Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 16, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CSTR | |
Entity Registrant Name | CAPSTAR FINANCIAL HOLDINGS, INC. | |
Entity Central Index Key | 1,676,479 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 11,359,130 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and due from banks | $ 10,796 | $ 9,134 |
Interest-bearing deposits in financial institutions | 58,993 | 54,323 |
Federal funds sold | 16,654 | |
Total cash and cash equivalents | 69,789 | 80,111 |
Securities available-for-sale, at fair value | 146,600 | 182,355 |
Securities held-to-maturity, fair value of $48,980, and $49,731 at September 30, 2017 and December 31, 2016, respectively | 45,635 | 46,864 |
Loans held for sale | 53,225 | 42,111 |
Loans | 974,530 | 935,251 |
Less allowance for loan losses | (14,122) | (11,634) |
Loans, net | 960,408 | 923,617 |
Premises and equipment, net | 5,978 | 5,350 |
Restricted equity securities | 8,799 | 6,032 |
Accrued interest receivable | 3,849 | 3,942 |
Goodwill | 6,219 | 6,219 |
Core deposit intangible | 33 | 71 |
Deferred tax assets | 12,472 | 12,956 |
Bank owned life insurance | 22,335 | 21,900 |
Other assets | 3,217 | 2,147 |
Total assets | 1,338,559 | 1,333,675 |
Deposits: | ||
Non-interest-bearing | 250,007 | 197,788 |
Interest-bearing | 303,756 | 299,621 |
Savings and money market accounts | 338,391 | 447,686 |
Time | 199,341 | 183,628 |
Total deposits | 1,091,495 | 1,128,723 |
Federal Home Loan Bank advances | 95,000 | 55,000 |
Accrued interest payable | 305 | 212 |
Other liabilities | 7,555 | 10,533 |
Total liabilities | 1,194,355 | 1,194,468 |
Shareholders’ equity: | ||
Series A convertible preferred stock, $1 par value; 5,000,000 shares authorized; 878,049 shares issued and outstanding at September 30, 2017 and December 31, 2016 | 878 | 878 |
Common stock, voting, $1 par value; 20,000,000 shares authorized; 11,346,498 and 11,204,515 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 11,347 | 11,205 |
Additional paid-in capital | 117,617 | 116,143 |
Retained earnings | 18,541 | 17,132 |
Accumulated other comprehensive loss, net of income tax | (4,179) | (6,151) |
Total shareholders’ equity | 144,204 | 139,207 |
Total liabilities and shareholders’ equity | $ 1,338,559 | $ 1,333,675 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Securities held to maturity, fair value | $ 48,980 | $ 49,731 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 878,049 | 878,049 |
Preferred stock, shares outstanding | 878,049 | 878,049 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 11,346,498 | 11,204,515 |
Common stock, shares outstanding | 11,346,498 | 11,204,515 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest income: | ||||
Loans, including fees | $ 12,095 | $ 10,659 | $ 33,935 | $ 29,532 |
Securities: | ||||
Taxable | 838 | 787 | 2,827 | 2,596 |
Tax-exempt | 304 | 291 | 944 | 841 |
Federal funds sold | 7 | 4 | 26 | 12 |
Restricted equity securities | 108 | 71 | 271 | 210 |
Interest-bearing deposits in financial institutions | 169 | 63 | 387 | 197 |
Total interest income | 13,521 | 11,875 | 38,390 | 33,388 |
Interest expense: | ||||
Interest-bearing deposits | 635 | 404 | 1,839 | 1,096 |
Savings and money market accounts | 772 | 689 | 2,360 | 2,141 |
Time deposits | 706 | 546 | 1,750 | 1,566 |
Federal funds purchased | 2 | 13 | 13 | 21 |
Securities sold under agreements to repurchase | 1 | |||
Federal Home Loan Bank advances | 563 | 97 | 1,083 | 280 |
Total interest expense | 2,678 | 1,749 | 7,045 | 5,105 |
Net interest income | 10,843 | 10,126 | 31,345 | 28,283 |
Provision for loan losses | (195) | 1,639 | 12,900 | 2,759 |
Net interest income after provision for loan losses | 11,038 | 8,487 | 18,445 | 25,524 |
Noninterest income: | ||||
Treasury management and other deposit service charges | 427 | 277 | 1,097 | 805 |
Loan commitment fees | 223 | 329 | 646 | 901 |
Net gain (loss) on sale of securities | 9 | (4) | 42 | 121 |
Tri-Net fees | 367 | 748 | ||
Mortgage banking income | 2,030 | 2,339 | 4,617 | 5,342 |
Other noninterest income | 316 | 250 | 1,021 | 961 |
Total noninterest income | 3,372 | 3,191 | 8,171 | 8,130 |
Noninterest expense: | ||||
Salaries and employee benefits | 5,119 | 5,119 | 14,989 | 15,275 |
Data processing and software | 709 | 627 | 2,040 | 1,831 |
Professional fees | 336 | 391 | 1,050 | 1,148 |
Occupancy | 531 | 352 | 1,518 | 1,133 |
Equipment | 564 | 458 | 1,604 | 1,301 |
Regulatory fees | 270 | 250 | 877 | 742 |
Other operating | 946 | 1,330 | 2,988 | 3,057 |
Total noninterest expense | 8,475 | 8,527 | 25,066 | 24,487 |
Income before income taxes | 5,935 | 3,151 | 1,550 | 9,167 |
Income tax expense | 1,516 | 1,042 | 141 | 2,998 |
Net income | $ 4,419 | $ 2,109 | $ 1,409 | $ 6,169 |
Per share information: | ||||
Basic net income per share of common stock | $ 0.39 | $ 0.24 | $ 0.13 | $ 0.71 |
Diluted net income per share of common stock | $ 0.35 | $ 0.20 | $ 0.11 | $ 0.58 |
Weighted average shares outstanding: | ||||
Basic | 11,279,364 | 8,792,665 | 11,239,093 | 8,701,596 |
Diluted | 12,750,423 | 10,799,536 | 12,758,091 | 10,682,976 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 4,419 | $ 2,109 | $ 1,409 | $ 6,169 |
Unrealized gains (losses) on securities available-for-sale: | ||||
Unrealized holding gains (losses) arising during the period | 526 | (744) | 2,433 | 2,829 |
Reclassification adjustment for gains (losses) included in net income | (9) | 4 | (42) | (121) |
Tax effect | (198) | 283 | (915) | (1,037) |
Net of tax | 319 | (457) | 1,476 | 1,671 |
Unrealized losses on securities transferred to held-to-maturity: | ||||
Reclassification adjustment for losses included in net income | 79 | 42 | 162 | 125 |
Tax effect | (30) | (16) | (62) | (48) |
Net of tax | 49 | 26 | 100 | 77 |
Unrealized gains (losses) on cash flow hedges: | ||||
Unrealized holding gains (losses) arising during the period | (29) | 87 | (242) | (1,760) |
Reclassification adjustment for losses included in net income | 278 | 88 | 589 | 261 |
Tax effect | (34) | (33) | 49 | 674 |
Net of tax | 215 | 142 | 396 | (825) |
Other comprehensive income (loss) | 583 | (289) | 1,972 | 923 |
Comprehensive income | $ 5,002 | $ 1,820 | $ 3,381 | $ 7,092 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2015 | $ 108,586 | $ 1,610 | $ 8,577 | $ 95,277 | $ 8,036 | $ (4,914) |
Beginning balance, shares at Dec. 31, 2015 | 8,577,051 | |||||
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations | (16) | $ 107 | (123) | |||
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations, shares | 106,548 | |||||
Stock-based compensation expense | 643 | 643 | ||||
Excess tax benefit from stock compensation | 29 | 29 | ||||
Issuance of common stock | 21,928 | $ 1,688 | 20,240 | |||
Issuance of common stock, shares | 1,688,049 | |||||
Conversion of preferred stock | (732) | $ 732 | ||||
Conversion of preferred stock, shares | 731,707 | |||||
Exercise of common stock warrants | 165 | $ 88 | 77 | |||
Exercise of common stock warrants, shares | 87,666 | |||||
Net income | 6,169 | 6,169 | ||||
Other comprehensive income | 923 | 923 | ||||
Ending balance at Sep. 30, 2016 | 138,427 | 878 | $ 11,192 | 116,143 | 14,205 | (3,991) |
Ending balance, shares at Sep. 30, 2016 | 11,191,021 | |||||
Beginning balance at Dec. 31, 2016 | 139,207 | 878 | $ 11,205 | 116,143 | 17,132 | (6,151) |
Beginning balance, shares at Dec. 31, 2016 | 11,204,515 | |||||
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations | (264) | $ 21 | (285) | |||
Issuance of restricted common stock, net of forfeitures and withholdings to satisfy employee tax obligations, shares | 21,480 | |||||
Stock-based compensation expense | 771 | 771 | ||||
Exercise of employee common stock options, net of withholdings to satisfy employee tax obligations | 644 | $ 72 | 572 | |||
Exercise of employee common stock options, net of withholdings to satisfy employee tax obligations, shares | 71,517 | |||||
Exercise of common stock warrants | 465 | $ 49 | 416 | |||
Exercise of common stock warrants, shares | 48,986 | |||||
Net income | 1,409 | 1,409 | ||||
Other comprehensive income | 1,972 | 1,972 | ||||
Ending balance at Sep. 30, 2017 | $ 144,204 | $ 878 | $ 11,347 | $ 117,617 | $ 18,541 | $ (4,179) |
Ending balance, shares at Sep. 30, 2017 | 11,346,498 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 1,409,000 | $ 6,169,000 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision for loan losses | 12,900,000 | 2,759,000 |
Accretion of discounts on acquired loans and deferred fees | (537,000) | (1,232,000) |
Depreciation and amortization | 345,000 | 324,000 |
Net amortization of premiums on investment securities | 984,000 | 1,106,000 |
Securities gains, net | (42,000) | (121,000) |
Mortgage banking income | (4,617,000) | (5,342,000) |
Tri-Net fees | (748,000) | |
Net gain on sale of loans | (67,000) | |
Net loss on disposal of premises and equipment | 137,000 | |
Net gain on sale of other real estate owned | (157,000) | |
Stock-based compensation | 771,000 | 643,000 |
Excess tax benefit from stock compensation | (29,000) | |
Deferred income tax expense | (445,000) | 63,000 |
Origination of loans held for sale | (409,179,000) | (393,378,000) |
Proceeds from loans held for sale | 403,497,000 | 370,374,000 |
Net increase in accrued interest receivable and other assets | (1,320,000) | (2,021,000) |
Net increase (decrease) in accrued interest payable and other liabilities | (2,630,000) | 1,077,000 |
Net cash provided by (used in) operating activities | 458,000 | (19,765,000) |
Activities in securities available for sale: | ||
Purchases | (11,754,000) | (55,862,000) |
Sales | 34,299,000 | 46,700,000 |
Maturities, prepayments and calls | 14,718,000 | 17,113,000 |
Activities in securities held to maturity: | ||
Purchases | (4,300,000) | |
Maturities, prepayments and calls | 1,332,000 | 1,233,000 |
Purchase of restricted equity securities | (2,767,000) | (112,000) |
Net increase in loans | (49,154,000) | (112,961,000) |
Purchase of premises and equipment | (1,074,000) | (103,000) |
Proceeds from the sale of premises and equipment | 3,000 | |
Proceeds from sale of other real estate | 373,000 | |
Net cash used in investing activities | (14,397,000) | (107,919,000) |
Cash flows from financing activities: | ||
Net increase (decrease) in deposits | (37,228,000) | 97,599,000 |
Proceeds from Federal Home Loan Bank advances | 135,000,000 | 15,000,000 |
Payments on Federal Home Loan Bank advances | (95,000,000) | (30,000,000) |
Issuance of common stock | 21,928,000 | |
Exercise of common stock options and warrants, net of repurchase of restricted shares | 845,000 | 149,000 |
Excess tax benefit from stock compensation | 29,000 | |
Net decrease in repurchase agreements | (3,755,000) | |
Net cash provided by financing activities | 3,617,000 | 100,950,000 |
Net decrease in cash and cash equivalents | (10,322,000) | (26,734,000) |
Cash and cash equivalents at beginning of period | 80,111,000 | 100,185,000 |
Cash and cash equivalents at end of period | 69,789,000 | 73,451,000 |
Supplemental disclosures of cash paid: | ||
Interest paid | 6,951,000 | 5,079,000 |
Income taxes | 2,142,000 | 2,545,000 |
Supplemental disclosures of noncash transactions: | ||
Loans charged off to the allowance for loan losses | $ 12,369,000 | 1,452,000 |
Loans transferred from held for sale to held for investment | $ 2,823,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements as of and for the period ended September 30, 2017 include CapStar Financial Holdings, Inc. and its wholly owned subsidiary, CapStar Bank (the “Bank”, together referred to as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation. On February 5, 2016, CapStar Financial Holdings, Inc. acquired all of the Bank’s issued and outstanding shares of common stock, preferred stock, common stock options and warrants, and the Bank became the wholly owned subsidiary of CapStar Financial Holdings, Inc. The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. These unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Initial Public Offering On September 21, 2016, the Securities and Exchange Commission (“SEC”) declared effective our registration statement on Form S-1 registering the shares of our common stock. On September 27, 2016, we completed the initial public offering of 2,972,750 shares of our common stock. Of the 2,972,750 shares sold, 1,688,049 shares were sold by us and 1,284,701 shares were sold by certain selling shareholders. Of the 1,284,701 shares sold by certain selling shareholders, 731,707 were from preferred shares converted to common shares and 79,166 from the cashless exercise of 250,000 common share warrants. We received net proceeds of approximately $21.9 million from the offering, after deducting the underwriting discounts and commissions and estimated offering expenses. We did not receive any proceeds from the sale of shares by the selling shareholders. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, determination of impairment of intangible assets, including goodwill, the valuation of our investment portfolio, deferred tax assets and estimated liabilities. There have been no significant changes to the Company’s critical accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Tri-Net Fees Tri-Net fees represent a new line of business, implemented in the fourth quarter of 2016, which originates, with the intent to sell, commercial real estate loans to third-party investors. All of these loan sales transfer servicing rights to the buyer. Realized gains and losses are recognized when legal title of the loan has transferred to the investor and sales proceeds have been received and are reflected in the accompanying statement of income in Tri-Net fees, net of related costs such as commission expenses. Loans that have not been sold at period end are classified as held for sale on the balance sheet and recorded at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Subsequent Events Accounting Standards Codification (“ASC”) 855, Subsequent Events, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company evaluated all events or transactions that occurred after September 30, 2017 through the date of the issued financial statements. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Securities | NOTE 2 – SECURITIES The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands): September 30, 2017 December 31, 2016 Amortized Cost Gross unrealized gains Gross unrealized (losses) Estimated fair value Amortized Cost Gross unrealized gains Gross unrealized (losses) Estimated fair value Securities available-for-sale: U. S. government agency securities $ 11,434 $ 18 $ (153 ) $ 11,299 $ 9,517 $ — $ (143 ) $ 9,374 State and municipal securities 19,031 172 (136 ) 19,067 28,480 65 (632 ) 27,913 Mortgage-backed securities 96,975 14 (1,166 ) 95,823 126,637 17 (2,059 ) 124,595 Asset-backed securities 20,668 — (257 ) 20,411 21,620 — (1,147 ) 20,473 Total $ 148,108 $ 204 $ (1,712 ) $ 146,600 $ 186,254 $ 82 $ (3,981 ) $ 182,355 Securities held-to-maturity: State and municipal securities $ 36,469 $ 3,138 $ — $ 39,607 $ 36,842 $ 2,784 $ — $ 39,626 Mortgage-backed securities 3,837 77 — 3,914 4,687 79 — 4,766 Other debt securities 5,329 130 — 5,459 5,335 11 (7 ) 5,339 Total $ 45,635 $ 3,345 $ — $ 48,980 $ 46,864 $ 2,874 $ (7 ) $ 49,731 Security fair values are established by an independent pricing service as of the dates indicated. The difference between amortized cost and fair value reflects current interest rates and represents the potential gain (loss) had the portfolio been liquidated on those dates. Security gains (losses) are realized only in the event of dispositions prior to maturity or other-than-temporary impairment. Securities with unrealized losses as of September 30, 2017 and December 31, 2016, and the length of time they were in continuous loss positions as of such dates are as follows (in thousands): Less than 12 months 12 months or more Total September 30, 2017 Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses U. S. government agency securities $ 9,303 $ (153 ) $ — $ — $ 9,303 $ (153 ) State and municipal securities 4,968 (19 ) 6,103 (117 ) 11,071 (136 ) Mortgage-backed securities 61,997 (591 ) 30,360 (575 ) 92,357 (1,166 ) Asset-backed securities — — 20,410 (257 ) 20,410 (257 ) Total temporarily impaired securities $ 76,268 $ (763 ) $ 56,873 $ (949 ) $ 133,141 $ (1,712 ) December 31, 2016 U. S. government agency securities $ 9,374 $ (143 ) $ — $ — $ 9,374 $ (143 ) State and municipal securities 20,279 (632 ) — — 20,279 (632 ) Mortgage-backed securities 110,563 (1,955 ) 4,150 (104 ) 114,713 (2,059 ) Asset-backed securities — — 20,473 (1,147 ) 20,473 (1,147 ) Other debt securities 2,029 (7 ) — — 2,029 (7 ) Total temporarily impaired securities $ 142,245 $ (2,737 ) $ 24,623 $ (1,251 ) $ 166,868 $ (3,988 ) As noted in the table above, as of September 30, 2017, the Company had unrealized losses of $1.7 million in its investment securities portfolio. The unrealized losses associated with these investment securities are driven by changes in interest rates and are recorded as a component of equity. These investment securities will continue to be monitored as a part of our ongoing impairment analysis. