the acquisition of F&M Bancshares, Inc. (“F&M Bancshares”) and its wholly-owned subsidiary Enterprise Bank (“Enterprise”) headquartered in Houston, Texas. Enterprise operated nine banking locations, seven in Houston, Texas and two in Central Texas. The two Central Texas locations and their related assets have been classified within loans held for sale and branch assets held for sale as of December 31, 2015. During the first quarter of 2015, the Company consolidated two of the seven acquired Houston area locations due to the close proximity of these locations to its existing banking locations. The Company acquired F&M Bancshares to further expand its Houston, Texas area market. Goodwill resulted from a combination of expected operational synergies and an enhanced branching network. Goodwill is not expected to be deductible for tax purposes. Pursuant to the merger agreement, the Company issued 2,338,520 shares of Allegiance common stock for all outstanding shares of F&M Bancshares capital stock and paid $642 thousand in cash for any fractional and out of state shares held by F&M Bancshares shareholders. The Company recognized goodwill of $28.2 million which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of identifiable assets acquired, none of which is expected to be deductible for tax purposes. F&M Bancshares’ results of operations were included in the Company’s results beginning January 1, 2015. For the year ended December 31, 2015, net interest income associated with F&M Bancshares was $17.1 million . The Company does not track separately the noninterest income and noninterest expense of the F&M Bancshares branches. As of December 31, 2015, the Company finalized its valuation of all assets and liabilities acquired, resulting in no changes to preliminary acquisition accounting adjustments. A summary of the final purchase price allocation is as follows (dollars in thousands): Fair value of consideration paid: Common shares issued (2,338,520 shares) $ 51,447 Preferred shares issued (11,550 shares) 11,550 Cash consideration 642 Total consideration paid $ 63,639 Fair value of assets acquired: Cash and cash equivalents $ 107,128 Investment securities 14,722 Loans, net 404,637 Premises and equipment 7,699 Core deposit intangibles 4,313 Other assets 15,896 Total assets acquired $ 554,395 Fair value of liabilities assumed: Deposits $ 489,556 Subordinated debt 8,871 Borrowed funds 18,000 Other liabilities 2,574 Total liabilities assumed 519,001 Fair value of net assets acquired $ 35,394 Goodwill resulting from acquisition $ 28,245 Subsequent to the acquisition, the Company paid off the $18.0 million of funds borrowed from F&M Bancshares shareholders by drawing on its credit agreement with another financial institution. Additionally, the securities acquired from F&M Bancshares were sold subsequent to the acquisition with no income statement impact. Additionally, on July 15, 2015, the Company redeemed all of the outstanding shares of Series A and Series B preferred stock for an aggregate redemption price of $11.7 million (which is the sum of the liquidation amount plus accrued and unpaid dividends up to, but excluding, the redemption date). The Company issued the shares of Series A and Series B preferred stock in connection with the F&M Bancshares acquisition, which had preferred stock pursuant to the U.S. Treasury’s Troubled Asset Relief Program. The fair value of net assets acquired includes fair value adjustments to certain acquired loans that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. The following presents details of all loans acquired as of January 1, 2015: Contractual Balance Fair Value Discount (Dollars in thousands) Commercial and industrial $ 96,891 $ 95,256 $ (1,635 ) Real estate: Commercial real estate (including multi-family residential) 225,191 222,082 (3,109 ) Commercial real estate construction and land development 40,787 40,094 (693 ) 1-4 family residential (including home equity) 35,897 35,488 (409 ) Residential construction 6,467 6,395 (72 ) Consumer and other 5,421 5,322 (99 ) Total loans $ 410,654 $ 404,637 $ (6,017 ) The following table presents unaudited pro forma financial information as if the acquisition had occurred at the beginning of 2014. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates. For the Years Ended December 31, 2015 2014 (Dollars in thousands, except per share data) Net interest income $ 77,598 $ 71,664 Net income attributable to common shareholders 14,170 14,999 Basic earnings per common share 1.35 1.53 Diluted earnings per common share 1.33 1.51 To determine pro forma information, the Company adjusted its year ended December 31, 2015 and 2014 historical results to include the historical results for F&M Bancshares for the year ended December 31, 2014. The pro forma information includes acquisition accounting adjustments to interest on loans, certificates of deposit and subordinated debt, difference in the rate of borrowed funds, amortization of intangibles arising from the transaction and the related income tax effects. The Company incurred approximately $941 thousand and $245 thousand of pre-tax merger related expenses during the years ended December 31, 2015 and 2014, respectively, related to the F&M Bancshares acquisition. The merger expenses are reflected on the Company’s income statement for the applicable periods and are reported primarily in the categories of salaries and benefits and professional fees but are excluded from the calculation of pro forma income above. As of December 31, 2015, the Company held the two Central Texas locations and their related assets for sale. The assets held for sale of these locations included loans, the related accrued interest receivable on those loans and premises and equipment. The loans are presented as loans held for sale on the balance sheet. The branch assets held for sale reported on the balance sheet include accrued interest receivable and premises and equipment for these two respective locations. The Company completed the sale of the two Central Texas banking locations in January 2016 for a gain of $2.1 million , or $1.3 million after-tax. |
GOODWILL AND CORE DEPOSIT INTAN
GOODWILL AND CORE DEPOSIT INTANGIBLES | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND CORE DEPOSIT INTANGIBLES | GOODWILL AND CORE DEPOSIT INTANGIBLES Changes in the carrying amount of the Company’s goodwill and core deposit intangibles were as follows: Goodwill Core Deposit (Dollars in thousands) Balance as of January 1, 2015 $ 11,144 $ 1,747 Acquisition of F&M Bancshares 28,245 4,313 Amortization — (830 ) Balance as of December 31, 2015 39,389 5,230 Sale of branch assets — (390 ) Amortization — (785 ) Balance as of December 31, 2016 39,389 4,055 Amortization — (781 ) Balance as of December 31, 2017 $ 39,389 $ 3,274 Goodwill is recorded on the acquisition date of an entity. During the measurement period, the Company may record subsequent adjustments to goodwill for provisional amounts recorded at the acquisition date. The Company performed its annual impairment test on October 1, 2017 and determined no impairment was necessary. The estimated aggregate future amortization expense for core deposit intangibles remaining as of December 31, 2017 is as follows (dollars in thousands): 2018 $ 781 2019 781 2020 744 2021 484 2022 484 Thereafter — Total $ 3,274 |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND DUE FROM BANKS | CASH AND DUE FROM BANKS The Bank can be required by the Federal Reserve Bank of Dallas to maintain average reserve balances. “Cash and due from banks” in the consolidated balance sheets included a restricted amount of $50.3 million at December 31, 2015 . The Bank was not required to maintain reserve balances at December 31, 2016 or 2017 . |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | SECURITIES The amortized cost and fair value of investment securities were as follows: December 31, 2017 Amortized Gross Gross Fair (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 8,507 $ 232 $ (24 ) $ 8,715 Municipal securities 222,330 2,470 (1,842 ) 222,958 Agency mortgage-backed pass-through securities 32,014 159 (361 ) 31,812 Corporate bonds 46,247 62 (179 ) 46,130 Total $ 309,098 $ 2,923 $ (2,406 ) $ 309,615 December 31, 2016 Amortized Gross Gross Fair (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 5,883 $ 266 $ — $ 6,149 Municipal securities 242,501 956 (5,655 ) 237,802 Agency mortgage-backed pass-through securities 27,496 265 (437 ) 27,324 Corporate bonds 45,271 77 (168 ) 45,180 Total $ 321,151 $ 1,564 $ (6,260 ) $ 316,455 As of December 31, 2017 , the Company's management does not expect to sell any securities classified as available for sale with material unrealized losses; and the Company believes that it is more likely than not it will not be required to sell any of these securities before their anticipated recovery at which time the Company will receive full value for the securities. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2017 , management believes the unrealized losses in the previous table are temporary and no other than temporary impairment loss has been realized in the Company’s consolidated statements of income. The amortized cost and fair value of investment securities at December 31, 2017 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations at any time with or without call or prepayment penalties. Amortized Fair (Dollars in thousands) Due in one year or less $ 10,834 $ 10,837 Due after one year through five years 58,894 58,832 Due after five years through ten years 93,535 93,673 Due after ten years 113,821 114,461 Subtotal 277,084 277,803 Agency mortgage-backed pass through securities 32,014 31,812 Total $ 309,098 $ 309,615 Securities with unrealized losses segregated by length of time such securities have been in a continuous loss position are as follows: December 31, 2017 Less than 12 Months More than 12 Months Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 3,110 $ (9 ) $ 595 $ (15 ) $ 3,705 $ (24 ) Municipal securities 42,249 (517 ) 56,483 (1,325 ) 98,732 (1,842 ) Agency mortgage-backed pass-through securities 13,238 (105 ) 8,921 (256 ) 22,159 (361 ) Corporate bonds 30,203 (179 ) — — 30,203 (179 ) Total $ 88,800 $ (810 ) $ 65,999 $ (1,596 ) $ 154,799 $ (2,406 ) December 31, 2016 Less than 12 Months More than 12 Months Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (Dollars in thousands) Available for Sale U.S. Government and agency securities $ — $ — $ — $ — $ — $ — Municipal securities 178,876 (5,655 ) — — 178,876 (5,655 ) Agency mortgage-backed pass-through securities 12,520 (347 ) 2,803 (90 ) 15,323 (437 ) Corporate bonds 24,629 (168 ) — — 24,629 (168 ) Total $ 216,025 $ (6,170 ) $ 2,803 $ (90 ) $ 218,828 $ (6,260 ) There were no realized losses on the securities in the portfolio as the Company believes these securities are temporarily impaired due to changes in market interest rates. The majority of the securities in an unrealized loss position are related to the Company's municipal securities. During 2017, the Company sold $39.1 million in securities and recorded a net gain on the sales of $18 thousand . The Company sold $2.5 million in securities during 2016 and recorded a gain on the sale of $30 thousand . The Company sold $2.2 million in securities during 2015 and recorded a loss on the sale of $37 thousand . During the first quarter of 2015, the Company sold all securities acquired in the F&M Bancshares transaction resulting in gross proceeds of approximately $15.0 million . No gains or losses were recognized. At December 31, 2017 and 2016 , the Company did not own securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of the consolidated shareholders’ equity at such respective dates. The carrying value of pledged securities was $5.0 million and $4.9 million at December 31, 2017 and 2016, respectively. The securities are pledged to further collateralize letters of credit issued by the Bank but confirmed by another financial institution. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily all made to borrowers located within Texas and are classified by major type as follows: December 31, 2017 2016 (Dollars in thousands) Commercial and industrial $ 457,129 $ 416,752 Mortgage warehouse (1) 69,456 67,038 Real estate: Commercial real estate (including multi-family residential) 1,080,247 891,989 Commercial real estate construction and land development 243,389 159,247 1-4 family residential (including home equity) 301,219 246,987 Residential construction 109,116 98,657 Consumer and other 10,320 10,965 Total loans 2,270,876 1,891,635 Allowance for loan losses (23,649 ) (17,911 ) Loans, net $ 2,247,227 $ 1,873,724 (1) Mortgage warehouse loans are to unaffiliated mortgage loan originators collateralized by mortgage promissory notes which are segregated in the Company’s mortgage warehouse portfolio. These promissory notes originated by the Company’s mortgage warehouse customers carry terms and conditions as would be expected in the competitive permanent mortgage market and serve as collateral under a traditional mortgage warehouse arrangement whereby such promissory notes are warehoused under a revolving credit facility to allow for the end investor (or purchaser) of the note to receive a complete loan package and remit funds to the bank. The maturity of each revolving line of credit facility is normally less than 24 months, while the promissory notes that are warehoused under such facilities may have a much shorter length of time outstanding. For mortgage promissory notes secured by residential property, the warehouse time is normally 10 to 20 days. For mortgage promissory notes secured by commercial property, the warehouse time is normally 40 to 50 days. The funded balance of the mortgage warehouse portfolio can have significant fluctuation based upon market demand for the product, level of home sales and refinancing activity, market interest rates and velocity of end investor processing times. Loan Origination/Risk Management The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. The Company maintains an independent loan review department that reviews and validates the credit risk program on a periodic basis. In addition, an independent third party loan review is performed on an annual basis. (i) Commercial and Industrial Loans. The Company makes commercial and industrial loans in its market area that are underwritten on the basis of the borrower’s ability to service the debt from income. The Company generally takes as collateral a lien on any available real estate, equipment or other assets owned by the borrower and typically obtains a personal guaranty of the borrower or principal. In general, commercial loans involve more credit risk than residential mortgage loans and commercial mortgage loans and therefore typically yield a higher return. The increased risk in commercial loans derives from the expectation that commercial and industrial loans generally are serviced principally from the operations of the business, which may not be successful and from the type of collateral securing these loans. As a result, commercial and industrial loans require more extensive underwriting and servicing than other types of loans. (ii) Commercial Real Estate. The Company makes loans collateralized by owner-occupied, nonowner-occupied and multi-family real estate to finance the purchase or ownership of real estate. The Company’s nonowner-occupied and multi-family commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. The Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. In addition, these loans are generally guaranteed by individual owners of the borrower and have typically lower loan to value ratios. Loans secured by owner-occupied properties generally involve less risk and represented 51.4% of the outstanding principal balance of the Company’s commercial real estate loans at December 31, 2017 . The Company is dependent on the cash flows of the business occupying the property and its owners and requires these loans to be secured by property with adequate margins and to be guaranteed by the individual owners. The Company’s owner-occupied commercial real estate loans collateralized by first liens on real estate typically have fixed interest rates and amortize over a 10 to 20 year period. (iii) Construction and Land Development Loans. The Company makes loans to finance the construction of residential and to a lesser extent nonresidential properties. Construction loans generally are collateralized by first liens on real estate and have floating interest rates. The Company generally conducts periodic inspections, either directly or through an agent, prior to approval of periodic draws on these loans. Underwriting guidelines similar to those described above are also used in the Company’s construction lending activities. Construction loans involve additional risks as they often involve the disbursement of funds with the repayment dependent on the ultimate success of the project’s completion. Sources of repayment for these loans may be pre-committed permanent financing or sale of the developed property. The loans in this portfolio are monitored closely by management. Due to uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation on real property, it can be difficult to accurately evaluate the total funds required to complete a project and the related loan to value ratio. As a result of these uncertainties, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company will be able to recover all of the unpaid portion of the loan. In addition, the Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time. (iv) Residential Real Estate Loans. The Company’s lending activities also include the origination of 1-4 family residential mortgage loans (including home equity loans) collateralized by owner-occupied residential properties located in the Company’s market areas. The Company offers a variety of mortgage loan portfolio products which have a term of 5 to 7 years and generally amortize over 10 to 20 years . Loans collateralized by 1-4 family residential real estate generally have been originated in amounts of no more than 90% of appraised value. (v) Consumer and Other Loans. The Company makes a variety of loans to individuals for personal and household purposes including secured and unsecured installment and term loans. Consumer loans are underwritten based on the individual borrower’s income, current debt level, past credit history and the value of any available collateral. The terms of these loans typically range from 12 to 60 months and vary based upon the nature of collateral and size of loan. Generally, consumer loans entail greater risk than residential real estate loans because they may be unsecured or if secured the value of the collateral, such as an automobile or boat, may be more difficult to assess and more likely to decrease in value than real estate. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan balance. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws may limit the amount which can be recovered on such loans. Concentrations of Credit The vast majority of the Company’s lending activity occurs in and around the Houston, Texas area. The Company’s loans are primarily loans secured by real estate, including commercial and residential construction, owner-occupied and nonowner-occupied and multi-family commercial real estate, raw land and other real estate based loans. Related Party Loans As of December 31, 2017 and 2016 , loans outstanding to directors, officers and their affiliates totaled $4.4 million and $3.9 million , respectively. An analysis of activity with respect to these related-party loans is as follows: 2017 (Dollars in thousands) Beginning balance on January 1 $ 3,943 New loans and reclassified related loans 805 Repayments (380 ) Ending balance on December 31 $ 4,368 Nonaccrual and Past Due Loans An aging analysis of the recorded investment in past due loans, segregated by class of loans, is as follows: December 31, 2017 Loans Past Due and Still Accruing 30-89 90 or More Total Past Nonaccrual Loans Current Total Loans (Dollars in thousands) Commercial and industrial $ 1,069 $ — $ 1,069 $ 6,437 $ 449,623 $ 457,129 Mortgage warehouse — — — — 69,456 69,456 Real estate: Commercial real estate (including multi-family residential) 4,932 — 4,932 6,110 1,069,205 1,080,247 Commercial real estate construction and land development 5,274 — 5,274 — 238,115 243,389 1-4 family residential (including home equity) 924 — 924 781 299,514 301,219 Residential construction 674 — 674 — 108,442 109,116 Consumer and other 74 — 74 — 10,246 10,320 Total loans $ 12,947 $ — $ 12,947 $ 13,328 $ 2,244,601 $ 2,270,876 December 31, 2016 Loans Past Due and Still Accruing 30-89 90 or More Total Past Nonaccrual Loans Current Total Loans (Dollars in thousands) Commercial and industrial $ 1,028 $ 911 $ 1,939 $ 3,896 $ 410,917 $ 416,752 Mortgage warehouse — — — — 67,038 67,038 Real estate: Commercial real estate (including multi-family residential) 1,661 — 1,661 11,663 878,665 891,989 Commercial real estate construction and land development 263 — 263 — 158,984 159,247 1-4 family residential (including home equity) 280 — 280 217 246,490 246,987 Residential construction — — — — 98,657 98,657 Consumer and other 125 — 125 12 10,828 10,965 Total loans $ 3,357 $ 911 $ 4,268 $ 15,788 $ 1,871,579 $ 1,891,635 If interest on nonaccrual loans had been accrued under the original loan terms, approximately $733 thousand and $892 thousand would have been recorded as income for the years ended December 31, 2017 and 2016 , respectively. Impaired Loans Impaired loans by class of loans are set forth in the following tables. December 31, 2017 Recorded Unpaid Related (Dollars in thousands) With no related allowance recorded: Commercial and industrial $ 5,792 $ 6,666 $ — Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 12,155 12,155 — Commercial real estate construction and land development 209 209 — 1-4 family residential (including home equity) 948 948 — Residential construction — — — Consumer and other — — — Total 19,104 19,978 — With an allowance recorded: Commercial and industrial 5,600 5,652 1,640 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 8,009 8,194 716 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) — — — Residential construction — — — Consumer and other — — — Total 13,609 13,846 2,356 Total: Commercial and industrial 11,392 12,318 1,640 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 20,164 20,349 716 Commercial real estate construction and land development 209 209 — 1-4 family residential (including home equity) 948 948 — Residential construction — — — Consumer and other — — — $ 32,713 $ 33,824 $ 2,356 December 31, 2016 Recorded Unpaid Related (Dollars in thousands) With no related allowance recorded: Commercial and industrial $ 5,300 $ 5,414 $ — Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 11,748 11,833 — Commercial real estate construction and land development — — — 1-4 family residential (including home equity) 217 217 — Residential construction — — — Consumer and other 5 5 — Total 17,270 17,469 — With an allowance recorded: Commercial and industrial 3,108 3,328 1,543 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 573 573 105 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) — — — Residential construction — — — Consumer and other 6 6 6 Total 3,687 3,907 1,654 Total: Commercial and industrial 8,408 8,742 1,543 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 12,321 12,406 105 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) 217 217 — Residential construction — — — Consumer and other 11 11 6 $ 20,957 $ 21,376 $ 1,654 The following table presents the average recorded investment of impaired loans and interest recognized on impaired loans. Years Ended December 31, 2017 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (Dollars in thousands) Commercial and industrial $ 11,972 $ 418 $ 9,427 $ 442 Mortgage warehouse — — — — Real estate: Commercial real estate (including multi-family residential) 20,606 475 12,840 393 Commercial real estate construction and land development 314 10 — — 1-4 family residential (including home equity) 1,167 18 228 24 Residential construction — — — — Consumer and other — 1 26 3 Total $ 34,059 $ 922 $ 22,521 $ 862 The average recorded investment of impaired loans for the year ended December 31, 2015 was $12.1 million . Interest income recognized for the year ended December 31, 2015 was $693 thousand . Credit Quality Indicators The company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt including factors such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. The