Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | OLD SECOND BANCORP INC | |
Entity Central Index Key | 357,173 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,554,716 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and due from banks | $ 29,203 | $ 26,975 |
Interest bearing deposits with financial institutions | 160,744 | 13,363 |
Cash and cash equivalents | 189,947 | 40,338 |
Securities available-for-sale, at fair value | 531,057 | 456,066 |
Securities held-to-maturity, at amortized cost | 247,746 | |
Federal Home Loan Bank and Federal Reserve Bank stock | 7,918 | 8,518 |
Loans held-for-sale | 3,750 | 2,849 |
Loans | 1,202,852 | 1,133,715 |
Less: allowance for loan losses | 14,983 | 16,223 |
Net loans | 1,187,869 | 1,117,492 |
Premises and equipment, net | 39,092 | 39,612 |
Other real estate owned | 14,144 | 19,141 |
Mortgage servicing rights, net | 5,075 | 5,847 |
Bank-owned life insurance (BOLI) | 60,036 | 59,049 |
Deferred tax assets, net | 55,536 | 64,552 |
Other assets | 18,327 | 15,818 |
Total assets | 2,112,751 | 2,077,028 |
Deposits: | ||
Noninterest bearing demand | 473,477 | 442,639 |
Interest bearing: | ||
Savings, NOW, and money market | 904,137 | 908,598 |
Time | 399,768 | 407,849 |
Total deposits | 1,777,382 | 1,759,086 |
Securities sold under repurchase agreements | 46,606 | 34,070 |
Other short-term borrowings | 15,000 | |
Junior subordinated debentures | 57,579 | 57,543 |
Subordinated debt | 45,000 | 45,000 |
Notes payable and other borrowings | 500 | 500 |
Other liabilities | 14,057 | 9,900 |
Total liabilities | 1,941,124 | 1,921,099 |
Stockholders' Equity | ||
Common stock | 34,533 | 34,427 |
Additional paid-in capital | 116,468 | 115,918 |
Retained earnings | 124,283 | 114,209 |
Accumulated other comprehensive loss | (7,437) | (12,659) |
Treasury stock | (96,220) | (95,966) |
Total stockholders' equity | 171,627 | 155,929 |
Total liabilities and stockholders' equity | $ 2,112,751 | $ 2,077,028 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Preferred stock, Par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, Shares authorized | 300,000 | 300,000 |
Common stock, Par value (in dollars per share) | $ 1 | $ 1 |
Common Stock, Shares authorized | 60,000,000 | 60,000,000 |
Common stock, Shares issued | 34,532,734 | 34,427,234 |
Common stock, Shares outstanding | 29,554,716 | 29,483,429 |
Treasury stock, Shares | 4,978,018 | 4,943,805 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest and Dividend Income | ||||
Loans, including fees | $ 13,496 | $ 13,353 | $ 39,593 | $ 40,038 |
Loans held-for-sale | 48 | 38 | 115 | 153 |
Securities: | ||||
Taxable | 3,954 | 3,471 | 12,547 | 10,218 |
Tax exempt | 180 | 122 | 579 | 426 |
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock | 83 | 76 | 251 | 230 |
Interest bearing deposits with financial institutions | 64 | 12 | 98 | 43 |
Total interest and dividend income | 17,825 | 17,072 | 53,183 | 51,108 |
Interest Expense | ||||
Savings, NOW, and money market deposits | 193 | 185 | 577 | 547 |
Time deposits | 931 | 799 | 2,622 | 2,377 |
Other short-term borrowings | 23 | 6 | 69 | 22 |
Junior subordinated debentures | 1,084 | 1,072 | 3,251 | 3,215 |
Subordinated debt | 245 | 205 | 727 | 604 |
Notes payable and other borrowings | 2 | 1 | 6 | 5 |
Total interest expense | 2,478 | 2,268 | 7,252 | 6,770 |
Net interest and dividend income | 15,347 | 14,804 | 45,931 | 44,338 |
Loan loss reserve release | (2,100) | (4,400) | ||
Net interest and dividend income after release for loan losses | 15,347 | 16,904 | 45,931 | 48,738 |
Noninterest Income | ||||
Trust income | 1,403 | 1,444 | 4,274 | 4,526 |
Service charges on deposits | 1,756 | 1,766 | 4,961 | 5,086 |
Secondary mortgage fees | 322 | 190 | 795 | 715 |
Mortgage servicing gain / (loss), net of changes in fair value | 290 | (274) | (641) | 18 |
Net gain on sales of mortgage loans | 2,177 | 1,359 | 5,031 | 4,677 |
Securities loss, net | (1,959) | (57) | (2,020) | (178) |
Increase in cash surrender value of bank-owned life insurance | 383 | 236 | 987 | 1,015 |
Debit card interchange income | 1,013 | 1,004 | 3,009 | 3,013 |
(Loss) gain on disposal and transfer of fixed assets | (1,143) | (1) | (1,143) | |
Other income | 1,209 | 1,123 | 3,751 | 4,156 |
Total noninterest income | 6,594 | 5,648 | 20,146 | 21,885 |
Noninterest Expense | ||||
Salaries and employee benefits | 9,014 | 8,260 | 26,854 | 26,664 |
Occupancy expense, net | 1,120 | 1,156 | 3,358 | 3,521 |
Furniture and equipment expense | 1,144 | 1,110 | 3,180 | 3,176 |
FDIC insurance | 228 | 373 | 793 | 1,023 |
General bank insurance | 269 | 308 | 839 | 975 |
Advertising expense | 430 | 434 | 1,212 | 992 |
Debit card interchange expense | 363 | 379 | 1,186 | 1,131 |
Legal fees | 242 | 279 | 594 | 922 |
Other real estate expense, net | 426 | 977 | 2,043 | 4,717 |
Other expense | 3,346 | 2,968 | 9,487 | 9,203 |
Total noninterest expense | 16,582 | 16,244 | 49,546 | 52,324 |
Income before income taxes | 5,359 | 6,308 | 16,531 | 18,299 |
Provision for income taxes | 1,860 | 2,384 | 5,865 | 6,747 |
Net income | 3,499 | 3,924 | 10,666 | 11,552 |
Preferred stock dividends and accretion of discount | 339 | 1,873 | ||
Net income available to common stockholders | $ 3,499 | $ 3,585 | $ 10,666 | $ 9,679 |
Basic earnings per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.33 |
Diluted earnings per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.33 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 3,499 | $ 3,924 | $ 10,666 | $ 11,552 |
Unrealized holding (losses) gains on available-for-sale securities arising during the period | (616) | (5,191) | 5,151 | (4,845) |
Related tax benefit (expense) | 237 | 2,079 | (2,071) | 1,869 |
Holding (losses) gains after tax on available-for-sale securities | (379) | (3,112) | 3,080 | (2,976) |
Less: Reclassification adjustment for the net (losses) gains realized during the period | ||||
Net realized (losses) gains | (1,959) | (57) | (2,020) | (178) |
Income tax benefit (expense) on net realized gains | 782 | 23 | 807 | 71 |
Net realized (losses) gains after tax | (1,177) | (34) | (1,213) | (107) |
Other comprehensive (loss) income on available-for-sale securities | 798 | (3,078) | 4,293 | (2,869) |
Accretion of net unrealized holding gains on held-to-maturity transferred from available-for-sale securities | 242 | 5,939 | 739 | |
Related tax expense | (100) | (2,446) | (304) | |
Other comprehensive income on held-to-maturity securities | 142 | 3,493 | 435 | |
Changes in fair value of derivatives used for cashflow hedges | (254) | (816) | (4,278) | (816) |
Related tax benefit | 102 | 1,714 | ||
Other comprehensive loss on cashflow hedges | (152) | (816) | (2,564) | (816) |
Total other comprehensive income (loss) income | 646 | (3,752) | 5,222 | (3,250) |
Total comprehensive income | $ 4,145 | $ 172 | $ 15,888 | $ 8,302 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income | $ 10,666 | $ 11,552 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of leasehold improvement | 1,682 | 1,816 |
Change in fair value of mortgage servicing rights | 1,920 | 1,201 |
Loan loss reserve release | (4,400) | |
Provision for deferred tax expense | 5,476 | 6,485 |
Originations of loans held-for-sale | (147,186) | (153,990) |
Proceeds from sales of loans held-for-sale | 150,247 | 158,621 |
Net gain on sales of mortgage loans | (5,031) | (4,677) |
Change in current income taxes receivable (payable) | 300 | 11 |
Increase in cash surrender value of bank-owned life insurance | (987) | (624) |
Change in accrued interest receivable and other assets | (2,659) | (2,413) |
Change in accrued interest payable and other liabilities | (246) | (3,385) |
Net discount (accretion)/premium amortization on securities | (517) | 226 |
Securities losses, net | 2,020 | 178 |
Amortization of junior subordinated debentures issuance costs | 36 | 35 |
Stock based compensation | 482 | 466 |
Net gain on sale of other real estate owned | (316) | (769) |
Provision for other real estate owned losses | 1,305 | 3,825 |
Net loss on disposal of fixed assets | 1 | 4 |
Loss on transfer of premises to other real estate owned | 1,139 | |
Net cash provided by (used in) operating activities | 17,193 | 15,301 |
Cash flows from investing activities | ||
Proceeds from maturities and calls including pay down of securities available-for-sale | 62,868 | 33,035 |
Proceeds from sales of securities available-for-sale | 271,374 | 70,176 |
Purchases of securities available-for-sale | (153,252) | (131,956) |
Proceeds from maturities and calls including pay down of securities held-to-maturity | 3,372 | 10,689 |
Proceeds from sales of Federal Home Loan Bank stock | 600 | 787 |
Net change in loans | (71,600) | 18,403 |
Improvements in other real estate owned | (16) | |
Proceeds from sales of other real estate owned | 5,247 | 12,336 |
Net purchases of premises and equipment | (1,163) | (793) |
Net cash (used in) provided by investing activities | 117,430 | 12,677 |
Cash flows from financing activities | ||
Net change in deposits | 18,296 | 35,424 |
Net change in securities sold under repurchase agreements | 12,536 | 6,038 |
Net change in other short-term borrowings | (15,000) | (10,000) |
Redemption of preferred stock | (47,331) | |
Dividends paid on preferred stock | (2,417) | |
Dividends paid common stock | (592) | |
Purchase of treasury stock | (254) | (117) |
Net cash (used in) provided by financing activities | 14,986 | (18,403) |
Net change in cash and cash equivalents | 149,609 | 9,575 |
Cash and cash equivalents at beginning of period | 40,338 | 44,197 |
Cash and cash equivalents at end of period | 189,947 | 53,772 |
Supplemental cash flow information | ||
Income taxes paid | 160 | 250 |
Interest paid for deposits | 3,142 | 2,964 |
Interest paid for borrowings | 4,021 | 3,848 |
Non-cash transfer of loans to other real estate owned | 1,223 | 7,393 |
Non-cash transfer of loans to securities available-for-sale | 468 | |
Non-cash transfer of securities held-to-maturity to securities available-for-sale | $ 244,823 | |
Change in dividends accrued | $ (544) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Preferred Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Balance at Dec. 31, 2014 | $ 34,365 | $ 47,331 | $ 115,332 | $ 100,697 | $ (7,713) | $ (95,849) | $ 194,163 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 11,552 | 11,552 | |||||
Other comprehensive gain, net of tax | (3,250) | (3,250) | |||||
Change in restricted stock | 58 | (58) | |||||
Tax effect from vesting of restricted stock | (33) | (33) | |||||
Stock based compensation | 466 | 466 | |||||
Purchase of treasury stock | (117) | (117) | |||||
Redemption of preferred stock | $ (47,331) | (47,331) | |||||
Preferred stock accretion and declared dividends | (1,873) | (1,873) | |||||