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments. If a shortfall in future cash flows is identified, a credit loss will be deemed to have occurred and will be recognized as a charge to earnings and a new cost basis for the security will be established. Because the Company currently does not intend to sell any investment securities that have an unrealized loss at September 30, 2017, and it is not more-likely-than-not that we will be required to sell these investment securities before recovery of their amortized cost bases, which may be at maturity, we do not consider these securities to be other-than-temporarily impaired at September 30, 2017. Securities with a carrying value of $127.1 million at September 30, 2017 were pledged to collateralize public deposits, derivative positions and Federal Home Loan Bank advances. The proceeds from sales of securities and the associated gains and losses are listed below (dollars in thousands): Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 Proceeds $ 34,299 $ 46,700 Gross gains 99 244 Gross losses (57 ) (123 ) The amortized cost and fair value of securities at September 30, 2017, by contractual maturity, are shown below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available-for-sale Held-to-maturity Amortized cost Estimated fair value Amortized cost Estimated fair value Due one to five years $ 11,388 $ 11,511 $ 27,299 $ 29,448 Due five to ten years 17,970 17,788 14,069 15,129 Due beyond ten years 1,107 1,067 430 489 Mortgage-backed securities 96,975 95,823 3,837 3,914 Asset-backed securities 20,668 20,411 — — $ 148,108 $ 146,600 $ 45,635 $ 48,980 |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | NOTE 3 – LOANS AND ALLLOWANCE FOR LOAN LOSSES A summary of the loan portfolio as of September 30, 2017 and December 31, 2016 follows (dollars in thousands): September 30, 2017 December 31, 2016 Commercial real estate $ 366,778 $ 302,322 Consumer real estate 100,811 97,015 Construction and land development 79,951 94,491 Commercial and industrial 394,600 379,620 Consumer 6,289 5,974 Other 26,460 56,796 Total 974,889 936,218 Less net unearned income (359 ) (967 ) 974,530 935,251 Allowance for loan losses (14,122 ) (11,634 ) $ 960,408 $ 923,617 The adequacy of the allowance for loan losses (ALL) is assessed at the end of each quarter. The ALL includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogenous pools and collectively evaluated for impairment. The ALL factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes all commercial loans, and consumer relationships with an outstanding balance greater than $500,000, individually and assigns each loan a risk rating. This analysis is performed on a continual basis by the relationship managers and credit department personnel. On at least an annual basis an independent party performs a formal credit risk review of a sample of the loan portfolio. Among other things, this review assesses the appropriateness of the loan’s risk rating. The Company uses the following definitions for risk ratings: Special Mention – A special mention asset possesses deficiencies or potential weaknesses deserving of management’s attention. If uncorrected, such weaknesses or deficiencies may expose the Company to an increased risk of loss in the future. Substandard – A substandard asset is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. Doubtful – A doubtful asset has all weaknesses inherent in one classified substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset exist, therefore, its classification as an estimated loss is deferred until a more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. Loans not falling into the criteria above are considered to be pass-rated loans. The Company utilizes six loan grades within the pass risk rating. The following tables present the loan balances by category as well as risk rating (dollars in thousands): Performing Loans September 30, 2017 Pass/Watch Special Mention Substandard Total Performing Total Loans Total Commercial real estate $ 365,545 $ — $ — $ 365,545 $ 1,233 $ 366,778 Consumer real estate 100,522 — 289 100,811 — 100,811 Construction and land development 79,951 — — 79,951 — 79,951 Commercial and industrial 370,657 16,443 5,568 392,668 1,932 394,600 Consumer 6,276 — 13 6,289 — 6,289 Other 26,460 — — 26,460 — 26,460 Total $ 949,411 $ 16,443 $ 5,870 $ 971,724 $ 3,165 $ 974,889 December 31, 2016 Commercial real estate $ 301,012 $ — $ — $ 301,012 $ 1,310 $ 302,322 Consumer real estate 96,722 — 293 97,015 — 97,015 Construction and land development 94,491 — — 94,491 — 94,491 Commercial and industrial 349,857 11,035 16,419 377,311 2,309 379,620 Consumer 5,958 — 16 5,974 — 5,974 Other 56,796 — — 56,796 — 56,796 Total $ 904,836 $ 11,035 $ 16,728 $ 932,599 $ 3,619 $ 936,218 None of the Company’s loans had a risk rating of “Doubtful” as of September 30, 2017 or December 31, 2016. The following tables detail the changes in the ALL for the three and nine months ended September 30, 2017 and 2016 (in thousands): Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total Three Months Ended September 30, 2017 Balance, beginning of period $ 3,533 $ 1,081 $ 911 $ 6,395 $ 57 $ 477 $ 12,454 Charged-off loans — — — — — — — Recoveries 3 — — 1,860 — — 1,863 Provision for loan losses (242 ) (97 ) 576 (306 ) 22 (148 ) (195 ) Balance, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Three Months Ended September 30, 2016 Balance, beginning of period $ 2,596 $ 968 $ 943 $ 5,037 $ 104 $ 806 $ 10,454 Charged-off loans — — — (645 ) — (645 ) Recoveries 52 — — 10 — — 62 Provision for loan losses (228 ) 4 721 1,166 (18 ) (6 ) 1,639 Balance, end of period $ 2,420 $ 972 $ 1,664 $ 5,568 $ 86 $ 800 $ 11,510 Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total Nine Months Ended September 30, 2017 Balance, beginning of period $ 2,655 $ 1,013 $ 1,574 $ 5,618 $ 76 $ 698 $ 11,634 Charged-off loans — — — (12,369 ) — — (12,369 ) Recoveries 4 — — 1,862 91 — 1,957 Provision for loan losses 635 (29 ) (87 ) 12,838 (88 ) (369 ) 12,900 Balance, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Nine Months Ended September 30, 2016 Balance, beginning of period $ 2,879 $ 968 $ 914 $ 4,693 $ 103 $ 575 $ 10,132 Charged-off loans (350 ) — — (956 ) (146 ) — (1,452 ) Recoveries 52 — — 18 1 — 71 Provision for loan losses (161 ) 4 750 1,813 128 225 2,759 Balance, end of period $ 2,420 $ 972 $ 1,664 $ 5,568 $ 86 $ 800 $ 11,510 A breakdown of the ALL and the loan portfolio by loan category at September 30, 2017 and December 31, 2016 follows (dollars in thousands): Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total September 30, 2017 Allowance for Loan Losses: Collectively evaluated for impairment $ 3,294 $ 984 $ 1,487 $ 7,449 $ 79 $ 329 $ 13,622 Individually evaluated for impairment — — — 500 — — 500 Balances, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Loans: Collectively evaluated for impairment $ 365,545 $ 100,811 $ 79,951 $ 392,668 $ 6,289 $ 26,460 $ 971,724 Individually evaluated for impairment 1,233 — — 1,932 — — 3,165 Balances, end of period $ 366,778 $ 100,811 $ 79,951 $ 394,600 $ 6,289 $ 26,460 $ 974,889 December 31, 2016 Allowance for Loan Losses: Collectively evaluated for impairment $ 2,655 $ 1,013 $ 1,574 $ 5,118 $ 76 $ 698 $ 11,134 Individually evaluated for impairment — — — 500 — — 500 Balances, end of period $ 2,655 $ 1,013 $ 1,574 $ 5,618 $ 76 $ 698 $ 11,634 Loans: Collectively evaluated for impairment $ 301,012 $ 97,015 $ 94,491 $ 377,311 $ 5,974 $ 56,796 $ 932,599 Individually evaluated for impairment 1,310 — — 2,309 — — 3,619 Balances, end of period $ 302,322 $ 97,015 $ 94,491 $ 379,620 $ 5,974 $ 56,796 $ 936,218 The following table presents the allocation of the ALL for each respective loan category with the corresponding percentage of the ALL in each category to total loans, net of deferred fees as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Amount Percent of total loans, net of deferred fees Amount Percent of total loans, net of deferred fees Commercial real estate $ 3,294 0.34 % $ 2,655 0.28 % Consumer real estate 984 0.10 1,013 0.11 Construction and land development 1,487 0.15 1,574 0.17 Commercial and industrial 7,949 0.82 5,618 0.60 Consumer 79 0.01 76 0.01 Other 329 0.03 698 0.07 Total allowance for loan losses $ 14,122 1.45 % $ 11,634 1.24 % The following table presents the Company’s impaired loans that were evaluated for specific loss allowance as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Recorded investment Unpaid principal balance Related allowance Recorded investment Unpaid principal balance Related allowance With no related allowance recorded: Commercial real estate $ 1,233 $ 1,660 $ — $ 1,310 $ 1,686 $ — Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial — — — — — — Consumer — — — — — — Other — — — — — — Subtotal 1,233 1,660 — 1,310 1,686 — With an allowance recorded: Commercial real estate — — — — — — Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial 1,932 2,770 500 2,309 2,921 500 Consumer — — — — — — Other — — — — — — Subtotal 1,932 2,770 500 2,309 2,921 500 Total $ 3,165 $ 4,430 $ 500 $ 3,619 $ 4,607 $ 500 The following table presents information related to the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average recorded investment Interest income recognized Average recorded investment Interest income recognized Average recorded investment Interest income recognized Average recorded investment Interest income recognized With no related allowance recorded: Commercial real estate $ 1,245 $ — $ — $ — $ 1,272 $ — $ — $ — Consumer real estate — — — — — — — — Construction and land development — — — — — — — — Commercial and industrial — — — — — — — — Consumer — — — — — — — — Other — — — — — — — — Subtotal 1,245 — — — 1,272 — — — With an allowance recorded: Commercial real estate — — 1,685 — — — 1,742 — Consumer real estate — — — — — — — — Construction and land development — — — — — — — — Commercial and industrial 1,941 — 3,411 — 2,141 — 3,534 30 Consumer — — — — — — — — Other — — — — — — — — Subtotal 1,941 — 5,096 — 2,141 — 5,276 30 Total $ 3,186 $ — $ 5,096 $ — $ 3,413 $ — $ 5,276 $ 30 There was no interest income recognized on a cash basis for impaired loans for the three or nine months ended September 30, 2017 or 2016. The following table presents the aging of the recorded investment in past-due loans as of September 30, 2017 and December 31, 2016 by class of loans (dollars in thousands): 30 - 59 60 - 89 Greater Than Days Days 89 Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total September 30, 2017 Commercial real estate $ — $ — $ — $ — $ 366,778 $ 366,778 Consumer real estate 506 279 — 785 100,026 100,811 Construction and land development — — — — 79,951 79,951 Commercial and industrial 1,154 218 27 1,398 393,202 394,600 Consumer — 1 — 1 6,288 6,289 Other — — — — 26,460 26,460 Total $ 1,660 $ 497 $ 27 $ 2,184 $ 972,705 $ 974,889 December 31, 2016 Commercial real estate $ — $ — $ — $ — $ 302,322 $ 302,322 Consumer real estate 81 282 — 363 96,652 97,015 Construction and land development — — — — 94,491 94,491 Commercial and industrial — — — — 379,620 379,620 Consumer — — — — 5,974 5,974 Other — — — — 56,796 56,796 Total $ 81 $ 282 $ — $ 363 $ 935,855 $ 936,218 The following table presents the recorded investment in non-accrual loans, past due loans over 90 days outstanding and accruing and troubled debt restructurings (“TDR”) by class of loans as of September 30, 2017 and December 31, 2016 (dollars in thousands): Non-Accrual Past Due Over 90 Days and Accruing Troubled Debt Restructurings September 30, 2017 Commercial real estate $ 1,233 $ — $ 1,222 Consumer real estate — — — Construction and land development — — — Commercial and industrial 1,932 27 — Consumer — — — Other — — — Total $ 3,165 $ 27 $ 1,222 December 31, 2016 Commercial real estate $ 1,310 $ — $ 1,272 Consumer real estate — — — Construction and land development — — — Commercial and industrial 2,309 — — Consumer — — — Other — — — Total $ 3,619 $ — $ 1,272 As of September 30, 2017 and December 31, 2016, all loans classified as nonperforming were deemed to be impaired. As of September 30, 2017 and December 31, 2016, the Company had a recorded investment in TDR of $1.2 million and $1.3 million, respectively. The Company had no specific allowance for those loans at September 30, 2017 or December 31, 2016 and there were no commitments to lend additional amounts. Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, certain modifications of amortization periods or extended suspension of principal payments due to customer financial difficulties. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s loan policy. Loans accounted for as TDR are individually evaluated for impairment. The following table presents loans by class modified as TDR that occurred during the three and nine months ended September 30, 2016 (dollars in thousands). There were no new TDR identified during the three or nine months ended September 30, 2017. Three Months Ended Nine Months Ended September 30, September 30, Number of contracts Pre modification outstanding recorded investment Post modification outstanding recorded investment, net of related allowance Number of contracts Pre modification outstanding recorded investment Post modification outstanding recorded investment, net of related allowance 2016 Commercial real estate — $ — $ — 1 $ 1,948 $ 1,170 Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial — — — — — — Consumer — — — — — — Other — — — — — — Total — $ — $ — 1 $ 1,948 $ 1,170 The following table presents loans by class modified as TDR for which there was a payment default within twelve months following the modification during the three and nine months ended September 30, 2016 (dollars in thousands). There were no TDR for which there was a payment default within twelve months following the modification during the three or nine months ended September 30, 2017. Three Months Ended Nine Months Ended September 30, September 30, Number of contracts Recorded investment Number of contracts Recorded investment 2016 Commercial real estate — $ — — $ — Consumer real estate — — — — Construction and land development — — — — Commercial and industrial — — — — Consumer — — 1 124 Other — — — — Total — $ — 1 $ 124 The consumer loan TDR that subsequently defaulted during the nine months ended September 30, 2016 had no specific reserve in the allowance for loan losses and resulted in a $0.1 million charge-off. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances | 9 Months Ended |
Sep. 30, 2017 | |
Federal Home Loan Banks [Abstract] | |