Company analyzes loans individually by classifying the loans by credit risk. As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks risk ratings to be used as credit quality indicators. The following is a general description of the risk ratings used: Watch —Loans classified as watch loans may still be of high quality, but have an element of risk added to the credit such as declining payment history, deteriorating financial position of the borrower or a decrease in collateral value. Special Mention —Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Substandard —Loans classified as substandard have well-defined weaknesses on a continuing basis and are inadequately protected by the current net worth and paying capacity of the borrower, impaired or declining collateral values, or a continuing downturn in their industry which is reducing their profits to below zero and having a significantly negative impact on their cash flow. These loans so classified are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful —Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loan at December 31, 2017 is as follows: Pass Watch Special Mention Substandard Doubtful Total (Dollars in thousands) Commercial and industrial $ 427,336 $ 10,274 $ 2,195 $ 17,324 $ — $ 457,129 Mortgage warehouse 69,456 — — — — 69,456 Real estate: Commercial real estate (including multi-family residential) 1,016,831 23,039 4,685 35,692 — 1,080,247 Commercial real estate construction and land development 231,536 4,397 — 7,456 — 243,389 1-4 family residential (including home equity) 295,744 2,696 785 1,994 — 301,219 Residential construction 103,611 5,505 — — — 109,116 Consumer and other 10,207 111 — 2 — 10,320 Total loans $ 2,154,721 $ 46,022 $ 7,665 $ 62,468 $ — $ 2,270,876 The following table presents the risk category of loans by class of loan at December 31, 2016 : Pass Watch Special Mention Substandard Doubtful Total (Dollars in thousands) Commercial and industrial $ 384,979 $ 11,784 $ 3,344 $ 16,645 $ — $ 416,752 Mortgage warehouse 67,038 — — — — 67,038 Real estate: Commercial real estate (including multi-family residential) 834,781 16,009 6,804 34,395 — 891,989 Commercial real estate construction and land development 149,010 8,124 — 2,113 — 159,247 1-4 family residential (including home equity) 242,208 512 2,069 2,198 — 246,987 Residential construction 97,808 — 415 434 — 98,657 Consumer and other 10,520 364 4 77 — 10,965 Total loans $ 1,786,344 $ 36,793 $ 12,636 $ 55,862 $ — $ 1,891,635 Allowance for Loan Losses At December 31, 2017, the allowance for loan losses totaled $ 23.6 million , or 1.04% of total loans. At December 31, 2016, the allowance totaled $ 17.9 million or 0.95% of total loans. The following table presents the activity in the allowance for loan losses by portfolio type for the years ended December 31, 2017 , 2016 and 2015 : Commercial Mortgage Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Allowance for loan losses: Balance December 31, 2016 $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 Provision for loan losses 9,792 — 1,424 1,298 254 194 226 13,188 Charge-offs (7,673 ) — (124 ) — — — (196 ) (7,993 ) Recoveries 516 — 3 10 10 — 4 543 Net charge-offs (7,157 ) — (121 ) 10 10 — (192 ) (7,450 ) Balance December 31, 2017 $ 7,694 $ — $ 10,253 $ 2,525 $ 2,140 $ 942 $ 95 $ 23,649 Allowance for loan losses: Balance December 31, 2015 $ 3,644 $ — $ 5,914 $ 1,221 $ 1,432 $ 820 $ 67 $ 13,098 Provision for loan losses 1,951 — 3,122 (4 ) 434 (72 ) 38 5,469 Charge-offs (722 ) — (129 ) — — — (49 ) (900 ) Recoveries 186 — 43 — 10 — 5 244 Net charge-offs (536 ) — (86 ) — 10 — (44 ) (656 ) Balance December 31, 2016 $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 Allowance for loan losses: Balance December 31, 2014 $ 2,334 $ — $ 3,799 $ 578 $ 1,008 $ 475 $ 52 $ 8,246 Provision for loan losses 2,193 — 2,115 625 464 321 74 5,792 Charge-offs (935 ) — — — (40 ) — (65 ) (1,040 ) Recoveries 52 — — 18 — 24 6 100 Net charge-offs (883 ) — — 18 (40 ) 24 (59 ) (940 ) Balance December 31, 2015 $ 3,644 $ — $ 5,914 $ 1,221 $ 1,432 $ 820 $ 67 $ 13,098 The following table presents the balance in the allowance for loan losses by portfolio type based on the impairment method as of December 31, 2017 and 2016 : Commercial and Industrial Mortgage Warehouse Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Allowance for loan losses related to: December 31, 2017 Individually evaluated for impairment $ 1,640 $ — $ 716 $ — $ — $ — $ — $ 2,356 Collectively evaluated for impairment 6,054 — 9,537 2,525 2,140 942 95 21,293 Total allowance for loan losses $ 7,694 $ — $ 10,253 $ 2,525 $ 2,140 $ 942 $ 95 $ 23,649 December 31, 2016 Individually evaluated for impairment $ 1,543 $ — $ 105 $ — $ — $ — $ 6 $ 1,654 Collectively evaluated for impairment 3,516 — 8,845 1,217 1,876 748 55 16,257 Total allowance for loan losses $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 The following table presents the recorded investment in loans held for investment by portfolio type based on the impairment method as of December 31, 2017 and 2016 : Commercial and Industrial Mortgage Warehouse Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Recorded investment in loans: December 31, 2017 Individually evaluated for impairment $ 11,392 $ — $ 20,164 $ 209 $ 948 $ — $ — $ 32,713 Collectively evaluated for impairment 445,737 69,456 1,060,083 243,180 300,271 109,116 10,320 2,238,163 Total loans evaluated for impairment $ 457,129 $ 69,456 $ 1,080,247 $ 243,389 $ 301,219 $ 109,116 $ 10,320 $ 2,270,876 December 31, 2016 Individually evaluated for impairment $ 8,408 $ — $ 12,321 $ — $ 217 $ — $ 11 $ 20,957 Collectively evaluated for impairment 408,344 67,038 879,668 159,247 246,770 98,657 10,954 1,870,678 Total loans evaluated for impairment $ 416,752 $ 67,038 $ 891,989 $ 159,247 $ 246,987 $ 98,657 $ 10,965 $ 1,891,635 Troubled Debt Restructurings As of December 31, 2017 and 2016 , the Company had a recorded investment in troubled debt restructurings of $25.6 million and $12.6 million , respectively. The Company allocated $2.2 million and $879 thousand of specific reserves for these loans at December 31, 2017 and 2016 , respectively, and did not commit to lend additional amounts on these loans. The following table presents information regarding loans modified in a troubled debt restructuring during the years ended December 31, 2017 , 2016 and 2015 : As of December 31, 2017 2016 2015 Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment (Dollars in thousands) Commercial and industrial 9 $ 2,399 $ 2,399 21 $ 3,939 $ 3,939 6 $ 2,959 $ 2,959 Mortgage warehouse Real estate: Commercial real estate (including multi-family residential) 6 11,837 11,837 8 7,144 7,144 1 63 63 Commercial real estate construction and land development 1 210 210 — — — — — — 1-4 family residential (including home equity) 1 86 86 — — — — — — Residential construction — — — — — — — — — Consumer and other — — — 1 6 6 2 20 20 Total 17 $ 14,532 $ 14,532 30 $ 11,089 $ 11,089 9 $ 3,042 $ 3,042 Troubled debt restructurings resulted in charge-offs of $136 thousand , $211 thousand and $45 thousand during the years ended December 31, 2017 , 2016 and 2015 , respectively. As of December 31, 2017 , there have been no defaults on any loans that were modified as troubled debt restructurings during the preceding 12 months. Default is determined at 90 or more days past due. The modifications primarily related to extending the amortization periods of the loans. The Company did not grant principal reductions on any restructured loans. There were no commitments to lend additional amounts for the years 2017 and 2016. During the year ended December 31, 2017 , the Company added $14.5 million in new troubled debt restructurings, of which $14.2 million were still outstanding on December 31, 2017 . |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value represents the estimated exchange price that would be received from selling an asset or paid to transfer a liability, otherwise known as an “exit price” in the principal or most advantageous market available to the entity in an orderly transaction between market participants on the measurement date. Fair Value Hierarchy • Level 1—Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. • Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3—Significant unobservable inputs that reflect management’s judgment and assumptions that market participants would use in pricing an asset or liability that are supported by little or no market activity. The carrying amounts and estimated fair values of financial instruments that are reported on the balance sheet are as follows: As of December 31, 2017 Carrying Estimated Fair Value Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Cash and cash equivalents $ 182,103 $ 182,103 $ — $ — $ 182,103 Available for sale securities 309,615 — 309,615 — 309,615 Loans held for investment, net of allowance 2,247,227 — — 2,238,721 2,238,721 FHLB stock 12,862 N/A N/A N/A N/A Accrued interest receivable 12,194 3 3,296 8,895 12,194 Financial liabilities Total deposits $ 2,213,974 $ — $ 2,209,111 $ — $ 2,209,111 Accrued interest payable 610 — 610 — 610 Borrowed funds 282,569 — 288,887 — 288,887 Subordinated debt 48,659 — 48,659 — 48,659 As of December 31, 2016 Carrying Estimated Fair Value Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Cash and cash equivalents $ 142,098 $ 142,098 $ — $ — $ 142,098 Available for sale securities 316,455 — 316,455 — 316,455 Loans held for investment, net of allowance 1,873,724 — — 1,872,056 1,872,056 FHLB Stock 13,175 N/A N/A N/A N/A Accrued interest receivable 9,007 3 3,616 5,388 9,007 Financial liabilities Total deposits $ 1,870,183 $ — $ 1,868,429 $ — $ 1,868,429 Accrued interest payable 285 — 285 — 285 Borrowed funds 285,569 — 284,989 — 284,989 Subordinated debt 9,196 — 9,196 — 9,196 The fair value estimates presented herein are based on pertinent information available to management as of the dates indicated. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value, non-financial assets and non-financial liabilities and for estimating fair value for financial instruments not recorded at fair value: Cash and Cash Equivalents —For these short-term instruments, the carrying amount is a reasonable estimate of fair value. The Company classifies the estimated fair value of these instruments as Level 1. Available for Sale Securities —Fair values for investment securities are based upon quoted market prices, if available, and are considered Level 1 inputs. For all other available for sale securities, if quoted prices are not available, fair values are measured based on market prices for similar securities and are considered Level 2 inputs. For these securities, the Company generally 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 prepayment speeds, credit information and the bond’s terms and conditions, among other things. Available for sale securities are recorded at fair value on a recurring basis. Loans Held for Investment —The estimated fair value approximates carrying value for variable-rate loans that reprice frequently and that have no significant change in credit risk resulting in a Level 3 classification. Fair values for fixed-rate loans and variable rate loans which reprice infrequently are estimated by discounting future cash flows based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. Federal Home Loan Bank Stock —The fair value of FHLB stock is estimated to be equal to its carrying amount as it is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. Deposits —The fair value of demand deposits (e.g., interest and noninterest checking, savings and certain types of money market deposits) is the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The fair value of fixed rate certificates of deposit is estimated using a discounted cash flows calculation that applies interest rates currently offered on certificates of deposit to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. Accrued Interest —The carrying amounts of accrued interest approximate their fair values resulting in a Level 2 or 3 classification. Borrowed Funds —The fair value of the Company’s borrowed funds are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements and are measured utilizing Level 2 inputs. Subordinated Debentures —The fair value of subordinated debentures is estimated using discounted cash flow analyses based on the Company’s current borrowing rates for similar types of borrowing arrangements and are measured utilizing Level 2 inputs. Off-balance sheet instruments —The fair values of off-balance sheet commitments to extend credit and standby letters of credit financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The Company has reviewed the unfunded portion of commitments to extend credit as well as standby and other letters of credit and has determined that the fair value of such financial instruments is not material. The following tables present fair values for assets measured at fair value on a recurring basis: As of December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Available for sale securities: U.S. Government and agency securities $ — $ 8,715 $ — $ 8,715 Municipal securities — 222,958 — 222,958 Agency mortgage-backed pass-through securities — 31,812 — 31,812 Corporate bonds — 46,130 — 46,130 Total $ — $ 309,615 $ — $ 309,615 As of December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Available for sale securities: U.S. Government and agency securities $ — $ 6,149 $ — $ 6,149 Municipal securities — 237,802 — 237,802 Agency mortgage-backed pass-through securities — 27,324 — 27,324 Corporate bonds — 45,180 — 45,180 Total $ — $ 316,455 $ — $ 316,455 There were no liabilities measured at fair value on a recurring basis as of December 31, 2017 or 2016 . There were no transfers between levels during 2017 or 2016 . Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances such as evidence of impairment. As of December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Impaired loans: Commercial and industrial $ — $ — $ 4,012 Commercial real estate (including multi-family residential) — — 7,478 Other real estate owned — — 365 $ — $ — $ 11,855 As of December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Impaired loans: Commercial and industrial $ — $ — $ 1,785 Commercial real estate (including multi-family residential) — — 468 Other real estate owned — — 1,503 $ — $ — $ 3,756 Historically, we measure fair value for certain loans and other real estate owned on a nonrecurring basis as described below. Impaired Loans with Specific Allocation of Allowance Impaired loans are those loans the Company has measured at fair value, generally based on the fair value of the loan’s collateral. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due pursuant to the contractual terms of the loan agreement. Impairment is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying fair value of the loan’s collateral. For real estate loans, fair value of the impaired loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 10% of the appraised value. For non-real estate loans, fair value of the impaired loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and the customer's business. During the years ended December 31, 2017 and 2016 , certain impaired loans were reevaluated and reported at fair value through a specific allocation of the allowance for loan losses. At December 31, 2017 , the total reported fair value of impaired loans of $11.5 million based on collateral valuations utilizing Level 3 valuation inputs had a carrying value of $ 13.8 million that was reduced by specific allowance allocations totaling $ 2.4 million . At December 31, 2016 , the total reported fair value of impaired loans of $2.3 million based on collateral valuations utilizing Level 3 valuation inputs had a carrying value of $ 3.9 million that was reduced by specific allowance allocations totaling $ 1.7 million . Other Real Estate Owned Other real estate owned is comprised of real estate acquired in partial or full satisfaction of loans. Other real estate owned is recorded at its estimated fair value less estimated selling and closing costs at the date of transfer. Any excess of the related loan balance over the fair value less expected selling costs is charged to the allowance. Subsequent declines in fair value are reported as adjustments to the carrying amount and are recorded against earnings. The fair value of other real estate owned is determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. For this asset class, the actual valuation methods (income, sales comparable or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 10% of the appraised value. At December 31, 2017 , the balance of other real estate owned consisted of a $365 thousand foreclosed commercial real estate property recorded as a result of obtaining physical possession of the property. At December 31, 2017 , there was no formal foreclosure in process on this other real estate owned. The Company had $1.5 million of other real estate owned at December 31, 2016 . |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT Premises and equipment are summarized as follows: As of December 31, 2017 2016 (Dollars in thousands) Land $ 5,376 $ 5,376 Buildings 7,977 8,034 Leasehold improvements 5,059 5,098 Furniture, fixtures and equipment 8,967 7,927 Construction in progress 320 5 Total 27,699 26,440 Less: accumulated depreciation 9,222 8,100 Premises and equipment, net $ 18,477 $ 18,340 Depreciation expense was $1.6 million for each of the years ended December 31, 2017 , 2016 and 2015 , respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Deposit Liabilities [Abstract] | |
DEPOSITS | DEPOSITS Time deposits that meet or exceed the Federal Deposit Insurance Corporation (the “FDIC”) Insurance limit of $250 thousand at December 31, 2017 and December 31, 2016 were $227.4 million and $196.5 million , respectively. Scheduled maturities of time deposits for the next five years are as follows (dollars in thousands): Within one year $ 504,104 After one but within two years 129,562 After two but within three years 34,922 After three but within four years 29,976 After four but within five years 62,750 Total $ 761,314 The Company has $314.8 million and $65.9 million of brokered deposits, and there are no major concentrations of deposits with any one depositor at December 31, 2017 and 2016 , respectively. Included in these amounts are reciprocal deposits that the Company has placed through the Certificates of Deposits Account Registry Service (CDARS) Network of $68.4 million and $64.8 million , at December 31, 2017 and 2016 , respectively. Related party deposits from principal officers, directors and their affiliates at December 31, 2017 and 2016 were $15.7 million and $14.8 million , respectively. |
BORROWINGS AND BORROWING CAPACI
BORROWINGS AND BORROWING CAPACITY | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
BORROWINGS AND BORROWING CAPACITY | BORROWINGS AND BORROWING CAPACITY The Company has an available line of credit with the FHLB of Dallas, which allows the Company to borrow on a collateralized basis. FHLB advances are used to manage liquidity as needed. The advances are secured by a blanket lien on certain loans. Maturing advances are replaced by drawing on available cash, making additional borrowings or through increased customer deposits. At December 31, 2017 , the Company had a total borrowing capacity of $930.6 million , of which $606.2 million was available. FHLB advances of $282.0 million were outstanding at December 31, 2017 , at a weighted average rate of 1.45% . Letters of credit were $42.4 million at December 31, 2017 , of which $3.1 million expired in February 2018 and was renewed until February 2019, $ 8.0 million will expire in August 2018, $25.0 million will expire in October 2018 and $6.4 million will expire in December 2018. In 2015, the Company borrowed an additional $18.0 million under its credit agreement with another financial institution, which was in addition to the $10.1 million of indebtedness incurred under the credit agreement in 2014. The credit agreement matures in December 2021. The Company used the funds borrowed in 2015 to repay debt that F&M Bancshares owed and used the funds borrowed in 2014 to pay off a previous borrowing with another financial institution that had been entered into during 2013 in conjunction with the Independence Bank acquisition. In October 2015, the Company paid down $27.5 million of the credit agreement with a portion of the proceeds from the Initial Public Offering. The credit agreement includes certain restrictive covenants. At December 31, 2017 , the Company believes it was in compliance with all such debt covenants, except that return on assets at the Bank for the fourth quarter of 2017 was 0.46% (below the required minimum), primarily due to the tax provision adjustment recorded as a result of the enactment of the tax reform bill at the end of the fourth quarter. Such noncompliance has been waived the lender with respect to the fourth quarter of 2017. The interest rate on the debt is the Prime Rate minus 25 basis points, or 4.25% , at December 31, 2017 , and is paid quarterly. Scheduled principal maturities are as follows (dollars in thousands): 2018 $ — 2019 — 2020 — 2021 — 2022 and thereafter 569 Total $ 569 |
SUBORDINATED DEBT
SUBORDINATED DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated Borrowings [Abstract] | |