Balance at Sep. 30, 2015 | 34,423 | 115,773 | 110,376 | (10,963) | (95,966) | 153,643 | |
Balance at Dec. 31, 2015 | 34,427 | 115,918 | 114,209 | (12,659) | (95,966) | 155,929 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 10,666 | 10,666 | |||||
Other comprehensive gain, net of tax | 5,222 | 5,222 | |||||
Dividends declared and paid | (592) | (592) | |||||
Change in restricted stock | 106 | (106) | |||||
Tax effect from vesting of restricted stock | 174 | 174 | |||||
Stock based compensation | 482 | 482 | |||||
Purchase of treasury stock | (254) | (254) | |||||
Balance at Sep. 30, 2016 | $ 34,533 | $ 116,468 | $ 124,283 | $ (7,437) | $ (96,220) | $ 171,627 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies The accounting policies followed in the preparation of the interim consolidated financial statements are consistent with those used in the preparation of the annual financial information. The interim consolidated financial statements reflect all normal and recurring adjustments that are necessary, in the opinion of management, for a fair statement of results for the interim period presented. Results for the period ended September 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These interim consolidated financial statements are unaudited and should be read in conjunction with the audited financial statements and notes included in Old Second Bancorp, Inc.’s (the “Company”) annual report on Form 10-K for the year ended December 31, 2015. Unless otherwise indicated, amounts in the tables contained in the notes to the consolidated financial statements are in thousands. Certain items in prior periods have been reclassified to conform to the current presentation. The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the consolidated financial statements. Future changes in information may affect these estimates, assumptions, and judgments, which, in turn, may affect amounts reported in the consolidated financial statements. All significant accounting policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the consolidated financial statements and how those values are determined. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14 “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date .” This accounting standards update defers the effective date of ASU 2014-09 for an additional year. ASU 2015-14 will be effective for annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is not permitted. In March 2016, the FASB issued ASU 2016-08 “ Revenue from Contracts with Customers (TOPIC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” and in April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (TOPIC 606): Identifying Performance Obligations and Licensing.” ASU 2016-08 requires the entity to determine if it is acting as a principal with control over the goods or services it is contractually obligated to provide, or an agent with no control over specified goods or services provided by another party to a customer. ASU 2016-10 was issued to further clarify ASU 2014-09 implementation regarding identifying performance obligation materiality, identification of key contract components, and scope. The Company is assessing the impact of ASU 2014-09 and other related ASUs as noted above on its accounting and disclosures. In April 2015, the FASB issued ASU No. 2015-03 “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 amended prior guidance to simplify the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard did not have a material effect to the Company’s operating results or financial condition. This standard was adopted by the Company effective January 2016. In March 2016, the FASB issued ASU No. 2016-09 “ Improvements to Employee Share-Based Payment Accounting. ” FASB issued this ASU as part of the Simplification Initiative. This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016. The Company is assessing the impact of ASU 2016-09 on its accounting and disclosures. In June 2016, the FASB issued ASU No. 2016-13 “ Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date to enhance the decision making process. ASU 2016-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures. Subsequent Events On October 18, 2016, the Company’s Board of Directors declared a cash dividend of 1 cent per share payable on November 7, 2016, to stockholders of record as of October 28, 2016. On October 28, 2016, the bank completed its previously announced acquisition of the Chicago branch of Talmer Bank and Trust, the banking subsidiary of Talmer Bancorp, Inc. (“Talmer”). As a result of the transaction, the Bank acquired approximately $48.9 million of deposits and $223.4 million of loans. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2016 | |
Securities | |
Securities | Note 2 – Securities Investment Portfolio Management Our investment portfolio serves the liquidity needs and income objectives of the Company. While the portfolio serves as an important component of the overall liquidity management at the Bank, portions of the portfolio also serve as income producing assets. The size and composition of the portfolio reflects liquidity needs, loan demand and interest income objectives. Portfolio size and composition will be adjusted from time to time. While a significant portion of the portfolio consists of readily marketable securities to address liquidity, other parts of the portfolio may reflect funds invested pending future loan demand or to maximize interest income without undue interest rate risk. Investments are comprised of debt securities and non-marketable equity investments. Securities available-for-sale are carried at fair value. Unrealized gains and losses, net of tax, on securities available-for-sale are reported as a separate component of equity. This balance sheet component changes as interest rates and market conditions change. Unrealized gains and losses are not included in the calculation of regulatory capital. In the second quarter of 2016, the securities held-to-maturity portfolio was reclassified to available-for-sale to allow for portfolio restructuring and to fund loan growth. This transfer of $244.8 million at net book value was approved by the Board of Directors, and will preclude any holdings of securities held-to-maturity for a two year period. In the third quarter of 2016, approximately $233.5 million of securities available-for-sale were sold to satisfy anticipated funding requirements for the acquisition of the Talmer branch. Securities losses of $2.0 million pretax were realized upon these sales. Nonmarketable equity investments include Federal Home Loan Bank of Chicago (“FHLBC”) stock and Federal Reserve Bank of Chicago (“Reserve Bank”) stock. FHLBC stock was recorded at $3.2 million at September 30, 2016, and $3.7 million at December 31, 2015. Reserve Bank stock was recorded at $4.8 million at September 30, 2016, and December 31, 2015. Our FHLBC stock is necessary to maintain access to FHLBC advances. The following table summarizes the amortized cost and fair value of the securities portfolio at September 30, 2016, and December 31, 2015, and the corresponding amounts of gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized Fair September 30, 2016 Cost Gains Losses Value Securities available-for-sale U.S. government agencies $ $ - $ $ U.S. government agencies mortgage-backed - States and political subdivisions - Corporate bonds - Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations - Total securities available-for-sale $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value Securities available-for-sale U.S. Treasury $ $ - $ - $ U.S. government agencies - U.S. government agencies mortgage-backed States and political subdivisions Corporate bonds - Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations - Total securities available-for-sale $ $ $ $ Securities held-to-maturity U.S. government agency mortgage-backed $ $ $ - $ Collateralized mortgage obligations Total securities held-to-maturity $ $ $ $ The fair value, amortized cost and weighted average yield of debt securities at September 30, 2016, by contractual maturity, were as follows in the table below. Securities not due at a single maturity date are shown separately. Weighted Amortized Average Fair Securities available-for-sale Cost Yield Value Due in one year or less $ % $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed and collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ % $ At September 30, 2016, the Company’s investments include $118.9 million of asset-backed securities that are backed by student loans originated under the Federal Family Education Loan program (“FFEL”). Under the FFEL, private lenders made federally guaranteed student loans to parents and students and packaged and sold them as asset-backed securities. While the program was modified several times before elimination in 2010, not less than 97% of the outstanding principal amount of the loans made under FFEL are guaranteed by the U.S. Department of Education. In addition to the U.S. Department of Education guarantee, total added credit enhancement in the form of overcollateralization and/or subordination amounted to $12.8 million, or 9.62%, of outstanding principal. Securities with unrealized losses at September 30, 2016, and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands except for number of securities): Less than 12 months 12 months or more September 30, 2016 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies - $ - $ - $ $ $ $ Corporate bonds Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ $ $ $ $ $ Less than 12 months 12 months or more December 31, 2015 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies - $ - $ - $ $ $ $ U.S. government agencies mortgage-backed - - - States and political subdivisions Corporate bonds Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity Collateralized mortgage obligations $ $ $ $ $ $ Total securities held-to-maturity $ $ $ $ $ $ Recognition of other-than-temporary impairment was not necessary in the three and nine months ending September 30, 2016, or the year ended December 31, 2015. The changes in fair value related primarily to interest rate fluctuations. Our review of other-than-temporary impairment determined that there was no credit quality deterioration. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2016 | |
Loans | |