Federal Home Loan Bank Advances | NOTE 4 – FEDERAL HOME LOAN BANK ADVANCES The Company had outstanding borrowings totaling $95.0 million and $55.0 million at September 30, 2017 and December 31, 2016, respectively, via various advances. These advances are non-callable; interest payments are due monthly, with principal due at maturity. The following is a summary of the contractual maturities and average effective rates of outstanding advances (dollars in thousands): September 30, 2017 December 31, 2016 Year Amount Interest Rates Amount Interest Rates 2017 $ 60,000 1.18 % $ 55,000 0.80 % 2018 35,000 1.50 — — 2019 — — — — 2020 — — — — 2021 — — — — Thereafter — — — — Total $ 95,000 1.30 % $ 55,000 0.80 % Advances from the FHLB are collateralized by investment securities, FHLB stock and certain commercial and residential real estate mortgage loans totaling $367.0 million under a blanket mortgage collateral agreement. At September 30, 2017, the amount of available credit from the FHLB totaled $108.0 million. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 5 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following were changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2017 and 2016 (dollars in thousands): Unrealized Gains Unrealized Gains and and Losses Losses on Losses on on Available Securities Cash Flow for Sale Transferred to Hedges Securities Held to Maturity Total Nine Months Ended September 30, 2017 Beginning Balance $ (4,241 ) $ (698 ) $ (1,212 ) $ (6,151 ) Other comprehensive income (loss) before reclassification, net of tax (193 ) 1,502 — 1,309 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 589 (26 ) 100 663 Net current period other comprehensive income (loss) 396 1,476 100 1,972 Ending Balance $ (3,845 ) $ 778 $ (1,112 ) $ (4,179 ) Nine Months Ended September 30, 2016 Beginning Balance $ (3,704 ) $ 105 $ (1,315 ) $ (4,914 ) Other comprehensive income (loss) before reclassification, net of tax (1,086 ) 1,746 — 660 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 261 (75 ) 77 263 Net current period other comprehensive income (loss) (825 ) 1,671 77 923 Ending Balance $ (4,529 ) $ 1,776 $ (1,238 ) $ (3,991 ) The following were significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands): Affected Line Item Details about Accumulated Other Three Months Ended September 30, Nine Months Ended September 30, in the Statement Where Comprehensive Income Components 2017 2016 2017 2016 Net Income is Presented Unrealized losses on cash flow hedges $ 109 $ 38 $ 322 $ 113 Interest expense - money market 168 50 267 148 Interest expense - Federal Home Loan Bank advances $ 277 $ 88 $ 589 $ 261 Net of tax Unrealized (gains) and losses on available for sale securities $ (9 ) $ 4 $ (42 ) $ (121 ) Net (gain) loss on sale of securities 3 (2 ) 16 46 Income tax expense (benefit) $ (6 ) $ 2 $ (26 ) $ (75 ) Net of tax Unrealized losses on securities transferred to held to maturity $ 79 $ 42 $ 162 $ 125 Interest income - securities (30 ) (16 ) (62 ) (48 ) Income tax benefit $ 49 $ 26 $ 100 $ 77 Net of tax |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 6 – INCOME TAXES The Company’s effective tax rate for the three and nine months ended September 30, 2017 was 25.5% and 9.1% compared to 33.1% and 32.7% for the three and nine months ended September 30, 2016. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences. In addition to other changes, the guidance changes the accounting for excess tax benefits and tax deficiencies from generally being recognized in additional paid-in capital to recognition as income tax expense or benefit in the period they occur. The Company adopted the new guidance in the first quarter of 2017. As a result, the Company’s income tax expense was reduced by $144,000 and $310,000 for the three and nine months ended September 30, 2017. The effective tax rate compared favorably to the statutory federal rate of 34% and Tennessee excise tax rate of 6.5% primarily due to investments in qualified municipal securities, company owned life insurance, state tax credits, net of the effect of certain non-deductible expenses and the recognition of excess tax benefits related to stock compensation. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7 – COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the balance sheet. The following table sets forth outstanding financial instruments whose contract amounts represent credit risk as of September 30, 2017 and December 31, 2016 (dollars in thousands): Contract or notional amount September 30, 2017 December 31, 2016 Financial instruments whose contract amounts represent credit risk: Unused commitments to extend credit $ 575,558 $ 508,990 Standby letters of credit 11,535 10,886 Total $ 587,093 $ 519,876 The Company is party to litigation and claims arising in the normal course of business. Management believes that the liabilities, if any, arising from such litigation and claims as of September 30, 2017, will not have a material impact on the financial statements of the Company. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 8 – DERIVATIVES The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Interest Rate Swaps Designated as Cash Flow Hedges Forward starting interest rate swaps with notional amounts totaling $20 million and $20 million as of September 30, 2017 and December 31, 2016, respectively, were designated as cash flow hedges of certain liabilities and were determined to be fully effective during all periods presented. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining terms of the swaps. Summary information about the interest-rate swaps designated as cash flow hedges was as follows (dollars in thousands): September 30, 2017 December 31, 2016 Notional amounts $ 20,000 $ 20,000 Weighted average pay rates 3.54 % 3.54 % Weighted average receive rates 3 month 3 month LIBOR Weighted average maturity 5.7 years 6.5 years Fair value $ (1,658 ) $ (1,535 ) Amount of unrealized loss recognized in accumulated other comprehensive income, net of tax $ (1,023 ) $ (947 ) Pursuant to its interest rate swap agreements, the Company pledged collateral to the counterparties in the form of investment securities with a carrying value of $2.7 million at September 30, 2017. There was no collateral posted from the counterparties to the Company as of September 30, 2017. It is possible that the Company may need to post additional collateral in the future or that the counterparties may be required to post collateral to the Company in the future. Other Interest Rate Swaps The Company also enters into swaps to facilitate customer transactions and meet their financing needs. Upon entering into these transactions the Company enters into offsetting positions with large U.S. financial institutions in order to minimize risk to the Company. A summary of the Company’s customer related interest rate swaps was as follows (dollars in thousands): September 30, 2017 December 31, 2016 Notional Estimated Notional Estimated amount fair value amount fair value Interest rate swap agreements: Pay fixed/receive variable swaps $ 46,021 $ (250 ) $ 41,254 $ (460 ) Pay variable/receive fixed swaps 46,021 250 41,254 460 Total $ 92,042 $ — $ 82,508 $ — |
Stock Options and Restricted Sh
Stock Options and Restricted Shares | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options and Restricted Shares | NOTE 9 – STOCK OPTIONS AND RESTRICTED SHARES During 2008, the board of directors of the Bank approved the CapStar Bank 2008 Stock Incentive Plan (the Plan). The Plan was intended to provide incentives to certain officers, employees, and directors to stimulate their efforts toward the continued success of the Bank and to operate and manage the business in a manner that will provide for the long‑term growth and profitability of the Bank. Additionally the Plan was intended to encourage stock ownership to align the interests of employees and shareholders and to provide a means of obtaining, rewarding and retaining officers, employees, and directors. Following the formation of CapStar Financial Holdings, Inc. in 2016, and in connection with the Share Exchange, the outstanding awards of restricted stock and stock options under the CapStar Bank 2008 Stock Incentive Plan were exchanged for similar awards of restricted stock and stock options issued by CapStar Financial Holdings, Inc. under the CapStar Financial Holdings, Inc. Stock Incentive Plan, which the board of directors adopted in 2016. The Stock Incentive Plan provides for the grant of stock-based incentives, including stock options, restricted stock units, performance awards and restricted stock, to employees, directors and service providers that are subject to forfeiture until vesting conditions have been satisfied by the award recipient under the terms of the award. The Plan reserved 1,569,475 shares of stock for issuance of stock incentives. Stock incentives include both restricted share and stock option grants. Total shares issuable under the plan were 169,867 at September 30, 2017. The Company has recognized stock-based compensation expense, within salaries and employee benefits for employees, and within other non-interest expense for directors, in the consolidated statements of income as follows (dollars in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Stock-based compensation expense before income taxes $ 288 $ 212 $ 771 $ 643 Less: deferred tax benefit (110 ) (81 ) (295 ) (246 ) Reduction of net income $ 178 $ 131 $ 476 $ 397 Restricted Shares Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the issue date. The fair value of each restricted stock grant is based on valuations performed by independent consultants. The recipients have the right to vote and receive dividends but cannot sell, transfer, assign, pledge, hypothecate, or otherwise encumber the restricted stock until the shares have vested. Restricted shares fully vest on the third anniversary of the grant date. A summary of the changes in the Company’s nonvested restricted shares for the nine months ended September 30, 2017 follows: Weighted Average Restricted Grant Date Nonvested Shares Shares Fair Value Nonvested at beginning of period 199,641 $ 12.34 Granted 37,233 18.05 Vested (58,921 ) 12.24 Forfeited (3,600 ) 13.57 Nonvested at end of period 174,353 $ 13.56 As of September 30, 2017, there was $1.6 million of unrecognized compensation cost related to nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted-average period of 1.9 years. The total fair value of shares vested during the nine months ended September 30, 2017 and 2016 was $1.1 million and $0.5 million, respectively. Stock Options Option awards are generally granted with an exercise price equal to the fair value of the Company’s common stock at the date of grant. Option awards generally have a three year vesting period and a ten year contractual term. The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model that uses the assumptions noted in the table below. Expected volatility is based on calculations performed by management using industry data. The Company’s expected dividend yield is 0.00% because the Company has not paid dividends in the past. The expected term of options granted was calculated using the “simplified” method for plain vanilla options as permitted under authoritative literature. The risk free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There were no options granted in 2017. The fair value of options granted was determined using the following weighted average assumptions as of the grant date: 2017 2016 Dividend yield — — Expected term (in years) — 7.48 Expected stock price volatility — 17.20 % Risk-free interest rate — 1.66 % Pre-vest forfeiture rate — 10.25 % A summary of the activity in stock options for the nine months ended September 30, 2017 follows: Weighted Weighted Average Average Remaining Exercise Contractual Shares Price Term (years) Outstanding at beginning of period 1,006,000 $ 10.48 Granted — — Exercised (82,150 ) 10.00 Forfeited or expired — — Outstanding at end of period 923,850 $ 10.52 2.5 Fully vested and expected to vest 918,437 $ 10.51 2.5 Exercisable at end of period 875,100 $ 10.43 2.2 Information related to stock options during each year follows: 2017 2016 Intrinsic value of options exercised $ 684,275 $ — Cash received from option exercises 821,500 — Tax benefit realized from option exercises 263,446 — Weighted average fair value of options granted — 3.16 As of September 30, 2017, there was $0.1 million of 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 1.8 years. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 9 Months Ended |
Sep. 30, 2017 | |
Banking And Thrift [Abstract] | |
Regulatory Capital Requirements | NOTE 10 – REGULATORY CAPITAL REQUIREMENTS The Company and the Bank are subject to regulatory capital requirements administered by the Federal Reserve and the Bank is also subject to the regulatory capital requirements of the Tennessee Department of Financial Institutions. Failure to meet capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that could, in that event, have a material adverse effect on the institutions’ financial statements. The relevant regulations require the Company and the Bank to meet specific capital adequacy guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting principles. The capital classifications of the Company and the Bank are also subject to qualitative judgments by their regulators about components, risk weightings, and other factors. Those qualitative judgments could also affect the capital status of the Company and the Bank and the amount of dividends the Company and the Bank may distribute. The final rules implementing the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Bank 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. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of September 30, 2017, the Company and the Bank met all regulatory capital adequacy requirements to which they are subject. The Company’s and the Bank’s capital amounts and ratios as of September 30, 2017 and December 31, 2016 are presented in the following table (dollars in thousands). Actual Minimum capital requirement (1) Minimum to be well-capitalized (2) Amount Ratio Amount Ratio Amount Ratio At September 30, 2017: Total capital to risk-weighted assets: CapStar Financial Holdings, Inc. $ 155,426 12.42 % $ 100,130 8.00 % N/A N/A CapStar Bank 141,843 11.33 100,118 8.00 $ 125,147 10.00 Tier I capital to risk-weighted assets: CapStar Financial Holdings, Inc. 141,125 11.28 75,098 6.00 N/A N/A CapStar Bank 127,542 10.19 75,088 6.00 100,118 8.00 Common equity Tier 1 capital to risk weighted assets: CapStar Financial Holdings, Inc. 132,417 10.58 56,323 4.50 N/A N/A CapStar Bank 111,334 8.90 56,316 4.50 81,346 6.50 Tier I capital to average assets: CapStar Financial Holdings, Inc. 141,125 10.36 54,464 4.00 N/A N/A CapStar Bank 127,542 9.37 54,463 4.00 68,079 5.00 At December 31, 2016: Total capital to risk-weighted assets: CapStar Financial Holdings, Inc. $ 149,616 12.60 % $ 95,028 8.00 % N/A N/A CapStar Bank 126,718 10.67 95,028 8.00 $ 118,785 10.00 Tier I capital to risk-weighted assets: CapStar Financial Holdings, Inc. 137,909 11.61 71,271 6.00 N/A N/A CapStar Bank 115,011 9.68 71,271 6.00 95,028 8.00 Common equity Tier 1 capital to risk weighted assets: CapStar Financial Holdings, Inc. 129,528 10.90 53,453 4.50 N/A N/A CapStar Bank 99,130 8.35 53,453 4.50 77,210 6.50 Tier I capital to average assets: CapStar Financial Holdings, Inc. 137,909 10.46 52,727 4.00 N/A N/A CapStar Bank 115,011 8.72 52,727 4.00 65,909 5.00 (1) For the calendar year 2017, the Company must maintain a capital conservation buffer of Tier 1 common equity capital in excess of minimum risk-based capital ratios by at least 1.25% to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. (2) For the Company to be well-capitalized, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 11 – EARNINGS PER SHARE The following is a summary of the basic and diluted earnings per share calculation for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands, except share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic net income per share calculation: Numerator – Net income $ 4,419 $ 2,109 $ 1,409 $ 6,169 Denominator – Average common shares outstanding 11,279,364 8,792,665 11,239,093 8,701,596 Basic net income per share $ 0.39 $ 0.24 $ 0.13 $ 0.71 Diluted net income per share calculation: Numerator – Net income $ 4,419 $ 2,109 $ 1,409 $ 6,169 Denominator – Average common shares outstanding 11,279,364 8,792,665 11,239,093 8,701,596 Dilutive shares contingently issuable 1,471,059 2,006,871 1,518,998 1,981,380 Average diluted common shares outstanding 12,750,423 10,799,536 12,758,091 10,682,976 Diluted net income per share $ 0.35 $ 0.20 $ 0.11 $ 0.58 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 12 – FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant 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 a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Bank used the following methods and significant assumptions to estimate fair value: Investment Securities Derivatives-Interest Rate Swaps Impaired Loans Other Real Estate Owned Loans Held For Sale Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair value measurements at September 30, 2017 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (Level 1) (Level 2) (Level 3) Assets: Securities available for sale: U.S. government-sponsored agencies $ 11,299 $ — $ 11,299 $ — Obligations of states and political subdivisions 19,067 — 19,067 — Mortgage-backed securities-residential 95,823 — 95,823 — Asset-backed securities 20,411 — 20,411 — Total securities available for sale $ 146,600 $ — $ 146,600 $ — Derivatives: Interest rate swaps - customer related $ 352 $ — $ 352 $ — Liabilities: Derivatives: Interest rate swaps - customer related $ (352 ) $ — $ (352 ) $ — Interest rate swaps - cash flow hedges (1,658 ) — (1,658 ) — Total derivatives $ (2,010 ) $ — $ (2,010 ) $ — Fair value measurements at December 31, 2016 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (Level 1) (Level 2) (Level 3) Assets: Securities available for sale: U.S. government-sponsored agencies $ 9,374 $ — $ 9,374 $ — Obligations of states and political subdivisions 27,913 — 27,913 — Mortgage-backed securities-residential 124,595 — 124,595 — Asset-backed securities 20,473 — 20,473 — Total securities available for sale $ 182,355 $ — $ 182,355 $ — Derivatives: Interest rate swaps - customer related $ 460 $ — $ 460 $ — Liabilities: Derivatives: Interest rate swaps - customer related $ (460 ) $ — $ (460 ) $ — Interest rate swaps - cash flow hedges (1,535 ) — (1,535 ) — Total derivatives $ (1,995 ) $ — $ (1,995 ) $ — Assets measured at fair value on a nonrecurring basis are summarized below (dollars in thousands): Fair value measurements at September 30, 2017 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (level 1) (level 2) (level 3) Assets: Impaired loans: Commercial and industrial $ 1,432 — — 1,432 Fair value measurements at December 31, 2016 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (level 1) (level 2) (level 3) Assets: Impaired loans: Commercial