SUBORDINATED DEBT | SUBORDINATED DEBT Junior Subordinated Debentures On January 1, 2015, the Company acquired F&M Bancshares and assumed Farmers & Merchants Capital Trust II and Farmers & Merchants Capital Trust III. Each of the trusts is a capital or statutory business trust organized for the sole purpose of issuing trust securities and investing the proceeds in the Company’s junior subordinated debentures. The preferred trust securities of each trust represent preferred beneficial interests in the assets of the respective trusts and are subject to mandatory redemption upon payment of the junior subordinated debentures held by the trust. The common securities of each trust are wholly owned by the Company. Each trust’s ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated debentures. The debentures, which are the only assets of each trust, are subordinate and junior in right of payment to all of the Company’s present and future senior indebtedness. The Company has fully and unconditionally guaranteed each trust’s obligations under the trust securities issued by such trust to the extent not paid or made by each trust, provided such trust has funds available for such obligations. Under the provisions of each issue of the debentures, the Company has the right to defer payment of interest on the debentures at any time, or from time to time, for periods not exceeding five years . If interest payments on either issue of the debentures are deferred, the distributions on the applicable trust preferred securities and common securities will also be deferred. The Company assumed the junior subordinated debentures with an aggregate original principal amount of $11.3 million and a current fair value of $9.3 million at December 31, 2017 . At acquisition, the Company recorded a discount of $2.5 million on the debentures. The difference between the carrying value and contractual balance will be recognized as a yield adjustment over the remaining term for the debentures. At December 31, 2017 , the Company had $11.3 million outstanding in junior subordinated debentures issued to the Company’s unconsolidated subsidiary trusts. The junior subordinated debentures are included in Tier 1 capital under current regulatory guidelines and interpretations. A summary of pertinent information related to the Company's issuances of junior subordinated debentures outstanding at December 31, 2017 is set forth in the table below: Description Issuance Date Trust Preferred Securities Outstanding Interest Rate (1) Junior Subordinated Debt Owed to Trusts Maturity Date (2) (Dollars in thousands) Farmers & Merchants Capital Trust II November 13, 2003 $ 7,500 3 month LIBOR + 3.00% $ 7,732 November 8, 2033 Farmers & Merchants Capital Trust III June 30, 2005 3,500 3 month LIBOR + 1.80% 3,609 July 7, 2035 (1) The 3-month LIBOR in effect as of December 31, 2017 was 1.6098% . (2) All debentures are currently callable. Subordinated Notes In December 2017, the Bank completed the issuance, through a private placement, of $40.0 million aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes (the "Notes") due December 15, 2027. The Notes were issued at a price equal to 100% of the principal amount, resulting in net proceeds to the Bank of $39.4 million . The Bank intends to use the net proceeds from the offering to support its growth and for general corporate purposes. The Notes are intended to qualify as Tier 2 capital for bank regulatory purposes. The Notes bear a fixed interest rate of 5.25% per annum until (but excluding) December 15, 2022, payable semi-annually in arrears. From December 15, 2022, the Notes will bear a floating rate of interest equal to 3-Month LIBOR + 3.03% until the Notes mature on December 15, 2027, or such earlier redemption date, payable quarterly in arrears. The Notes will be redeemable by the Bank, in whole or in part, on or after December 15, 2022 or, in whole but not in part, upon the occurrence of certain specified tax events, capital events or investment company events. Any redemption will be at a redemption price equal to 100% of the principal amount of Notes being redeemed, plus accrued and unpaid interest, and will be subject to, and require, prior regulatory approval. The Notes are not subject to redemption at the option of the holders. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of the provision for federal income taxes are as follows: Years Ended December 31, 2017 2016 2015 (Dollars in thousands) Current $ 8,320 $ 11,162 $ 8,221 Deferred 427 (1,608 ) (446 ) Total $ 8,747 $ 9,554 $ 7,775 Reported income tax expense differs from the amounts computed by applying the U.S. federal statutory income tax rate to income before income taxes for the years ended December 31, 2017, 2016 and 2015 due to the following: Years Ended December 31, 2017 2016 2015 (Dollars in thousands) Taxes calculated at statutory rate $ 9,233 $ 11,342 $ 8,247 Increase (decrease) resulting from: Stock based compensation (755 ) 67 393 Provisional deferred tax adjustment related to reduction in U.S. federal statutory income tax rate 2,621 — — Effect of tax exempt income (2,328 ) (1,929 ) (890 ) Other, net (24 ) 74 25 Total $ 8,747 $ 9,554 $ 7,775 Income tax expense for 2017 was impacted by the adjustment of the Company's deferred tax assets related to the reduction in the U.S. federal statutory income tax rate to 21% under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017. As a result of the new law, the Company recognized a provisional net tax expense totaling $2.6 million . During 2016, the Company adopted a new accounting standard that requires the income tax effects associated with stock-based compensation to be recognized as a component of income tax expense. The Company recognized net tax benefits related to stock-based compensation totaling $1.1 million in 2017 and $371 thousand in 2016. Year-end deferred taxes are presented in the table below. As a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, deferred taxes as of December 31, 2017 are based on the newly enacted U.S. statutory federal income tax rate of 21%. Deferred taxes as of December 31, 2016 are based on the previously enacted U.S. statutory federal income tax rate of 35%. Deferred tax assets and liabilities are as follows: As of December 31, 2017 2016 (Dollars in thousands) Deferred tax assets: Allowance for credit losses $ 5,284 $ 6,938 Net unrealized loss on available for sale securities — 1,642 Deferred compensation 177 168 Total deferred tax assets 5,461 8,748 Deferred tax liabilities: Core deposit intangible and other purchase accounting adjustments (1,100 ) (1,953 ) Net unrealized gain on available for sale securities (65 ) — Premises and equipment basis difference (321 ) (568 ) Total deferred tax liabilities (1,486 ) (2,521 ) Net deferred tax assets $ 3,975 $ 6,227 The amount of federal and state income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the amount of other nondeductible items. For the year ended December 31, 2017 , income tax expense was $8.7 million compared with $9.6 million for the year ended December 31, 2016 and $7.8 million for the year ended December 31, 2015 . The decrease in income tax expense for 2017 compared to 2016 was primarily due to lower pre-tax earnings. The increase in income tax expense for 2016 compared to 2015 was primarily attributable to higher pre-tax earnings. The effective income tax rate for the year ended December 31, 2017 was 33.2% compared to 29.5% for the year ended December 31, 2016 and 33.0% for the year ended December 31, 2015 . The effective tax rate increased for the year ended 2017 compared to the same period in 2016 and 2015 due to the the nonrecurring tax provision adjustment recorded as a result of the revaluation of the deferred tax asset due to the enactment of the Tax Cuts and Jobs Act partially offset by tax free income from the purchase of additional municipal securities and from cashless exercises of stock options by employees in 2017 . Interest and penalties related to tax positions are recognized in the period in which they begin accruing or when the entity claims the position that does not meet the minimum statutory thresholds. The Company does not have any uncertain tax positions and does not have any interest and penalties recorded in the income statement for the years ended December 31, 2017 , 2016 and 2015 . The Company is no longer subject to examination by the US Federal Tax Jurisdiction for the years prior to 2014. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes. The Company’s financial results reflect the income tax effects of the Tax Cuts and Jobs Act for which the accounting under ASC Topic 740 is complete and provisional amounts for those specific income tax effects of the Tax Cuts and Jobs Act for which the accounting under ASC Topic 740 is incomplete but a reasonable estimate could be determined. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION During 2015, the Company’s Board of Directors and shareholders approved the 2015 Amended and Restated Stock Awards and Incentive Plan (the “Plan”) covering certain awards of stock-based compensation to key employees and directors of the Company. The Plan was amended in 2017 as the shareholders authorized a maximum aggregate number of shares of stock to be issued of 1,900,000 , any or all of which may be issued through incentive stock options. The Company accounts for stock based employee compensation plans using the fair value-based method of accounting. The Company recognized total stock based compensation expense of $1.8 million , $1.5 million and $1.4 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Stock Options Options to purchase a total of 1,304,431 shares of Company stock have been granted as of December 31, 2017 . Under the Plan, options are exercisable up to 10 years from the date of the grant and, dependent on the terms of the applicable award agreement generally vest 4 years after the date of grant. The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. The expected volatility was determined based on historical volatilities of Allegiance's common stock. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding and takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Black-Scholes pricing model utilizes certain assumptions noted in the table below. 2017 2016 2015 Risk-free interest rate 2.40 % 1.76 % 1.99 % Expected term 10.00 10.00 10.00 Expected stock price volatility 29.70 % 34.60 % 18.06 % Dividend yield — — — A summary of the activity in the stock option plan during the years ended December 31, 2017 and 2016 is set forth below: Number of Weighted Weighted Aggregate (In thousands) (In years) (In thousands) Options outstanding, January 1, 2016 969 $ 17.45 6.62 $ 6,006 Options granted 107 22.83 Options exercised (116 ) 15.42 Options forfeited (25 ) 21.56 Options outstanding, December 31, 2016 935 $ 18.21 6.23 $ 16,773 Options granted 64 36.88 Options exercised (215 ) 17.50 Options forfeited (9 ) 23.35 Options outstanding, December 31, 2017 775 $ 19.94 5.72 $ 13,718 Options vested and exercisable, December 31, 2017 484 $ 16.73 4.42 $ 10,127 The Company expects all outstanding options at December 31, 2017 to vest. Information related to the stock option plan during each year is as follows: 2017 2016 2015 (In thousands) Intrinsic value of options exercised $ 3,371 $ 1,128 $ — Cash received from option exercises 3,743 1,782 — Weighted average fair value of options granted $ 16.55 $ 10.51 $ 6.78 As of December 31, 2017 , there was $2.0 million of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 1.62 years . Restricted Stock Awards The Company has issued 104,462 restricted stock awards under the Plan as of December 31, 2017 . During 2015, the Company awarded 3,983 shares of restricted stock with a weighted average grant date fair value of $22.00 . During 2016, the Company awarded 15,401 shares of restricted stock with a weighted average grant date fair value of $17.52 . During 2017, the Company awarded 28,106 shares of restricted stock with a weighted average grant date fair value of $36.17 . The shares of restricted stock generally vest over a period of 4 years and are considered outstanding at the date of issuance. The Company accounts for shares of restricted stock by recording the fair value of the grant on the award date as compensation expense over the vesting period. A summary of the activity of the nonvested shares of restricted stock as of December 31, 2017 and 2016 including changes during the years then ended is as follows: Number of Weighted Average Grant Date Fair Value (Shares in thousands) Nonvested share awards outstanding, January 1, 2016 18 $ 19.68 Share awards granted 15 17.52 Share awards vested (9 ) 19.45 Nonvested share awards forfeited — — Nonvested share awards outstanding, December 31, 2016 24 18.31 Share awards granted 28 36.17 Share awards vested (11 ) 18.32 Nonvested share awards forfeited — — Nonvested share awards outstanding, December 31, 2017 41 $ 30.46 At December 31, 2017 , there was $511 thousand of unrecognized compensation expense related to the restricted stock awards which is expected to be recognized over a remaining period of 3.35 years . The total fair value of restricted stock awards that fully vested during the years ended December 31, 2017 , 2016 and 2015 was approximately $203 thousand , $172 thousand and $220 thousand , respectively. |
OTHER EMPLOYEE BENEFITS
OTHER EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
OTHER EMPLOYEE BENEFITS | OTHER EMPLOYEE BENEFITS 401(k) benefit plan The Company has a 401(k) benefit plan whereby participants may contribute a percentage of their compensation. The Company matches 50% of an employee's contributions up to 6% of the employee’s compensation, for a maximum match of 3% of compensation. Matching contribution expense as of December 31, 2017 , 2016 and 2015 was $789 thousand , $637 thousand and $551 thousand , respectively. Profit sharing plan The financial statements include an accrual for $1.5 million , $1.7 million and $1.2 million for a contribution to the plan as a profit sharing contribution for the years ended December 31, 2017 , 2016 and 2015 , respectively. Employee Stock Purchase Plan The Company offers its employees an opportunity to purchase shares of Allegiance’s common stock, pursuant to the terms of the Allegiance Bancshares, Inc. Amended and Restated Employee Stock Purchase Plan, as amended (“ESPP Plan”). The ESPP Plan was adopted by the Board of Directors to provide employees with an opportunity to purchase shares of Allegiance in order to provide employees a more direct opportunity to participate in the Company’s growth. The Company allows employees to purchase shares at a 15% discount to market value and thus incurs stock based compensation expense for the fair value of the discount given. The Company recognized total stock based compensation expense of $144 thousand , $90 thousand and $96 thousand for the years ended December 31, 2017 , 2016 , and 2015 respectively. |
OFF-BALANCE SHEET ARRANGEMENTS,
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Off Balance Sheet Arrangements Commitments And Contingencies Disclosure [Abstract] | |
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES | OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company enters into various transactions, which, in accordance with accounting principles generally accepted in the United States are not included in the Company’s consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve to varying degrees elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company uses the same credit policies in making commitments and conditional obligations as it does for on balance sheet instruments. Commitments to Extend Credit 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 do not necessarily represent future cash funding requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for credit losses. The amount and type of collateral, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Standby Letters of Credit Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, the Company has the rights to the underlying collateral. The credit risk to the Company in issuing letters of credit is essentially the same as that involved in extending loan facilities to its customers. The Company’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. The contractual amounts of financial instruments with off-balance sheet risk are as follows: December 31, 2017 2016 Fixed Variable Fixed Variable (Dollars in thousands) Commitments to extend credit $ 369,573 $ 250,467 $ 353,822 $ 232,551 Standby letters of credit 15,445 1,725 9,423 124 Total $ 385,018 $ 252,192 $ 363,245 $ 232,675 Commitments to make loans are generally made for periods of 120 days or less. As of December 31, 2017 , the fixed rate loan commitments have interest rates ranging from 1.60% to 7.50% with a weighted average maturity and rate of 2.71 years and 4.98% , respectively. Leases The following table presents a summary of non-cancelable future operating lease commitments as of December 31, 2017 (dollars in thousands): 2018 $ 1,806 2019 1,030 2020 1,039 2021 911 2022 893 Thereafter 3,780 $ 9,459 It is expected that in the normal course of business, expiring leases will be renewed or replaced by leases on other property or equipment. Rent expense under all noncancelable operating lease obligations aggregated approximately $2.8 million , $2.7 million and $2.6 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
REGULATORY CAPITAL MATTERS
REGULATORY CAPITAL MATTERS | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
REGULATORY CAPITAL MATTERS | REGULATORY CAPITAL MATTERS The Company and the Bank are subject to various regulatory capital requirements administered by the 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 weightings and other factors. Failure to meet minimum capital requirements can initiate actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. The final rules implementing Basel Committee on Banking Supervision’s capital guideline for U.S. Banks (Basel III Rules) became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Management believes as of December 31, 2017 and 2016 , the Company and the Bank meet all capital adequacy requirements to which they were subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited as is asset growth and expansion, and capital restoration plans are required. At year end 2017 and 2016 , the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. The following is a summary of the Company’s and the Bank’s actual and required capital ratios at December 31, 2017 and 2016 : Actual Minimum Required For Capital Minimum Required Plus Capital Conservation Buffer To Be Categorized As Well Capitalized Under Amount Ratio Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) ALLEGIANCE BANCSHARES, INC. (Consolidated) As of December 31, 2017 Total Capital (to Risk Weighted Assets) $ 336,829 13.43 % $ 200,687 8.00 % $ 232,044 9.250 % N/A N/A Common Equity Tier 1 Capital (to Risk Weighted Assets) 264,521 10.54 % 112,886 4.50 % 144,244 5.750 % N/A N/A Tier 1 Capital (to Risk Weighted Assets) 273,825 10.92 % 150,515 6.00 % 181,872 7.250 % N/A N/A Tier 1 Capital (to Average Tangible Assets) 273,825 9.84 % 111,274 4.00 % 111,274 4.000 % N/A N/A As of December 31, 2016 Total Capital (to Risk Weighted Assets) $ 268,155 12.57 % $ 170,690 8.00 % $ 184,025 8.625 % N/A N/A Common Equity Tier 1 Capital (to Risk Weighted Assets) 241,048 11.30 % 96,013 4.50 % 109,348 5.125 % N/A N/A Tier 1 Capital (to Risk Weighted Assets) 250,244 11.73 % 128,018 6.00 % 141,353 6.625 % N/A N/A Tier 1 Capital (to Average Tangible Assets) 250,244 10.35 % 96,708 4.00 % 96,708 4.000 % N/A N/A ALLEGIANCE BANK As of December 31, 2017 Total Capital (to Risk Weighted Assets) $ 331,872 13.24 % $ 200,596 8.00 % $ 231,939 9.250 % $ 250,745 10.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 268,868 10.72 % 112,835 4.50 % 144,179 5.750 % 162,985 6.50 % Tier 1 Capital (to Risk Weighted Assets) 268,868 10.72 % 150,447 6.00 % 181,790 7.250 % 200,596 8.00 % Tier 1 Capital (to Average Tangible Assets) 268,868 9.67 % 111,230 4.00 % 111,230 4.000 % 139,037 5.00 % As of December 31, 2016 Total Capital (to Risk Weighted Assets) $ 247,606 11.61 % $ 170,630 8.00 % $ 183,960 8.625 % $ 213,288 10.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 229,694 10.77 % 95,979 4.50 % 109,310 5.125 % 138,637 6.50 % Tier 1 Capital (to Risk Weighted Assets) 229,694 10.77 % 127,973 6.00 % 141,303 6.625 % 170,630 8.00 % Tier 1 Capital (to Average Tangible Assets) 229,694 9.50 % 96,679 4.00 % 96,679 4.000 % 120,849 5.00 % Dividend Restrictions Allegiance's principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. In addition, Allegiance's credit agreement with another financial institution also limits its ability to pay dividends. Under these regulations, the amount of dividends that may be paid by the Bank in any calendar year is limited to the current year’s net profits combined with the retained net profits of the preceding two years, subject to the capital requirements described above. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Diluted earnings per common share is computed using the weighted-average number of common 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. Outstanding stock options issued by the Company represent the only dilutive effect reflected in diluted weighted average shares. Restricted shares are considered outstanding at the date of grant, accounted for as participating securities and are included in basic and diluted weighted average common shares outstanding. Years Ended December 31, 2017 2016 2015 Amount Per Share Amount Per Share Amount Per Share (Amounts in thousands, except per share data) Net income attributable to common shareholders $ 17,632 $ 22,851 $ 15,227 Basic: Weighted average common shares outstanding 13,125 $ 1.34 12,873 $ 1.78 10,470 $ 1.45 Diluted: Add incremental shares for: Dilutive effect of stock option exercises 333 201 184 Total 13,458 $ 1.31 13,074 $ 1.75 10,654 $ 1.43 Stock options for 28 thousand shares were not considered in computing diluted earnings per share as of December 31, 2017 because they were antidilutive. All stock options as of December 31, 2016 were dilutive and considered in computing diluted earnings per share. |
PARENT COMPANY ONLY FINANCIAL S
PARENT COMPANY ONLY FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY ONLY FINANCIAL STATEMENTS | PARENT COMPANY ONLY FINANCIAL STATEMENTS ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED BALANCE SHEETS December 31, 2017 2016 (Dollars in thousands) ASSETS Cash and due from banks $ 4,857 $ 21,206 Investment in subsidiary 311,553 268,804 Other assets 791 412 TOTAL $ 317,201 $ 290,422 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES: Borrowed funds $ 569 $ 569 Subordinated debentures 9,304 9,197 Accrued interest payable and other liabilities 463 839 Total liabilities 10,336 10,605 SHAREHOLDERS’ EQUITY: Common stock 13,227 12,958 Capital surplus 218,408 212,649 Retained earnings 74,894 57,262 Accumulated other comprehensive income (loss) 336 (3,052 ) Total shareholders’ equity 306,865 279,817 TOTAL $ 317,201 $ 290,422 ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF INCOME For the Years Ended December 31, 2017 2016 2015 (Dollars in thousands) OPERATING INCOME: Other income $ 13 $ 11 $ 16 Total operating income 13 11 16 OPERATING EXPENSE: Interest expense on borrowed funds 33 30 707 Other expenses 1,465 1,204 771 Total operating expense 1,498 1,234 1,478 Income before income tax benefit and equity in undistributed income of subsidiaries (1,485 ) (1,223 ) (1,462 ) Income tax benefit 756 428 500 Income before equity in undistributed income of subsidiaries (729 ) (795 ) (962 ) Equity in undistributed income of subsidiaries 18,361 23,646 16,748 Net income $ 17,632 $ 22,851 $ 15,786 Preferred stock dividends — — 559 Net income attributable to common shareholders $ 17,632 $ 22,851 $ 15,227 ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017 2016 2015 (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 17,632 $ 22,851 $ 15,786 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed earnings of subsidiaries (18,361 ) (23,646 ) (16,748 ) Net amortization of discount on subordinated debentures 107 107 218 (Increase) decrease in other assets (378 ) (399 ) 220 (Decrease) increase in accrued interest payable and other liabilities (377 ) 186 (462 ) Net cash used in operating activities (1,377 ) (901 ) (986 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash and cash equivalents acquired in the purchase of F&M Bancshares, Inc. — — 818 Capital investment in bank subsidiary (21,000 ) — (12,000 ) Net cash used in investing activities (21,000 ) — (11,182 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 4,248 2,006 133 Proceeds from initial public offering — — 57,138 Stock based compensation expense 1,780 1,501 1,351 Proceeds on borrowed funds — — 18,000 Paydowns of borrowed funds — — (45,500 ) Redemption of preferred stock — — (11,550 ) Preferred stock dividends — — (559 ) Issuance (repurchase) of treasury stock — 38 (52 ) Net cash provided by financing activities 6,028 3,545 18,961 NET CHANGE IN CASH AND CASH EQUIVALENTS (16,349 ) 2,644 6,793 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 21,206 18,562 11,769 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,857 $ 21,206 $ 18,562 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Interest Net Interest Net Income Attributable to Common Earnings Per Share (1) Income Income Shareholders Basic Diluted (Dollars in thousands, except per share data) 2017 First quarter $ 27,512 $ 24,128 $ 6,047 $ 0.46 $ 0.45 Second quarter 28,987 25,107 5,395 0.41 0.40 Third quarter 30,901 26,997 2,986 0.23 0.22 Fourth quarter 32,038 27,436 3,204 0.24 0.24 2016 First quarter $ 23,451 $ 21,084 $ 6,355 $ 0.49 $ 0.49 Second quarter 24,527 21,949 5,254 0.41 0.40 Third quarter 26,319 23,409 5,471 0.42 0.42 Fourth quarter 26,481 23,422 5,771 0.45 0.44 (1) Earnings per share are computed independently for each of the quarters presented and therefore may not total earnings per share for the year. |
NATURE OF OPERATIONS AND SUMM27
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation- The consolidated financial statements include Allegiance Bancshares, Inc. (“Allegiance”) and its wholly-owned subsidiary, Allegiance Bank (the “Bank”, and together with Allegiance, collectively referred to as the “Company”) provide commercial and retail loans and commercial banking services. Intercompany transactions and balances are eliminated in consolidation under U.S. generally accepted accounting principles (“GAAP”). The Company derives substantially all of its revenues and income from the operation of the Bank. Allegiance Bank is a Texas banking association which began operations in October 2007. The Company is focused on delivering a wide variety of relationship-driven commercial banking products and community-oriented services tailored to meet the needs of small to mid-sized businesses, professionals and individuals through its 16 offices and one loan production office in Houston, Texas and the surrounding region, as of the year ended December 31, 2017 . The Bank provides its customers with a variety of banking services including checking accounts, savings accounts and certificates of deposit and its primary lending products are commercial, personal, automobile, mortgage and home improvement loans. The Bank also offers safe deposit boxes, automated teller machines, drive-through services and 24-hour depository facilities. |
Use of Estimates | Use of Estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the reporting of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents —Cash and cash equivalents include cash, deposits with other financial institutions with maturities not greater than one year . Net cash flows are reported for customer loan and deposit transactions. |