Loans | Note 3 – Loans Major classifications of loans were as follows: September 30, 2016 December 31, 2015 Commercial $ $ Real estate - commercial Real estate - construction Real estate - residential Consumer Overdraft Lease financing receivables Other Net deferred loan costs Total loans $ $ It is the policy of the Company to review each prospective credit prior to making a loan in order to determine if an adequate level of security or collateral has been obtained. The type of collateral, when required, will vary from liquid assets to real estate. The Company’s access to collateral, in the event of borrower default, is assured through adherence to lending laws, the Company’s lending standards and credit monitoring procedures. With selected exceptions, the Bank makes loans solely within its market area. There are no significant concentrations of loans where the customers’ ability to honor loan terms is dependent upon a single economic sector, although the real estate related categories listed above represent 83.5% and 86.1% of the portfolio at September 30, 2016, and December 31, 2015, respectively. Aged analysis of past due loans by class of loans was as follows: Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and September 30, 2016 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial 1 $ $ - $ - $ $ $ $ $ - Real estate - commercial Owner occupied general purpose - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - Real estate - construction Homebuilder - - - - - - Land - - - - - - Commercial speculative - - - - - All other - - - - Real estate - residential Investor Owner occupied - - - Revolving and junior liens Consumer - - - - Other 2 - - - - - - Total $ $ $ $ $ $ $ $ Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2015 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial 1 $ $ - $ - $ $ $ $ $ - Real estate - commercial Owner occupied general purpose - - Owner occupied special purpose - - - Non-owner occupied general purpose - - - - - Non-owner occupied special purpose - - - - - - Retail properties - - - - - - Farm - - - - - Real estate - construction Homebuilder - - - - - - Land - - - - - - Commercial speculative - - - - - All other - Real estate - residential Investor - - - Owner occupied - - Revolving and junior liens - - Consumer - - - - Other 2 - - - - - - Total $ $ $ $ $ $ $ $ 1 The “Commercial” class includes lease financing receivables. 2 The “Other” class includes overdrafts and net deferred costs. Credit Quality Indicators The Company categorizes loans into credit risk categories based on current financial information, overall debt service coverage, comparison against industry averages, historical payment experience, and current economic trends. This analysis includes loans with outstanding balances or commitments greater than $50,000 and excludes homogeneous loans such as home equity lines of credit and residential mortgages. Loans with a classified risk rating are reviewed quarterly regardless of size or loan type. The Company uses the following definitions for classified risk ratings: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Credits that are not covered by the definitions above are pass credits, which are not considered to be adversely rated. Credit Quality Indicators by class of loans were as follows: September 30, 2016 Special Pass Mention Substandard 1 Doubtful Total Commercial $ $ $ $ - $ Real estate - commercial Owner occupied general purpose - Owner occupied special purpose - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail Properties - - Farm - Real estate - construction Homebuilder - - - Land - - - Commercial speculative - - All other - - Real estate - residential Investor - - Owner occupied - - Revolving and junior liens - - Consumer - - Other - - Total $ $ $ $ - $ December 31, 2015 Special Pass Mention Substandard 1 Doubtful Total Commercial $ $ $ $ - $ Real estate - commercial Owner occupied general purpose - - Owner occupied special purpose - - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail Properties - Farm - - Real estate - construction Homebuilder - - - Land - - - Commercial speculative - - All other - - - Real estate - residential Investor - - Owner occupied - - Revolving and junior liens - - Consumer - - Other - - - Total $ $ $ $ - $ 1 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans. The Company had $2.2 million and $3.9 million residential assets in the process of foreclosure as of September 30, 2016, and December 31, 2015, respectively. Impaired loans, which include nonaccrual loans and troubled debt restructurings, by class of loans for the September 2016 periods listed were as follows: Nine Months Ended As of September 30, 2016 September 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ $ $ - $ $ - Commercial real estate Owner occupied general purpose - Owner occupied special purpose - - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail properties - - Farm - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - All other - - - - - Residential Investor - Owner occupied - Revolving and junior liens - Consumer - - Total impaired loans with no recorded allowance - With an allowance recorded Commercial - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Owner occupied - Revolving and junior liens - - - - Consumer - - - - - Total impaired loans with a recorded allowance Total impaired loans $ $ $ $ $ Impaired loans by class of loans as of December 31, 2015 and for the nine months ended September 30, 2015 were as follows: Nine Months Ended As of December 31, 2015 September 30, 2015 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ $ $ - $ $ - Commercial real estate Owner occupied general purpose - Owner occupied special purpose - - Non-owner occupied general purpose - - Non-owner occupied special purpose - - - - Retail properties - - - - - Farm - - Construction Homebuilder - - - - Land - - - - - Commercial speculative - - All other - - - - Residential Investor - Owner occupied - Revolving and junior liens - Consumer - - - - - Total impaired loans with no recorded allowance - With an allowance recorded Commercial - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - Residential Investor - - - - Owner occupied - Revolving and junior liens - Consumer - - - - - Total impaired loans with a recorded allowance Total impaired loans $ $ $ $ $ Troubled debt restructurings (“TDRs”) are loans for which the contractual terms have been modified and both of these conditions exist: (1) there is a concession to the borrower and (2) the borrower is experiencing financial difficulties. Loans are restructured on a case-by-case basis during the loan collection process with modifications generally initiated at the request of the borrower. These modifications may include reduction in interest rates, extension of term, deferrals of principal, and other modifications. The Bank participates in the U.S. Department of the Treasury’s (the “Treasury”) Home Affordable Modification Program (“HAMP”) which gives qualifying homeowners an opportunity to refinance into more affordable monthly payments. The specific allocation of the allowance for loan losses for all loans, including TDRs, is determined by either discounting the modified cash flows at the original effective rate of the loan before modification or is based on the underlying collateral value less costs to sell, if repayment of the loan is collateral-dependent. If the resulting amount is less than the recorded book value, the Bank either establishes a valuation allowance (i.e. specific reserve) as a component of the allowance for loan losses or charges off the impaired balance if it determines that such amount is a confirmed loss. This method is used consistently for all segments of the portfolio. The allowance for loan losses also includes an allowance based on a loss migration analysis for each loan category on loans that are not individually evaluated for specific impairment. All loans charged-off, including TDRs charged-off, are factored into this calculation by portfolio segment. TDRs that were modified during the period are as follows: TDR Modifications TDR Modifications Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - commercial Other 1 - $ - $ - $ $ Real estate - residential Owner occupied HAMP 2 - - - Revolving and junior liens HAMP 2 - - - Other 1 Total $ $ $ $ TDR Modifications TDR Modifications Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 # of Pre-modification Post-modification # of Pre-modification Post-modification contracts recorded investment recorded investment contracts recorded investment recorded investment Troubled debt restructurings Real estate - residential Owner occupied Other 1 - $ - $ - $ $ Revolving and junior liens HAMP 2 Other 1 Total $ $ $ $ 1 Other: Change of terms from bankruptcy court 2 HAMP: Home Affordable Modification Program TDRs are classified as being in default on a case-by-case basis when they fail to be in compliance with the modified terms. There was no TDR default activity for three and nine months ending September 30, 2016, and September 30, 2015, for loans that were restructured within the 12 month period prior to default. |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2016 | |
Allowance for Loan Losses | |
Allowance for Loan Losses | Note 4 – Allowance for Loan Losses Changes in the allowance for loan losses by segment of loans based on method of impairment for three and nine months ending September 30, 2016, were as follows: Allowance for loan losses: Real Estate Real Estate Real Estate Commercial Commercial Construction Residential Consumer Other Total Three months ended September 30, 2016 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - Provision (Release) - Ending balance $ $ $ $ $ $ $ Nine months ended September 30, 2016 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - (Release) Provision - Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ - $ $ - $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Loans: Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ $ $ $ $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Changes in the allowance for loan losses by segment of loans based on method of impairment for September 30, 2015, were as follows: Allowance for loan losses: Real Estate Real Estate Real Estate Commercial Commercial Construction Residential Consumer Other Total Three months ended September 30, 2015 Beginning balance $ $ $ $ $ $ $ Charge-offs - - Recoveries - Provision (Release) Ending balance $ $ $ $ $ $ $ Nine months ended September 30, 2015 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - Provision (Release) Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ - $ - $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Loans: Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ $ $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ |
Other Real Estate Owned
Other Real Estate Owned | 9 Months Ended |
Sep. 30, 2016 | |
Other Real Estate Owned | |