and industrial $ 1,809 — — 1,809 The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis at September 30, 2017 and December 31, 2016 (dollars in thousands): Range Fair Valuation (Weighted- September 30, 2017 Value Technique(s) Unobservable Input(s) Average) Impaired loans: Commercial and industrial $ 1,432 Sales comparison approach Appraisal discounts 25 % Range Fair Valuation (Weighted- December 31, 2016 Value Technique(s) Unobservable Input(s) Average) Impaired loans: Commercial and industrial $ 1,809 Sales comparison approach Appraisal discounts 25 % Fair Value of Financial Instruments The carrying value and estimated fair values of the Bank’s financial instruments at September 30, 2017 and December 31, 2016 were as follows (dollars in thousands): September 30, 2017 December 31, 2016 Carrying Carrying Fair value amount Fair value amount Fair value level of input Financial assets: Cash and due from banks, interest-bearing deposits in financial institutions $ 69,789 $ 69,789 $ 63,456 $ 63,456 Level 1 Federal funds sold — — 16,654 16,654 Level 1 Securities available for sale 146,600 146,600 182,355 182,355 Level 2 Securities held to maturity 45,635 48,980 46,864 49,731 Level 2 Loans held for sale 53,225 54,407 42,111 42,302 Level 2 Restricted equity securities 8,799 N/A 6,032 N/A N/A Loans, net of unearned income 974,530 974,551 935,251 934,628 Level 3 Accrued interest receivable 3,849 3,849 3,942 3,942 Level 2 Bank owned life insurance 22,335 22,335 21,900 21,900 Level 2 Other assets 352 352 460 460 Level 2 Financial liabilities: Deposits 1,091,495 1,050,801 1,128,723 1,088,758 Level 3 Federal Home Loan Bank advances 95,000 94,980 55,000 54,989 Level 2 Accrued interest payable 305 305 212 212 Level 2 Other liabilities 3,800 3,800 5,349 5,349 Level 3 The methods and assumptions, not previously presented, used to estimate fair values are described as follows: (a) Cash and Due from Banks, Interest-Bearing Deposits in Financial Institutions For these short‑term instruments, the carrying amount is a reasonable estimate of fair value. (b) Federal Funds Sold Federal funds sold clear on a daily basis. For this reason, the carrying amount is a reasonable estimate of fair value. (c) Restricted Equity Securities It is not practical to determine the fair value of restricted securities due to restrictions placed on their transferability. (d) Loans, net The fair value of the Bank’s loan portfolio includes a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Bank’s loan portfolio is initially fair valued using a segmented approach. The Bank divides its loan portfolio into the following categories: variable rate loans, impaired loans and all other loans. The results are then adjusted to account for credit risk. For variable‑rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for impaired loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral. For other loans, fair values are estimated using discounted cash flow models, using current market interest rates offered for loans with similar terms to borrowers of similar credit quality. The values derived from the discounted cash flow approach for each of the above portfolios are then further discounted to incorporate credit risk. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. (e) Bank Owned Life Insurance For bank owned life insurance, the carrying amount is based on the cash surrender value and is a reasonable estimate of fair value. (f) Other Assets Included in other assets are certain interest rate swap agreements and the cash flow hedge relationships. The fair values of interest rate swap agreements and the cash flow hedge relationships are based on independent pricing services that utilize pricing models with observable market inputs. (g) Deposits The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounted cash flow models, using current market interest rates offered on certificates with similar remaining maturities. (h) Federal Home Loan Bank Advances The fair value of fixed rate Federal Home Loan Bank Advances is estimated using discounted cash flow models, using current market interest rates offered on certificates, advances and other borrowings with similar remaining maturities. (i) Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value. (j) Other Liabilities Included in other liabilities are certain interest rate swap agreements, the cash flow hedge relationships and contingent consideration. The fair values of interest rate swap agreements and the cash flow hedge relationships are based on independent pricing services that utilize pricing models with observable market inputs. The fair value of contingent consideration is estimated by a discounted cash flow model that utilizes various unobservable inputs. (k) Off-Balance Sheet Instruments Fair values for off-balance sheet, credit-related 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 fair value of commitments is not material. (l) Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on estimating on and off‑balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, fixed assets are not considered financial instruments and their value has not been incorporated into the fair value estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements as of and for the period ended September 30, 2017 include CapStar Financial Holdings, Inc. and its wholly owned subsidiary, CapStar Bank (the “Bank”, together referred to as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation. On February 5, 2016, CapStar Financial Holdings, Inc. acquired all of the Bank’s issued and outstanding shares of common stock, preferred stock, common stock options and warrants, and the Bank became the wholly owned subsidiary of CapStar Financial Holdings, Inc. The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. These unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Initial Public Offering | Initial Public Offering On September 21, 2016, the Securities and Exchange Commission (“SEC”) declared effective our registration statement on Form S-1 registering the shares of our common stock. On September 27, 2016, we completed the initial public offering of 2,972,750 shares of our common stock. Of the 2,972,750 shares sold, 1,688,049 shares were sold by us and 1,284,701 shares were sold by certain selling shareholders. Of the 1,284,701 shares sold by certain selling shareholders, 731,707 were from preferred shares converted to common shares and 79,166 from the cashless exercise of 250,000 common share warrants. We received net proceeds of approximately $21.9 million from the offering, after deducting the underwriting discounts and commissions and estimated offering expenses. We did not receive any proceeds from the sale of shares by the selling shareholders. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, determination of impairment of intangible assets, including goodwill, the valuation of our investment portfolio, deferred tax assets and estimated liabilities. There have been no significant changes to the Company’s critical accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Tri-Net Fees | Tri-Net Fees Tri-Net fees represent a new line of business, implemented in the fourth quarter of 2016, which originates, with the intent to sell, commercial real estate loans to third-party investors. All of these loan sales transfer servicing rights to the buyer. Realized gains and losses are recognized when legal title of the loan has transferred to the investor and sales proceeds have been received and are reflected in the accompanying statement of income in Tri-Net fees, net of related costs such as commission expenses. Loans that have not been sold at period end are classified as held for sale on the balance sheet and recorded at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. |
Subsequent Events | Subsequent Events Accounting Standards Codification (“ASC”) 855, Subsequent Events, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company evaluated all events or transactions that occurred after September 30, 2017 through the date of the issued financial statements. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Securities | The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands): September 30, 2017 December 31, 2016 Amortized Cost Gross unrealized gains Gross unrealized (losses) Estimated fair value Amortized Cost Gross unrealized gains Gross unrealized (losses) Estimated fair value Securities available-for-sale: U. S. government agency securities $ 11,434 $ 18 $ (153 ) $ 11,299 $ 9,517 $ — $ (143 ) $ 9,374 State and municipal securities 19,031 172 (136 ) 19,067 28,480 65 (632 ) 27,913 Mortgage-backed securities 96,975 14 (1,166 ) 95,823 126,637 17 (2,059 ) 124,595 Asset-backed securities 20,668 — (257 ) 20,411 21,620 — (1,147 ) 20,473 Total $ 148,108 $ 204 $ (1,712 ) $ 146,600 $ 186,254 $ 82 $ (3,981 ) $ 182,355 Securities held-to-maturity: State and municipal securities $ 36,469 $ 3,138 $ — $ 39,607 $ 36,842 $ 2,784 $ — $ 39,626 Mortgage-backed securities 3,837 77 — 3,914 4,687 79 — 4,766 Other debt securities 5,329 130 — 5,459 5,335 11 (7 ) 5,339 Total $ 45,635 $ 3,345 $ — $ 48,980 $ 46,864 $ 2,874 $ (7 ) $ 49,731 |
Summary of Securities with Unrealized Losses and Length of Time Continuous Loss Positions | Security fair values are established by an independent pricing service as of the dates indicated. The difference between amortized cost and fair value reflects current interest rates and represents the potential gain (loss) had the portfolio been liquidated on those dates. Security gains (losses) are realized only in the event of dispositions prior to maturity or other-than-temporary impairment. Securities with unrealized losses as of September 30, 2017 and December 31, 2016, and the length of time they were in continuous loss positions as of such dates are as follows (in thousands): Less than 12 months 12 months or more Total September 30, 2017 Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses U. S. government agency securities $ 9,303 $ (153 ) $ — $ — $ 9,303 $ (153 ) State and municipal securities 4,968 (19 ) 6,103 (117 ) 11,071 (136 ) Mortgage-backed securities 61,997 (591 ) 30,360 (575 ) 92,357 (1,166 ) Asset-backed securities — — 20,410 (257 ) 20,410 (257 ) Total temporarily impaired securities $ 76,268 $ (763 ) $ 56,873 $ (949 ) $ 133,141 $ (1,712 ) December 31, 2016 U. S. government agency securities $ 9,374 $ (143 ) $ — $ — $ 9,374 $ (143 ) State and municipal securities 20,279 (632 ) — — 20,279 (632 ) Mortgage-backed securities 110,563 (1,955 ) 4,150 (104 ) 114,713 (2,059 ) Asset-backed securities — — 20,473 (1,147 ) 20,473 (1,147 ) Other debt securities 2,029 (7 ) — — 2,029 (7 ) Total temporarily impaired securities $ 142,245 $ (2,737 ) $ 24,623 $ (1,251 ) $ 166,868 $ (3,988 ) |
Summary of Proceeds from Sales of Securities and Associated Gains and Losses | The proceeds from sales of securities and the associated gains and losses are listed below (dollars in thousands): Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 Proceeds $ 34,299 $ 46,700 Gross gains 99 244 Gross losses (57 ) (123 ) |
Summary of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | The amortized cost and fair value of securities at September 30, 2017, by contractual maturity, are shown below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available-for-sale Held-to-maturity Amortized cost Estimated fair value Amortized cost Estimated fair value Due one to five years $ 11,388 $ 11,511 $ 27,299 $ 29,448 Due five to ten years 17,970 17,788 14,069 15,129 Due beyond ten years 1,107 1,067 430 489 Mortgage-backed securities 96,975 95,823 3,837 3,914 Asset-backed securities 20,668 20,411 — — $ 148,108 $ 146,600 $ 45,635 $ 48,980 |
Loans and Allowance for Loan 22
Loans and Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Summary of Loan Portfolio | A summary of the loan portfolio as of September 30, 2017 and December 31, 2016 follows (dollars in thousands): September 30, 2017 December 31, 2016 Commercial real estate $ 366,778 $ 302,322 Consumer real estate 100,811 97,015 Construction and land development 79,951 94,491 Commercial and industrial 394,600 379,620 Consumer 6,289 5,974 Other 26,460 56,796 Total 974,889 936,218 Less net unearned income (359 ) (967 ) 974,530 935,251 Allowance for loan losses (14,122 ) (11,634 ) $ 960,408 $ 923,617 |
Summary of Loans by Risk Rating | The following tables present the loan balances by category as well as risk rating (dollars in thousands): Performing Loans September 30, 2017 Pass/Watch Special Mention Substandard Total Performing Total Loans Total Commercial real estate $ 365,545 $ — $ — $ 365,545 $ 1,233 $ 366,778 Consumer real estate 100,522 — 289 100,811 — 100,811 Construction and land development 79,951 — — 79,951 — 79,951 Commercial and industrial 370,657 16,443 5,568 392,668 1,932 394,600 Consumer 6,276 — 13 6,289 — 6,289 Other 26,460 — — 26,460 — 26,460 Total $ 949,411 $ 16,443 $ 5,870 $ 971,724 $ 3,165 $ 974,889 December 31, 2016 Commercial real estate $ 301,012 $ — $ — $ 301,012 $ 1,310 $ 302,322 Consumer real estate 96,722 — 293 97,015 — 97,015 Construction and land development 94,491 — — 94,491 — 94,491 Commercial and industrial 349,857 11,035 16,419 377,311 2,309 379,620 Consumer 5,958 — 16 5,974 — 5,974 Other 56,796 — — 56,796 — 56,796 Total $ 904,836 $ 11,035 $ 16,728 $ 932,599 $ 3,619 $ 936,218 |
Summary of Changes and Breakdown of Allowance for Loan Losses and Loan Portfolio by Loan Category | The following tables detail the changes in the ALL for the three and nine months ended September 30, 2017 and 2016 (in thousands): Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total Three Months Ended September 30, 2017 Balance, beginning of period $ 3,533 $ 1,081 $ 911 $ 6,395 $ 57 $ 477 $ 12,454 Charged-off loans — — — — — — — Recoveries 3 — — 1,860 — — 1,863 Provision for loan losses (242 ) (97 ) 576 (306 ) 22 (148 ) (195 ) Balance, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Three Months Ended September 30, 2016 Balance, beginning of period $ 2,596 $ 968 $ 943 $ 5,037 $ 104 $ 806 $ 10,454 Charged-off loans — — — (645 ) — (645 ) Recoveries 52 — — 10 — — 62 Provision for loan losses (228 ) 4 721 1,166 (18 ) (6 ) 1,639 Balance, end of period $ 2,420 $ 972 $ 1,664 $ 5,568 $ 86 $ 800 $ 11,510 Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total Nine Months Ended September 30, 2017 Balance, beginning of period $ 2,655 $ 1,013 $ 1,574 $ 5,618 $ 76 $ 698 $ 11,634 Charged-off loans — — — (12,369 ) — — (12,369 ) Recoveries 4 — — 1,862 91 — 1,957 Provision for loan losses 635 (29 ) (87 ) 12,838 (88 ) (369 ) 12,900 Balance, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Nine Months Ended September 30, 2016 Balance, beginning of period $ 2,879 $ 968 $ 914 $ 4,693 $ 103 $ 575 $ 10,132 Charged-off loans (350 ) — — (956 ) (146 ) — (1,452 ) Recoveries 52 — — 18 1 — 71 Provision for loan losses (161 ) 4 750 1,813 128 225 2,759 Balance, end of period $ 2,420 $ 972 $ 1,664 $ 5,568 $ 86 $ 800 $ 11,510 A breakdown of the ALL and the loan portfolio by loan category at September 30, 2017 and December 31, 2016 follows (dollars in thousands): Commercial real estate Consumer real estate Construction and land development Commercial and industrial Consumer Other Total September 30, 2017 Allowance for Loan Losses: Collectively evaluated for impairment $ 3,294 $ 984 $ 1,487 $ 7,449 $ 79 $ 329 $ 13,622 Individually evaluated for impairment — — — 500 — — 500 Balances, end of period $ 3,294 $ 984 $ 1,487 $ 7,949 $ 79 $ 329 $ 14,122 Loans: Collectively evaluated for impairment $ 365,545 $ 100,811 $ 79,951 $ 392,668 $ 6,289 $ 26,460 $ 971,724 Individually evaluated for impairment 1,233 — — 1,932 — — 3,165 Balances, end of period $ 366,778 $ 100,811 $ 79,951 $ 394,600 $ 6,289 $ 26,460 $ 974,889 December 31, 2016 Allowance for Loan Losses: Collectively evaluated for impairment $ 2,655 $ 1,013 $ 1,574 $ 5,118 $ 76 $ 698 $ 11,134 Individually evaluated for impairment — — — 500 — — 500 Balances, end of period $ 2,655 $ 1,013 $ 1,574 $ 5,618 $ 76 $ 698 $ 11,634 Loans: Collectively evaluated for impairment $ 301,012 $ 97,015 $ 94,491 $ 377,311 $ 5,974 $ 56,796 $ 932,599 Individually evaluated for impairment 1,310 — — 2,309 — — 3,619 Balances, end of period $ 302,322 $ 97,015 $ 94,491 $ 379,620 $ 5,974 $ 56,796 $ 936,218 |
Allocation of ALL with Corresponding Percentage of ALL in Each Category to Total Loans, Net of Deferred Fee | The following table presents the allocation of the ALL for each respective loan category with the corresponding percentage of the ALL in each category to total loans, net of deferred fees as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Amount Percent of total loans, net of deferred fees Amount Percent of total loans, net of deferred fees Commercial real estate $ 3,294 0.34 % $ 2,655 0.28 % Consumer real estate 984 0.10 1,013 0.11 Construction and land development 1,487 0.15 1,574 0.17 Commercial and industrial 7,949 0.82 5,618 0.60 Consumer 79 0.01 76 0.01 Other 329 0.03 698 0.07 Total allowance for loan losses $ 14,122 1.45 % $ 11,634 1.24 % |