Securities | Securities —Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value. Unrealized gains and losses are excluded from earnings and reported, net of tax, as a separate component of shareholders’ equity until realized. Securities within the available for sale portfolio may be used as part of the Company’s asset/liability strategy and may be sold in response to changes in interest rate risk, prepayment risk or other similar economic factors. Interest earned on these assets is included in interest income. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income, net of applicable taxes. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The previous amortized cost bases less the OTTI recognized in earnings shall become the new amortized cost basis of the security. |
Loans held for sale | Loans held for Sale —Loans held for sale are carried at lower of aggregate cost or fair value. During 2015, the Company purchased F&M Bancshares, Inc. At December 31, 2015, loans held for sale consisted of loans at two former F&M Bancshares branches in Central Texas that were for sale. On January 31, 2016, the Company completed the sale of these two branches. |
Loans Held for Investment | Loans Held for Investment —Loans held for investment are those that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Loans are typically secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Interest income is accrued on the unpaid principal balance. |
Nonrefundable Fees and Costs Associated with Lending Activities | Nonrefundable Fees and Costs Associated with Lending Activities — Loan commitment and loan origination fees, and certain direct origination costs, are deferred and recognized in interest income as an adjustment to yield without anticipating prepayments using the interest method over the related loan life or; if the commitment expires unexercised, balances are recognized in income upon expiration of the commitment. |
Nonperforming and Past Due Loans | Nonperforming and Past Due Loans —The Company has several procedures in place to assist it in maintaining the overall quality of its loan portfolio. The Company has established underwriting guidelines to be followed by its officers, and monitors its delinquency levels for any negative or adverse trends. There can be no assurance, however, that the Company’s loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions or other factors. Past due status is based on the contractual terms of the loan. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The Company generally classifies a loan as nonperforming, automatically places the loan on nonaccrual status, ceases accruing interest and reverses all unpaid accrued interest against interest income, when, in management’s opinion, the borrower may be unable to meet payment obligations, when the payment of principal or interest on a loan is delinquent for 90 days, as well as when required by regulatory provisions, unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. Any payments received on nonaccrual loans are applied first to outstanding loan amounts. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan. Nonaccrual loans and loans past due 90 days include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. When available information confirms that specific loans, or portions thereof, are uncollectible, these amounts are charged-off against the allowance. All loan types are considered delinquent after 30 days past due and are typically charged-off or charged-down no later than 120 days past due, with consideration of, but not limited to, the following criteria in determining the need and optional timing of the charge-off or charge-down: (1) the Bank is in the process of repossession or foreclosure and there appears to be a likely deficiency, (2) the collateral securing the loan has been sold and there is an actual deficiency, (3) the Bank is proceeding with lengthy legal action to collect its balance, (4) the borrower is unable to be located or (5) the borrower has filed bankruptcy. Charge-offs occur when the Company confirms a loss on a loan. |
Troubled debt restructurings (TDRs) | Troubled debt restructurings (TDRs) —Loans on which terms have been modified resulting in a concession have been granted because of a borrower’s financial difficulty are considered troubled debt restructurings and classified as impaired. The restructuring of a loan is considered a troubled debt restructuring if both (1) the borrower is experiencing financial difficulties and (2) the creditor has granted a concession that it would not otherwise consider. Concessions may include reductions of interest rates to a below market interest rate: extension of the terms of the debt, principal forgiveness, restructuring the payment of the debt obligation; and other actions intended to minimize potential losses. Subsequent to identification as a troubled debt restructuring such loans are then evaluated for impairment on an individual basis whereby the loans are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan: the loan is reported, net, at the fair value of the collateral. |
Impaired Loans | Impaired Loans —On a continuous basis, loans are evaluated for impairment classification. Loans are considered impaired when based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case-by-case basis taking into consideration all of the circumstances surrounding the loan and the borrower including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. |
Allowance for Loan Losses | Allowance for Loan Losses —The allowance for loan losses is a valuation allowance that is established through charges to earnings in the form of a provision for loan losses. The amount of the allowance for loan losses is affected by the following: (1) charge-offs of loans that decrease the allowance, (2) subsequent recoveries on loans previously charged off that increase the allowance and (3) provisions for loan losses charged to income that increase the allowance. Throughout the year, management estimates the probable incurred losses in the loan portfolio to determine if the allowance for loan losses is adequate to absorb such losses. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The Company follows a loan review program to evaluate the credit risk in the loan portfolio. Loans that have been identified as impaired are generally reviewed on a quarterly basis in order to determine whether a specific reserve is required. The general component covers non-impaired loans and is based on industry and Company specific historical loan loss experience, volume, growth and composition of the loan portfolio, the evaluation of the Company’s loan portfolio through its internal loan review process, general current economic conditions both internal and external to the Company that may affect the borrower’s ability to pay, value of collateral and other qualitative relevant risk factors. Based on a review of these estimates, the allowance for loan losses is adjusted to a level determined to be adequate. Estimates of loan losses are inherently subjective as it involves an exercise of judgment. It is the judgment of management that the allowance for loan losses reflected in the consolidated balance sheets is adequate to absorb probable losses that exist in the loan portfolio as of the reporting date. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The Company assesses the exposure for each modification, either by collateral discounting or by calculation of the present value of future cash flows, and determines if a specific allocation to the allowance for loan losses is needed. Once an obligation has been restructured because of such credit problems, it continues to be considered a troubled debt restructuring until paid in full. The Company returns troubled debt restructurings to accrual status only if (1) all contractual amounts due can reasonably be expected to be repaid within a prudent period and (2) repayment has been in accordance with the contract for a sustained period, typically at least twelve months. Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of loan losses expected to be realized over the remaining lives of the loans. Therefore no corresponding allowance for loan losses is recorded for these loans at acquisition. Methods utilized to estimate any subsequently required allowance for loan losses for acquired loans not deemed credit-impaired at acquisition are similar to originated loans. However, the estimate of loss is based on the unpaid principal balance and then compared to any remaining unaccreted purchase discount. To the extent that the calculated loss is greater than the remaining unaccreted purchase discount, an allowance is recorded for such difference. |
Premises and Equipment | Premises and Equipment —Premises and equipment are carried at cost less accumulated depreciation. Depreciation expense is calculated principally using the straight-line method over the estimated useful lives of the assets which range from 3 to 40 years . Leasehold improvements are amortized using the straight-line method over the periods of the leases or the estimated useful lives, whichever is shorter. Land is carried at cost. |
Other Real Estate Owned | Other Real Estate Owned —Assets acquired through or instead of loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions. At December 31, 2017 , the $365 thousand balance of other real estate owned was secured by a commercial real estate property for which there was no formal foreclosure in process. |
Federal Home Loan Bank (“FHLB”) Stock | Federal Home Loan Bank (“FHLB”) Stock— The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. |
Bank Owned Life Insurance | Bank Owned Life Insurance— During 2015, the Company purchased bank owned life insurance policies on certain key executives and acquired life insurance policies in conjunction with the acquisition of F&M Bancshares. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value, which is the most reasonable estimate of fair value, adjusted for other charges or other amounts due that are probable at settlement. |
Goodwill | Goodwill —Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is determined to have an indefinite useful life and is not amortized, but is tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company performs its annual impairment test on October 1. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. |
Core Deposit Intangibles | Core Deposit Intangibles —Core deposit and acquired customer relationship intangibles arising from acquisitions are amortized using a straight-line amortization method over their estimated useful lives, which is seven to nine years . |
Borrowed Funds | Borrowed Funds —The Company has a credit agreement with another financial institution. The Company pledged its shares in the Bank’s stock as collateral for the borrowing. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments —Financial instruments include off-balance sheet credit instruments, such as commitments to extend credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Stock Based Compensation | Stock Based Compensation —Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. The expense associated with stock based compensation is recognized over the required service period, generally defined as the vesting period of each individual arrangement. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The fair value of stock options granted and employee stock purchase plan awards are estimated at the date of grant using the Black-Scholes option-pricing model and the market price of the Company’s common stock on the date of grant is used to value restricted stock awards. |
Employee Stock Purchase Plan | Employee Stock Purchase Plan —The cost of shares issued in the ESPP, but not allocated to participants, is shown as a reduction of shareholder’s equity. Compensation expense is based on the market price of the shares as they are committed to be released to participant accounts. |
Income Taxes | Income Taxes —Income tax expense is the total of the current year income tax due and the change in deferred tax assets or liabilities. Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are recorded in other assets on the Company’s consolidated balance sheets. The Company records uncertain tax positions on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the related tax authority. For tax positions not meeting the more likely than not test, no tax benefit is recorded. Any interest and/or penalties related to income taxes are reported as a component of income tax expense. The Company files a consolidated federal income tax return. |
Comprehensive income | Comprehensive income —Comprehensive income consists of net income and other comprehensive income which includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments —Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Operating Segments | Operating Segments— While management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. All of the financial service operations are considered by management to be aggregated in one reportable operating segment. |
Reclassifications | Reclassifications —Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. |
Earnings per Common Share | Earnings per Common Share —Basic earnings per common share is calculated as net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, restricted stock awards and the Employee Stock Purchase Plan. |
Loss Contingencies | Loss Contingencies —Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements. |
Dividend Restrictions | Dividend Restrictions —Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Allegiance or by Allegiance to its shareholders. In addition, Allegiance's credit agreement with another financial institution also limits its ability to pay dividends. |
New Accounting Standards | New Accounting Standards Adoption of New Accounting Standards On January 1, 2016, the Company adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09, all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. The Company elected to adopt the provisions of ASU 2016-09 in 2016 in advance of the required application date of January 1, 2017 without a significant impact on its financial statements. Newly Issued But Not Yet Effective Accounting Standards ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised 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 new standard was effective for the Company on January 1, 2018 and management has completed its analysis of the impact of the standard’s adoption. Adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements and related disclosures. The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of ASU 2014-09. The Company’s revenue recognition pattern for revenue streams within the scope of ASU 2014-09, including but not limited to service charges on deposit accounts and gains/losses on the sale of OREO, did not change significantly from current practice. The standard permits the use of either the full retrospective or modified retrospective transition method. The Company elected to use the modified retrospective transition method which requires application of ASU 2014-09 to uncompleted contracts at the date of adoption; however, periods prior to the date of adoption will not be retrospectively revised as the impact of the ASU on uncompleted contracts at the date of adoption was not material. ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities." ASU 2016-01 makes targeted amendments to fair value measurement and disclosure guidance. ASU 2016-01 requires equity investments (other than equity method investments) to be measured at fair value with changes in fair value recognized in net income. This change is only applied if a readily determinable fair value can be obtained. The update also requires the use of exit prices to measure fair value for disclosure purposes as well as other enhanced disclosure requirements. ASU 2016-01 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on its financial statements and related disclosures. 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; however, 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. Early application of this ASU is permitted for all entities. Adoption of ASU 2016-02 is not expected to have a material impact on the Company’s financial statements. The Company leases certain properties and equipment under operating leases that will result in the recognition of lease assets and lease liabilities on the Company’s balance sheet under the ASU. ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” Among other things, 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. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. 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 is effective for the Company on January 1, 2020 and must be applied using the modified retrospective approach with limited exceptions. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. While the Company is currently unable to reasonably estimate the impact of adopting ASU 2016-13, the Company expects that the impact of adoption will be significantly influenced by the composition, characteristics and quality of its loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date. 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. Among other things, the update clarifies the appropriate classification for proceeds from settlement of bank owned life insurance (BOLI) policies. Based on preliminary assessments, the Company expects to change the classification of proceeds from settlement of BOLI policies from operating activities to investing activities. Other changes in classification resulting from this update are not expected to be significant. ASU 2016-15 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on the Company's financial statements. ASU No. 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 which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2020, with earlier adoption permitted and is not expected to have a significant impact on the Company's financial statements. ASU 2017-08,“Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. Under prior guidance, entities were generally required to amortize premiums on individual, non-pooled callable debt securities as a yield adjustment over the contractual life of the security. ASU 2017-08 does not change the accounting for callable debt securities held at a discount. ASU 2017-08 will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2017-08 on its financial statements. ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting.” ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. ASU 2017-09 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on its financial statements. ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 amends ASC 220, Income Statement - Reporting Comprehensive Income , to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective on January 1, 2019, with early adoption permitted. The Company plans to early adopt and will recognize a decrease to retained earnings of $72 thousand due to a reclassification on January 1, 2018. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | As of December 31, 2015, the Company finalized its valuation of all assets and liabilities acquired, resulting in no changes to preliminary acquisition accounting adjustments. A summary of the final purchase price allocation is as follows (dollars in thousands): Fair value of consideration paid: Common shares issued (2,338,520 shares) $ 51,447 Preferred shares issued (11,550 shares) 11,550 Cash consideration 642 Total consideration paid $ 63,639 Fair value of assets acquired: Cash and cash equivalents $ 107,128 Investment securities 14,722 Loans, net 404,637 Premises and equipment 7,699 Core deposit intangibles 4,313 Other assets 15,896 Total assets acquired $ 554,395 Fair value of liabilities assumed: Deposits $ 489,556 Subordinated debt 8,871 Borrowed funds 18,000 Other liabilities 2,574 Total liabilities assumed 519,001 Fair value of net assets acquired $ 35,394 Goodwill resulting from acquisition $ 28,245 |
Schedule of Details of Loans Acquired | The following presents details of all loans acquired as of January 1, 2015: Contractual Balance Fair Value Discount (Dollars in thousands) Commercial and industrial $ 96,891 $ 95,256 $ (1,635 ) Real estate: Commercial real estate (including multi-family residential) 225,191 222,082 (3,109 ) Commercial real estate construction and land development 40,787 40,094 (693 ) 1-4 family residential (including home equity) 35,897 35,488 (409 ) Residential construction 6,467 6,395 (72 ) Consumer and other 5,421 5,322 (99 ) Total loans $ 410,654 $ 404,637 $ (6,017 ) |
Schedule of Pro Forma Information | The following table presents unaudited pro forma financial information as if the acquisition had occurred at the beginning of 2014. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates. For the Years Ended December 31, 2015 2014 (Dollars in thousands, except per share data) Net interest income $ 77,598 $ 71,664 Net income attributable to common shareholders 14,170 14,999 Basic earnings per common share 1.35 1.53 Diluted earnings per common share 1.33 1.51 |
GOODWILL AND CORE DEPOSIT INT29
GOODWILL AND CORE DEPOSIT INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Changes in the carrying amount of the Company’s goodwill and core deposit intangibles were as follows: Goodwill Core Deposit (Dollars in thousands) Balance as of January 1, 2015 $ 11,144 $ 1,747 Acquisition of F&M Bancshares 28,245 4,313 Amortization — (830 ) Balance as of December 31, 2015 39,389 5,230 Sale of branch assets — (390 ) Amortization — (785 ) Balance as of December 31, 2016 39,389 4,055 Amortization — (781 ) Balance as of December 31, 2017 $ 39,389 $ 3,274 |
Schedule of Future Amortization Expense | The estimated aggregate future amortization expense for core deposit intangibles remaining as of December 31, 2017 is as follows (dollars in thousands): 2018 $ 781 2019 781 2020 744 2021 484 2022 484 Thereafter — Total $ 3,274 |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Securities | The amortized cost and fair value of investment securities were as follows: December 31, 2017 Amortized Gross Gross Fair (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 8,507 $ 232 $ (24 ) $ 8,715 Municipal securities 222,330 2,470 (1,842 ) 222,958 Agency mortgage-backed pass-through securities 32,014 159 (361 ) 31,812 Corporate bonds 46,247 62 (179 ) 46,130 Total $ 309,098 $ 2,923 $ (2,406 ) $ 309,615 December 31, 2016 Amortized Gross Gross Fair (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 5,883 $ 266 $ — $ 6,149 Municipal securities 242,501 956 (5,655 ) 237,802 Agency mortgage-backed pass-through securities 27,496 265 (437 ) 27,324 Corporate bonds 45,271 77 (168 ) 45,180 Total $ 321,151 $ 1,564 $ (6,260 ) $ 316,455 |
Schedule of Investments Classified by Contractual Maturity Date | The amortized cost and fair value of investment securities at December 31, 2017 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations at any time with or without call or prepayment penalties. Amortized Fair (Dollars in thousands) Due in one year or less $ 10,834 $ 10,837 Due after one year through five years 58,894 58,832 Due after five years through ten years 93,535 93,673 Due after ten years 113,821 114,461 Subtotal 277,084 277,803 Agency mortgage-backed pass through securities 32,014 31,812 Total $ 309,098 $ 309,615 |
Schedule of Investment Securities, Continuous Unrealized Loss Position | Securities with unrealized losses segregated by length of time such securities have been in a continuous loss position are as follows: December 31, 2017 Less than 12 Months More than 12 Months Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (Dollars in thousands) Available for Sale U.S. Government and agency securities $ 3,110 $ (9 ) $ 595 $ (15 ) $ 3,705 $ (24 ) Municipal securities 42,249 (517 ) 56,483 (1,325 ) 98,732 (1,842 ) Agency mortgage-backed pass-through securities 13,238 (105 ) 8,921 (256 ) 22,159 (361 ) Corporate bonds 30,203 (179 ) — — 30,203 (179 ) Total $ 88,800 $ (810 ) $ 65,999 $ (1,596 ) $ 154,799 $ (2,406 ) December 31, 2016 Less than 12 Months More than 12 Months Total Estimated Unrealized Estimated Unrealized Estimated Unrealized (Dollars in thousands) Available for Sale U.S. Government and agency securities $ — $ — $ — $ — $ — $ — Municipal securities 178,876 (5,655 ) — — 178,876 (5,655 ) Agency mortgage-backed pass-through securities 12,520 (347 ) 2,803 (90 ) 15,323 (437 ) Corporate bonds 24,629 (168 ) — — 24,629 (168 ) Total $ 216,025 $ (6,170 ) $ 2,803 $ (90 ) $ 218,828 $ (6,260 ) |