Other Real Estate Owned | Note 5 – Other Real Estate Owned Details related to the activity in the other real estate owned (“OREO”) portfolio, net of valuation reserve, for the periods presented are itemized in the following table: Three Months Ended Nine Months Ended September 30, September 30, Other real estate owned 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Property additions Property improvements - - Less: Property disposals, net of gains/losses Period valuation adjustments Balance at end of period $ $ $ $ Activity in the valuation allowance was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Provision for unrealized losses Reductions taken on sales Other adjustments - - - Balance at end of period $ $ $ $ Expenses related to OREO, net of lease revenue includes: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Gain on sales, net $ $ $ $ Provision for unrealized losses Operating expenses Less: Lease revenue Net OREO expense $ $ $ $ |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2016 | |
Deposits | |
Deposits | Note 6 – Deposits Major classifications of deposits were as follows: September 30, 2016 December 31, 2015 Noninterest bearing demand $ $ Savings NOW accounts Money market accounts Certificates of deposit of less than $100,000 Certificates of deposit of $100,000 through $250,000 Certificates of deposit of more than $250,000 Total deposits $ $ |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2016 | |
Borrowings | |
Borrowings | Note 7 – Borrowings The following table is a summary of borrowings as of September 30, 2016, and December 31, 2015. Junior subordinated debentures are discussed in detail in Note 8: September 30, 2016 December 31, 2015 Securities sold under repurchase agreements $ $ FHLBC advances 1 - Junior subordinated debentures Subordinated debt Notes payable and other borrowings Total borrowings $ $ 1 Included in other short-term borrowings on the balance sheet. The Company enters into deposit sweep transactions where the transaction amounts are secured by pledged securities. These transactions consistently mature overnight from the transaction date and are governed by sweep repurchase agreements. All sweep repurchase agreements are treated as financings secured by U.S. government agencies and collateralized mortgage-backed securities and had a carrying amount of $46.6 million at September 30, 2016, and $34.1 million at December 31, 2015. The fair value of the pledged collateral was $47.6 million at September 30, 2016 and $45.4 million at December 31, 2015. At September 30, 2016, there was one customer with secured balances exceeding 10% of stockholders’ equity. The Company’s borrowings at the FHLBC require the Bank to be a member and invest in the stock of the FHLBC. Total borrowings are generally limited to the lower of 35% of total assets or 60% of the book value of certain mortgage loans. As of September 30, 2016, the Bank had no advances outstanding under the FHLBC as compared to $15 million outstanding as of December 31, 2015. As of September 30, 2016, FHLBC stock held was valued at $3.2 million, and any potential FHLBC advances were collateralized by securities with a fair value of $65.4 million and loans with a principal balance of $176.4 million, which carried a FHLBC calculated combined collateral value of $178.6 million. The Company had excess collateral of $142.3 million available to secure borrowings at September 30, 2016. One of the Company’s most significant borrowing relationships continued to be the $45.5 million credit facility with a correspondent bank. That credit began in January 2008 and was originally composed of a $30.5 million senior debt facility, which included $500,000 in term debt, and $45.0 million of subordinated debt. The subordinated debt and the term debt portion of the senior debt facility mature on March 31, 2018. The interest rate on the senior debt facility resets quarterly and at the Company’s option, is based on either the lender’s prime rate or three-month LIBOR plus 90 basis points. The interest rate on the subordinated debt resets quarterly, and is equal to three-month LIBOR plus 150 basis points. The Company had no principal outstanding balance on the senior line of credit portion of the senior debt facility when it matured and was terminated. The Company had $500,000 in principal outstanding in term debt and $45.0 million in principal outstanding in subordinated debt at both September 30, 2016, and December 31, 2015. The term debt is secured by all of the outstanding capital stock of the Bank. The Company has made all required interest payments on the outstanding principal balance on a timely basis. The credit facility agreement contains usual and customary provisions regarding acceleration of the senior debt upon the occurrence of an event of default by the Company under the senior debt agreement. The senior debt agreement also contains certain customary representations and warranties, and financial covenants. At September 30, 2016, and December 31, 2015, the Company was in compliance with all covenants contained within the credit agreement. |
Junior Subordinated Debentures
Junior Subordinated Debentures | 9 Months Ended |
Sep. 30, 2016 | |
Junior Subordinated Debentures | |
Junior Subordinated Debentures | Note 8 – Junior Subordinated Debentures The Company completed the sale of $27.5 million of cumulative trust preferred securities by its unconsolidated subsidiary, Old Second Capital Trust I, in June 2003. An additional $4.1 million of cumulative trust preferred securities were sold in July 2003. The trust preferred securities may remain outstanding for a 30-year term but, subject to regulatory approval, can be called in whole or in part by the Company after June 30, 2008. When not in deferral, distributions on the securities are payable quarterly at an annual rate of 7.80%. The Company issued a new $32.6 million subordinated debenture to Old Second Capital Trust I in return for the aggregate net proceeds of this trust preferred offering. The interest rate and payment frequency on the debenture are equivalent to the cash distribution basis on the trust preferred securities. The Company issued an additional $25.0 million of cumulative trust preferred securities through a private placement completed by an additional, unconsolidated subsidiary, Old Second Capital Trust II, in April 2007. These trust preferred securities also mature in 30 years, but subject to the aforementioned regulatory approval, can be called in whole or in part on a quarterly basis commencing June 15, 2017. The quarterly cash distributions on the securities are fixed at 6.77% through June 15, 2017, and float at 150 basis points over three-month LIBOR thereafter. The Company issued a new $25.8 million subordinated debenture to Old Second Capital Trust II in return for the aggregate net proceeds of this trust preferred offering. The interest rate and payment frequency on the debenture are equivalent to the cash distribution basis on the trust preferred securities. Both of the debentures issued by the Company are disclosed on the Consolidated Balance Sheet as junior subordinated debentures and the related interest expense for each issuance is included in the Consolidated Statements of Income. As of September 30, 2016, the Company is current on the payments due on these securities. |
Equity Compensation Plans
Equity Compensation Plans | 9 Months Ended |
Sep. 30, 2016 | |
Equity Compensation Plans | |
Equity Compensation Plans | Note 9 – Equity Compensation Plans Stock-based awards are outstanding under the Company’s 2008 Equity Incentive Plan (the “2008 Plan”) and the Company’s 2014 Equity Incentive Plan (the “2014 Plan,” and together with the 2008 Plan, the “Plans”). The 2014 Plan was approved at the 2014 annual meeting of stockholders; a maximum of 375,000 shares were authorized to be issued under this plan. Following approval of the 2014 Plan, no further awards will be granted under the 2008 Plan or any other Company equity compensation plan. At the May 2016 annual stockholders meeting, an amendment to the 2014 Plan authorized an additional 600,000 shares to be issued, which resulted in a total of 975,000 shares authorized for issuance under this plan. The 2014 Plan authorizes the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights. Awards may be granted to selected directors and officers or employees under the 2014 Plan at the discretion of the Compensation Committee of the Company’s Board of Directors. As of September 30, 2016, 596,007 shares remained available for issuance under the 2014 Plan. Total compensation cost that has been charged for the Plans was $482,000 in the first nine months of 2016. There were no stock options granted in the third quarter of 2016 and 2015. All stock options are granted for a term of ten years. There were no stock options exercised during the third quarter of 2016 and 2015 or for the first nine months of 2016 and 2015. There is no unrecognized compensation cost related to unvested stock options as all stock options of the Company’s common stock have fully vested. A summary of stock option activity in the Plans for the nine months ending September 30, 2016, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding $ Canceled - - Expired - - Ending outstanding $ $ - Exercisable at end of period $ $ - Generally, restricted stock and restricted stock units granted under the Plans vest three years from the grant date, but the Compensation Committee of the Company’s Board of Directors has discretionary authority to change some terms including the amount of time until the vest date. Awards under the 2008 Plan will become fully vested upon a merger or change in control of the Company. Under the 2014 Plan, upon a change in control of the Company, if (i) the 2014 Plan is not an obligation of the successor entity following the change in control, or (ii) the 2014 Plan is an obligation of the successor entity following the change in control and the participant incurs an involuntary termination, then the stock options, stock appreciation rights, stock awards and cash incentive awards under the 2014 Plan will become fully exercisable and vested. Performance-based awards generally will vest based upon the level of achievement of the applicable performance measures through the change in control. The Company granted restricted stock under its equity compensation plans beginning in 2005 and it began granting restricted stock units in February 2009. Restricted stock awards under the Plans generally entitle holders to voting and dividend rights upon grant and are subject to forfeiture until certain restrictions have lapsed including employment for a specific period. Restricted stock units under the Plans are also subject to forfeiture until certain restrictions have lapsed including employment for a specific period, but do not entitle holders to voting rights until the restricted period ends and shares are transferred in connection with the units. There were 130,000 restricted awards issued under the Plans during the nine months ending September 30, 2016. There were 101,500 restricted awards issued during the nine months ending September 30, 2015 . Compensation expense is recognized over the vesting period of the restricted award based on the market value of the award on the issue date. A summary of changes in the Company’s unvested restricted awards for the nine months ending September 30, 2016, is as follows: September 30, 2016 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 $ Granted Vested Forfeited Nonvested at September 30 $ Total unrecognized compensation cost of restricted awards was $1.1 million as of September 30, 2016, which is expected to be recognized over a weighted-average period of 1.99 years. Total unrecognized compensation cost of restricted awards was $869,000 as of September 30, 2015, which was expected to be recognized over a weighted-average period of 2.12 years. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