Summary of Impaired Loans | The following table presents the Company’s impaired loans that were evaluated for specific loss allowance as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Recorded investment Unpaid principal balance Related allowance Recorded investment Unpaid principal balance Related allowance With no related allowance recorded: Commercial real estate $ 1,233 $ 1,660 $ — $ 1,310 $ 1,686 $ — Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial — — — — — — Consumer — — — — — — Other — — — — — — Subtotal 1,233 1,660 — 1,310 1,686 — With an allowance recorded: Commercial real estate — — — — — — Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial 1,932 2,770 500 2,309 2,921 500 Consumer — — — — — — Other — — — — — — Subtotal 1,932 2,770 500 2,309 2,921 500 Total $ 3,165 $ 4,430 $ 500 $ 3,619 $ 4,607 $ 500 The following table presents information related to the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average recorded investment Interest income recognized Average recorded investment Interest income recognized Average recorded investment Interest income recognized Average recorded investment Interest income recognized With no related allowance recorded: Commercial real estate $ 1,245 $ — $ — $ — $ 1,272 $ — $ — $ — Consumer real estate — — — — — — — — Construction and land development — — — — — — — — Commercial and industrial — — — — — — — — Consumer — — — — — — — — Other — — — — — — — — Subtotal 1,245 — — — 1,272 — — — With an allowance recorded: Commercial real estate — — 1,685 — — — 1,742 — Consumer real estate — — — — — — — — Construction and land development — — — — — — — — Commercial and industrial 1,941 — 3,411 — 2,141 — 3,534 30 Consumer — — — — — — — — Other — — — — — — — — Subtotal 1,941 — 5,096 — 2,141 — 5,276 30 Total $ 3,186 $ — $ 5,096 $ — $ 3,413 $ — $ 5,276 $ 30 |
Schedule of Aging of Recorded Investment in Past-due Loans, by Class of Loans | The following table presents the aging of the recorded investment in past-due loans as of September 30, 2017 and December 31, 2016 by class of loans (dollars in thousands): 30 - 59 60 - 89 Greater Than Days Days 89 Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total September 30, 2017 Commercial real estate $ — $ — $ — $ — $ 366,778 $ 366,778 Consumer real estate 506 279 — 785 100,026 100,811 Construction and land development — — — — 79,951 79,951 Commercial and industrial 1,154 218 27 1,398 393,202 394,600 Consumer — 1 — 1 6,288 6,289 Other — — — — 26,460 26,460 Total $ 1,660 $ 497 $ 27 $ 2,184 $ 972,705 $ 974,889 December 31, 2016 Commercial real estate $ — $ — $ — $ — $ 302,322 $ 302,322 Consumer real estate 81 282 — 363 96,652 97,015 Construction and land development — — — — 94,491 94,491 Commercial and industrial — — — — 379,620 379,620 Consumer — — — — 5,974 5,974 Other — — — — 56,796 56,796 Total $ 81 $ 282 $ — $ 363 $ 935,855 $ 936,218 |
Schedule of Recorded In Non Accrual Loans, Past Due Loans over 90 Days Outstanding and Accruing and Troubled Debt Restructurings | The following table presents the recorded investment in non-accrual loans, past due loans over 90 days outstanding and accruing and troubled debt restructurings (“TDR”) by class of loans as of September 30, 2017 and December 31, 2016 (dollars in thousands): Non-Accrual Past Due Over 90 Days and Accruing Troubled Debt Restructurings September 30, 2017 Commercial real estate $ 1,233 $ — $ 1,222 Consumer real estate — — — Construction and land development — — — Commercial and industrial 1,932 27 — Consumer — — — Other — — — Total $ 3,165 $ 27 $ 1,222 December 31, 2016 Commercial real estate $ 1,310 $ — $ 1,272 Consumer real estate — — — Construction and land development — — — Commercial and industrial 2,309 — — Consumer — — — Other — — — Total $ 3,619 $ — $ 1,272 |
Schedule of Presents Loans by Class Modified as TDR | The following table presents loans by class modified as TDR that occurred during the three and nine months ended September 30, 2016 (dollars in thousands). Three Months Ended Nine Months Ended September 30, September 30, Number of contracts Pre modification outstanding recorded investment Post modification outstanding recorded investment, net of related allowance Number of contracts Pre modification outstanding recorded investment Post modification outstanding recorded investment, net of related allowance 2016 Commercial real estate — $ — $ — 1 $ 1,948 $ 1,170 Consumer real estate — — — — — — Construction and land development — — — — — — Commercial and industrial — — — — — — Consumer — — — — — — Other — — — — — — Total — $ — $ — 1 $ 1,948 $ 1,170 |
Schedule of Loans by Class Modified as TDR for the Payment Default Within Twelve Months | The following table presents loans by class modified as TDR for which there was a payment default within twelve months following the modification during the three and nine months ended September 30, 2016 (dollars in thousands). Three Months Ended Nine Months Ended September 30, September 30, Number of contracts Recorded investment Number of contracts Recorded investment 2016 Commercial real estate — $ — — $ — Consumer real estate — — — — Construction and land development — — — — Commercial and industrial — — — — Consumer — — 1 124 Other — — — — Total — $ — 1 $ 124 |
Federal Home Loan Bank Advanc23
Federal Home Loan Bank Advances (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Federal Home Loan Banks [Abstract] | |
Summary of Contractual Maturities and Average Effective Rates of Outstanding Advances | The following is a summary of the contractual maturities and average effective rates of outstanding advances (dollars in thousands): September 30, 2017 December 31, 2016 Year Amount Interest Rates Amount Interest Rates 2017 $ 60,000 1.18 % $ 55,000 0.80 % 2018 35,000 1.50 — — 2019 — — — — 2020 — — — — 2021 — — — — Thereafter — — — — Total $ 95,000 1.30 % $ 55,000 0.80 % |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | The following were changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2017 and 2016 (dollars in thousands): Unrealized Gains Unrealized Gains and and Losses Losses on Losses on on Available Securities Cash Flow for Sale Transferred to Hedges Securities Held to Maturity Total Nine Months Ended September 30, 2017 Beginning Balance $ (4,241 ) $ (698 ) $ (1,212 ) $ (6,151 ) Other comprehensive income (loss) before reclassification, net of tax (193 ) 1,502 — 1,309 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 589 (26 ) 100 663 Net current period other comprehensive income (loss) 396 1,476 100 1,972 Ending Balance $ (3,845 ) $ 778 $ (1,112 ) $ (4,179 ) Nine Months Ended September 30, 2016 Beginning Balance $ (3,704 ) $ 105 $ (1,315 ) $ (4,914 ) Other comprehensive income (loss) before reclassification, net of tax (1,086 ) 1,746 — 660 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 261 (75 ) 77 263 Net current period other comprehensive income (loss) (825 ) 1,671 77 923 Ending Balance $ (4,529 ) $ 1,776 $ (1,238 ) $ (3,991 ) |
Summary of Significant Amounts Reclassified out off Accumulated Other Comprehensive Income (Loss) | The following were significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands): Affected Line Item Details about Accumulated Other Three Months Ended September 30, Nine Months Ended September 30, in the Statement Where Comprehensive Income Components 2017 2016 2017 2016 Net Income is Presented Unrealized losses on cash flow hedges $ 109 $ 38 $ 322 $ 113 Interest expense - money market 168 50 267 148 Interest expense - Federal Home Loan Bank advances $ 277 $ 88 $ 589 $ 261 Net of tax Unrealized (gains) and losses on available for sale securities $ (9 ) $ 4 $ (42 ) $ (121 ) Net (gain) loss on sale of securities 3 (2 ) 16 46 Income tax expense (benefit) $ (6 ) $ 2 $ (26 ) $ (75 ) Net of tax Unrealized losses on securities transferred to held to maturity $ 79 $ 42 $ 162 $ 125 Interest income - securities (30 ) (16 ) (62 ) (48 ) Income tax benefit $ 49 $ 26 $ 100 $ 77 Net of tax |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Financial Instruments Representing Credit Risk | The following table sets forth outstanding financial instruments whose contract amounts represent credit risk as of September 30, 2017 and December 31, 2016 (dollars in thousands): Contract or notional amount September 30, 2017 December 31, 2016 Financial instruments whose contract amounts represent credit risk: Unused commitments to extend credit $ 575,558 $ 508,990 Standby letters of credit 11,535 10,886 Total $ 587,093 $ 519,876 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Interest-Rate Swaps Designated as Cash Flow Hedges | Summary information about the interest-rate swaps designated as cash flow hedges was as follows (dollars in thousands): September 30, 2017 December 31, 2016 Notional amounts $ 20,000 $ 20,000 Weighted average pay rates 3.54 % 3.54 % Weighted average receive rates 3 month 3 month LIBOR Weighted average maturity 5.7 years 6.5 years Fair value $ (1,658 ) $ (1,535 ) Amount of unrealized loss recognized in accumulated other comprehensive income, net of tax $ (1,023 ) $ (947 ) |
Summary of Customer Related Interest Rate Swaps | A summary of the Company’s customer related interest rate swaps was as follows (dollars in thousands): September 30, 2017 December 31, 2016 Notional Estimated Notional Estimated amount fair value amount fair value Interest rate swap agreements: Pay fixed/receive variable swaps $ 46,021 $ (250 ) $ 41,254 $ (460 ) Pay variable/receive fixed swaps 46,021 250 41,254 460 Total $ 92,042 $ — $ 82,508 $ — |
Stock Options and Restricted 27
Stock Options and Restricted Shares (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Company Recognized Stock-Based Compensation Expense | The Company has recognized stock-based compensation expense, within salaries and employee benefits for employees, and within other non-interest expense for directors, in the consolidated statements of income as follows (dollars in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Stock-based compensation expense before income taxes $ 288 $ 212 $ 771 $ 643 Less: deferred tax benefit (110 ) (81 ) (295 ) (246 ) Reduction of net income $ 178 $ 131 $ 476 $ 397 |
Summary of Changes in Company's Nonvested Restricted Shares | A summary of the changes in the Company’s nonvested restricted shares for the nine months ended September 30, 2017 follows: Weighted Average Restricted Grant Date Nonvested Shares Shares Fair Value Nonvested at beginning of period 199,641 $ 12.34 Granted 37,233 18.05 Vested (58,921 ) 12.24 Forfeited (3,600 ) 13.57 Nonvested at end of period 174,353 $ 13.56 |
Summary of Fair Value of Options Granted Using Weighted Average Assumptions | The fair value of options granted was determined using the following weighted average assumptions as of the grant date: 2017 2016 Dividend yield — — Expected term (in years) — 7.48 Expected stock price volatility — 17.20 % Risk-free interest rate — 1.66 % Pre-vest forfeiture rate — 10.25 % |
Summary of Activity in Stock Options | A summary of the activity in stock options for the nine months ended September 30, 2017 follows: Weighted Weighted Average Average Remaining Exercise Contractual Shares Price Term (years) Outstanding at beginning of period 1,006,000 $ 10.48 Granted — — Exercised (82,150 ) 10.00 Forfeited or expired — — Outstanding at end of period 923,850 $ 10.52 2.5 Fully vested and expected to vest 918,437 $ 10.51 2.5 Exercisable at end of period 875,100 $ 10.43 2.2 |
Information Related to Stock Options | Information related to stock options during each year follows: 2017 2016 Intrinsic value of options exercised $ 684,275 $ — Cash received from option exercises 821,500 — Tax benefit realized from option exercises 263,446 — Weighted average fair value of options granted — 3.16 |
Regulatory Capital Requiremen28
Regulatory Capital Requirements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Banking And Thrift [Abstract] | |
Schedule of Capital Amounts and Ratios | The Company’s and the Bank’s capital amounts and ratios as of September 30, 2017 and December 31, 2016 are presented in the following table (dollars in thousands). Actual Minimum capital requirement (1) Minimum to be well-capitalized (2) Amount Ratio Amount Ratio Amount Ratio At September 30, 2017: Total capital to risk-weighted assets: CapStar Financial Holdings, Inc. $ 155,426 12.42 % $ 100,130 8.00 % N/A N/A CapStar Bank 141,843 11.33 100,118 8.00 $ 125,147 10.00 Tier I capital to risk-weighted assets: CapStar Financial Holdings, Inc. 141,125 11.28 75,098 6.00 N/A N/A CapStar Bank 127,542 10.19 75,088 6.00 100,118 8.00 Common equity Tier 1 capital to risk weighted assets: CapStar Financial Holdings, Inc. 132,417 10.58 56,323 4.50 N/A N/A CapStar Bank 111,334 8.90 56,316 4.50 81,346 6.50 Tier I capital to average assets: CapStar Financial Holdings, Inc. 141,125 10.36 54,464 4.00 N/A N/A CapStar Bank 127,542 9.37 54,463 4.00 68,079 5.00 At December 31, 2016: Total capital to risk-weighted assets: CapStar Financial Holdings, Inc. $ 149,616 12.60 % $ 95,028 8.00 % N/A N/A CapStar Bank 126,718 10.67 95,028 8.00 $ 118,785 10.00 Tier I capital to risk-weighted assets: CapStar Financial Holdings, Inc. 137,909 11.61 71,271 6.00 N/A N/A CapStar Bank 115,011 9.68 71,271 6.00 95,028 8.00 Common equity Tier 1 capital to risk weighted assets: CapStar Financial Holdings, Inc. 129,528 10.90 53,453 4.50 N/A N/A CapStar Bank 99,130 8.35 53,453 4.50 77,210 6.50 Tier I capital to average assets: CapStar Financial Holdings, Inc. 137,909 10.46 52,727 4.00 N/A N/A CapStar Bank 115,011 8.72 52,727 4.00 65,909 5.00 (1) For the calendar year 2017, the Company must maintain a capital conservation buffer of Tier 1 common equity capital in excess of minimum risk-based capital ratios by at least 1.25% to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. (2) For the Company to be well-capitalized, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | The following is a summary of the basic and diluted earnings per share calculation for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands, except share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic net income per share calculation: Numerator – Net income $ 4,419 $ 2,109 $ 1,409 $ 6,169 Denominator – Average common shares outstanding 11,279,364 8,792,665 11,239,093 8,701,596 Basic net income per share $ 0.39 $ 0.24 $ 0.13 $ 0.71 Diluted net income per share calculation: Numerator – Net income $ 4,419 $ 2,109 $ 1,409 $ 6,169 Denominator – Average common shares outstanding 11,279,364 8,792,665 11,239,093 8,701,596 Dilutive shares contingently issuable 1,471,059 2,006,871 1,518,998 1,981,380 Average diluted common shares outstanding 12,750,423 10,799,536 12,758,091 10,682,976 Diluted net income per share $ 0.35 $ 0.20 $ 0.11 $ 0.58 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair value measurements at September 30, 2017 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (Level 1) (Level 2) (Level 3) Assets: Securities available for sale: U.S. government-sponsored agencies $ 11,299 $ — $ 11,299 $ — Obligations of states and political subdivisions 19,067 — 19,067 — Mortgage-backed securities-residential 95,823 — 95,823 — Asset-backed securities 20,411 — 20,411 — Total securities available for sale $ 146,600 $ — $ 146,600 $ — Derivatives: Interest rate swaps - customer related $ 352 $ — $ 352 $ — Liabilities: Derivatives: Interest rate swaps - customer related $ (352 ) $ — $ (352 ) $ — Interest rate swaps - cash flow hedges (1,658 ) — (1,658 ) — Total derivatives $ (2,010 ) $ — $ (2,010 ) $ — Fair value measurements at December 31, 2016 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (Level 1) (Level 2) (Level 3) Assets: Securities available for sale: U.S. government-sponsored agencies $ 9,374 $ — $ 9,374 $ — Obligations of states and political subdivisions 27,913 — 27,913 — Mortgage-backed securities-residential 124,595 — 124,595 — Asset-backed securities 20,473 — 20,473 — Total securities available for sale $ 182,355 $ — $ 182,355 $ — Derivatives: Interest rate swaps - customer related $ 460 $ — $ 460 $ — Liabilities: Derivatives: Interest rate swaps - customer related $ (460 ) $ — $ (460 ) $ — Interest rate swaps - cash flow hedges (1,535 ) — (1,535 ) — Total derivatives $ (1,995 ) $ — $ (1,995 ) $ — |
Summary of Assets Measured at Fair Value on a Nonrecurring Basis | Assets measured at fair value on a nonrecurring basis are summarized below (dollars in thousands): Fair value measurements at September 30, 2017 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (level 1) (level 2) (level 3) Assets: Impaired loans: Commercial and industrial $ 1,432 — — 1,432 Fair value measurements at December 31, 2016 Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying assets inputs inputs Value (level 1) (level 2) (level 3) Assets: Impaired loans: Commercial and industrial $ 1,809 — — 1,809 |