LOANS AND ALLOWANCE FOR LOAN 31
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily all made to borrowers located within Texas and are classified by major type as follows: December 31, 2017 2016 (Dollars in thousands) Commercial and industrial $ 457,129 $ 416,752 Mortgage warehouse (1) 69,456 67,038 Real estate: Commercial real estate (including multi-family residential) 1,080,247 891,989 Commercial real estate construction and land development 243,389 159,247 1-4 family residential (including home equity) 301,219 246,987 Residential construction 109,116 98,657 Consumer and other 10,320 10,965 Total loans 2,270,876 1,891,635 Allowance for loan losses (23,649 ) (17,911 ) Loans, net $ 2,247,227 $ 1,873,724 (1) Mortgage warehouse loans are to unaffiliated mortgage loan originators collateralized by mortgage promissory notes which are segregated in the Company’s mortgage warehouse portfolio. These promissory notes originated by the Company’s mortgage warehouse customers carry terms and conditions as would be expected in the competitive permanent mortgage market and serve as collateral under a traditional mortgage warehouse arrangement whereby such promissory notes are warehoused under a revolving credit facility to allow for the end investor (or purchaser) of the note to receive a complete loan package and remit funds to the bank. The maturity of each revolving line of credit facility is normally less than 24 months, while the promissory notes that are warehoused under such facilities may have a much shorter length of time outstanding. For mortgage promissory notes secured by residential property, the warehouse time is normally 10 to 20 days. For mortgage promissory notes secured by commercial property, the warehouse time is normally 40 to 50 days. The funded balance of the mortgage warehouse portfolio can have significant fluctuation based upon market demand for the product, level of home sales and refinancing activity, market interest rates and velocity of end investor processing times. |
Schedule of Related Party Transactions | An analysis of activity with respect to these related-party loans is as follows: 2017 (Dollars in thousands) Beginning balance on January 1 $ 3,943 New loans and reclassified related loans 805 Repayments (380 ) Ending balance on December 31 $ 4,368 |
Past Due Financing Receivables | An aging analysis of the recorded investment in past due loans, segregated by class of loans, is as follows: December 31, 2017 Loans Past Due and Still Accruing 30-89 90 or More Total Past Nonaccrual Loans Current Total Loans (Dollars in thousands) Commercial and industrial $ 1,069 $ — $ 1,069 $ 6,437 $ 449,623 $ 457,129 Mortgage warehouse — — — — 69,456 69,456 Real estate: Commercial real estate (including multi-family residential) 4,932 — 4,932 6,110 1,069,205 1,080,247 Commercial real estate construction and land development 5,274 — 5,274 — 238,115 243,389 1-4 family residential (including home equity) 924 — 924 781 299,514 301,219 Residential construction 674 — 674 — 108,442 109,116 Consumer and other 74 — 74 — 10,246 10,320 Total loans $ 12,947 $ — $ 12,947 $ 13,328 $ 2,244,601 $ 2,270,876 December 31, 2016 Loans Past Due and Still Accruing 30-89 90 or More Total Past Nonaccrual Loans Current Total Loans (Dollars in thousands) Commercial and industrial $ 1,028 $ 911 $ 1,939 $ 3,896 $ 410,917 $ 416,752 Mortgage warehouse — — — — 67,038 67,038 Real estate: Commercial real estate (including multi-family residential) 1,661 — 1,661 11,663 878,665 891,989 Commercial real estate construction and land development 263 — 263 — 158,984 159,247 1-4 family residential (including home equity) 280 — 280 217 246,490 246,987 Residential construction — — — — 98,657 98,657 Consumer and other 125 — 125 12 10,828 10,965 Total loans $ 3,357 $ 911 $ 4,268 $ 15,788 $ 1,871,579 $ 1,891,635 |
Impaired Financing Receivables | The following table presents the average recorded investment of impaired loans and interest recognized on impaired loans. Years Ended December 31, 2017 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (Dollars in thousands) Commercial and industrial $ 11,972 $ 418 $ 9,427 $ 442 Mortgage warehouse — — — — Real estate: Commercial real estate (including multi-family residential) 20,606 475 12,840 393 Commercial real estate construction and land development 314 10 — — 1-4 family residential (including home equity) 1,167 18 228 24 Residential construction — — — — Consumer and other — 1 26 3 Total $ 34,059 $ 922 $ 22,521 $ 862 Impaired loans by class of loans are set forth in the following tables. December 31, 2017 Recorded Unpaid Related (Dollars in thousands) With no related allowance recorded: Commercial and industrial $ 5,792 $ 6,666 $ — Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 12,155 12,155 — Commercial real estate construction and land development 209 209 — 1-4 family residential (including home equity) 948 948 — Residential construction — — — Consumer and other — — — Total 19,104 19,978 — With an allowance recorded: Commercial and industrial 5,600 5,652 1,640 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 8,009 8,194 716 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) — — — Residential construction — — — Consumer and other — — — Total 13,609 13,846 2,356 Total: Commercial and industrial 11,392 12,318 1,640 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 20,164 20,349 716 Commercial real estate construction and land development 209 209 — 1-4 family residential (including home equity) 948 948 — Residential construction — — — Consumer and other — — — $ 32,713 $ 33,824 $ 2,356 December 31, 2016 Recorded Unpaid Related (Dollars in thousands) With no related allowance recorded: Commercial and industrial $ 5,300 $ 5,414 $ — Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 11,748 11,833 — Commercial real estate construction and land development — — — 1-4 family residential (including home equity) 217 217 — Residential construction — — — Consumer and other 5 5 — Total 17,270 17,469 — With an allowance recorded: Commercial and industrial 3,108 3,328 1,543 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 573 573 105 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) — — — Residential construction — — — Consumer and other 6 6 6 Total 3,687 3,907 1,654 Total: Commercial and industrial 8,408 8,742 1,543 Mortgage warehouse — — — Real estate: Commercial real estate (including multi-family residential) 12,321 12,406 105 Commercial real estate construction and land development — — — 1-4 family residential (including home equity) 217 217 — Residential construction — — — Consumer and other 11 11 6 $ 20,957 $ 21,376 $ 1,654 |
Financing Receivable Credit Quality Indicators | Based on the most recent analysis performed, the risk category of loans by class of loan at December 31, 2017 is as follows: Pass Watch Special Mention Substandard Doubtful Total (Dollars in thousands) Commercial and industrial $ 427,336 $ 10,274 $ 2,195 $ 17,324 $ — $ 457,129 Mortgage warehouse 69,456 — — — — 69,456 Real estate: Commercial real estate (including multi-family residential) 1,016,831 23,039 4,685 35,692 — 1,080,247 Commercial real estate construction and land development 231,536 4,397 — 7,456 — 243,389 1-4 family residential (including home equity) 295,744 2,696 785 1,994 — 301,219 Residential construction 103,611 5,505 — — — 109,116 Consumer and other 10,207 111 — 2 — 10,320 Total loans $ 2,154,721 $ 46,022 $ 7,665 $ 62,468 $ — $ 2,270,876 The following table presents the risk category of loans by class of loan at December 31, 2016 : Pass Watch Special Mention Substandard Doubtful Total (Dollars in thousands) Commercial and industrial $ 384,979 $ 11,784 $ 3,344 $ 16,645 $ — $ 416,752 Mortgage warehouse 67,038 — — — — 67,038 Real estate: Commercial real estate (including multi-family residential) 834,781 16,009 6,804 34,395 — 891,989 Commercial real estate construction and land development 149,010 8,124 — 2,113 — 159,247 1-4 family residential (including home equity) 242,208 512 2,069 2,198 — 246,987 Residential construction 97,808 — 415 434 — 98,657 Consumer and other 10,520 364 4 77 — 10,965 Total loans $ 1,786,344 $ 36,793 $ 12,636 $ 55,862 $ — $ 1,891,635 |
Allowance for Credit Losses on Financing Receivables | The following table presents the activity in the allowance for loan losses by portfolio type for the years ended December 31, 2017 , 2016 and 2015 : Commercial Mortgage Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Allowance for loan losses: Balance December 31, 2016 $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 Provision for loan losses 9,792 — 1,424 1,298 254 194 226 13,188 Charge-offs (7,673 ) — (124 ) — — — (196 ) (7,993 ) Recoveries 516 — 3 10 10 — 4 543 Net charge-offs (7,157 ) — (121 ) 10 10 — (192 ) (7,450 ) Balance December 31, 2017 $ 7,694 $ — $ 10,253 $ 2,525 $ 2,140 $ 942 $ 95 $ 23,649 Allowance for loan losses: Balance December 31, 2015 $ 3,644 $ — $ 5,914 $ 1,221 $ 1,432 $ 820 $ 67 $ 13,098 Provision for loan losses 1,951 — 3,122 (4 ) 434 (72 ) 38 5,469 Charge-offs (722 ) — (129 ) — — — (49 ) (900 ) Recoveries 186 — 43 — 10 — 5 244 Net charge-offs (536 ) — (86 ) — 10 — (44 ) (656 ) Balance December 31, 2016 $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 Allowance for loan losses: Balance December 31, 2014 $ 2,334 $ — $ 3,799 $ 578 $ 1,008 $ 475 $ 52 $ 8,246 Provision for loan losses 2,193 — 2,115 625 464 321 74 5,792 Charge-offs (935 ) — — — (40 ) — (65 ) (1,040 ) Recoveries 52 — — 18 — 24 6 100 Net charge-offs (883 ) — — 18 (40 ) 24 (59 ) (940 ) Balance December 31, 2015 $ 3,644 $ — $ 5,914 $ 1,221 $ 1,432 $ 820 $ 67 $ 13,098 The following table presents the balance in the allowance for loan losses by portfolio type based on the impairment method as of December 31, 2017 and 2016 : Commercial and Industrial Mortgage Warehouse Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Allowance for loan losses related to: December 31, 2017 Individually evaluated for impairment $ 1,640 $ — $ 716 $ — $ — $ — $ — $ 2,356 Collectively evaluated for impairment 6,054 — 9,537 2,525 2,140 942 95 21,293 Total allowance for loan losses $ 7,694 $ — $ 10,253 $ 2,525 $ 2,140 $ 942 $ 95 $ 23,649 December 31, 2016 Individually evaluated for impairment $ 1,543 $ — $ 105 $ — $ — $ — $ 6 $ 1,654 Collectively evaluated for impairment 3,516 — 8,845 1,217 1,876 748 55 16,257 Total allowance for loan losses $ 5,059 $ — $ 8,950 $ 1,217 $ 1,876 $ 748 $ 61 $ 17,911 The following table presents the recorded investment in loans held for investment by portfolio type based on the impairment method as of December 31, 2017 and 2016 : Commercial and Industrial Mortgage Warehouse Commercial real estate (including multi-family residential) Commercial real estate construction and land development 1-4 family residential (including home equity) Residential Construction Consumer and Other Total (Dollars in thousands) Recorded investment in loans: December 31, 2017 Individually evaluated for impairment $ 11,392 $ — $ 20,164 $ 209 $ 948 $ — $ — $ 32,713 Collectively evaluated for impairment 445,737 69,456 1,060,083 243,180 300,271 109,116 10,320 2,238,163 Total loans evaluated for impairment $ 457,129 $ 69,456 $ 1,080,247 $ 243,389 $ 301,219 $ 109,116 $ 10,320 $ 2,270,876 December 31, 2016 Individually evaluated for impairment $ 8,408 $ — $ 12,321 $ — $ 217 $ — $ 11 $ 20,957 Collectively evaluated for impairment 408,344 67,038 879,668 159,247 246,770 98,657 10,954 1,870,678 Total loans evaluated for impairment $ 416,752 $ 67,038 $ 891,989 $ 159,247 $ 246,987 $ 98,657 $ 10,965 $ 1,891,635 |
Troubled Debt Restructurings on Financing Receivables | The following table presents information regarding loans modified in a troubled debt restructuring during the years ended December 31, 2017 , 2016 and 2015 : As of December 31, 2017 2016 2015 Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment Number of Contracts Pre-Modification of Outstanding Recorded Investment Post-Modification of Outstanding Recorded Investment (Dollars in thousands) Commercial and industrial 9 $ 2,399 $ 2,399 21 $ 3,939 $ 3,939 6 $ 2,959 $ 2,959 Mortgage warehouse Real estate: Commercial real estate (including multi-family residential) 6 11,837 11,837 8 7,144 7,144 1 63 63 Commercial real estate construction and land development 1 210 210 — — — — — — 1-4 family residential (including home equity) 1 86 86 — — — — — — Residential construction — — — — — — — — — Consumer and other — — — 1 6 6 2 20 20 Total 17 $ 14,532 $ 14,532 30 $ 11,089 $ 11,089 9 $ 3,042 $ 3,042 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The carrying amounts and estimated fair values of financial instruments that are reported on the balance sheet are as follows: As of December 31, 2017 Carrying Estimated Fair Value Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Cash and cash equivalents $ 182,103 $ 182,103 $ — $ — $ 182,103 Available for sale securities 309,615 — 309,615 — 309,615 Loans held for investment, net of allowance 2,247,227 — — 2,238,721 2,238,721 FHLB stock 12,862 N/A N/A N/A N/A Accrued interest receivable 12,194 3 3,296 8,895 12,194 Financial liabilities Total deposits $ 2,213,974 $ — $ 2,209,111 $ — $ 2,209,111 Accrued interest payable 610 — 610 — 610 Borrowed funds 282,569 — 288,887 — 288,887 Subordinated debt 48,659 — 48,659 — 48,659 As of December 31, 2016 Carrying Estimated Fair Value Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Cash and cash equivalents $ 142,098 $ 142,098 $ — $ — $ 142,098 Available for sale securities 316,455 — 316,455 — 316,455 Loans held for investment, net of allowance 1,873,724 — — 1,872,056 1,872,056 FHLB Stock 13,175 N/A N/A N/A N/A Accrued interest receivable 9,007 3 3,616 5,388 9,007 Financial liabilities Total deposits $ 1,870,183 $ — $ 1,868,429 $ — $ 1,868,429 Accrued interest payable 285 — 285 — 285 Borrowed funds 285,569 — 284,989 — 284,989 Subordinated debt 9,196 — 9,196 — 9,196 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present fair values for assets measured at fair value on a recurring basis: As of December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Available for sale securities: U.S. Government and agency securities $ — $ 8,715 $ — $ 8,715 Municipal securities — 222,958 — 222,958 Agency mortgage-backed pass-through securities — 31,812 — 31,812 Corporate bonds — 46,130 — 46,130 Total $ — $ 309,615 $ — $ 309,615 As of December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Available for sale securities: U.S. Government and agency securities $ — $ 6,149 $ — $ 6,149 Municipal securities — 237,802 — 237,802 Agency mortgage-backed pass-through securities — 27,324 — 27,324 Corporate bonds — 45,180 — 45,180 Total $ — $ 316,455 $ — $ 316,455 |
Fair Value Measurements, Nonrecurring | Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances such as evidence of impairment. As of December 31, 2017 Level 1 Level 2 Level 3 (Dollars in thousands) Impaired loans: Commercial and industrial $ — $ — $ 4,012 Commercial real estate (including multi-family residential) — — 7,478 Other real estate owned — — 365 $ — $ — $ 11,855 As of December 31, 2016 Level 1 Level 2 Level 3 (Dollars in thousands) Impaired loans: Commercial and industrial $ — $ — $ 1,785 Commercial real estate (including multi-family residential) — — 468 Other real estate owned — — 1,503 $ — $ — $ 3,756 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment are summarized as follows: As of December 31, 2017 2016 (Dollars in thousands) Land $ 5,376 $ 5,376 Buildings 7,977 8,034 Leasehold improvements 5,059 5,098 Furniture, fixtures and equipment 8,967 7,927 Construction in progress 320 5 Total 27,699 26,440 Less: accumulated depreciation 9,222 8,100 Premises and equipment, net $ 18,477 $ 18,340 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposit Liabilities [Abstract] | |
Schedule of Maturities of Time Deposits | Scheduled maturities of time deposits for the next five years are as follows (dollars in thousands): Within one year $ 504,104 After one but within two years 129,562 After two but within three years 34,922 After three but within four years 29,976 After four but within five years 62,750 Total $ 761,314 |
BORROWINGS AND BORROWING CAPA35
BORROWINGS AND BORROWING CAPACITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Scheduled principal maturities are as follows (dollars in thousands): 2018 $ — 2019 — 2020 — 2021 — 2022 and thereafter 569 Total $ 569 |
SUBORDINATED DEBT (Tables)
SUBORDINATED DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Subordinated Borrowings [Abstract] | |
Schedule of Subordinated Borrowings | A summary of pertinent information related to the Company's issuances of junior subordinated debentures outstanding at December 31, 2017 is set forth in the table below: Description Issuance Date Trust Preferred Securities Outstanding Interest Rate (1) Junior Subordinated Debt Owed to Trusts Maturity Date (2) (Dollars in thousands) Farmers & Merchants Capital Trust II November 13, 2003 $ 7,500 3 month LIBOR + 3.00% $ 7,732 November 8, 2033 Farmers & Merchants Capital Trust III June 30, 2005 3,500 3 month LIBOR + 1.80% 3,609 July 7, 2035 (1) The 3-month LIBOR in effect as of December 31, 2017 was 1.6098% . (2) All debentures are currently callable. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Federal Income Taxes | The components of the provision for federal income taxes are as follows: Years Ended December 31, 2017 2016 2015 (Dollars in thousands) Current $ 8,320 $ 11,162 $ 8,221 Deferred 427 (1,608 ) (446 ) Total $ 8,747 $ 9,554 $ 7,775 |
Schedule of Effective Income Tax Rate Reconciliation | Reported income tax expense differs from the amounts computed by applying the U.S. federal statutory income tax rate to income before income taxes for the years ended December 31, 2017, 2016 and 2015 due to the following: Years Ended December 31, 2017 2016 2015 (Dollars in thousands) Taxes calculated at statutory rate $ 9,233 $ 11,342 $ 8,247 Increase (decrease) resulting from: Stock based compensation (755 ) 67 393 Provisional deferred tax adjustment related to reduction in U.S. federal statutory income tax rate 2,621 — — Effect of tax exempt income (2,328 ) (1,929 ) (890 ) Other, net (24 ) 74 25 Total $ 8,747 $ 9,554 $ 7,775 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities are as follows: As of December 31, 2017 2016 (Dollars in thousands) Deferred tax assets: Allowance for credit losses $ 5,284 $ 6,938 Net unrealized loss on available for sale securities — 1,642 Deferred compensation 177 168 Total deferred tax assets 5,461 8,748 Deferred tax liabilities: Core deposit intangible and other purchase accounting adjustments (1,100 ) (1,953 ) Net unrealized gain on available for sale securities (65 ) — Premises and equipment basis difference (321 ) (568 ) Total deferred tax liabilities (1,486 ) (2,521 ) Net deferred tax assets $ 3,975 $ 6,227 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Black-Scholes pricing model utilizes certain assumptions noted in the table below. 2017 2016 2015 Risk-free interest rate 2.40 % 1.76 % 1.99 % Expected term 10.00 10.00 10.00 Expected stock price volatility 29.70 % 34.60 % 18.06 % Dividend yield — — — |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the activity in the stock option plan during the years ended December 31, 2017 and 2016 is set forth below: Number of Weighted Weighted Aggregate (In thousands) (In years) (In thousands) Options outstanding, January 1, 2016 969 $ 17.45 6.62 $ 6,006 Options granted 107 22.83 Options exercised (116 ) 15.42 Options forfeited (25 ) 21.56 Options outstanding, December 31, 2016 935 $ 18.21 6.23 $ 16,773 Options granted 64 36.88 Options exercised (215 ) 17.50 Options forfeited (9 ) 23.35 Options outstanding, December 31, 2017 775 $ 19.94 5.72 $ 13,718 Options vested and exercisable, December 31, 2017 484 $ 16.73 4.42 $ 10,127 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value | Information related to the stock option plan during each year is as follows: 2017 2016 2015 (In thousands) Intrinsic value of options exercised $ 3,371 $ 1,128 $ — Cash received from option exercises 3,743 1,782 — Weighted average fair value of options granted $ 16.55 $ 10.51 $ 6.78 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity] | A summary of the activity of the nonvested shares of restricted stock as of December 31, 2017 and 2016 including changes during the years then ended is as follows: Number of Weighted Average Grant Date Fair Value (Shares in thousands) Nonvested share awards outstanding, January 1, 2016 18 $ 19.68 Share awards granted 15 17.52 Share awards vested (9 ) 19.45 Nonvested share awards forfeited — — Nonvested share awards outstanding, December 31, 2016 24 18.31 Share awards granted 28 36.17 Share awards vested (11 ) 18.32 Nonvested share awards forfeited — — Nonvested share awards outstanding, December 31, 2017 41 $ 30.46 |
OFF-BALANCE SHEET ARRANGEMENT39
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Off Balance Sheet Arrangements Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Fair Value, Off-balance Sheet Risks | The contractual amounts of financial instruments with off-balance sheet risk are as follows: December 31, 2017 2016 Fixed Variable Fixed Variable (Dollars in thousands) Commitments to extend credit $ 369,573 $ 250,467 $ 353,822 $ 232,551 Standby letters of credit 15,445 1,725 9,423 124 Total $ 385,018 $ 252,192 $ 363,245 $ 232,675 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents a summary of non-cancelable future operating lease commitments as of December 31, 2017 (dollars in thousands): 2018 $ 1,806 2019 1,030 2020 1,039 2021 911 2022 893 Thereafter 3,780 $ 9,459 |
REGULATORY CAPITAL MATTERS (Tab
REGULATORY CAPITAL MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following is a summary of the Company’s and the Bank’s actual and required capital ratios at December 31, 2017 and 2016 : Actual Minimum Required For Capital Minimum Required Plus Capital Conservation Buffer To Be Categorized As Well Capitalized Under Amount Ratio Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) ALLEGIANCE BANCSHARES, INC. (Consolidated) As of December 31, 2017 Total Capital (to Risk Weighted Assets) $ 336,829 13.43 % $ 200,687 8.00 % $ 232,044 9.250 % N/A N/A Common Equity Tier 1 Capital (to Risk Weighted Assets) 264,521 10.54 % 112,886 4.50 % 144,244 5.750 % N/A N/A Tier 1 Capital (to Risk Weighted Assets) 273,825 10.92 % 150,515 6.00 % 181,872 7.250 % N/A N/A Tier 1 Capital (to Average Tangible Assets) 273,825 9.84 % 111,274 4.00 % 111,274 4.000 % N/A N/A As of December 31, 2016 Total Capital (to Risk Weighted Assets) $ 268,155 12.57 % $ 170,690 8.00 % $ 184,025 8.625 % N/A N/A Common Equity Tier 1 Capital (to Risk Weighted Assets) 241,048 11.30 % 96,013 4.50 % 109,348 5.125 % N/A N/A Tier 1 Capital (to Risk Weighted Assets) 250,244 11.73 % 128,018 6.00 % 141,353 6.625 % N/A N/A Tier 1 Capital (to Average Tangible Assets) 250,244 10.35 % 96,708 4.00 % 96,708 4.000 % N/A N/A ALLEGIANCE BANK As of December 31, 2017 Total Capital (to Risk Weighted Assets) $ 331,872 13.24 % $ 200,596 8.00 % $ 231,939 9.250 % $ 250,745 10.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 268,868 10.72 % 112,835 4.50 % 144,179 5.750 % 162,985 6.50 % Tier 1 Capital (to Risk Weighted Assets) 268,868 10.72 % 150,447 6.00 % 181,790 7.250 % 200,596 8.00 % Tier 1 Capital (to Average Tangible Assets) 268,868 9.67 % 111,230 4.00 % 111,230 4.000 % 139,037 5.00 % As of December 31, 2016 Total Capital (to Risk Weighted Assets) $ 247,606 11.61 % $ 170,630 8.00 % $ 183,960 8.625 % $ 213,288 10.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 229,694 10.77 % 95,979 4.50 % 109,310 5.125 % 138,637 6.50 % Tier 1 Capital (to Risk Weighted Assets) 229,694 10.77 % 127,973 6.00 % 141,303 6.625 % 170,630 8.00 % Tier 1 Capital (to Average Tangible Assets) 229,694 9.50 % 96,679 4.00 % 96,679 4.000 % 120,849 5.00 % |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Years Ended December 31, 2017 2016 2015 Amount Per Share Amount Per Share Amount Per Share (Amounts in thousands, except per share data) Net income attributable to common shareholders $ 17,632 $ 22,851 $ 15,227 Basic: Weighted average common shares outstanding 13,125 $ 1.34 12,873 $ 1.78 10,470 $ 1.45 Diluted: Add incremental shares for: Dilutive effect of stock option exercises 333 201 184 Total 13,458 $ 1.31 13,074 $ 1.75 10,654 $ 1.43 |
PARENT COMPANY ONLY FINANCIAL42