Earnings Per Share | Note 10 – Earnings Per Share The earnings per share – both basic and diluted – are included below as of September 30 (in thousands except for share data): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Basic earnings per share: Weighted-average common shares outstanding Net income $ $ $ $ Preferred stock dividends and accretion - - Net earnings available to common stockholders $ $ $ $ Basic earnings per share $ $ $ $ Diluted earnings per share: Weighted-average common shares outstanding Dilutive effect of nonvested restricted awards 1 Dilutive effect of stock options - - Diluted average common shares outstanding Net earnings available to common stockholders $ $ $ $ Diluted earnings per share $ $ $ $ Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 1 Includes the common stock equivalents for restricted share rights that are dilutive. The above earnings per share calculation did not include a warrant for 815,339 shares of common stock, at an exercise price of $13.43 per share, that was outstanding as of September 30, 2016, and September 30, 2015, because the warrant was anti-dilutive. Of note, the ten year warrant was issued in 2009, and was sold at auction by the Treasury in June 2013 to a third party investor. |
Regulatory & Capital Matters
Regulatory & Capital Matters | 9 Months Ended |
Sep. 30, 2016 | |
Regulatory & Capital Matters | |
Regulatory & Capital Matters | Note 11 – Regulatory & Capital Matters The Bank is subject to the risk-based capital regulatory guidelines, which include the methodology for calculating the risk-weighted Bank assets, developed by the Office of the Comptroller of the Currency (the “OCC”) and the other bank regulatory agencies. In connection with the current economic environment, the Bank’s current level of nonperforming assets and the risk-based capital guidelines, the Bank’s Board of Directors has determined that the Bank should maintain a Tier 1 leverage capital ratio at or above eight percent (8%) and a total risk-based capital ratio at or above twelve percent (12%). At September 30, 2016, the Bank exceeded those thresholds. At September 30, 2016, the Bank’s Tier 1 capital leverage ratio was 10.65%, an increase of 71 basis points from December 31, 2015, and well above the 8.00% objective. The Bank’s total capital ratio was 16.24%, an increase of 101 basis points from December 31, 2015, and also well above the objective of 12.00%. Bank holding companies are required to maintain minimum levels of capital in accordance with capital guidelines implemented by the Board of Governors of the Federal Reserve System. The general bank and holding company capital adequacy guidelines are shown in the accompanying table, as are the capital ratios of the Company and the Bank, as of September 30, 2016, and December 31, 2015. In July 2013, the U.S. federal banking authorities issued final rules (the “Basel III Rules”) establishing more stringent regulatory capital requirements for U.S. banking institutions, which went into effect on January 1, 2015. A detailed discussion of the Basel III Rules is included in Part I, Item 1 of the Company’s Form 10-K for the year ended December 31, 2015, under the heading “Supervision and Regulation.” At September 30, 2016, the Company, on a consolidated basis, exceeded the minimum thresholds to be considered “adequately capitalized” under current regulatory defined capital ratios. Capital levels and industry defined regulatory minimum required levels are as follows: Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio September 30, 2016 Common equity tier 1 capital to risk weighted assets Consolidated $ % $ % N/A N/A Old Second Bank $ % Total capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to average assets Consolidated N/A N/A Old Second Bank December 31, 2015 Common equity tier 1 capital to risk weighted assets Consolidated $ % $ % N/A N/A Old Second Bank $ % Total capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to average assets Consolidated N/A N/A Old Second Bank 1 As of September 30, 2016, amounts are shown inclusive of a capital conservation buffer of 0.625% 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.” Dividend Restrictions In addition to the above requirements, banking regulations and capital guidelines generally limit the amount of dividends that may be paid by a bank without prior regulatory approval. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s profits, combined with the retained profit of the previous two years, subject to the capital requirements described above. Pursuant to the Basel III rules that came into effect January 1, 2015, the Bank must keep a buffer of 0.625% for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter of minimum capital requirements in order to avoid additional limitations on capital distributions. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 12 – Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an 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. The fair value hierarchy established by the Company also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company 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, and other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company’s own view about the assumptions that market participants would use in pricing an asset or liability. Transfers between levels are deemed to have occurred at the end of the reporting period. For the nine months ended September 30, 2016, there were no significant transfers between levels. For the nine months ended September 30, 2015, there was a transfer of $24.9 million from Level 3 to Level 2 in asset-backed securities. The majority of securities (available-for-sale and held-to-maturity) are valued by external pricing services or dealer market participants and are classified in Level 2 of the fair value hierarchy. Both market and income valuation approaches are utilized. Quarterly, the Company evaluates the methodologies used by the external pricing services or dealer market participants to develop the fair values to determine whether the results of the valuations are representative of an exit price in the Company’s principal markets and an appropriate representation of fair value. The Company uses the following methods and significant assumptions to estimate fair value: · Government-sponsored agency debt securities are primarily priced using available market information through processes such as benchmark spreads, market valuations of like securities, like securities groupings and matrix pricing. · Other government-sponsored agency securities, MBS and some of the actively traded real estate mortgage investment conduits and collateralized mortgage obligations are priced using available market information including benchmark yields, prepayment speeds, spreads, volatility of similar securities and trade date. · State and political subdivisions are largely grouped by characteristics (e.g., geographical data and source of revenue in trade dissemination systems). Because some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. · Auction rate securities are priced using market spreads, cash flows, prepayment speeds, and loss analytics. Therefore, the valuations of auction rate asset-backed securities are considered Level 2 valuations. · Asset-backed collateralized loan obligations were priced using data from a pricing matrix supported by our bond accounting service provider and are therefore considered Level 2 valuations. · Annually every security holding is priced by a pricing service independent of the regular and recurring pricing services used. The independent service provides a measurement to indicate if the price assigned by the regular service is within or outside of a reasonable range. Management reviews this report and applies judgment in adjusting calculations, usually in the last quarter of the year, related to securities pricing. · Residential mortgage loans eligible for sale in the secondary market are carried at fair market value. The fair value of loans held-for-sale is determined using quoted secondary market prices. · Lending related commitments to fund certain residential mortgage loans, e.g., residential mortgage loans with locked interest rates to be sold in the secondary market and forward commitments for the future delivery of mortgage loans to third party investors, as well as forward commitments for future delivery of MBS, are considered derivatives. Fair values are estimated based on observable changes in mortgage interest rates including prices for MBS from the date of the commitment and do not typically involve significant judgments by management. · The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income to derive the resultant value. The Company is able to compare the valuation model inputs, such as the discount rate, prepayment speeds, weighted average delinquency and foreclosure/bankruptcy rates to widely available published industry data for reasonableness. · Interest rate swap positions, both assets and liabilities, are based on valuation pricing models using an income approach reflecting readily observable market parameters such as interest rate yield curves. · The fair value of impaired loans with specific allocations of the allowance for loan losses is essentially based on recent real estate appraisals or the fair value of the collateralized asset. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are made in the appraisal process by the appraisers to reflect differences between the available comparable sales and income data. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. · Nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Assets and Liabilities Measured at Fair Value on a Recurring Basis : The tables below present the balance of assets and liabilities at September 30, 2016, and December 31, 2015, respectively, measured by the Company at fair value on a recurring basis: September 30, 2016 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies $ - $ $ - $ U.S. government agencies mortgage-backed - - States and political subdivisions - - Corporate bonds - - Collateralized mortgage obligations - - Asset-backed securities - - Collateralized loan obligations - - Loans held-for-sale - - Mortgage servicing rights - - Other assets (Interest rate swap agreements) - - Other assets (Mortgage banking derivatives) - - Total $ - $ $ $ Liabilities: Other liabilities (Interest rate swap agreements) $ - $ $ - $ Total $ - $ $ - $ December 31, 2015 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ $ - $ - $ U.S. government agencies - - U.S. government agencies mortgage-backed - - States and political subdivisions - Corporate bonds - - Collateralized mortgage obligations - - Asset-backed securities - - Collateralized loan obligations - - Loans held-for-sale - - Mortgage servicing rights - - Other assets (Interest rate swap agreements net of swap credit valuation) - - Other assets (Mortgage banking derivatives) - - Total $ $ $ $ Liabilities: Other liabilities (Interest rate swap agreements) $ - $ $ - $ Total $ - $ $ - $ The significant increase in the total assets measured at fair value on a recurring basis is primarily due to the $244.8 million transfer of securities held-to-maturity to securities available-for-sale in the second quarter of 2016, partially offset by the sale of securities in the third quarter of 2016 to satisfy funding needs for the Talmer branch acquisition. The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are as follows: Nine Months Ended September 30, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ $ Transfers out of Level 3 - Total gains or losses Included in earnings (or changes in net assets) - Included in other comprehensive income - Purchases, issuances, sales, and settlements Issuances - Settlements Sales - - Ending balance September 30, 2016 $ - $ Nine Months Ended September 30, 2015 Securities available-for-sale States and Mortgage Asset- Political Servicing backed Subdivisions Rights Beginning balance January 1, 2015 $ $ $ Transfers out of Level 3 - - Total gains or losses Included in earnings (or changes in net assets) - Included in other comprehensive income - - Purchases, issuances, sales, and settlements Issuances - - Settlements - - Sales - - Ending balance September 30, 2015 $ - $ $ The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of September 30, 2016: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage Servicing rights $ Discounted Cash Flow Discount Rate 10.0-17.0% % Prepayment Speed 6.0-40.2% % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2015: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage Servicing rights $ Discounted Cash Flow Discount Rate 10.0-15.5% % Prepayment Speed 6.0-35.2% % Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis: The Company may be required, from time to time, to measure certain other assets at fair value on a nonrecurring basis in accordance with GAAP. These assets consist of impaired loans and OREO. For assets measured at fair value on a nonrecurring basis at September 30, 2016, and December 31, 2015, respectively, the following tables provide the level of valuation assumptions used to determine each valuation and the carrying value of the related assets: September 30, 2016 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ $ Other real estate owned, net 2 - - Total $ - $ - $ $ 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $864,000 with a valuation allowance of $514,000 resulting in an increase of specific allocations within the allowance for loan losses of $480,000 for the nine months ending September 30, 2016. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $14.1 million, which is made up of the outstanding balance of $29.1 million, net of a valuation allowance of $13.3 million and participations of $1.7 million, at September 30, 2016. December 31, 2015 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ $ Other real estate owned, net 2 - - Total $ - $ - $ $ 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $115,000, with a valuation allowance of $34,000, resulting in a decrease of specific allocations within the provision for loan losses of $243,000 for the year ending December 31, 2015. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $19.1 million, which is made up of the outstanding balance of $34.9 million, net of a valuation allowance of $14.1 million and participations of $1.7 million, at December 31, 2015. The Company has estimated the fair values of these assets based primarily on Level 3 inputs. OREO and impaired loans are generally valued using the fair value of collateral provided by third party appraisals. These valuations include assumptions related to cash flow projections, discount rates, and recent comparable sales. The numerical range of unobservable inputs for these valuation assumptions are not meaningful. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 13 – Fair Values of Financial Instruments The estimated fair values approximate carrying amount for all items except those described in the following table. Securities available-for-sale fair values are based upon market prices or dealer quotes, and if no such information is available, on the rate and term of the security. The carrying value of FHLBC stock approximates fair value as the stock is nonmarketable and can only be sold to the FHLBC or another member institution at par. FHLBC stock is carried at cost and considered a Level 2 fair value. Fair values of loans were estimated for portfolios of loans with similar financial characteristics, such as type and fixed or variable interest rate terms. Cash flows were discounted using current rates at which similar loans would be made to borrowers with similar ratings and for similar maturities. The fair value of time deposits is estimated using discounted future cash flows at current rates offered for deposits of similar remaining maturities. The fair values of borrowings were estimated based on interest rates available to the Company for debt with similar terms and remaining maturities. The fair value of off balance sheet volume is not considered material. The carrying amount and estimated fair values of financial instruments were as follows: September 30, 2016 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ $ $ $ - $ - Interest bearing deposits with financial institutions - - Securities available-for-sale - - FHLBC and Reserve Bank Stock - - Loans held-for-sale - - Loans - - Accrued interest receivable - - Financial liabilities: Noninterest bearing deposits $ $ $ $ - $ - Interest bearing deposits - - Securities sold under repurchase agreements - - Other short-term borrowings - - - - - Junior subordinated debentures - Subordinated debenture - - Note payable and other borrowings - - Interest rate swap agreements Borrowing interest payable - - Deposit interest payable - - December 31, 2015 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ $ $ $ - $ - Interest bearing deposits with financial institutions - - Securities available-for-sale Securities held-to-maturity - - FHLBC and Reserve Bank Stock - - Loans held-for-sale - - Loans - - Accrued interest receivable - - Financial liabilities: Noninterest bearing deposits $ $ $ $ - $ - Interest bearing deposits - - Securities sold under repurchase agreements - - Other short-term borrowings - - Junior subordinated debentures - Subordinated debenture - - Note payable and other borrowings - - Interest rate swap agreements Borrowing interest payable - - Deposit interest payable - - |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | |
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | Note 14 – Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions To meet the financing needs of its customers, the Bank, as a subsidiary of the Company, is a party to various financial instruments with off-balance-sheet risk in the normal course of business. These off-balance-sheet financial instruments include commitments to originate and sell loans as well as financial standby, performance standby and commercial letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The Bank’s exposure to credit loss for loan commitments and letters of credit is represented by the dollar amount of those instruments. Management generally uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet instruments. Interest Rate Swap Designated as a Cash Flow Hedge The Company entered into a forward starting interest rate swap on August 18, 2015, with an effective date of June 15, 2017. This transaction had a notional amount totaling $25.8 million as of September 30, 2016, was designated as a cash flow hedge of certain junior subordinated debentures and was determined to be fully effective during the period presented. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swap is recorded in other assets with changes in fair value recorded in other comprehensive income. The amount included in other comprehensive income would be reclassified to current earnings should all or a portion of the hedge no longer be considered effective. The Company expects the hedge to remain fully effective during the remaining term of the swap. The Bank will pay the counterparty a fixed rate and receive a floating rate based on three month LIBOR. Management concluded that it would be advantageous to enter this transaction given that the Company has trust preferred securities that will change from fixed rate to floating rate on June 15, 2017. The cash flow hedge has a maturity date of June 15, 2037. Summary information about the interest rate swap designated as a cash flow hedge is as follows: As of September 30, 2016 December 31, 2015 Notional amount $ $ Unrealized loss Other Interest Rate Swaps The Bank also has interest rate derivative positions to assist with risk management that are not designated as hedging instruments. These derivative positions relate to transactions in which the Bank enters an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. Per contractual requirements with the correspondent financial institution, the Bank had $7.5 million in securities available-for-sale pledged to support interest rate swap activity with two correspondent financial institutions at September 30, 2016. The Bank had $2.4 million in securities pledged to support interest rate swap activity with two correspondent financial institutions