Summary of Quantitative Information About Level 3 Fair Value Measurements for Assets Measured at Fair Value on a Non-recurring Basis | The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis at September 30, 2017 and December 31, 2016 (dollars in thousands): Range Fair Valuation (Weighted- September 30, 2017 Value Technique(s) Unobservable Input(s) Average) Impaired loans: Commercial and industrial $ 1,432 Sales comparison approach Appraisal discounts 25 % Range Fair Valuation (Weighted- December 31, 2016 Value Technique(s) Unobservable Input(s) Average) Impaired loans: Commercial and industrial $ 1,809 Sales comparison approach Appraisal discounts 25 % |
Summary of Carrying Value and Fair Values of the Bank's Financial Instruments | The carrying value and estimated fair values of the Bank’s financial instruments at September 30, 2017 and December 31, 2016 were as follows (dollars in thousands): September 30, 2017 December 31, 2016 Carrying Carrying Fair value amount Fair value amount Fair value level of input Financial assets: Cash and due from banks, interest-bearing deposits in financial institutions $ 69,789 $ 69,789 $ 63,456 $ 63,456 Level 1 Federal funds sold — — 16,654 16,654 Level 1 Securities available for sale 146,600 146,600 182,355 182,355 Level 2 Securities held to maturity 45,635 48,980 46,864 49,731 Level 2 Loans held for sale 53,225 54,407 42,111 42,302 Level 2 Restricted equity securities 8,799 N/A 6,032 N/A N/A Loans, net of unearned income 974,530 974,551 935,251 934,628 Level 3 Accrued interest receivable 3,849 3,849 3,942 3,942 Level 2 Bank owned life insurance 22,335 22,335 21,900 21,900 Level 2 Other assets 352 352 460 460 Level 2 Financial liabilities: Deposits 1,091,495 1,050,801 1,128,723 1,088,758 Level 3 Federal Home Loan Bank advances 95,000 94,980 55,000 54,989 Level 2 Accrued interest payable 305 305 212 212 Level 2 Other liabilities 3,800 3,800 5,349 5,349 Level 3 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Sep. 27, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Summary Of Significant Accounting Policies [Line Items] | |||
Date of acquisition | Feb. 5, 2016 | ||
Common Stock | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Issuance of common stock | 1,688,049 | ||
Exercise of common stock warrants, shares | 48,986 | 87,666 | |
Initial Public Offering | Common Stock | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Issuance of common stock | 2,972,750 | ||
Net proceeds from issuance | $ 21,900,000 | ||
Initial Public Offering by the Company | Common Stock | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Issuance of common stock | 1,688,049 | ||
Initial Public Offering by certain selling shareholders | Common Stock | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Issuance of common stock | 1,284,701 | ||
Preferred shares converted to common stock | 731,707 | ||
Cashless exercise | 79,166 | ||
Exercise of common stock warrants, shares | 250,000 | ||
Net proceeds from issuance | $ 0 |
Securities - Summary of Amortiz
Securities - Summary of Amortized Cost and Fair Value of Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Securities available for sale [Abstract] | ||
Amortized Cost | $ 148,108 | $ 186,254 |
Gross unrealized gains | 204 | 82 |
Gross unrealized (losses) | (1,712) | (3,981) |
Estimated fair value | 146,600 | 182,355 |
Securities held to maturity [Abstract] | ||
Amortized Cost | 45,635 | 46,864 |
Gross unrealized gains | 3,345 | 2,874 |
Gross unrealized (losses) | (7) | |
Estimated fair value | 48,980 | 49,731 |
U. S. government agency securities | ||
Securities available for sale [Abstract] | ||
Amortized Cost | 11,434 | 9,517 |
Gross unrealized gains | 18 | |
Gross unrealized (losses) | (153) | (143) |
Estimated fair value | 11,299 | 9,374 |
State and municipal securities | ||
Securities available for sale [Abstract] | ||
Amortized Cost | 19,031 | 28,480 |
Gross unrealized gains | 172 | 65 |
Gross unrealized (losses) | (136) | (632) |
Estimated fair value | 19,067 | 27,913 |
Securities held to maturity [Abstract] | ||
Amortized Cost | 36,469 | 36,842 |
Gross unrealized gains | 3,138 | 2,784 |
Estimated fair value | 39,607 | 39,626 |
Mortgage-backed securities | ||
Securities available for sale [Abstract] | ||
Amortized Cost | 96,975 | 126,637 |
Gross unrealized gains | 14 | 17 |
Gross unrealized (losses) | (1,166) | (2,059) |
Estimated fair value | 95,823 | 124,595 |
Securities held to maturity [Abstract] | ||
Amortized Cost | 3,837 | 4,687 |
Gross unrealized gains | 77 | 79 |
Estimated fair value | 3,914 | 4,766 |
Asset-backed securities | ||
Securities available for sale [Abstract] | ||
Amortized Cost | 20,668 | 21,620 |
Gross unrealized (losses) | (257) | (1,147) |
Estimated fair value | 20,411 | 20,473 |
Other debt securities | ||
Securities held to maturity [Abstract] | ||
Amortized Cost | 5,329 | 5,335 |
Gross unrealized gains | 130 | 11 |
Gross unrealized (losses) | (7) | |
Estimated fair value | $ 5,459 | $ 5,339 |
Securities - Summary of Securit
Securities - Summary of Securities with Unrealized Losses and Length of Time Continuous Loss Positions (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
Less than 12 months, Estimated fair value | $ 76,268 | $ 142,245 |
Less than 12 months, Gross unrealized (losses) | (763) | (2,737) |
12 months or more, Estimated fair value | 56,873 | 24,623 |
12 months or more, Gross unrealized losses | (949) | (1,251) |
Total, Estimated fair value | 133,141 | 166,868 |
Total, Gross unrealized losses | (1,712) | (3,988) |
U. S. government agency securities | ||
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
Less than 12 months, Estimated fair value | 9,303 | 9,374 |
Less than 12 months, Gross unrealized (losses) | (153) | (143) |
Total, Estimated fair value | 9,303 | 9,374 |
Total, Gross unrealized losses | (153) | (143) |
State and municipal securities | ||
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
Less than 12 months, Estimated fair value | 4,968 | 20,279 |
Less than 12 months, Gross unrealized (losses) | (19) | (632) |
12 months or more, Estimated fair value | 6,103 | |
12 months or more, Gross unrealized losses | (117) | |
Total, Estimated fair value | 11,071 | 20,279 |
Total, Gross unrealized losses | (136) | (632) |
Mortgage-backed securities | ||
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
Less than 12 months, Estimated fair value | 61,997 | 110,563 |
Less than 12 months, Gross unrealized (losses) | (591) | (1,955) |
12 months or more, Estimated fair value | 30,360 | 4,150 |
12 months or more, Gross unrealized losses | (575) | (104) |
Total, Estimated fair value | 92,357 | 114,713 |
Total, Gross unrealized losses | (1,166) | (2,059) |
Asset-backed securities | ||
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
12 months or more, Estimated fair value | 20,410 | 20,473 |
12 months or more, Gross unrealized losses | (257) | (1,147) |
Total, Estimated fair value | 20,410 | 20,473 |
Total, Gross unrealized losses | $ (257) | (1,147) |
Other debt securities | ||
Available-for-sale securities, continuous unrealized loss position [Abstract] | ||
Less than 12 months, Estimated fair value | 2,029 | |
Less than 12 months, Gross unrealized (losses) | (7) | |
Total, Estimated fair value | 2,029 | |
Total, Gross unrealized losses | $ (7) |
Securities - Additional Informa
Securities - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Schedule Of Available For Sale Securities [Line Items] | |
Unrealized losses in investment securities portfolio | $ 1.7 |
Public Deposits, Derivative Positions and Federal Home Loan Bank Advances | |
Schedule Of Available For Sale Securities [Line Items] | |
Carrying value of securities | $ 127.1 |
Securities - Summary of Proceed
Securities - Summary of Proceeds from Sales of Securities and Associated Gains and Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Investments Debt And Equity Securities [Abstract] | ||
Proceeds | $ 34,299 | $ 46,700 |
Gross gains | 99 | 244 |
Gross losses | $ (57) | $ (123) |
Securities - Summary of Amort36
Securities - Summary of Amortized Cost and Fair Value of Debt and Equity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale, Amortized cost [Abstract] | ||
Due one to five years | $ 11,388 | |
Due five to ten years | 17,970 | |
Due beyond ten years | 1,107 | |
Amortized Cost | 148,108 | $ 186,254 |
Available-for-sale, Estimated fair value [Abstract] | ||
Due one to five years | 11,511 | |
Due five to ten years | 17,788 | |
Due beyond ten years | 1,067 | |
Estimated fair value | 146,600 | 182,355 |
Held-to-maturity, Amortized cost [Abstract] | ||
Due one to five years | 27,299 | |
Due five to ten years | 14,069 | |
Due beyond ten years | 430 | |
Mortgage-backed securities | 3,837 | |
Amortized Cost | 45,635 | 46,864 |
Securities held to maturity [Abstract] | ||
Due one to five years | 29,448 | |
Due five to ten years | 15,129 | |
Due beyond ten years | 489 | |
Mortgage-backed securities | 3,914 | |
Estimated fair value | 48,980 | 49,731 |
Mortgage-backed securities | ||
Available-for-sale, Amortized cost [Abstract] | ||
Amortized cost | 96,975 | |
Amortized Cost | 96,975 | 126,637 |
Available-for-sale, Estimated fair value [Abstract] | ||
Estimated fair value | 95,823 | |
Estimated fair value | 95,823 | 124,595 |
Held-to-maturity, Amortized cost [Abstract] | ||
Amortized Cost | 3,837 | 4,687 |
Securities held to maturity [Abstract] | ||
Estimated fair value | 3,914 | 4,766 |
Asset-backed securities | ||
Available-for-sale, Amortized cost [Abstract] | ||
Amortized cost | 20,668 | |
Amortized Cost | 20,668 | 21,620 |
Available-for-sale, Estimated fair value [Abstract] | ||
Estimated fair value | 20,411 | |
Estimated fair value | $ 20,411 | $ 20,473 |
Loans and Allowance for Loan 37
Loans and Allowance for Loan Losses - Summary of Loan Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | $ 974,889 | $ 936,218 | ||||
Less net unearned income | (359) | (967) | ||||
Loans, net of unearned income | 974,530 | 935,251 | ||||
Allowance for loan losses | (14,122) | $ (12,454) | (11,634) | $ (11,510) | $ (10,454) | $ (10,132) |
Loans, net | 960,408 | 923,617 | ||||
Commercial real estate | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 366,778 | 302,322 | ||||
Allowance for loan losses | (3,294) | (3,533) | (2,655) | (2,420) | (2,596) | (2,879) |
Consumer real estate | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 100,811 | 97,015 | ||||
Allowance for loan losses | (984) | (1,081) | (1,013) | (972) | (968) | (968) |
Construction and land development | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 79,951 | 94,491 | ||||
Allowance for loan losses | (1,487) | (911) | (1,574) | (1,664) | (943) | (914) |
Commercial and industrial | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 394,600 | 379,620 | ||||
Allowance for loan losses | (7,949) | (6,395) | (5,618) | (5,568) | (5,037) | (4,693) |
Consumer | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 6,289 | 5,974 | ||||
Allowance for loan losses | (79) | (57) | (76) | (86) | (104) | (103) |
Other | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Total loans | 26,460 | 56,796 | ||||
Allowance for loan losses | $ (329) | $ (477) | $ (698) | $ (800) | $ (806) | $ (575) |
Loans and Allowance for Loan 38
Loans and Allowance for Loan Losses - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)Contract | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Contract | Sep. 30, 2016USD ($)Contract | Dec. 31, 2016USD ($) | |
Loans And Leases Receivable Disclosure [Line Items] | |||||
Minimum loan amount for loans analyzed by credit risk | $ 500,000 | ||||
Total loans | $ 974,889,000 | 974,889,000 | $ 936,218,000 | ||
Interest income recognized on a cash basis for impaired loans | 0 | $ 0 | 0 | $ 0 | |
Investment in TDR | 1,200,000 | 1,200,000 | 1,300,000 | ||
Specific allowance related to loans | 500,000 | 500,000 | 500,000 | ||
Additional commitments related to TDR | $ 0 | $ 0 | 0 | ||
New TDR identified during the period | Contract | 0 | 0 | 1 | ||
TDR, payment default within twelve months | Contract | 0 | 0 | 1 | ||
Loan period considered as payment default | 30 days | ||||
Consumer | |||||
Loans And Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 6,289,000 | $ 6,289,000 | 5,974,000 | ||
TDR, payment default within twelve months | Contract | 1 | ||||
Allowance for loan and lease losses, specific reserve | $ 0 | ||||
Subsequent default TDR charge-off | $ 100,000 | ||||
Troubled Debt Restructurings | |||||
Loans And Leases Receivable Disclosure [Line Items] | |||||
Specific allowance related to loans | 0 | 0 | 0 | ||
Doubtful | |||||
Loans And Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 0 | $ 0 | $ 0 |
Loans and Allowance for Loan 39
Loans and Allowance for Loan Losses - Summary of Loan Balances by Category as well as Risk Rating (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | $ 974,889 | $ 936,218 |
Total Impaired Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 3,165 | 3,619 |
Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 971,724 | 932,599 |
Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 949,411 | 904,836 |
Performing Loans | Special Mention | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 16,443 | 11,035 |
Performing Loans | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 5,870 | 16,728 |
Commercial real estate | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 366,778 | 302,322 |
Commercial real estate | Total Impaired Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 1,233 | 1,310 |
Commercial real estate | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 365,545 | 301,012 |
Commercial real estate | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 365,545 | 301,012 |
Consumer real estate | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 100,811 | 97,015 |
Consumer real estate | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 100,811 | 97,015 |
Consumer real estate | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 100,522 | 96,722 |
Consumer real estate | Performing Loans | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 289 | 293 |
Construction and land development | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 79,951 | 94,491 |
Construction and land development | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 79,951 | 94,491 |
Construction and land development | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 79,951 | 94,491 |
Commercial and industrial | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 394,600 | 379,620 |
Commercial and industrial | Total Impaired Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 1,932 | 2,309 |
Commercial and industrial | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 392,668 | 377,311 |
Commercial and industrial | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 370,657 | 349,857 |
Commercial and industrial | Performing Loans | Special Mention | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 16,443 | 11,035 |
Commercial and industrial | Performing Loans | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 5,568 | 16,419 |
Consumer | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 6,289 | 5,974 |
Consumer | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 6,289 | 5,974 |
Consumer | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 6,276 | 5,958 |
Consumer | Performing Loans | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 13 | 16 |
Other | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 26,460 | 56,796 |
Other | Performing Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | 26,460 | 56,796 |
Other | Performing Loans | Pass/Watch | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total loans | $ 26,460 | $ 56,796 |
Loans and Allowance for Loan 40
Loans and Allowance for Loan Losses - Summary of Changes in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | $ 12,454 | $ 10,454 | $ 11,634 | $ 10,132 |
Charged-off loans | (645) | (12,369) | (1,452) | |
Recoveries | 1,863 | 62 | 1,957 | 71 |
Provision for loan losses | (195) | 1,639 | 12,900 | 2,759 |
Ending Balance | 14,122 | 11,510 | 14,122 | 11,510 |
Commercial real estate | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 3,533 | 2,596 | 2,655 | 2,879 |
Charged-off loans | (350) | |||
Recoveries | 3 | 52 | 4 | 52 |
Provision for loan losses | (242) | (228) | 635 | (161) |
Ending Balance | 3,294 | 2,420 | 3,294 | 2,420 |
Consumer real estate | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 1,081 | 968 | 1,013 | 968 |
Provision for loan losses | (97) | 4 | (29) | 4 |
Ending Balance | 984 | 972 | 984 | 972 |
Construction and land development | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 911 | 943 | 1,574 | 914 |
Provision for loan losses | 576 | 721 | (87) | 750 |
Ending Balance | 1,487 | 1,664 | 1,487 | 1,664 |
Commercial and industrial | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 6,395 | 5,037 | 5,618 | 4,693 |
Charged-off loans | (645) | (12,369) | (956) | |
Recoveries | 1,860 | 10 | 1,862 | 18 |