PARENT COMPANY ONLY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of Condensed Balance Sheet | ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED BALANCE SHEETS December 31, 2017 2016 (Dollars in thousands) ASSETS Cash and due from banks $ 4,857 $ 21,206 Investment in subsidiary 311,553 268,804 Other assets 791 412 TOTAL $ 317,201 $ 290,422 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES: Borrowed funds $ 569 $ 569 Subordinated debentures 9,304 9,197 Accrued interest payable and other liabilities 463 839 Total liabilities 10,336 10,605 SHAREHOLDERS’ EQUITY: Common stock 13,227 12,958 Capital surplus 218,408 212,649 Retained earnings 74,894 57,262 Accumulated other comprehensive income (loss) 336 (3,052 ) Total shareholders’ equity 306,865 279,817 TOTAL $ 317,201 $ 290,422 |
Schedule of Condensed Income Statement | ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF INCOME For the Years Ended December 31, 2017 2016 2015 (Dollars in thousands) OPERATING INCOME: Other income $ 13 $ 11 $ 16 Total operating income 13 11 16 OPERATING EXPENSE: Interest expense on borrowed funds 33 30 707 Other expenses 1,465 1,204 771 Total operating expense 1,498 1,234 1,478 Income before income tax benefit and equity in undistributed income of subsidiaries (1,485 ) (1,223 ) (1,462 ) Income tax benefit 756 428 500 Income before equity in undistributed income of subsidiaries (729 ) (795 ) (962 ) Equity in undistributed income of subsidiaries 18,361 23,646 16,748 Net income $ 17,632 $ 22,851 $ 15,786 Preferred stock dividends — — 559 Net income attributable to common shareholders $ 17,632 $ 22,851 $ 15,227 |
Schedule of Condensed Cash Flow Statement | ALLEGIANCE BANCSHARES, INC (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017 2016 2015 (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 17,632 $ 22,851 $ 15,786 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed earnings of subsidiaries (18,361 ) (23,646 ) (16,748 ) Net amortization of discount on subordinated debentures 107 107 218 (Increase) decrease in other assets (378 ) (399 ) 220 (Decrease) increase in accrued interest payable and other liabilities (377 ) 186 (462 ) Net cash used in operating activities (1,377 ) (901 ) (986 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash and cash equivalents acquired in the purchase of F&M Bancshares, Inc. — — 818 Capital investment in bank subsidiary (21,000 ) — (12,000 ) Net cash used in investing activities (21,000 ) — (11,182 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 4,248 2,006 133 Proceeds from initial public offering — — 57,138 Stock based compensation expense 1,780 1,501 1,351 Proceeds on borrowed funds — — 18,000 Paydowns of borrowed funds — — (45,500 ) Redemption of preferred stock — — (11,550 ) Preferred stock dividends — — (559 ) Issuance (repurchase) of treasury stock — 38 (52 ) Net cash provided by financing activities 6,028 3,545 18,961 NET CHANGE IN CASH AND CASH EQUIVALENTS (16,349 ) 2,644 6,793 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 21,206 18,562 11,769 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,857 $ 21,206 $ 18,562 |
QUARTERLY FINANCIAL DATA (UNA43
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Interest Net Interest Net Income Attributable to Common Earnings Per Share (1) Income Income Shareholders Basic Diluted (Dollars in thousands, except per share data) 2017 First quarter $ 27,512 $ 24,128 $ 6,047 $ 0.46 $ 0.45 Second quarter 28,987 25,107 5,395 0.41 0.40 Third quarter 30,901 26,997 2,986 0.23 0.22 Fourth quarter 32,038 27,436 3,204 0.24 0.24 2016 First quarter $ 23,451 $ 21,084 $ 6,355 $ 0.49 $ 0.49 Second quarter 24,527 21,949 5,254 0.41 0.40 Third quarter 26,319 23,409 5,471 0.42 0.42 Fourth quarter 26,481 23,422 5,771 0.45 0.44 (1) Earnings per share are computed independently for each of the quarters presented and therefore may not total earnings per share for the year. |
NATURE OF OPERATIONS AND SUMM44
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2017USD ($)segmentoffice | Jan. 01, 2018USD ($) | Dec. 31, 2016USD ($) | Jan. 31, 2016branch | |
Significant Accounting Policies [Line Items] | |||||
Number of offices in which entity operates | office | 16 | ||||
Number of loan production offices in which entity operates | office | 1 | ||||
Other real estate owned | $ 365 | $ 1,503 | |||
Number of reportable segments | segment | 1 | ||||
Retained Earnings | Forecast | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of new accounting principle in period of adoption | $ 72 | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Premises and equipment, useful life | 3 years | ||||
Minimum | Core Deposits | |||||
Significant Accounting Policies [Line Items] | |||||
Intangibles, useful life | 7 years | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Premises and equipment, useful life | 40 years | ||||
Maximum | Core Deposits | |||||
Significant Accounting Policies [Line Items] | |||||
Intangibles, useful life | 9 years | ||||
Disposed of by Sale | Central Texas | |||||
Significant Accounting Policies [Line Items] | |||||
Number of branches | branch | 2 | ||||
IPO | |||||
Significant Accounting Policies [Line Items] | |||||
Issuance of common stock (in shares) | shares | 2,990,000 | ||||
Share price (in dollars per share) | $ / shares | $ 21 | ||||
Payments of stock issuance costs (in dollars) | $ 57,100 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Thousands | Jan. 31, 2016USD ($)branch | Dec. 31, 2015USD ($)branchshares | Jul. 15, 2015USD ($) | Jan. 01, 2015USD ($)branchshares | Mar. 31, 2015branch | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)branch | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||||||||
Number of branches consolidated during the period | branch | 7 | ||||||||
Goodwill, acquired during period | $ 0 | ||||||||
Paydowns of long-term borrowings | $ 3,000 | $ 20,000 | $ 45,500 | ||||||
Redemption of preferred stock | 11,550 | ||||||||
Preferred Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Redemption of preferred stock | 11,550 | ||||||||
F&M Bancshares. Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 642 | $ 642 | |||||||
Goodwill, acquired during period | $ 28,200 | ||||||||
Interest income | 17,100 | ||||||||
Paydowns of long-term borrowings | 18,000 | ||||||||
Acquisition related costs | $ 941 | $ 245 | |||||||
F&M Bancshares. Inc. | Preferred Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Redemption of preferred stock | $ 11,700 | ||||||||
F&M Bancshares. Inc. | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration paid, shares issued (in shares) | shares | 2,338,520 | 2,338,520 | |||||||
Houston, Texas | F&M Bancshares. Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches consolidated during the period | branch | 2 | ||||||||
Central Texas | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches at which loans are held for sale | branch | 2 | 2 | |||||||
Central Texas | Disposed of by Sale | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches | branch | 2 | ||||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 2,100 | ||||||||
Gain (Loss) on Disposition of Business | $ 1,300 | ||||||||
Enterprise | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches | branch | 9 | ||||||||
Enterprise | Houston, Texas | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches | branch | 7 | ||||||||
Enterprise | Central Texas | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of branches | branch | 2 |
ACQUISITIONS - Allocation of th
ACQUISITIONS - Allocation of the Purchase Price to Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jan. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill resulting from acquisition | $ 39,389 | $ 39,389 | $ 39,389 | $ 11,144 | |
F&M Bancshares. Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | 642 | $ 642 | |||
Total consideration paid | 63,639 | ||||
Cash and cash equivalents | 107,128 | ||||
Investment securities | 14,722 | ||||
Loans, net | 404,637 | ||||
Premises and equipment | 7,699 | ||||
Core deposit intangibles | 4,313 | ||||
Other assets | 15,896 | ||||
Total assets acquired | 554,395 | ||||
Deposits | 489,556 | ||||
Subordinated debt | 8,871 | ||||
Borrowed funds | 18,000 | ||||
Other liabilities | 2,574 | ||||
Total liabilities assumed | 519,001 | ||||
Fair value of net assets acquired | 35,394 | ||||
Goodwill resulting from acquisition | 28,245 | ||||
F&M Bancshares. Inc. | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued and options assumed | 51,447 | ||||
F&M Bancshares. Inc. | Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued and options assumed | $ 11,550 |
ACQUISITIONS - Allocation of 47
ACQUISITIONS - Allocation of the Purchase Price to Assets and Liabilities - Narrative (Details) - F&M Bancshares. Inc. - shares | Dec. 31, 2015 | Jan. 01, 2015 |
Common Stock | ||
Business Acquisition [Line Items] | ||
Consideration paid, shares issued (in shares) | 2,338,520 | 2,338,520 |
Preferred Stock | ||
Business Acquisition [Line Items] | ||
Consideration paid, shares issued (in shares) | 11,550 |
ACQUISITIONS - Details of Loans
ACQUISITIONS - Details of Loans Acquired (Details) - F&M Bancshares. Inc. - USD ($) $ in Thousands | Dec. 31, 2015 | Jan. 01, 2015 |
Business Acquisition [Line Items] | ||
Acquired loans receivable | $ 404,637 | |
Discount | $ (6,017) | |
Commercial and industrial | ||
Business Acquisition [Line Items] | ||
Discount | (1,635) | |
Commercial real estate | Including multi-family residential | ||
Business Acquisition [Line Items] | ||
Discount | (3,109) | |
Commercial real estate | Construction loans | ||
Business Acquisition [Line Items] | ||
Discount | (693) | |
Residential portfolio | Construction loans | ||
Business Acquisition [Line Items] | ||
Discount | (72) | |
Residential portfolio | 1-4 Family residential including home equity | ||
Business Acquisition [Line Items] | ||
Discount | (409) | |
Consumer and other | ||
Business Acquisition [Line Items] | ||
Discount | (99) | |
Contractual Balance | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 410,654 | |
Contractual Balance | Commercial and industrial | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 96,891 | |
Contractual Balance | Commercial real estate | Including multi-family residential | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 225,191 | |
Contractual Balance | Commercial real estate | Construction loans | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 40,787 | |
Contractual Balance | Residential portfolio | Construction loans | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 6,467 | |
Contractual Balance | Residential portfolio | 1-4 Family residential including home equity | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 35,897 | |
Contractual Balance | Consumer and other | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 5,421 | |
Fair Value | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 404,637 | |
Fair Value | Commercial and industrial | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 95,256 | |
Fair Value | Commercial real estate | Including multi-family residential | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 222,082 | |
Fair Value | Commercial real estate | Construction loans | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 40,094 | |
Fair Value | Residential portfolio | Construction loans | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 6,395 | |
Fair Value | Residential portfolio | 1-4 Family residential including home equity | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | 35,488 | |
Fair Value | Consumer and other | ||
Business Acquisition [Line Items] | ||
Acquired loans receivable | $ 5,322 |
ACQUISITIONS - Business Acquisi
ACQUISITIONS - Business Acquisition, Pro Forma Information (Details) - F&M Bancshares. Inc. - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Net interest income | $ 77,598 | $ 71,664 |
Net income attributable to common shareholders | $ 14,170 | $ 14,999 |
Basic earnings per common share (in dollars per share) | $ 1.35 | $ 1.53 |
Diluted earnings per common share (in dollars per share) | $ 1.33 | $ 1.51 |
GOODWILL AND CORE DEPOSIT INT50
GOODWILL AND CORE DEPOSIT INTANGIBLES - Changes in the Carrying Amount of the Company's Goodwill and Core Deposit Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | |||
Beginning balance | $ 39,389 | $ 39,389 | $ 11,144 |
Sale of branch assets | 28,245 | ||
Acquisition | 0 | ||
Ending balance | 39,389 | 39,389 | 39,389 |
Intangibles | |||
Beginning balance | 4,055 | ||
Amortization | (781) | (785) | (830) |
Ending balance | 3,274 | 4,055 | |
Core Deposits | |||
Intangibles | |||
Beginning balance | 4,055 | 5,230 | 1,747 |
Acquisition of F&M Bancshares | 4,313 | ||
Sale of branch assets | (390) | ||
Amortization | (781) | (785) | (830) |
Ending balance | $ 3,274 | $ 4,055 | $ 5,230 |
GOODWILL AND CORE DEPOSIT INT51
GOODWILL AND CORE DEPOSIT INTANGIBLES - Estimated Aggregate Future Amortization Expense for Core Deposit Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 781 | |
2,019 | 781 | |
2,020 | 744 | |
2,021 | 484 | |
2,022 | 484 | |
Thereafter | 0 | |
Total | $ 3,274 | $ 4,055 |
CASH AND DUE FROM BANKS (Detail
CASH AND DUE FROM BANKS (Details) $ in Millions | Dec. 31, 2015USD ($) |
Cash and Cash Equivalents [Abstract] | |
Restricted cash | $ 50.3 |
SECURITIES - Narrative (Details
SECURITIES - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments, available-for-sale securities | $ 0 | |||
Sale proceeds | 39,100,000 | $ 2,500,000 | $ 2,200,000 | |
Gross realized gains | 18,000 | 30,000 | ||
Gross realized losses | 37,000 | |||
Proceeds from sales of available for sale securities | 39,125,000 | 2,500,000 | $ 16,943,000 | |
Security owned and pledged as collateral | $ 5,000,000 | $ 4,900,000 | ||
F&M Bancshares. Inc. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Proceeds from sales of available for sale securities | $ 15,000,000 | |||
Gross realized gain (loss) | $ 0 |
SECURITIES - Amortized Cost and
SECURITIES - Amortized Cost and Fair Value of Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available for Sale | ||
Amortized Cost | $ 309,098 | $ 321,151 |
Gross Unrealized Gains | 2,923 | 1,564 |
Gross Unrealized Losses | (2,406) | (6,260) |
Fair Value | 309,615 | 316,455 |
U.S. Government and agency securities | ||
Available for Sale | ||
Amortized Cost | 8,507 | 5,883 |
Gross Unrealized Gains | 232 | 266 |
Gross Unrealized Losses | (24) | 0 |
Fair Value | 8,715 | 6,149 |
Municipal securities | ||
Available for Sale | ||
Amortized Cost | 222,330 | 242,501 |
Gross Unrealized Gains | 2,470 | 956 |
Gross Unrealized Losses | (1,842) | (5,655) |
Fair Value | 222,958 | 237,802 |
Agency mortgage-backed pass-through securities | ||
Available for Sale | ||
Amortized Cost | 32,014 | 27,496 |
Gross Unrealized Gains | 159 | 265 |
Gross Unrealized Losses | (361) | (437) |
Fair Value | 31,812 | 27,324 |
Corporate Bonds | ||
Available for Sale | ||
Amortized Cost | 46,247 | 45,271 |
Gross Unrealized Gains | 62 | 77 |
Gross Unrealized Losses | (179) | (168) |
Fair Value | $ 46,130 | $ 45,180 |
SECURITIES - Amortized Cost a55
SECURITIES - Amortized Cost and Fair Value of Investment Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Due in one year or less | $ 10,834 | |
Due after one year through five years | 58,894 | |
Due after five years through ten years | 93,535 | |
Due after ten years | 113,821 | |
Subtotal | 277,084 | |
Agency mortgage-backed pass through securities | 32,014 | |
Total | 309,098 | |
Fair Value | ||
Due in one year or less | 10,837 | |
Due after one year through five years | 58,832 | |
Due after five years through ten years | 93,673 | |
Due after ten years | 114,461 | |
Subtotal | 277,803 | |
Agency mortgage-backed pass through securities | 31,812 | |
Total | $ 309,615 | $ 316,455 |
SECURITIES - Securities in a Co
SECURITIES - Securities in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Estimated Fair Value | $ 88,800 | $ 216,025 |
Less than 12 Months, Unrealized Losses | (810) | (6,170) |
More than 12 Months, Estimated Fair Value | 65,999 | 2,803 |
More than 12 Months, Unrealized Losses | (1,596) | (90) |
Total, Estimated Fair Value | 154,799 | 218,828 |
Total, Unrealized Losses | (2,406) | (6,260) |
U.S. Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 3,110 | 0 |
Less than 12 Months, Unrealized Losses | (9) | 0 |
More than 12 Months, Estimated Fair Value | 595 | 0 |
More than 12 Months, Unrealized Losses | (15) | 0 |
Total, Estimated Fair Value | 3,705 | 0 |
Total, Unrealized Losses | (24) | 0 |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 42,249 | 178,876 |
Less than 12 Months, Unrealized Losses | (517) | (5,655) |
More than 12 Months, Estimated Fair Value | 56,483 | 0 |
More than 12 Months, Unrealized Losses | (1,325) | 0 |
Total, Estimated Fair Value | 98,732 | 178,876 |
Total, Unrealized Losses | (1,842) | (5,655) |
Agency mortgage-backed pass-through securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 13,238 | 12,520 |
Less than 12 Months, Unrealized Losses | (105) | (347) |
More than 12 Months, Estimated Fair Value | 8,921 | 2,803 |
More than 12 Months, Unrealized Losses | (256) | (90) |
Total, Estimated Fair Value | 22,159 | 15,323 |
Total, Unrealized Losses | (361) | (437) |
Corporate Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 30,203 | 24,629 |
Less than 12 Months, Unrealized Losses | (179) | (168) |
More than 12 Months, Estimated Fair Value | 0 | 0 |
More than 12 Months, Unrealized Losses | 0 | 0 |
Total, Estimated Fair Value | 30,203 | 24,629 |
Total, Unrealized Losses | $ (179) | $ (168) |
LOANS AND ALLOWANCE FOR LOAN 57
LOANS AND ALLOWANCE FOR LOAN LOSSES - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)contract | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Owner-occupied loans to commercial real estate loans | 51.40% | |||
Maximum loans amount to appraised value | 90.00% | |||
Impaired, interest lost on nonaccrual loans | $ 733,000 | $ 892,000 | ||
Average recorded investment | 34,059,000 | 22,521,000 | $ 12,100,000 | |
Interest income, accrual method | 922,000 | 862,000 | 693,000 | |
Loans and leases receivable, allowance | $ 23,649,000 | $ 17,911,000 | 13,098,000 | $ 8,246,000 |
Loans and leases receivable, allowance, percentage | 1.04% | 0.95% | ||
Modifications, recorded investment | $ 25,600,000 | $ 12,600,000 | ||
Change in method of calculating impairment | 2,200,000 | 879,000 | ||
Impaired, commitment to lend | 0 | 0 | ||
Troubled debt restructuring, write-down | $ 136,000 | $ 211,000 | $ 45,000 | |
Subsequent default, number of contracts | contract | 0 | |||
Troubled debt restructuring, addition | $ 14,500,000 | |||
Troubled debt restructuring, addition, outstanding | $ 14,200,000 | |||
Minimum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Owner-occupied commercial real estate loans, amortization period | 10 years | |||
Mortgage loan, term | 5 years | |||
Mortgage loan, amortization period | 10 years | |||
Consumer and other loans, term | 12 months | |||
Maximum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Owner-occupied commercial real estate loans, amortization period | 20 years | |||
Mortgage loan, term | 7 years | |||
Mortgage loan, amortization period | 20 years | |||
Consumer and other loans, term | 60 months |
LOANS AND ALLOWANCE FOR LOAN 58
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loan Portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | $ 2,270,876 | $ 1,891,635 | ||
Total loans | 2,270,876 | 1,891,635 | ||
Allowance for loan losses | (23,649) | (17,911) | $ (13,098) | $ (8,246) |
Loans, net | 2,247,227 | 1,873,724 | ||
Commercial and industrial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 457,129 | 416,752 | ||
Allowance for loan losses | (7,694) | (5,059) | (3,644) | (2,334) |
Mortgage warehouse | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 69,456 | 67,038 | ||
Allowance for loan losses | 0 | 0 | 0 | 0 |
Real estate | Commercial real estate (including multi-family residential) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 1,080,247 | 891,989 | ||
Real estate | Commercial real estate construction and land development | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 243,389 | 159,247 | ||
Real estate | 1-4 family residential (including home equity) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 301,219 | 246,987 | ||
Real estate | Residential construction | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 109,116 | 98,657 | ||
Consumer and other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | 10,320 | 10,965 | ||
Allowance for loan losses | $ (95) | $ (61) | $ (67) | $ (52) |
LOANS AND ALLOWANCE FOR LOAN 59
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loan Portfolio, Narrative (Details) - Mortgage warehouse | 12 Months Ended |
Dec. 31, 2017 | |
Mortgage promissory notes secured by residential property | Minimum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Debt instrument, term | 10 days |
Mortgage promissory notes secured by residential property | Maximum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Debt instrument, term | 20 days |
Mortgage promissory notes secured by commercial property | Minimum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Debt instrument, term | 40 days |
Mortgage promissory notes secured by commercial property | Maximum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Debt instrument, term | 50 days |
Revolving line of credit facility | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Debt instrument, term | 24 months |
LOANS AND ALLOWANCE FOR LOAN 60
LOANS AND ALLOWANCE FOR LOAN LOSSES - Analysis Of Activity with Related-party Loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Loans and Leases Receivable, Related Parties [Roll Forward] | |
Beginning balance on January 1 | $ 3,943 |
New loans and reclassified related loans | 805 |
Repayments | (380) |
Ending balance on December 31 | $ 4,368 |
LOANS AND ALLOWANCE FOR LOAN 61
LOANS AND ALLOWANCE FOR LOAN LOSSES - Aging Analysis of the Recorded Investment in Past Due Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Loans held-for-investment | ||
Total Loans | $ 2,270,876 | $ 1,891,635 |
Total loans | 12,947 | 4,268 |
Nonaccrual Loans, including both held for sale and held for investment | 13,328 | 15,788 |
Current Loans, including both held for sale and held for investment | 2,244,601 | 1,871,579 |
Total loans | 2,270,876 | 1,891,635 |
Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Total loans | 12,947 | 3,357 |
Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Total loans | 0 | 911 |
Commercial and industrial | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 1,069 | 1,939 |
Nonaccrual Loans | 6,437 | 3,896 |
Current Loans | 449,623 | 410,917 |
Total Loans | 457,129 | 416,752 |
Commercial and industrial | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 1,069 | 1,028 |
Commercial and industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 911 |
Mortgage warehouse | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Nonaccrual Loans | 0 | 0 |
Current Loans | 69,456 | 67,038 |
Total Loans | 69,456 | 67,038 |
Mortgage warehouse | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Mortgage warehouse | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Real estate | Commercial real estate (including multi-family residential) | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 4,932 | 1,661 |
Nonaccrual Loans | 6,110 | 11,663 |
Current Loans | 1,069,205 | 878,665 |
Total Loans | 1,080,247 | 891,989 |
Real estate | Commercial real estate (including multi-family residential) | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 4,932 | 1,661 |
Real estate | Commercial real estate (including multi-family residential) | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Real estate | Commercial real estate construction and land development | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 5,274 | 263 |
Nonaccrual Loans | 0 | 0 |
Current Loans | 238,115 | 158,984 |
Total Loans | 243,389 | 159,247 |
Real estate | Commercial real estate construction and land development | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 5,274 | 263 |
Real estate | Commercial real estate construction and land development | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Real estate | 1-4 Family residential including home equity | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 924 | 280 |
Nonaccrual Loans | 781 | 217 |
Current Loans | 299,514 | 246,490 |
Total Loans | 301,219 | 246,987 |
Real estate | 1-4 Family residential including home equity | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 924 | 280 |
Real estate | 1-4 Family residential including home equity | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Real estate | Residential construction | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 674 | 0 |