at December 31, 2015. In connection with each transaction, the Bank agreed to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Bank agreed to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to convert a variable rate loan to a fixed rate loan and is part of the Company’s interest rate risk management strategy. Because the Bank acts as an intermediary for the client, changes in the fair value of the underlying derivative contracts offset each other and do not generally affect the results of operations. Fair value measurements include an assessment of credit risk related to the client’s ability to perform on their contract position, however, and valuation estimates related to that exposure are discussed in Note 12 above. At September 30, 2016, the notional amount of non-hedging interest rate swaps was $66.9 million with a weighted average maturity of 7 years. At December 31, 2015, the notional amount of non-hedging interest rate swaps was $20.7 million with a weighted average maturity of 5.1 years. The Bank offsets derivative assets and liabilities that are subject to a master netting arrangement. The Bank also grants mortgage loan interest rate lock commitments to borrowers, subject to normal loan underwriting standards. The interest rate risk associated with these loan interest rate lock commitments is managed with contracts for future deliveries of loans as well as selling forward mortgage-backed securities contracts. Loan interest rate lock commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Commitments to originate residential mortgage loans held-for-sale and forward commitments to sell residential mortgage loans or forward MBS contracts are considered derivative instruments and changes in the fair value are recorded to mortgage banking revenue. Fair values are estimated based on observable changes in mortgage interest rates including mortgage-backed securities prices from the date of the commitment. The following table presents derivatives not designated as hedging instruments as of September 30, 2016, and periodic changes in the values of the interest rate swaps are reported in other noninterest income. Periodic changes in the value of the forward contracts related to mortgage loan origination are reported in the net gain on sales of mortgage loans. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts $ Other Assets $ Other Liabilities $ Commitments 1 Other Assets N/A - Forward contracts 2 N/A - Other Liabilities - Total $ $ 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The following table presents derivatives not designated as hedging instruments as of December 31, 2015. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ Other Assets $ Other Liabilities $ Commitments 1 Other Assets N/A - Forward contracts 2 N/A - Other Liabilities - Total $ $ 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The Bank also issues letters of credit, which are conditional commitments that guarantee the performance of a customer to a third party. The credit risk involved and collateral obtained in issuing letters of credit are essentially the same as that involved in extending loan commitments to our customers. In addition to customer related commitments, the Company is responsible for letters of credit commitments that relate to properties held in OREO. The following table represents the Company’s contractual commitments due to letters of credit as of September 30, 2016, and December 31, 2015. The following table is a summary of letter of credit commitments (in thousands): September 30, 2016 December 31, 2015 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ $ $ $ $ $ Commercial standby - - Performance standby Non-borrower: Performance standby - - Total letters of credit $ $ $ $ $ $ |
Series B Preferred Stock
Series B Preferred Stock | 9 Months Ended |
Sep. 30, 2016 | |
Preferred Stock | |
Series B Preferred Stock | Note 15 – Series B Preferred Stock (“Series B Stock”) The Series B Stock was issued as part of the Treasury’s Troubled Asset Relief Program and Capital Repurchase Program during the first quarter of 2009. In the second quarter of 2014, the Company completed redemption of 25,669 shares of the Series B Stock. The Company redeemed 15,778 shares of its Series B Stock in the first quarter of 2015 and the remaining 13,553 shares of its Series B Stock in the third quarter of 2015. During the years ending December 31, 2015 and 2014, the Company paid $2.4 million and $12.4 million in dividends on the Series B Stock, respectively. At December 31, 2015, the Company had fully redeemed the Series B Stock. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU 2015-14 “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date .” This accounting standards update defers the effective date of ASU 2014-09 for an additional year. ASU 2015-14 will be effective for annual reporting periods beginning after December 15, 2017. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is not permitted. In March 2016, the FASB issued ASU 2016-08 “ Revenue from Contracts with Customers (TOPIC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” and in April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (TOPIC 606): Identifying Performance Obligations and Licensing.” ASU 2016-08 requires the entity to determine if it is acting as a principal with control over the goods or services it is contractually obligated to provide, or an agent with no control over specified goods or services provided by another party to a customer. ASU 2016-10 was issued to further clarify ASU 2014-09 implementation regarding identifying performance obligation materiality, identification of key contract components, and scope. The Company is assessing the impact of ASU 2014-09 and other related ASUs as noted above on its accounting and disclosures. In April 2015, the FASB issued ASU No. 2015-03 “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 amended prior guidance to simplify the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard did not have a material effect to the Company’s operating results or financial condition. This standard was adopted by the Company effective January 2016. In March 2016, the FASB issued ASU No. 2016-09 “ Improvements to Employee Share-Based Payment Accounting. ” FASB issued this ASU as part of the Simplification Initiative. This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016. The Company is assessing the impact of ASU 2016-09 on its accounting and disclosures. In June 2016, the FASB issued ASU No. 2016-13 “ Measurement of Credit Losses on Financial Instruments. ” ASU 2016-13 was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date to enhance the decision making process. ASU 2016-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is assessing the impact of ASU 2016-13 on its accounting and disclosures. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Securities | |
Schedule of amortized cost and fair value of the securities portfolio and corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss | Gross Gross Amortized Unrealized Unrealized Fair September 30, 2016 Cost Gains Losses Value Securities available-for-sale U.S. government agencies $ $ - $ $ U.S. government agencies mortgage-backed - States and political subdivisions - Corporate bonds - Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations - Total securities available-for-sale $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value Securities available-for-sale U.S. Treasury $ $ - $ - $ U.S. government agencies - U.S. government agencies mortgage-backed States and political subdivisions Corporate bonds - Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations - Total securities available-for-sale $ $ $ $ Securities held-to-maturity U.S. government agency mortgage-backed $ $ $ - $ Collateralized mortgage obligations Total securities held-to-maturity $ $ $ $ |
Schedule of fair value, amortized cost and weighted average yield of debt securities by contractual maturity along with securities not due at a single maturity date, primarily mortgage-backed securities (MBS), asset-backed securities, and collateralized loan obligations | Weighted Amortized Average Fair Securities available-for-sale Cost Yield Value Due in one year or less $ % $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed and collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ % $ |
Schedule of securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | Less than 12 months 12 months or more September 30, 2016 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies - $ - $ - $ $ $ $ Corporate bonds Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ $ $ $ $ $ Less than 12 months 12 months or more December 31, 2015 in an unrealized loss position in an unrealized loss position Total Number of Unrealized Fair Number of Unrealized Fair Number of Unrealized Fair Securities available-for-sale Securities Losses Value Securities Losses Value Securities Losses Value U.S. government agencies - $ - $ - $ $ $ $ U.S. government agencies mortgage-backed - - - States and political subdivisions Corporate bonds Collateralized mortgage obligations Asset-backed securities Collateralized loan obligations Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity Collateralized mortgage obligations $ $ $ $ $ $ Total securities held-to-maturity $ $ $ $ $ $ |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Loans | |
Schedule of major classifications of loans | September 30, 2016 December 31, 2015 Commercial $ $ Real estate - commercial Real estate - construction Real estate - residential Consumer Overdraft Lease financing receivables Other Net deferred loan costs Total loans $ $ |
Schedule of aged analysis of past due loans by class of loans | Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and September 30, 2016 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial 1 $ $ - $ - $ $ $ $ $ - Real estate - commercial Owner occupied general purpose - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - Real estate - construction Homebuilder - - - - - - Land - - - - - - Commercial speculative - - - - - All other - - - - Real estate - residential Investor Owner occupied - - - Revolving and junior liens Consumer - - - - Other 2 - - - - - - Total $ $ $ $ $ $ $ $ Recorded Investment 90 days or 90 Days or Greater Past 30-59 Days 60-89 Days Greater Past Total Past Due and December 31, 2015 Past Due Past Due Due Due Current Nonaccrual Total Loans Accruing Commercial 1 $ $ - $ - $ $ $ $ $ - Real estate - commercial Owner occupied general purpose - - Owner occupied special purpose - - - Non-owner occupied general purpose - - - - - Non-owner occupied special purpose - - - - - - Retail properties - - - - - - Farm - - - - - Real estate - construction Homebuilder - - - - - - Land - - - - - - Commercial speculative - - - - - All other - Real estate - residential Investor - - - Owner occupied - - Revolving and junior liens - - Consumer - - - - Other 2 - - - - - - Total $ $ $ $ $ $ $ $ 1 The “Commercial” class includes lease financing receivables. 2 The “Other” class includes overdrafts and net deferred costs. |