Provision for loan losses | (306) | 1,166 | 12,838 | 1,813 |
Ending Balance | 7,949 | 5,568 | 7,949 | 5,568 |
Consumer | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 57 | 104 | 76 | 103 |
Charged-off loans | (146) | |||
Recoveries | 91 | 1 | ||
Provision for loan losses | 22 | (18) | (88) | 128 |
Ending Balance | 79 | 86 | 79 | 86 |
Other | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning Balance | 477 | 806 | 698 | 575 |
Provision for loan losses | (148) | (6) | (369) | 225 |
Ending Balance | $ 329 | $ 800 | $ 329 | $ 800 |
Loans and Allowance for Loan 41
Loans and Allowance for Loan Losses - Summary of Breakdown of Allowance for Loan Losses and Loan Portfolio by Loan Category (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | $ 13,622 | $ 11,134 | ||||
Individually evaluated for impairment | 500 | 500 | ||||
Allowance for Loan Losses, Ending Balance | 14,122 | $ 12,454 | 11,634 | $ 11,510 | $ 10,454 | $ 10,132 |
Loans: | ||||||
Collectively evaluated for impairment | 971,724 | 932,599 | ||||
Individually evaluated for impairment | 3,165 | 3,619 | ||||
Total | 974,889 | 936,218 | ||||
Commercial real estate | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 3,294 | 2,655 | ||||
Individually evaluated for impairment | 0 | |||||
Allowance for Loan Losses, Ending Balance | 3,294 | 3,533 | 2,655 | 2,420 | 2,596 | 2,879 |
Loans: | ||||||
Collectively evaluated for impairment | 365,545 | 301,012 | ||||
Individually evaluated for impairment | 1,233 | 1,310 | ||||
Total | 366,778 | 302,322 | ||||
Consumer real estate | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 984 | 1,013 | ||||
Individually evaluated for impairment | 0 | |||||
Allowance for Loan Losses, Ending Balance | 984 | 1,081 | 1,013 | 972 | 968 | 968 |
Loans: | ||||||
Collectively evaluated for impairment | 100,811 | 97,015 | ||||
Individually evaluated for impairment | 0 | |||||
Total | 100,811 | 97,015 | ||||
Construction and land development | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 1,487 | 1,574 | ||||
Individually evaluated for impairment | 0 | |||||
Allowance for Loan Losses, Ending Balance | 1,487 | 911 | 1,574 | 1,664 | 943 | 914 |
Loans: | ||||||
Collectively evaluated for impairment | 79,951 | 94,491 | ||||
Individually evaluated for impairment | 0 | |||||
Total | 79,951 | 94,491 | ||||
Commercial and industrial | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 7,449 | 5,118 | ||||
Individually evaluated for impairment | 500 | 500 | ||||
Allowance for Loan Losses, Ending Balance | 7,949 | 6,395 | 5,618 | 5,568 | 5,037 | 4,693 |
Loans: | ||||||
Collectively evaluated for impairment | 392,668 | 377,311 | ||||
Individually evaluated for impairment | 1,932 | 2,309 | ||||
Total | 394,600 | 379,620 | ||||
Consumer | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 79 | 76 | ||||
Individually evaluated for impairment | 0 | |||||
Allowance for Loan Losses, Ending Balance | 79 | 57 | 76 | 86 | 104 | 103 |
Loans: | ||||||
Collectively evaluated for impairment | 6,289 | 5,974 | ||||
Individually evaluated for impairment | 0 | |||||
Total | 6,289 | 5,974 | ||||
Other | ||||||
Allowance for Loan Losses: | ||||||
Collectively evaluated for impairment | 329 | 698 | ||||
Individually evaluated for impairment | 0 | |||||
Allowance for Loan Losses, Ending Balance | 329 | $ 477 | 698 | $ 800 | $ 806 | $ 575 |
Loans: | ||||||
Collectively evaluated for impairment | 26,460 | 56,796 | ||||
Individually evaluated for impairment | 0 | |||||
Total | $ 26,460 | $ 56,796 |
Loans and Allowance for Loan 42
Loans and Allowance for Loan Losses - Allocation of ALL with Corresponding Percentage of ALL in Each Category to Total Loans, Net of Deferred Fee (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 14,122 | $ 12,454 | $ 11,634 | $ 11,510 | $ 10,454 | $ 10,132 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 1.45% | 1.24% | ||||
Commercial real estate | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 3,294 | 3,533 | $ 2,655 | 2,420 | 2,596 | 2,879 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.34% | 0.28% | ||||
Consumer real estate | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 984 | 1,081 | $ 1,013 | 972 | 968 | 968 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.10% | 0.11% | ||||
Construction and land development | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 1,487 | 911 | $ 1,574 | 1,664 | 943 | 914 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.15% | 0.17% | ||||
Commercial and industrial | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 7,949 | 6,395 | $ 5,618 | 5,568 | 5,037 | 4,693 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.82% | 0.60% | ||||
Consumer | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 79 | 57 | $ 76 | 86 | 104 | 103 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.01% | 0.01% | ||||
Other | ||||||
Loans And Leases Receivable Disclosure [Line Items] | ||||||
Allowance for loan losses, Amount | $ 329 | $ 477 | $ 698 | $ 800 | $ 806 | $ 575 |
Allowance for loan losses, Percentage of total loans, net of deferred fees | 0.03% | 0.07% |
Loans and Allowance for Loan 43
Loans and Allowance for Loan Losses - Summary of Impaired Loans Evaluated for Specific Loss Allowance (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable Impaired [Line Items] | ||
Impaired loans with no related allowance recorded, Recorded investment | $ 1,233 | $ 1,310 |
Impaired loans with no related allowance recorded, Unpaid principal balance | 1,660 | 1,686 |
Impaired loans with an allowance recorded, Related allowance | 500 | 500 |
Impaired loans with an allowance recorded, Recorded investment | 1,932 | 2,309 |
Impaired loans with an allowance recorded, Unpaid principal balance | 2,770 | 2,921 |
Recorded investment | 3,165 | 3,619 |
Unpaid principal balance | 4,430 | 4,607 |
Commercial real estate | ||
Financing Receivable Impaired [Line Items] | ||
Impaired loans with no related allowance recorded, Recorded investment | 1,233 | 1,310 |
Impaired loans with no related allowance recorded, Unpaid principal balance | 1,660 | 1,686 |
Commercial and industrial | ||
Financing Receivable Impaired [Line Items] | ||
Impaired loans with an allowance recorded, Related allowance | 500 | 500 |
Impaired loans with an allowance recorded, Recorded investment | 1,932 | 2,309 |
Impaired loans with an allowance recorded, Unpaid principal balance | $ 2,770 | $ 2,921 |
Loans and Allowance for Loan 44
Loans and Allowance for Loan Losses - Summary of Average Recorded Investment and Interest Income Recognized on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Financing Receivable Impaired [Line Items] | ||||
Impaired loans with no related allowance recorded, Average recorded investment | $ 1,245 | $ 1,272 | ||
Impaired loans with an allowance recorded, Average recorded investment | 1,941 | $ 5,096 | 2,141 | $ 5,276 |
Impaired loans with an allowance recorded, Interest income recognized | 30 | |||
Average recorded investment | 3,186 | 5,096 | 3,413 | 5,276 |
Interest income recognized | 30 | |||
Commercial real estate | ||||
Financing Receivable Impaired [Line Items] | ||||
Impaired loans with no related allowance recorded, Average recorded investment | 1,245 | 1,272 | ||
Impaired loans with an allowance recorded, Average recorded investment | 1,685 | 1,742 | ||
Commercial and industrial | ||||
Financing Receivable Impaired [Line Items] | ||||
Impaired loans with an allowance recorded, Average recorded investment | $ 1,941 | $ 3,411 | $ 2,141 | 3,534 |
Impaired loans with an allowance recorded, Interest income recognized | $ 30 |
Loans and Allowance for Loan 45
Loans and Allowance for Loan Losses - Schedule of Aging of Recorded Investment in Past-due Loans, by Class of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | $ 2,184 | $ 363 |
Loans Not Past Due | 972,705 | 935,855 |
Total | 974,889 | 936,218 |
Commercial real estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Loans Not Past Due | 366,778 | 302,322 |
Total | 366,778 | 302,322 |
Consumer real estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 785 | 363 |
Loans Not Past Due | 100,026 | 96,652 |
Total | 100,811 | 97,015 |
Construction and land development | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Loans Not Past Due | 79,951 | 94,491 |
Total | 79,951 | 94,491 |
Commercial and industrial | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1,398 | |
Loans Not Past Due | 393,202 | 379,620 |
Total | 394,600 | 379,620 |
Consumer | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1 | |
Loans Not Past Due | 6,288 | 5,974 |
Total | 6,289 | 5,974 |
Other | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Loans Not Past Due | 26,460 | 56,796 |
Total | 26,460 | 56,796 |
30 - 59 Days Past Due [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1,660 | 81 |
30 - 59 Days Past Due [Member] | Consumer real estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 506 | 81 |
30 - 59 Days Past Due [Member] | Commercial and industrial | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1,154 | |
60 - 89 Days Past Due [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 497 | 282 |
60 - 89 Days Past Due [Member] | Consumer real estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 279 | $ 282 |
60 - 89 Days Past Due [Member] | Commercial and industrial | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 218 | |
60 - 89 Days Past Due [Member] | Consumer | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1 | |
Greater than 89 Days Past Due [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 27 | |
Greater than 89 Days Past Due [Member] | Commercial and industrial | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | $ 27 |
Loans and Allowance for Loan 46
Loans and Allowance for Loan Losses - Schedule of Non-Accrual Loans, Past Due Loans over 90 Days Outstanding and Accruing and Troubled Debt Restructurings (TDR) by Class of Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Accounts Notes And Loans Receivable [Line Items] | |||
Non-Accrual | $ 3,619 | $ 3,165 | |
Past Due Over 90 Days and Accruing | 27 | ||
Troubled Debt Restructurings | $ 1,222 | 1,272 | |
Commercial real estate | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Non-Accrual | 1,310 | 1,233 | |
Troubled Debt Restructurings | $ 1,222 | 1,272 | |
Commercial and industrial | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Non-Accrual | $ 2,309 | 1,932 | |
Past Due Over 90 Days and Accruing | $ 27 |
Loans and Allowance for Loan 47
Loans and Allowance for Loan Losses - Schedule of Loans by Class Modified as TDR (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017Contract | Sep. 30, 2017Contract | Sep. 30, 2016USD ($)Contract | |
Financing Receivable Modifications [Line Items] | |||
Number of contracts | Contract | 0 | 0 | 1 |
Pre modification outstanding recorded investment | $ 1,948 | ||
Post modification outstanding recorded investment, net of related allowance | $ 1,170 | ||
Commercial real estate | |||
Financing Receivable Modifications [Line Items] | |||
Number of contracts | Contract | 1 | ||
Pre modification outstanding recorded investment | $ 1,948 | ||
Post modification outstanding recorded investment, net of related allowance | $ 1,170 |
Loans and Allowance for Loan 48
Loans and Allowance for Loan Losses - Schedule of Loans by Class Modified as TDR for Which There Was Payment Default Within Twelve Months Following Modification (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017Contract | Sep. 30, 2017Contract | Sep. 30, 2016USD ($)Contract | |
Financing Receivable Modifications [Line Items] | |||
Number of contracts | Contract | 0 | 0 | 1 |
Recorded investment | $ | $ 124 | ||
Consumer | |||
Financing Receivable Modifications [Line Items] | |||
Number of contracts | Contract | 1 | ||
Recorded investment | $ | $ 124 |
Federal Home Loan Bank Advanc49
Federal Home Loan Bank Advances - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank Advances [Line Items] | ||
Outstanding borrowings | $ 95,000 | $ 55,000 |
Investment securities, FHLB stock and commercial and residential real estate mortgage loans | ||
Federal Home Loan Bank Advances [Line Items] | ||
Mortgage loans collateralized amount | 367,000 | |
Amount of available credit | $ 108,000 |
Federal Home Loan Bank Advanc50
Federal Home Loan Bank Advances - Summary of Contractual Maturities and Average Effective Rates of Outstanding Advances (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank Advances Maturities Summary [Abstract] | ||
2,017 | $ 60,000 | |
2,017 | $ 55,000 | |
2,018 | 35,000 | |
Total amount | $ 95,000 | $ 55,000 |
2,017 | 1.18% | 0.80% |
2,018 | 1.50% | |
Total interest rates | 1.30% | 0.80% |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Loss) - Summary of Changes In Accumulated Other Comprehensive Income (Loss) By Component, Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | $ 139,207 | $ 108,586 | ||
Other comprehensive income (loss) before reclassification, net of tax | 1,309 | 660 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 663 | 263 | ||
Other comprehensive income (loss) | $ 583 | $ (289) | 1,972 | 923 |
Ending balance | 144,204 | 138,427 | 144,204 | 138,427 |
Gains and Losses on Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (4,241) | (3,704) | ||
Other comprehensive income (loss) before reclassification, net of tax | (193) | (1,086) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 589 | 261 | ||
Other comprehensive income (loss) | 396 | (825) | ||
Ending balance | (3,845) | (4,529) | (3,845) | (4,529) |
Unrealized Gains and Losses on Available for Sale Securities | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (698) | 105 | ||
Other comprehensive income (loss) before reclassification, net of tax | 1,502 | 1,746 | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (26) | (75) | ||
Other comprehensive income (loss) | 1,476 | 1,671 | ||
Ending balance | 778 | 1,776 | 778 | 1,776 |
Unrealized Losses on Securities Transferred to Held to Maturity | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (1,212) | (1,315) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 100 | 77 | ||
Other comprehensive income (loss) | 100 | 77 | ||
Ending balance | (1,112) | (1,238) | (1,112) | (1,238) |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (6,151) | (4,914) | ||
Other comprehensive income (loss) | 1,972 | 923 | ||
Ending balance | $ (4,179) | $ (3,991) | $ (4,179) | $ (3,991) |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Income (Loss) - Summary of Significant Amounts Reclassified out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Net (gain) loss on sale of securities | $ (42) | $ (121) | ||
Interest expense - Federal Home Loan Bank advances | $ 563 | $ 97 | 1,083 | 280 |
Income tax expense (benefit) | 1,516 | 1,042 | 141 | 2,998 |
Net of tax | (4,419) | (2,109) | (1,409) | (6,169) |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Losses on Cash Flow Hedges | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Interest expense money market | 109 | 38 | 322 | 113 |
Interest expense - Federal Home Loan Bank advances | 168 | 50 | 267 | 148 |
Net of tax | 277 | 88 | 589 | 261 |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized (Gains) and Losses on Available for Sale Securities | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Net (gain) loss on sale of securities | (9) | 4 | (42) | (121) |
Income tax expense (benefit) | 3 | (2) | 16 | 46 |
Net of tax | (6) | 2 | (26) | (75) |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Losses on Securities Transferred to Held to Maturity | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Interest income - securities | 79 | 42 | 162 | 125 |
Income tax expense (benefit) | (30) | (16) | (62) | (48) |
Net of tax | $ 49 | $ 26 | $ 100 | $ 77 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Line Items] | ||||
Effective tax rate | 25.50% | 33.10% | 9.10% | 32.70% |
Income tax expense | $ (144,000) | $ (310,000) | ||
Federal statutory income tax rate | 34.00% | 34.00% | 34.00% | 34.00% |
Tennessee | State and Local Jurisdiction | ||||
Income Taxes [Line Items] | ||||
Excise tax rate | 6.50% | 6.50% | 6.50% | 6.50% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Financial Instruments Representing Credit Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Commitments And Contingencies Disclosure [Abstract] | ||
Unused commitments to extend credit | $ 575,558 | $ 508,990 |
Standby letters of credit | 11,535 | 10,886 |
Total | $ 587,093 | $ 519,876 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - Designated as Hedging Instrument - Interest Rate Swaps - Cash Flow Hedges - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Notional amounts | $ 20,000,000 | $ 20,000,000 |
Investment securities pledged collateral to counterparties | 2,700,000 | |
Investment securities pledged collateral from counterparties | $ 0 |
Derivatives - Summary of Intere