Nonaccrual Loans | 0 | 0 |
Current Loans | 108,442 | 98,657 |
Total Loans | 109,116 | 98,657 |
Real estate | Residential construction | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 674 | 0 |
Real estate | Residential construction | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 0 | 0 |
Consumer and other | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 74 | 125 |
Nonaccrual Loans | 0 | 12 |
Current Loans | 10,246 | 10,828 |
Total Loans | 10,320 | 10,965 |
Consumer and other | Financing Receivables, 30 to 89 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | 74 | 125 |
Consumer and other | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Loans held-for-investment | ||
Loans past due and still accruing, held for investment | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN 62
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired Loans by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
With no related allowance recorded: | ||
Recorded Investment | $ 19,104 | $ 17,270 |
Unpaid Principal Balance | 19,978 | 17,469 |
With an allowance recorded: | ||
Recorded Investment | 13,609 | 3,687 |
Unpaid Principal Balance | 13,846 | 3,907 |
Related Allowance | 2,356 | 1,654 |
Total: | ||
Recorded Investment | 32,713 | 20,957 |
Unpaid Principal Balance | 33,824 | 21,376 |
Related Allowance | 2,356 | 1,654 |
Commercial and industrial | ||
With no related allowance recorded: | ||
Recorded Investment | 5,792 | 5,300 |
Unpaid Principal Balance | 6,666 | 5,414 |
With an allowance recorded: | ||
Recorded Investment | 5,600 | 3,108 |
Unpaid Principal Balance | 5,652 | 3,328 |
Related Allowance | 1,640 | 1,543 |
Total: | ||
Recorded Investment | 11,392 | 8,408 |
Unpaid Principal Balance | 12,318 | 8,742 |
Related Allowance | 1,640 | 1,543 |
Mortgage warehouse | ||
With no related allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
With an allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Total: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Real estate | Commercial real estate (including multi-family residential) | ||
With no related allowance recorded: | ||
Recorded Investment | 12,155 | 11,748 |
Unpaid Principal Balance | 12,155 | 11,833 |
With an allowance recorded: | ||
Recorded Investment | 8,009 | 573 |
Unpaid Principal Balance | 8,194 | 573 |
Related Allowance | 716 | 105 |
Total: | ||
Recorded Investment | 20,164 | 12,321 |
Unpaid Principal Balance | 20,349 | 12,406 |
Related Allowance | 716 | 105 |
Real estate | Commercial real estate construction and land development | ||
With no related allowance recorded: | ||
Recorded Investment | 209 | 0 |
Unpaid Principal Balance | 209 | 0 |
With an allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Total: | ||
Recorded Investment | 209 | 0 |
Unpaid Principal Balance | 209 | 0 |
Related Allowance | 0 | 0 |
Real estate | 1-4 Family residential including home equity | ||
With no related allowance recorded: | ||
Recorded Investment | 948 | 217 |
Unpaid Principal Balance | 948 | 217 |
With an allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Total: | ||
Recorded Investment | 948 | 217 |
Unpaid Principal Balance | 948 | 217 |
Related Allowance | 0 | 0 |
Real estate | Residential construction | ||
With no related allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
With an allowance recorded: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Total: | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Consumer and other | ||
With no related allowance recorded: | ||
Recorded Investment | 0 | 5 |
Unpaid Principal Balance | 0 | 5 |
With an allowance recorded: | ||
Recorded Investment | 0 | 6 |
Unpaid Principal Balance | 0 | 6 |
Related Allowance | 0 | 6 |
Total: | ||
Recorded Investment | 0 | 11 |
Unpaid Principal Balance | 0 | 11 |
Related Allowance | $ 0 | $ 6 |
LOANS AND ALLOWANCE FOR LOAN 63
LOANS AND ALLOWANCE FOR LOAN LOSSES - Average Impaired Loans and Interest Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | $ 34,059 | $ 22,521 | $ 12,100 |
Interest Income Recognized | 922 | 862 | $ 693 |
Commercial and industrial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 11,972 | 9,427 | |
Interest Income Recognized | 418 | 442 | |
Mortgage warehouse | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 0 | 0 | |
Interest Income Recognized | 0 | 0 | |
Commercial real estate (including multi-family residential) | Commercial real estate (including multi-family residential) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 20,606 | 12,840 | |
Interest Income Recognized | 475 | 393 | |
Commercial real estate (including multi-family residential) | Commercial real estate construction and land development | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 314 | 0 | |
Interest Income Recognized | 10 | 0 | |
Commercial real estate (including multi-family residential) | 1-4 family residential (including home equity) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 1,167 | 228 | |
Interest Income Recognized | 18 | 24 | |
Commercial real estate (including multi-family residential) | Residential construction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 0 | 0 | |
Interest Income Recognized | 0 | 0 | |
Consumer and other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Recorded Investment | 0 | 26 | |
Interest Income Recognized | $ 1 | $ 3 |
LOANS AND ALLOWANCE FOR LOAN 64
LOANS AND ALLOWANCE FOR LOAN LOSSES - Risk Category of Loans by Class (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | $ 2,270,876 | $ 1,891,635 |
Total loans | 2,270,876 | 1,891,635 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,154,721 | 1,786,344 |
Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 46,022 | 36,793 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 7,665 | 12,636 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 62,468 | 55,862 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 457,129 | 416,752 |
Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 427,336 | 384,979 |
Commercial and industrial | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 10,274 | 11,784 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 2,195 | 3,344 |
Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 17,324 | 16,645 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Mortgage warehouse | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 69,456 | 67,038 |
Mortgage warehouse | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 69,456 | 67,038 |
Mortgage warehouse | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Mortgage warehouse | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Mortgage warehouse | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Mortgage warehouse | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Real estate | Commercial real estate (including multi-family residential) | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 1,080,247 | 891,989 |
Real estate | Commercial real estate (including multi-family residential) | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 1,016,831 | 834,781 |
Real estate | Commercial real estate (including multi-family residential) | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 23,039 | 16,009 |
Real estate | Commercial real estate (including multi-family residential) | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 4,685 | 6,804 |
Real estate | Commercial real estate (including multi-family residential) | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 35,692 | 34,395 |
Real estate | Commercial real estate (including multi-family residential) | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Real estate | Commercial real estate construction and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 243,389 | 159,247 |
Real estate | Commercial real estate construction and land development | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 231,536 | 149,010 |
Real estate | Commercial real estate construction and land development | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 4,397 | 8,124 |
Real estate | Commercial real estate construction and land development | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Real estate | Commercial real estate construction and land development | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 7,456 | 2,113 |
Real estate | Commercial real estate construction and land development | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Real estate | 1-4 family residential (including home equity) | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 301,219 | 246,987 |
Real estate | 1-4 family residential (including home equity) | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 295,744 | 242,208 |
Real estate | 1-4 family residential (including home equity) | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 2,696 | 512 |
Real estate | 1-4 family residential (including home equity) | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 785 | 2,069 |
Real estate | 1-4 family residential (including home equity) | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 1,994 | 2,198 |
Real estate | 1-4 family residential (including home equity) | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Real estate | Residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 109,116 | 98,657 |
Real estate | Residential construction | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 103,611 | 97,808 |
Real estate | Residential construction | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 5,505 | 0 |
Real estate | Residential construction | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 415 |
Real estate | Residential construction | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 434 |
Real estate | Residential construction | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 0 |
Consumer and other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 10,320 | 10,965 |
Consumer and other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 10,207 | 10,520 |
Consumer and other | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 111 | 364 |
Consumer and other | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 0 | 4 |
Consumer and other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | 2 | 77 |
Consumer and other | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans held for investment | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN 65
LOANS AND ALLOWANCE FOR LOAN LOSSES - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for loan losses: | |||||
Balance, beginning of period | $ 17,911 | $ 13,098 | $ 8,246 | ||
Provision for loan losses | 13,188 | 5,469 | 5,792 | ||
Charge-offs | (7,993) | (900) | (1,040) | ||
Recoveries | 543 | 244 | 100 | ||
Net charge-offs | (7,450) | (656) | (940) | ||
Balance, end of period | 23,649 | 17,911 | 13,098 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | $ 2,356 | $ 1,654 | |||
Collectively evaluated for impairment | 21,293 | 16,257 | |||
Total allowance for loan losses | 17,911 | 13,098 | 8,246 | 23,649 | 17,911 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 32,713 | 20,957 | |||
Collectively evaluated for impairment | 2,238,163 | 1,870,678 | |||
Total Loans | 2,270,876 | 1,891,635 | |||
Commercial and industrial | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 5,059 | 3,644 | 2,334 | ||
Provision for loan losses | 9,792 | 1,951 | 2,193 | ||
Charge-offs | (7,673) | (722) | (935) | ||
Recoveries | 516 | 186 | 52 | ||
Net charge-offs | (7,157) | (536) | (883) | ||
Balance, end of period | 7,694 | 5,059 | 3,644 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 1,640 | 1,543 | |||
Collectively evaluated for impairment | 6,054 | 3,516 | |||
Total allowance for loan losses | 5,059 | 3,644 | 2,334 | 7,694 | 5,059 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 11,392 | 8,408 | |||
Collectively evaluated for impairment | 445,737 | 408,344 | |||
Total Loans | 457,129 | 416,752 | |||
Mortgage warehouse | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | ||
Charge-offs | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | ||
Net charge-offs | 0 | 0 | 0 | ||
Balance, end of period | 0 | 0 | 0 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 0 | 0 | |||
Total allowance for loan losses | 0 | 0 | 0 | 0 | 0 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 69,456 | 67,038 | |||
Total Loans | 69,456 | 67,038 | |||
Commercial real estate | Commercial real estate (including multi-family residential) | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 8,950 | 5,914 | 3,799 | ||
Provision for loan losses | 1,424 | 3,122 | 2,115 | ||
Charge-offs | (124) | (129) | 0 | ||
Recoveries | 3 | 43 | 0 | ||
Net charge-offs | (121) | (86) | 0 | ||
Balance, end of period | 10,253 | 8,950 | 5,914 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 716 | 105 | |||
Collectively evaluated for impairment | 9,537 | 8,845 | |||
Total allowance for loan losses | 8,950 | 5,914 | 3,799 | 10,253 | 8,950 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 20,164 | 12,321 | |||
Collectively evaluated for impairment | 1,060,083 | 879,668 | |||
Total Loans | 1,080,247 | 891,989 | |||
Commercial real estate | Commercial real estate construction and land development | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 1,217 | 1,221 | 578 | ||
Provision for loan losses | 1,298 | (4) | 625 | ||
Charge-offs | 0 | 0 | 0 | ||
Recoveries | 10 | 0 | 18 | ||
Net charge-offs | 10 | 0 | 18 | ||
Balance, end of period | 2,525 | 1,217 | 1,221 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 2,525 | 1,217 | |||
Total allowance for loan losses | 1,217 | 1,221 | 578 | 2,525 | 1,217 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 209 | 0 | |||
Collectively evaluated for impairment | 243,180 | 159,247 | |||
Total Loans | 243,389 | 159,247 | |||
Residential portfolio | Commercial real estate construction and land development | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 748 | 820 | 475 | ||
Provision for loan losses | 194 | (72) | 321 | ||
Charge-offs | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 24 | ||
Net charge-offs | 0 | 0 | 24 | ||
Balance, end of period | 942 | 748 | 820 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 942 | 748 | |||
Total allowance for loan losses | 748 | 820 | 475 | 942 | 748 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 109,116 | 98,657 | |||
Total Loans | 109,116 | 98,657 | |||
Residential portfolio | 1-4 family residential (including home equity) | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 1,876 | 1,432 | 1,008 | ||
Provision for loan losses | 254 | 434 | 464 | ||
Charge-offs | 0 | 0 | (40) | ||
Recoveries | 10 | 10 | 0 | ||
Net charge-offs | 10 | 10 | (40) | ||
Balance, end of period | 2,140 | 1,876 | 1,432 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 2,140 | 1,876 | |||
Total allowance for loan losses | 1,876 | 1,432 | 1,008 | 2,140 | 1,876 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 948 | 217 | |||
Collectively evaluated for impairment | 300,271 | 246,770 | |||
Total Loans | 301,219 | 246,987 | |||
Consumer and other | |||||
Allowance for loan losses: | |||||
Balance, beginning of period | 61 | 67 | 52 | ||
Provision for loan losses | 226 | 38 | 74 | ||
Charge-offs | (196) | (49) | (65) | ||
Recoveries | 4 | 5 | 6 | ||
Net charge-offs | (192) | (44) | (59) | ||
Balance, end of period | 95 | 61 | 67 | ||
Allowance for loan losses related to: | |||||
Individually evaluated for impairment | 0 | 6 | |||
Collectively evaluated for impairment | 95 | 55 | |||
Total allowance for loan losses | $ 61 | $ 67 | $ 52 | 95 | 61 |
Recorded investment in loans: | |||||
Individually evaluated for impairment | 0 | 11 | |||
Collectively evaluated for impairment | 10,320 | 10,954 | |||
Total Loans | $ 10,320 | $ 10,965 |
LOANS AND ALLOWANCE FOR LOAN 66
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loans Modified in a Troubled Debt Restructuring (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)contract | Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract | |
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 17 | 30 | 9 |
Pre-Modification of Outstanding Recorded Investment | $ 14,532 | $ 11,089 | $ 3,042 |
Post-Modification of Outstanding Recorded Investment | $ 14,532 | $ 11,089 | $ 3,042 |
Commercial and industrial | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 9 | 21 | 6 |
Pre-Modification of Outstanding Recorded Investment | $ 2,399 | $ 3,939 | $ 2,959 |
Post-Modification of Outstanding Recorded Investment | $ 2,399 | $ 3,939 | $ 2,959 |
Mortgage warehouse | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | |||
Pre-Modification of Outstanding Recorded Investment | |||
Post-Modification of Outstanding Recorded Investment | |||
Real estate | Commercial real estate (including multi-family residential) | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 6 | 8 | 1 |
Pre-Modification of Outstanding Recorded Investment | $ 11,837 | $ 7,144 | $ 63 |
Post-Modification of Outstanding Recorded Investment | $ 11,837 | $ 7,144 | $ 63 |
Real estate | Commercial real estate construction and land development | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 1 | 0 | 0 |
Pre-Modification of Outstanding Recorded Investment | $ 210 | $ 0 | $ 0 |
Post-Modification of Outstanding Recorded Investment | $ 210 | $ 0 | $ 0 |
Real estate | 1-4 Family residential including home equity | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 1 | 0 | 0 |
Pre-Modification of Outstanding Recorded Investment | $ 86 | $ 0 | $ 0 |
Post-Modification of Outstanding Recorded Investment | $ 86 | $ 0 | $ 0 |
Real estate | Residential construction | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 0 | 0 | 0 |
Pre-Modification of Outstanding Recorded Investment | $ 0 | $ 0 | $ 0 |
Post-Modification of Outstanding Recorded Investment | $ 0 | $ 0 | $ 0 |
Consumer and other | |||
Financing Receivable, Modifications [Line Items] | |||
Number of Contracts | contract | 0 | 1 | 2 |
Pre-Modification of Outstanding Recorded Investment | $ 0 | $ 6 | $ 20 |
Post-Modification of Outstanding Recorded Investment | $ 0 | $ 6 | $ 20 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure, recurring | $ 0 | $ 0 |
Repossessed assets | 0 | 0 |
Recorded Investment | 13,609,000 | 3,687,000 |
Unpaid principal balance | 13,846,000 | 3,907,000 |
Related allowance | 2,356,000 | 1,654,000 |
Loans receivable, real estate | 0 | 1,500,000 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Investment | 11,500,000 | 2,300,000 |
Unpaid principal balance | 13,800,000 | 3,900,000 |
Related allowance | 2,400,000 | $ 1,700,000 |
Real estate acquired through foreclosure | $ 365,000 | |
Impaired Loans with Specific Allocation of Allowance | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of estimated selling and closing costs of collateral | 5.00% | |
Impaired Loans with Specific Allocation of Allowance | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of estimated selling and closing costs of collateral | 10.00% | |
Other Real Estate Owned | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of estimated selling and closing costs of collateral | 5.00% | |
Other Real Estate Owned | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of estimated selling and closing costs of collateral | 10.00% |
FAIR VALUE - Carrying Amounts a
FAIR VALUE - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets | ||
Available for sale securities | $ 309,615 | $ 316,455 |
FHLB stock | 12,862 | 13,175 |
Contractual Balance | ||
Financial assets | ||
Cash and cash equivalents | 182,103 | 142,098 |
Available for sale securities | 309,615 | 316,455 |
Loans held for investment, net of allowance | 2,247,227 | 1,873,724 |
FHLB stock | 12,862 | 13,175 |
Accrued interest receivable | 12,194 | 9,007 |
Financial liabilities | ||
Total deposits | 2,213,974 | 1,870,183 |
Accrued interest payable | 610 | 285 |
Borrowed funds | 282,569 | 285,569 |
Subordinated debt | 48,659 | 9,196 |
Fair Value | ||
Financial assets | ||
Cash and cash equivalents | 182,103 | 142,098 |
Available for sale securities | 309,615 | 316,455 |
Loans held for investment, net of allowance | 2,238,721 | 1,872,056 |
Accrued interest receivable | 12,194 | 9,007 |
Financial liabilities | ||
Total deposits | 2,209,111 | 1,868,429 |
Accrued interest payable | 610 | 285 |
Borrowed funds | 288,887 | 284,989 |
Subordinated debt | 48,659 | 9,196 |
Fair Value | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 182,103 | 142,098 |
Available for sale securities | 0 | 0 |
Loans held for investment, net of allowance | 0 | 0 |
Accrued interest receivable | 3 | 3 |
Financial liabilities | ||
Total deposits | 0 | 0 |
Accrued interest payable | 0 | 0 |
Borrowed funds | 0 | 0 |
Subordinated debt | 0 | 0 |
Fair Value | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Available for sale securities | 309,615 | 316,455 |
Loans held for investment, net of allowance | 0 | 0 |
Accrued interest receivable | 3,296 | 3,616 |
Financial liabilities | ||
Total deposits | 2,209,111 | 1,868,429 |
Accrued interest payable | 610 | 285 |
Borrowed funds | 288,887 | 284,989 |
Subordinated debt | 48,659 | 9,196 |
Fair Value | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Available for sale securities | 0 | 0 |
Loans held for investment, net of allowance | 2,238,721 | 1,872,056 |
Accrued interest receivable | 8,895 | 5,388 |
Financial liabilities | ||
Total deposits | 0 | 0 |
Accrued interest payable | 0 | 0 |
Borrowed funds | 0 | 0 |
Subordinated debt | $ 0 | $ 0 |
FAIR VALUE - Fair Values for As
FAIR VALUE - Fair Values for Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 309,615 | $ 316,455 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 309,615 | 316,455 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 8,715 | 6,149 |
U.S. Government and agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
U.S. Government and agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 8,715 | 6,149 |
U.S. Government and agency securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 222,958 | 237,802 |
Municipal securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Municipal securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 222,958 | 237,802 |
Municipal securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Agency mortgage-backed pass-through securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,812 | 27,324 |
Agency mortgage-backed pass-through securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Agency mortgage-backed pass-through securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,812 | 27,324 |
Agency mortgage-backed pass-through securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 46,130 | 45,180 |
Corporate Bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Corporate Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 46,130 | 45,180 |
Corporate Bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 0 | $ 0 |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 11,855 | 3,756 |
Commercial and industrial | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Commercial and industrial | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Commercial and industrial | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 4,012 | 1,785 |
Commercial real estate (including multi-family residential) | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Commercial real estate (including multi-family residential) | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Commercial real estate (including multi-family residential) | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 7,478 | 468 |
Other real estate owned | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Other real estate owned | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | 0 | 0 |
Other real estate owned | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans receivable, fair value | $ 365 | $ 1,503 |
PREMISES AND EQUIPMENT - Narrat
PREMISES AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 1,637 | $ 1,627 | $ 1,614 |
PREMISES AND EQUIPMENT - Premis
PREMISES AND EQUIPMENT - Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 27,699 | $ 26,440 |
Less: accumulated depreciation | 9,222 | 8,100 |
Premises and equipment, net | 18,477 | 18,340 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 5,376 | 5,376 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 7,977 | 8,034 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 5,059 | 5,098 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 8,967 | 7,927 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 320 | $ 5 |
DEPOSITS - Narrative (Details)
DEPOSITS - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deposit Liabilities [Abstract] | ||
Time deposits, $250,000 or more | $ 227.4 | $ 196.5 |
Interest-bearing domestic deposit, brokered | 314.8 | 65.9 |
Interest-bearing domestic deposit, certificates of deposits | 68.4 | 64.8 |
Related party deposit liabilities | $ 15.7 | $ 14.8 |
DEPOSITS - Time Deposits by Mat
DEPOSITS - Time Deposits by Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deposit Liabilities [Abstract] | ||
Within one year | $ 504,104 | |
After one but within two years | 129,562 | |
After two but within three years | 34,922 | |
After three but within four years | 29,976 | |
After four but within five years | 62,750 | |
Total | $ 761,314 | $ 678,394 |
BORROWINGS AND BORROWING CAPA75
BORROWINGS AND BORROWING CAPACITY - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Increase (decrease) in other borrowings | $ 18,000,000 | $ 10,100,000 | |||
Repayments of debt | $ 27,500,000 | ||||
Allegiance Bank | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, percent of return on assets | 0.46% | ||||
Borrowing Agreement | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
Interest rate, effective percentage | 4.25% | 4.25% | |||
Federal Home Loan Bank of Dallas | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 930,600,000 | $ 930,600,000 | |||
Remaining borrowing capacity | 606,200,000 | 606,200,000 | |||
Letters of credit outstanding, amount | 42,400,000 | 42,400,000 | |||
Federal Home Loan Bank of Dallas | Expire in February 2018 | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding, amount | 3,100,000 | 3,100,000 | |||
Federal Home Loan Bank of Dallas | Expire in August 2018 | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding, amount | 8,000,000 | 8,000,000 | |||
Federal Home Loan Bank of Dallas | Expire in October 2018 | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding, amount | 25,000,000 | 25,000,000 | |||
Federal Home Loan Bank of Dallas | Expire in December 2018 | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding, amount | 6,400,000 | 6,400,000 | |||
Federal Home Loan Bank of Dallas | Short-term Debt | |||||
Debt Instrument [Line Items] | |||||
Federal Home Loan Bank, amount of advances | $ 282,000,000 | $ 282,000,000 | |||
Federal Home Loan Bank of Dallas | Short-term Debt | Weighted Average | |||||
Debt Instrument [Line Items] | |||||
Federal Home Loan Bank, interest rate | 1.45% | 1.45% |
BORROWINGS AND BORROWING CAPA76
BORROWINGS AND BORROWING CAPACITY - Scheduled Principal Maturities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2022 and thereafter | 569 |
Total | $ 569 |
SUBORDINATED DEBT - Narrative (
SUBORDINATED DEBT - Narrative (Details) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Period over which interest payments may be deferred | 5 years | |
Junior Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Face amount | $ 11,300,000 | $ 11,300,000 |
Borrowed funds | 9,300,000 | 9,300,000 |
Unamortized discount | 2,500,000 | 2,500,000 |
Outstanding amount | 11,300,000 | 11,300,000 |
Junior Subordinated Debt | Subordinated note issuance - 2017 | ||
Debt Instrument [Line Items] | ||
Face amount | $ 40,000,000 | $ 40,000,000 |
Issuance price, percentage | 100.00% | 100.00% |
Proceeds from issuance of debt | $ 39,400,000 | |
Interest Rate | 5.25% | 5.25% |
Redemption price, percentage | 100.00% | |
Junior Subordinated Debt | Subordinated note issuance - 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.03% |
SUBORDINATED DEBT - Summary of
SUBORDINATED DEBT - Summary of Pertinent Information Related to Junior Subordinated Debentures (Details) - Junior Subordinated Debt | 1 Months Ended | 12 Months Ended |
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Subordinated Borrowing [Line Items] | ||
Trust Preferred Securities Outstanding | $ 11,300,000 | $ 11,300,000 |
Junior Subordinated Debt Owed to Trusts | $ 11,300,000 | $ 11,300,000 |
LIBOR | ||
Subordinated Borrowing [Line Items] | ||
Interest rate, effective percentage | 1.6098% | 1.6098% |
Farmers & Merchants Capital Trust II | ||
Subordinated Borrowing [Line Items] | ||
Issuance Date | Nov. 13, 2003 | |
Trust Preferred Securities Outstanding | $ 7,500,000 | $ 7,500,000 |
Junior Subordinated Debt Owed to Trusts | 7,732,000 | $ 7,732,000 |
Maturity Date | Nov. 8, 2033 | |
Farmers & Merchants Capital Trust II | LIBOR | ||
Subordinated Borrowing [Line Items] | ||
Interest Rate | 3.00% | |
Farmers & Merchants Capital Trust III | ||
Subordinated Borrowing [Line Items] | ||
Issuance Date | Jun. 30, 2005 | |
Trust Preferred Securities Outstanding | 3,500,000 | $ 3,500,000 |
Junior Subordinated Debt Owed to Trusts | 3,609,000 | $ 3,609,000 |
Maturity Date | Jul. 7, 2035 | |
Farmers & Merchants Capital Trust III | LIBOR | ||
Subordinated Borrowing [Line Items] | ||
Interest Rate | 1.80% | |
Subordinated note issuance - 2017 | ||
Subordinated Borrowing [Line Items] | ||
Trust Preferred Securities Outstanding | $ 40,000,000 | $ 40,000,000 |
Subordinated note issuance - 2017 | LIBOR | ||
Subordinated Borrowing [Line Items] | ||
Interest Rate | 3.03% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax Cuts and Jobs Act of 2017, income tax expense | $ 2,600,000 | ||
Net benefit, share-based compensation | 1,100,000 | $ 371,000 | |
Provision for income taxes | $ 8,747,000 | $ 9,554,000 | $ 7,775,000 |
Effective income tax rate reconciliation, percent | 33.20% | 29.50% | 33.00% |
Unrecognized tax benefits, income tax penalties and interest expense | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Components of th
INCOME TAXES - Components of the Provision for Federal Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 8,320 | $ 11,162 | $ 8,221 |
Deferred | 427 | (1,608) | (446) |
Total | $ 8,747 | $ 9,554 | $ 7,775 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Taxes calculated at statutory rate | $ 9,233 | $ 11,342 | $ 8,247 |
Increase (decrease) resulting from: | |||
Stock based compensation | (755) | 67 | 393 |
Provisional deferred tax adjustment related to reduction in U.S. federal statutory income tax rate | 2,621 | 0 | 0 |
Effect of tax exempt income | (2,328) | (1,929) | (890) |
Other, net | (24) | 74 | 25 |
Total | $ 8,747 | $ 9,554 | $ 7,775 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for credit losses | $ 5,284 | $ 6,938 |
Net unrealized loss on available for sale securities | 0 | 1,642 |
Deferred compensation | 177 | 168 |
Total deferred tax assets | 5,461 | 8,748 |
Deferred tax liabilities: | ||
Core deposit intangible and other purchase accounting adjustments | (1,100) | (1,953) |
Net unrealized gain on available for sale securities | (65) | 0 |
Premises and equipment basis difference | (321) | (568) |
Total deferred tax liabilities | (1,486) | (2,521) |
Net deferred tax assets | $ 3,975 | $ 6,227 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
2008 Stock Awards and Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (shares) | 1,900,000 | ||
Share-based compensation expense | $ 1,800 | $ 1,500 | $ 1,400 |
Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cumulative options granted since inception (shares) | 1,304,431 | ||
Expiration period | 10 years | ||
Award vesting period | 4 years | ||
Nonvested awards, compensation not yet recognized | $ 2,000 | ||
Nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 7 months 13 days | ||
Share Award Plan | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Nonvested awards, compensation cost not yet recognized, period for recognition | 3 years 4 months 6 days | ||
Cumulative awards granted since inception (in shares) | 104,462 | ||
Share awards granted (in shares) | 28,106 | 15,401 | 3,983 |
Share awards granted (in dollars per share) | $ 36.17 | $ 17.52 | $ 22 |
Nonvested awards, compensation not yet recognized | $ 511 | ||
Award vested in period, fair value | $ 203 | $ 172 | $ 220 |
STOCK BASED COMPENSATION - Summ
STOCK BASED COMPENSATION - Summary of Stock Option Valuation Assumptions (Details) - Stock Option Plan | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.40% | 1.76% | 1.99% |
Expected term | 10 years | 10 years | 10 years |
Expected stock price volatility | 29.70% | 34.60% | 18.06% |
Dividend yield | 0.00% | 0.00% | 0.00% |
STOCK BASED COMPENSATION - Stoc
STOCK BASED COMPENSATION - Stock Option Plan Activity (Details) - Stock Option Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | ||||||
Beginning balance (in shares) | 775 | 935 | 969 | 775 | 935 | 969 |
Options granted (in shares) | 64 | 107 | ||||
Options exercised (in shares) | (215) | (116) | ||||
Options forfeited (in shares) | (9) | (25) | ||||
Ending balance (in shares) | 775 | 935 | 969 | |||
Options vested and exercisable, December 31, 2016 (in shares) | 484 | |||||
Weighted Average Exercise Price | ||||||
Beginning balance (in dollars per share) | $ 19.94 | $ 18.21 | $ 17.45 | $ 19.94 | $ 18.21 | $ 17.45 |
Options granted (in dollars per share) | 36.88 | 22.83 | ||||
Options exercised (in dollars per share) | 17.50 | 15.42 | ||||
Options forfeited (in dollars per share) | 23.35 | 21.56 | ||||
Ending balance (in dollars per share) | $ 19.94 | $ 18.21 | $ 17.45 | |||
Options vested and exercisable, December 31, 2016 (in dollars per share) | $ 16.73 | |||||
Weighted Average Remaining Contractual Term, Options outstanding | 5 years 8 months 19 days | 6 years 2 months 23 days | 6 years 7 months 13 days | |||
Weighted Average Remaining Contractual Term, Options vested and exercisable | 4 years 5 months 1 day | |||||
Aggregate Intrinsic Value, Options outstanding | $ 13,718 | $ 16,773 | $ 6,006 | |||
Aggregate Intrinsic Value, Options vested and exercisable | $ 10,127 |
STOCK BASED COMPENSATION - Info
STOCK BASED COMPENSATION - Information Related to the Stock Option Plan (Details) - Stock Option Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised | $ 3,371 | $ 1,128 | $ 0 |
Cash received from option exercises | $ 3,743 | $ 1,782 | $ 0 |
Weighted average fair value of options granted | $ 16.55 | $ 10.51 | $ 6.78 |
STOCK BASED COMPENSATION - Su87
STOCK BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - Share Award Plan - Restricted Stock Awards - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Beginning balance (in shares) | 24,000 | 18,000 | |
Share awards granted (in shares) | 28,106 | 15,401 | 3,983 |
Share awards vested (in shares) | (11,000) | (9,000) | |
Nonvested share awards forfeited (in shares) | 0 | 0 | |
Ending balance (in shares) | 41,000 | 24,000 | 18,000 |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 18.31 | $ 19.68 | |
Share awards granted (in dollars per share) | 36.17 | 17.52 | $ 22 |
Share awards vested (in dollars per share) | 18.32 | 19.45 | |
Nonvested share awards forfeited (in dollars per share) | 0 | 0 | |
Ending balance (in dollars per share) | $ 30.46 | $ 18.31 | $ 19.68 |
OTHER EMPLOYEE BENEFITS (Detail
OTHER EMPLOYEE BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Stock Purchase Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee purchase price for share as percent of discount to market value | 15.00% | ||
Share-based compensation expense | $ 144 | $ 90 | $ 96 |
401 (k) Benefit Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 50.00% | ||
Employer matching contribution, percent of employees' gross pay | 6.00% | ||
Maximum annual contributions per employee, percent | 3.00% | ||
Employer contribution amount | $ 789 | 637 | 551 |
Profit Sharing Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution amount | $ 1,500 | $ 1,700 | $ 1,200 |
OFF-BALANCE SHEET ARRANGEMENT89
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Commitments to make loans, period | 120 days | ||
Fixed rate loan commitments, weighted average maturity | 2 years 8 months 16 days | ||
Rent expense | $ 2.8 | $ 2.7 | $ 2.6 |
Minimum | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Fixed rate loan commitments, interest rate | 1.60% | ||
Maximum | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Fixed rate loan commitments, interest rate | 7.50% | ||
Weighted Average | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Fixed rate loan commitments, interest rate | 4.98% |
OFF-BALANCE SHEET ARRANGEMENT90
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Contractual Amounts of Financial Instruments With Off-balance Sheet Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed Rate | $ 385,018 | $ 363,245 |
Variable Rate | 252,192 | 232,675 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed Rate | 369,573 | 353,822 |
Variable Rate | 250,467 | 232,551 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed Rate | 15,445 | 9,423 |
Variable Rate | $ 1,725 | $ 124 |
OFF-BALANCE SHEET ARRANGEMENT91
OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES - Summary of Non-cancelable Future Operating Lease Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Off Balance Sheet Arrangements Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 1,806 |
2,019 | 1,030 |
2,020 | 1,039 |
2,021 | 911 |
2,022 | 893 |
Thereafter | 3,780 |
Operating Leases, Future Minimum Payments Due | $ 9,459 |
REGULATORY CAPITAL MATTERS (Det
REGULATORY CAPITAL MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total Capital | ||
Capital | $ 336,829 | $ 268,155 |
Capital to Risk Weighted Assets | 13.43% | 12.57% |
Capital Required for Capital Adequacy | $ 200,687 | $ 170,690 |
Capital Required for Capital Adequacy to Risk Weighted Assets | 8.00% | 8.00% |
Plus Capital Conservation Buffer | $ 232,044 | $ 184,025 |
Plus Capital Conservation Buffer to Risk Weighted Assets | 9.25% | 8.625% |
Common Equity Tier 1 Capital | ||
Common Equity Tier One Risk Based Capital | $ 264,521 | $ 241,048 |
Common Equity Tier One Risk Based Capital to Risk Weighted Assets | 10.54% | 11.30% |
Common Equity Tier One Risk Based Capital Required for Capital Adequacy | $ 112,886 | $ 96,013 |
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 4.50% | 4.50% |
Plus Common Equity Tier One Risk Based Capital | $ 144,244 | $ 109,348 |
Plus Common Equity Tier One Risk Based Capital to Risk Weighted Assets | 5.75% | 5.125% |
Tier I Capital | ||
Tier One Risk Based Capital | $ 273,825 | $ 250,244 |
Tier One Risk Based Capital to Risk Weighted Assets | 10.92% | 11.73% |
Tier One Risk Based Capital Required for Capital Adequacy | $ 150,515 | $ 128,018 |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | 6.00% |
Plus Tier One Risk Based Capital | $ 181,872 | $ 141,353 |
Plus Tier One Risk Based Capital to Risk Weighted Assets | 7.25% | 6.625% |
Tier I Capital | ||
Tier One Leverage Capital | $ 273,825 | $ 250,244 |
Tier One Leverage Capital to Average Assets | 9.84% | 10.35% |
Tier One Leverage Capital Required for Capital Adequacy | $ 111,274 | $ 96,708 |
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | 4.00% | 4.00% |
Plus Tier One Leverage Capital | $ 111,274 | $ 96,708 |
Plus Tier One Leverage Capital to Average Assets | 4.00% | 4.00% |
Allegiance Bank | ||
Total Capital | ||
Capital | $ 331,872 | $ 247,606 |
Capital to Risk Weighted Assets | 13.24% | 11.61% |
Capital Required for Capital Adequacy | $ 200,596 | $ 170,630 |
Capital Required for Capital Adequacy to Risk Weighted Assets | 8.00% | 8.00% |
Plus Capital Conservation Buffer | $ 231,939 | $ 183,960 |
Plus Capital Conservation Buffer to Risk Weighted Assets | 9.25% | 8.625% |
Capital Required to be Well Capitalized | $ 250,745 | $ 213,288 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Common Equity Tier 1 Capital | ||
Common Equity Tier One Risk Based Capital | $ 268,868 | $ 229,694 |
Common Equity Tier One Risk Based Capital to Risk Weighted Assets | 10.72% | 10.77% |
Common Equity Tier One Risk Based Capital Required for Capital Adequacy | $ 112,835 | $ 95,979 |
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 4.50% | 4.50% |
Plus Common Equity Tier One Risk Based Capital | $ 144,179 | $ 109,310 |
Plus Common Equity Tier One Risk Based Capital to Risk Weighted Assets | 5.75% | 5.125% |
Common Equity Tier One Risk Based Capital Required to be Well Capitalized | $ 162,985 | $ 138,637 |
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 6.50% | 6.50% |
Tier I Capital | ||
Tier One Risk Based Capital | $ 268,868 | $ 229,694 |
Tier One Risk Based Capital to Risk Weighted Assets | 10.72% | 10.77% |
Tier One Risk Based Capital Required for Capital Adequacy | $ 150,447 | $ 127,973 |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | 6.00% |
Plus Tier One Risk Based Capital | $ 181,790 | $ 141,303 |
Plus Tier One Risk Based Capital to Risk Weighted Assets | 7.25% | 6.625% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 200,596 | $ 170,630 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Tier I Capital | ||
Tier One Leverage Capital | $ 268,868 | $ 229,694 |
Tier One Leverage Capital to Average Assets | 9.67% | 9.50% |
Tier One Leverage Capital Required for Capital Adequacy | $ 111,230 | $ 96,679 |
Tier One Leverage Capital Required for Capital Adequacy to Average Assets | 4.00% | 4.00% |
Plus Tier One Leverage Capital | $ 111,230 | $ 96,679 |
Plus Tier One Leverage Capital to Average Assets | 4.00% | 4.00% |
Tier One Leverage Capital Required to be Well Capitalized | $ 139,037 | $ 120,849 |
Tier One Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
EARNINGS PER COMMON SHARE - Com
EARNINGS PER COMMON SHARE - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to common shareholders | $ 3,204 | $ 2,986 | $ 5,395 | $ 6,047 | $ 5,771 | $ 5,471 | $ 5,254 | $ 6,355 | $ 17,632 | $ 22,851 | $ 15,227 |
Basic: | |||||||||||
Weighted average common shares outstanding | 13,125 | 12,873 | 10,470 | ||||||||
Weighted average common shares outstanding (in dollars per share) | $ 0.24 | $ 0.23 | $ 0.41 | $ 0.46 | $ 0.45 | $ 0.42 | $ 0.41 | $ 0.49 | $ 1.34 | $ 1.78 | $ 1.45 |
Diluted: | |||||||||||
Dilutive effect of stock option exercises | 333 | 201 | 184 | ||||||||
Total | 13,458 | 13,074 | 10,654 | ||||||||
Diluted (in dollars per share) | $ 0.24 | $ 0.22 | $ 0.40 | $ 0.45 | $ 0.44 | $ 0.42 | $ 0.40 | $ 0.49 | $ 1.31 | $ 1.75 | $ 1.43 |
EARNINGS PER COMMON SHARE - Nar
EARNINGS PER COMMON SHARE - Narrative (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017shares | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 28 |
PARENT COMPANY ONLY FINANCIAL95
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Cash and due from banks | $ 133,124 | $ 94,073 | ||
Other assets | 12,303 | 11,365 | ||
TOTAL ASSETS | 2,860,231 | 2,450,948 | ||
LIABILITIES: | ||||
Borrowed funds | 282,569 | 285,569 | ||
Subordinated debt | 48,659 | 9,196 | ||
Total liabilities | 2,553,366 | 2,171,131 | ||
SHAREHOLDERS’ EQUITY: | ||||
Common stock | 13,227 | 12,958 | ||
Capital surplus | 218,408 | 212,649 | ||
Retained earnings | 74,894 | 57,262 | ||
Accumulated other comprehensive income (loss) | 336 | (3,052) | ||
Total shareholders’ equity | 306,865 | 279,817 | $ 258,490 | $ 131,778 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 2,860,231 | 2,450,948 | ||
Parent Company | ||||
ASSETS | ||||
Cash and due from banks | 4,857 | 21,206 | ||
Investment in subsidiary | 311,553 | 268,804 | ||
Other assets | 791 | 412 | ||
TOTAL ASSETS | 317,201 | 290,422 | ||
LIABILITIES: | ||||
Borrowed funds | 569 | 569 | ||
Subordinated debt | 9,304 | 9,197 | ||
Accrued interest payable and other liabilities | 463 | 839 | ||
Total liabilities | 10,336 | 10,605 | ||
SHAREHOLDERS’ EQUITY: | ||||
Common stock | 13,227 | 12,958 | ||
Capital surplus | 218,408 | 212,649 | ||
Retained earnings | 74,894 | 57,262 | ||
Accumulated other comprehensive income (loss) | 336 | (3,052) | ||
Total shareholders’ equity | 306,865 | 279,817 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 317,201 | $ 290,422 |
PARENT COMPANY ONLY FINANCIAL96
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING EXPENSE: | |||||||||||
Interest expense on borrowed funds | $ 15,770 | $ 10,914 | $ 8,640 | ||||||||
Income tax benefit | (8,747) | (9,554) | (7,775) | ||||||||
INCOME BEFORE INCOME TAXES | 26,379 | 32,405 | 23,561 | ||||||||
NET INCOME | 17,632 | 22,851 | 15,786 | ||||||||
Preferred stock dividends | 0 | 0 | 559 | ||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 3,204 | $ 2,986 | $ 5,395 | $ 6,047 | $ 5,771 | $ 5,471 | $ 5,254 | $ 6,355 | 17,632 | 22,851 | 15,227 |
Parent Company | |||||||||||
OPERATING INCOME: | |||||||||||
Other income | 13 | 11 | 16 | ||||||||
Total operating income | 13 | 11 | 16 | ||||||||
OPERATING EXPENSE: | |||||||||||
Interest expense on borrowed funds | 33 | 30 | 707 | ||||||||
Other expenses | 1,465 | 1,204 | 771 | ||||||||
Total operating expense | 1,498 | 1,234 | 1,478 | ||||||||
Income before income tax benefit and equity in undistributed income of subsidiaries | (1,485) | (1,223) | (1,462) | ||||||||
Income tax benefit | 756 | 428 | 500 | ||||||||
INCOME BEFORE INCOME TAXES | (729) | (795) | (962) | ||||||||
Equity in undistributed income of subsidiaries | 18,361 | 23,646 | 16,748 | ||||||||
NET INCOME | 17,632 | 22,851 | 15,786 | ||||||||
Preferred stock dividends | 0 | 0 | 559 | ||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 17,632 | $ 22,851 | $ 15,227 |
PARENT COMPANY ONLY FINANCIAL97
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Cash Flow Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 17,632 | $ 22,851 | $ 15,786 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net amortization of discount on subordinated debentures | 108 | 107 | 218 |
(Decrease) increase in accrued interest payable and other liabilities | 3,130 | (851) | 503 |
Net cash provided by operating activities | 33,432 | 27,435 | 20,421 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Net cash used in investing activities | (377,824) | (408,494) | (243,516) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from initial public offering | 0 | 0 | 57,138 |
Stock based compensation expense | 4,248 | 2,006 | 133 |
Proceeds from borrowed funds | 0 | 255,000 | 68,000 |
Paydowns on borrowed funds | (3,000) | (20,000) | (45,500) |
Redemption of preferred stock | 0 | 0 | (11,550) |
Preferred stock dividends | 0 | 0 | (559) |
Issuance (repurchase) of treasury stock | 0 | 38 | (52) |
Net cash provided by financing activities | 384,397 | 374,726 | 203,986 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 40,005 | (6,333) | (19,109) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 142,098 | 148,431 | 167,540 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 182,103 | 142,098 | 148,431 |
Parent Company | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 17,632 | 22,851 | 15,786 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed earnings of subsidiaries | (18,361) | (23,646) | (16,748) |
Net amortization of discount on subordinated debentures | 107 | 107 | 218 |
(Increase) decrease in other assets | (378) | (399) | 220 |
(Decrease) increase in accrued interest payable and other liabilities | (377) | 186 | (462) |
Net cash provided by operating activities | (1,377) | (901) | (986) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Net cash and cash equivalents acquired in the purchase of F&M Bancshares, Inc. | 0 | 0 | 818 |
Capital investment in bank subsidiary | (21,000) | 0 | (12,000) |
Net cash used in investing activities | (21,000) | 0 | (11,182) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock | 4,248 | 2,006 | 133 |
Proceeds from initial public offering | 0 | 0 | 57,138 |
Stock based compensation expense | 1,780 | 1,501 | 1,351 |
Proceeds from borrowed funds | 0 | 0 | 18,000 |
Paydowns on borrowed funds | 0 | 0 | (45,500) |
Redemption of preferred stock | 0 | 0 | (11,550) |
Preferred stock dividends | 0 | 0 | (559) |
Issuance (repurchase) of treasury stock | 0 | 38 | (52) |
Net cash provided by financing activities | 6,028 | 3,545 | 18,961 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (16,349) | 2,644 | 6,793 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 21,206 | 18,562 | 11,769 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 4,857 | $ 21,206 | $ 18,562 |
QUARTERLY FINANCIAL DATA (UNA98
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest Income | $ 32,038 | $ 30,901 | $ 28,987 | $ 27,512 | $ 26,481 | $ 26,319 | $ 24,527 | $ 23,451 | $ 119,438 | $ 100,778 | $ 88,806 |
Net Interest Income | 27,436 | 26,997 | 25,107 | 24,128 | 23,422 | 23,409 | 21,949 | 21,084 | 103,668 | 89,864 | 80,166 |
Net Income Attributable to Common Shareholders | $ 3,204 | $ 2,986 | $ 5,395 | $ 6,047 | $ 5,771 | $ 5,471 | $ 5,254 | $ 6,355 | $ 17,632 | $ 22,851 | $ 15,227 |
Earnings Per Share, Basic (in dollars per share) | $ 0.24 | $ 0.23 | $ 0.41 | $ 0.46 | $ 0.45 | $ 0.42 | $ 0.41 | $ 0.49 | $ 1.34 | $ 1.78 | $ 1.45 |
Earnings Per Share, Diluted (in dollars per share) | $ 0.24 | $ 0.22 | $ 0.40 | $ 0.45 | $ 0.44 | $ 0.42 | $ 0.40 | $ 0.49 | $ 1.31 | $ 1.75 | $ 1.43 |