Derivatives - Summary of Interest-Rate Swaps Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument - Cash Flow Hedges - Interest Rate Swaps - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amounts | $ 20,000,000 | $ 20,000,000 |
Weighted average pay rates | 3.54% | 3.54% |
Weighted average receive rates | Sep, 2017: 3 month LIBOR and Dec. 31, 2016: 3 month LIBOR | |
Weighted average maturity | 5 years 8 months 12 days | 6 years 6 months |
Fair value | $ (1,658,000) | $ (1,535,000) |
Amount of unrealized loss recognized in accumulated other comprehensive income, net of tax | $ (1,023,000) | $ (947,000) |
Derivatives - Summary of Custom
Derivatives - Summary of Customer Related Interest Rate Swaps (Details) - Interest Rate Swaps - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Interest rate swap, Notional amount | $ 92,042,000 | $ 82,508,000 |
Pay fixed/receive variable swaps | ||
Derivative [Line Items] | ||
Interest rate swap, Notional amount | 46,021,000 | 41,254,000 |
Interest rate swap, Estimated fair value | (250,000) | (460,000) |
Pay variable/receive fixed swaps | ||
Derivative [Line Items] | ||
Interest rate swap, Notional amount | 46,021,000 | 41,254,000 |
Interest rate swap, Estimated fair value | $ 250,000 | $ 460,000 |
Stock Options and Restricted 58
Stock Options and Restricted Shares - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 1.6 | |
Total fair value of shares vested | $ 1.1 | $ 0.5 |
Vesting period | 3 years | |
Contractual term | 10 years | |
Expected dividend yield | 0.00% | |
Options granted | 0 | |
Unrecognized compensation cost | $ 0.1 | |
Restricted Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Cost expected to be recognized over a weighted-average period | 1 year 10 months 24 days | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Cost expected to be recognized over a weighted-average period | 1 year 9 months 18 days | |
CapStar Bank 2008 Stock Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares of stock reserved for issuance of stock incentives | 1,569,475 | |
Shares issuable under both restricted share and stock option grants | 169,867 |
Stock Options and Restricted 59
Stock Options and Restricted Shares - Summary of Company Recognized Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Stock-based compensation expense before income taxes | $ 288 | $ 212 | $ 771 | $ 643 |
Less: deferred tax benefit | (110) | (81) | (295) | (246) |
Reduction of net income | $ 178 | $ 131 | $ 476 | $ 397 |
Stock Options and Restricted 60
Stock Options and Restricted Shares - Summary of Changes in Company's Nonvested Restricted Shares (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Restricted Shares, Abstract | |
Restricted Shares, Nonvested Beginning Balance | shares | 199,641 |
Restricted Shares, Granted | shares | 37,233 |
Restricted Shares, Vested | shares | (58,921) |
Restricted Shares, Forfeited | shares | (3,600) |
Restricted Shares, Nonvested Ending Balance | shares | 174,353 |
Weighted Average Grant Date Fair Value, Abstract | |
Weighted Average Grant Date Fair Value, Nonvested Beginning Balance | $ / shares | $ 12.34 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 18.05 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 12.24 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 13.57 |
Weighted Average Grant Date Fair Value, Nonvested Ending Balance | $ / shares | $ 13.56 |
Stock Options and Restricted 61
Stock Options and Restricted Shares - Summary of Fair Value of Options Granted Using Weighted Average Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected dividend yield | 0.00% | |
Expected term (in years) | 0 years | 7 years 5 months 23 days |
Expected stock price volatility | 17.20% | |
Risk-free interest rate | 1.66% | |
Pre-vest forfeiture rate | 10.25% |
Stock Options and Restricted 62
Stock Options and Restricted Shares - Summary of Activity in Stock Options (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Shares, Abstract | |
Shares Outstanding, Beginning Balance | 1,006,000 |
Shares Outstanding, Granted | 0 |
Shares Outstanding, Exercised | (82,150) |
Shares Outstanding, Ending Balance | 923,850 |
Shares, Fully Vested and Expected to Vest | 918,437 |
Shares, Exercisable at End of Period | 875,100 |
Weighted Average Exercise Price, Abstract | |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares | $ 10.48 |
Weighted Average Exercise Price Outstanding, Exercised | $ / shares | 10 |
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares | 10.52 |
Weighted Average Exercise Price, Fully vested and expected to vest | $ / shares | 10.51 |
Weighted Average Exercise Price, Exercisable at End of Period | $ / shares | $ 10.43 |
Weighted Average Remaining Contractual Term (year), Abstract | |
Weighted Average Remaining Contractual Term Outstanding | 2 years 6 months |
Weighted Average Remaining Contractual Term, Fully Vested and Expected to Vest | 2 years 6 months |
Weighted Average Remaining Contractual Term, Exercisable at End of Period | 2 years 2 months 12 days |
Stock Options and Restricted 63
Stock Options and Restricted Shares - Information Related to Stock Options (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Intrinsic value of options exercised | $ 684,275 | |
Cash received from option exercises | 821,500 | |
Tax benefit realized from option exercises | $ 263,446 | |
Weighted average fair value of options granted | $ 3.16 |
Regulatory Capital Requiremen64
Regulatory Capital Requirements - Schedule of Capital Amounts and Ratios (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
CapStar Financial Holdings, Inc. | |||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 155,426 | $ 149,616 | |
Tier I capital to risk-weighted assets, actual amount | 141,125 | 137,909 | |
Tier I capital to average assets, actual amount | $ 141,125 | $ 137,909 | |
Total capital to risk-weighted assets, actual ratio | 12.42% | 12.60% | |
Tier I capital to risk-weighted assets, actual ratio | 11.28% | 11.61% | |
Tier I capital to average assets, actual ratio | 10.36% | 10.46% | |
Total capital to risk-weighted assets, minimum capital requirement amount | [1] | $ 100,130 | $ 95,028 |
Tier I capital to risk-weighted assets, minimum capital requirement amount | [1] | 75,098 | 71,271 |
Tier I capital to average assets, minimum capital requirement amount | [1] | $ 54,464 | $ 52,727 |
Total capital to risk-weighted assets, minimum capital requirement ratio | [1] | 8.00% | 8.00% |
Tier I capital to risk-weighted assets, minimum capital requirement ratio | [1] | 6.00% | 6.00% |
Tier I capital to average assets, minimum capital requirement ratio | [1] | 4.00% | 4.00% |
CapStar Financial Holdings, Inc. | Common Stock | |||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | |||
Tier I capital to risk-weighted assets, actual amount | $ 132,417 | $ 129,528 | |
Tier I capital to risk-weighted assets, actual ratio | 10.58% | 10.90% | |
Tier I capital to risk-weighted assets, minimum capital requirement amount | [1] | $ 56,323 | $ 53,453 |
Tier I capital to risk-weighted assets, minimum capital requirement ratio | [1] | 4.50% | 4.50% |
CapStar Bank | |||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 141,843 | $ 126,718 | |
Tier I capital to risk-weighted assets, actual amount | 127,542 | 115,011 | |
Tier I capital to average assets, actual amount | $ 127,542 | $ 115,011 | |
Total capital to risk-weighted assets, actual ratio | 11.33% | 10.67% | |
Tier I capital to risk-weighted assets, actual ratio | 10.19% | 9.68% | |
Tier I capital to average assets, actual ratio | 9.37% | 8.72% | |
Total capital to risk-weighted assets, minimum capital requirement amount | [1] | $ 100,118 | $ 95,028 |
Tier I capital to risk-weighted assets, minimum capital requirement amount | [1] | 75,088 | 71,271 |
Tier I capital to average assets, minimum capital requirement amount | [1] | $ 54,463 | $ 52,727 |
Total capital to risk-weighted assets, minimum capital requirement ratio | [1] | 8.00% | 8.00% |
Tier I capital to risk-weighted assets, minimum capital requirement ratio | [1] | 6.00% | 6.00% |
Tier I capital to average assets, minimum capital requirement ratio | [1] | 4.00% | 4.00% |
Total capital to risk-weighted assets, minimum to be well capitalized amount | [2] | $ 125,147 | $ 118,785 |
Tier I capital to risk-weighted assets, minimum to be well capitalized amount | [2] | 100,118 | 95,028 |
Tier I capital to average assets, minimum to be well capitalized amount | [2] | $ 68,079 | $ 65,909 |
Total capital to risk-weighted assets, minimum to be well capitalized ratio | [2] | 10.00% | 10.00% |
Tier I capital to risk-weighted assets, minimum to be well capitalized ratio | [2] | 8.00% | 8.00% |
Tier I capital to average assets, minimum to be well capitalized ratio | [2] | 5.00% | 5.00% |
CapStar Bank | Common Stock | |||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | |||
Tier I capital to risk-weighted assets, actual amount | $ 111,334 | $ 99,130 | |
Tier I capital to risk-weighted assets, actual ratio | 8.90% | 8.35% | |
Tier I capital to risk-weighted assets, minimum capital requirement amount | [1] | $ 56,316 | $ 53,453 |
Tier I capital to risk-weighted assets, minimum capital requirement ratio | [1] | 4.50% | 4.50% |
Tier I capital to risk-weighted assets, minimum to be well capitalized amount | [2] | $ 81,346 | $ 77,210 |
Tier I capital to risk-weighted assets, minimum to be well capitalized ratio | [2] | 6.50% | 6.50% |
[1] | For the calendar year 2017, the Company must maintain a capital conservation buffer of Tier 1 common equity capital in excess of minimum risk-based capital ratios by at least 1.25% to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. | ||
[2] | For the Company to be well-capitalized, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure. |
Regulatory Capital Requiremen65
Regulatory Capital Requirements - Schedule of Capital Amounts and Ratios (Parenthetical) (Details) | Sep. 30, 2017 |
Banking And Thrift [Abstract] | |
Minimum risk based capital ratios | 1.25% |
Earning Per Share - Summary of
Earning Per Share - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic net income per share calculation: | ||||
Numerator – Net income | $ 4,419 | $ 2,109 | $ 1,409 | $ 6,169 |
Denominator – Average common shares outstanding | 11,279,364 | 8,792,665 | 11,239,093 | 8,701,596 |
Basic net income per share of common stock | $ 0.39 | $ 0.24 | $ 0.13 | $ 0.71 |
Diluted net income per share calculation: | ||||
Numerator – Net income | $ 4,419 | $ 2,109 | $ 1,409 | $ 6,169 |
Denominator – Average common shares outstanding | 11,279,364 | 8,792,665 | 11,239,093 | 8,701,596 |
Dilutive shares contingently issuable | 1,471,059 | 2,006,871 | 1,518,998 | 1,981,380 |
Average diluted common shares outstanding | 12,750,423 | 10,799,536 | 12,758,091 | 10,682,976 |
Diluted net income per share of common stock | $ 0.35 | $ 0.20 | $ 0.11 | $ 0.58 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Other real estate owned | $ 0 | $ 0 |
Loans held for sale carried at fair value | $ 0 | $ 0 |
Fair Value - Summary of Assets
Fair Value - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Total securities available for sale | $ 146,600 | $ 182,355 |
Obligations of States and Political Subdivisions | ||
Assets: | ||
Total securities available for sale | 19,067 | 27,913 |
Asset-backed securities | ||
Assets: | ||
Total securities available for sale | 20,411 | 20,473 |
Fair Value Measurements Recurring Basis | ||
Assets: | ||
Total securities available for sale | 146,600 | 182,355 |
Liabilities: | ||
Total derivatives | (2,010) | (1,995) |
Fair Value Measurements Recurring Basis | U.S. Government-sponsored Agencies | ||
Assets: | ||
Total securities available for sale | 11,299 | 9,374 |
Fair Value Measurements Recurring Basis | Obligations of States and Political Subdivisions | ||
Assets: | ||
Total securities available for sale | 19,067 | 27,913 |
Fair Value Measurements Recurring Basis | Mortgage-backed Securities-residential | ||
Assets: | ||
Total securities available for sale | 95,823 | 124,595 |
Fair Value Measurements Recurring Basis | Asset-backed securities | ||
Assets: | ||
Total securities available for sale | 20,411 | 20,473 |
Fair Value Measurements Recurring Basis | Interest Rate Swaps - Customer Related | ||
Assets: | ||
Interest rate swaps - customer related | 352 | 460 |
Liabilities: | ||
Total derivatives | (352) | (460) |
Fair Value Measurements Recurring Basis | Interest Rate Swaps - Cash Flow Hedges | ||
Liabilities: | ||
Total derivatives | (1,658) | (1,535) |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total securities available for sale | 146,600 | 182,355 |
Liabilities: | ||
Total derivatives | (2,010) | (1,995) |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | U.S. Government-sponsored Agencies | ||
Assets: | ||
Total securities available for sale | 11,299 | 9,374 |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | Obligations of States and Political Subdivisions | ||
Assets: | ||
Total securities available for sale | 19,067 | 27,913 |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed Securities-residential | ||
Assets: | ||
Total securities available for sale | 95,823 | 124,595 |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Assets: | ||
Total securities available for sale | 20,411 | 20,473 |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | Interest Rate Swaps - Customer Related | ||
Assets: | ||
Interest rate swaps - customer related | 352 | 460 |
Liabilities: | ||
Total derivatives | (352) | (460) |
Fair Value Measurements Recurring Basis | Significant Other Observable Inputs (Level 2) | Interest Rate Swaps - Cash Flow Hedges | ||
Liabilities: | ||
Total derivatives | $ (1,658) | $ (1,535) |
Fair Value - Summary of Asset69
Fair Value - Summary of Assets Measured at Fair Value on a Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - Commercial and industrial - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Impaired loans | $ 1,432 | $ 1,809 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Impaired loans | $ 1,432 | $ 1,809 |
Fair Value - Summary of Quantit
Fair Value - Summary of Quantitative Information About Level 3 Fair Value Measurements for Assets Measured at Fair Value on a Non-Recurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - Commercial and industrial - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 1,432 | $ 1,809 |
Level 3 Fair Value Measurements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 1,432 | $ 1,809 |
Valuation Technique(s) | Sep. 30, 2017: Sales comparison approach and Dec. 31, 2016: Sales comparison approach | |
Unobservable Input(s) | Sep. 30, 2017: Appraisal discounts and Dec. 31, 2016: Appraisal discounts | |
Range (Weighted-Average) | 25.00% | 25.00% |
Fair Value - Summary of Carryin
Fair Value - Summary of Carrying Value and Fair Values of the Bank's Financial Instruments (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Securities available for sale | $ 146,600,000 | $ 182,355,000 |
Securities held to maturity, fair value | 48,980,000 | 49,731,000 |
Loans held for sale | 0 | 0 |
Carrying amount | ||
Financial assets: | ||
Restricted equity securities | 8,799,000 | 6,032,000 |
Carrying amount | Level 1 | ||
Financial assets: | ||
Cash and due from banks, interest-bearing deposits in financial institutions | 69,789,000 | 63,456,000 |
Federal funds sold | 16,654,000 | |
Carrying amount | Level 2 | ||
Financial assets: | ||
Securities available for sale | 146,600,000 | 182,355,000 |
Securities held to maturity, fair value | 45,635,000 | 46,864,000 |
Loans held for sale | 53,225,000 | 42,111,000 |
Accrued interest receivable | 3,849,000 | 3,942,000 |
Bank owned life insurance | 22,335,000 | 21,900,000 |
Other assets | 352,000 | 460,000 |
Financial liabilities: | ||
Federal Home Loan Bank advances | 95,000,000 | 55,000,000 |
Accrued interest payable | 305,000 | 212,000 |
Carrying amount | Level 3 Fair Value Measurements | ||
Financial assets: | ||
Loans, net of unearned income | 974,530,000 | 935,251,000 |
Financial liabilities: | ||
Deposits | 1,091,495,000 | 1,128,723,000 |
Other liabilities | 3,800,000 | 5,349,000 |
Fair value | Level 1 | ||
Financial assets: | ||
Cash and due from banks, interest-bearing deposits in financial institutions | 69,789,000 | 63,456,000 |
Federal funds sold | 16,654,000 | |
Fair value | Level 2 | ||
Financial assets: | ||
Securities available for sale | 146,600,000 | 182,355,000 |
Securities held to maturity, fair value | 48,980,000 | 49,731,000 |
Loans held for sale | 54,407,000 | 42,302,000 |
Accrued interest receivable | 3,849,000 | 3,942,000 |
Bank owned life insurance | 22,335,000 | 21,900,000 |
Other assets | 352,000 | 460,000 |
Financial liabilities: | ||
Federal Home Loan Bank advances | 94,980,000 | 54,989,000 |
Accrued interest payable | 305,000 | 212,000 |
Fair value | Level 3 Fair Value Measurements | ||
Financial assets: | ||
Loans, net of unearned income | 974,551,000 | 934,628,000 |
Financial liabilities: | ||
Deposits | 1,050,801,000 | 1,088,758,000 |
Other liabilities | $ 3,800,000 | $ 5,349,000 |