Schedule of credit quality indicators by class of loans | September 30, 2016 Special Pass Mention Substandard 1 Doubtful Total Commercial $ $ $ $ - $ Real estate - commercial Owner occupied general purpose - Owner occupied special purpose - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail Properties - - Farm - Real estate - construction Homebuilder - - - Land - - - Commercial speculative - - All other - - Real estate - residential Investor - - Owner occupied - - Revolving and junior liens - - Consumer - - Other - - Total $ $ $ $ - $ December 31, 2015 Special Pass Mention Substandard 1 Doubtful Total Commercial $ $ $ $ - $ Real estate - commercial Owner occupied general purpose - - Owner occupied special purpose - - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail Properties - Farm - - Real estate - construction Homebuilder - - - Land - - - Commercial speculative - - All other - - - Real estate - residential Investor - - Owner occupied - - Revolving and junior liens - - Consumer - - Other - - - Total $ $ $ $ - $ 1 The substandard credit quality indicator includes both potential problem loans that are currently performing and nonperforming loans. |
Schedule of impaired loans by class of loan | Nine Months Ended As of September 30, 2016 September 30, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ $ $ - $ $ - Commercial real estate Owner occupied general purpose - Owner occupied special purpose - - Non-owner occupied general purpose - Non-owner occupied special purpose - - Retail properties - - Farm - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - All other - - - - - Residential Investor - Owner occupied - Revolving and junior liens - Consumer - - Total impaired loans with no recorded allowance - With an allowance recorded Commercial - - - - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - - Residential Investor - - - - - Owner occupied - Revolving and junior liens - - - - Consumer - - - - - Total impaired loans with a recorded allowance Total impaired loans $ $ $ $ $ Impaired loans by class of loans as of December 31, 2015 and for the nine months ended September 30, 2015 were as follows: Nine Months Ended As of December 31, 2015 September 30, 2015 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial $ $ $ - $ $ - Commercial real estate Owner occupied general purpose - Owner occupied special purpose - - Non-owner occupied general purpose - - Non-owner occupied special purpose - - - - Retail properties - - - - - Farm - - Construction Homebuilder - - - - Land - - - - - Commercial speculative - - All other - - - - Residential Investor - Owner occupied - Revolving and junior liens - Consumer - - - - - Total impaired loans with no recorded allowance - With an allowance recorded Commercial - Commercial real estate Owner occupied general purpose - - - - - Owner occupied special purpose - - - - - Non-owner occupied general purpose - - - - Non-owner occupied special purpose - - - - - Retail properties - - - - - Farm - - - - - Construction Homebuilder - - - - - Land - - - - - Commercial speculative - - - - - All other - - - - Residential Investor - - - - Owner occupied - Revolving and junior liens - Consumer - - - - - Total impaired loans with a recorded allowance Total impaired loans $ $ $ $ $ |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Allowance for Loan Losses | |
Schedule of changes in the allowance for loan losses by segment of loans based on method of impairment | Changes in the allowance for loan losses by segment of loans based on method of impairment for three and nine months ending September 30, 2016, were as follows: Allowance for loan losses: Real Estate Real Estate Real Estate Commercial Commercial Construction Residential Consumer Other Total Three months ended September 30, 2016 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - Provision (Release) - Ending balance $ $ $ $ $ $ $ Nine months ended September 30, 2016 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - (Release) Provision - Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ - $ $ - $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Loans: Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ $ $ $ $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Changes in the allowance for loan losses by segment of loans based on method of impairment for September 30, 2015, were as follows: Allowance for loan losses: Real Estate Real Estate Real Estate Commercial Commercial Construction Residential Consumer Other Total Three months ended September 30, 2015 Beginning balance $ $ $ $ $ $ $ Charge-offs - - Recoveries - Provision (Release) Ending balance $ $ $ $ $ $ $ Nine months ended September 30, 2015 Beginning balance $ $ $ $ $ $ $ Charge-offs - Recoveries - Provision (Release) Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ - $ - $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ Loans: Ending balance $ $ $ $ $ $ $ Ending balance: Individually evaluated for impairment $ $ $ $ $ - $ - $ Ending balance: Collectively evaluated for impairment $ $ $ $ $ $ $ |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Real Estate Owned | |
Schedule of activity in the other real estate owned (OREO) portfolio, net of valuation reserve | Three Months Ended Nine Months Ended September 30, September 30, Other real estate owned 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Property additions Property improvements - - Less: Property disposals, net of gains/losses Period valuation adjustments Balance at end of period $ $ $ $ |
Schedule of activity in valuation allowance | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at beginning of period $ $ $ $ Provision for unrealized losses Reductions taken on sales Other adjustments - - - Balance at end of period $ $ $ $ |
Schedule of expenses related to foreclosed assets, net of lease revenue | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Gain on sales, net $ $ $ $ Provision for unrealized losses Operating expenses Less: Lease revenue Net OREO expense $ $ $ $ |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Deposits | |
Schedule of major classifications of deposits | September 30, 2016 December 31, 2015 Noninterest bearing demand $ $ Savings NOW accounts Money market accounts Certificates of deposit of less than $100,000 Certificates of deposit of $100,000 through $250,000 Certificates of deposit of more than $250,000 Total deposits $ $ |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Borrowings | |
Summary of borrowings and junior subordinated debentures | September 30, 2016 December 31, 2015 Securities sold under repurchase agreements $ $ FHLBC advances 1 - Junior subordinated debentures Subordinated debt Notes payable and other borrowings Total borrowings $ $ |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity Compensation Plans | |
Summary of stock option activity in Incentive Plan | A summary of stock option activity in the Plans for the nine months ending September 30, 2016, is as follows: Weighted- Weighted Average Average Remaining Exercise Contractual Aggregate Shares Price Term (years) Intrinsic Value Beginning outstanding $ Canceled - - Expired - - Ending outstanding $ $ - Exercisable at end of period $ $ - |
Summary of changes in nonvested shares of restricted share rights | September 30, 2016 Weighted Restricted Average Stock Shares Grant Date and Units Fair Value Nonvested at January 1 $ Granted Vested Forfeited Nonvested at September 30 $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
Schedule of Earnings Per Share | Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Basic earnings per share: Weighted-average common shares outstanding Net income $ $ $ $ Preferred stock dividends and accretion - - Net earnings available to common stockholders $ $ $ $ Basic earnings per share $ $ $ $ Diluted earnings per share: Weighted-average common shares outstanding Dilutive effect of nonvested restricted awards 1 Dilutive effect of stock options - - Diluted average common shares outstanding Net earnings available to common stockholders $ $ $ $ Diluted earnings per share $ $ $ $ Number of antidilutive options and warrants excluded from the diluted earnings per share calculation 1 Includes the common stock equivalents for restricted share rights that are dilutive. |
Regulatory & Capital Matters (T
Regulatory & Capital Matters (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Regulatory & Capital Matters | |
Schedule of capital levels and industry defined regulatory minimum required levels | Minimum Capital To Be Well Capitalized Under Adequacy with Capital Prompt Corrective Actual Conservation Buffer if applicable 1 Action Provisions 2 Amount Ratio Amount Ratio Amount Ratio September 30, 2016 Common equity tier 1 capital to risk weighted assets Consolidated $ % $ % N/A N/A Old Second Bank $ % Total capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to average assets Consolidated N/A N/A Old Second Bank December 31, 2015 Common equity tier 1 capital to risk weighted assets Consolidated $ % $ % N/A N/A Old Second Bank $ % Total capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to risk weighted assets Consolidated N/A N/A Old Second Bank Tier 1 capital to average assets Consolidated N/A N/A Old Second Bank 1 As of September 30, 2016, amounts are shown inclusive of a capital conservation buffer of 0.625% 2 The Bank exceeded the general minimum regulatory requirements to be considered “well capitalized.” |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis | September 30, 2016 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. government agencies $ - $ $ - $ U.S. government agencies mortgage-backed - - States and political subdivisions - - Corporate bonds - - Collateralized mortgage obligations - - Asset-backed securities - - Collateralized loan obligations - - Loans held-for-sale - - Mortgage servicing rights - - Other assets (Interest rate swap agreements) - - Other assets (Mortgage banking derivatives) - - Total $ - $ $ $ Liabilities: Other liabilities (Interest rate swap agreements) $ - $ $ - $ Total $ - $ $ - $ December 31, 2015 Level 1 Level 2 Level 3 Total Assets: Securities available-for-sale U.S. Treasury $ $ - $ - $ U.S. government agencies - - U.S. government agencies mortgage-backed - - States and political subdivisions - Corporate bonds - - Collateralized mortgage obligations - - Asset-backed securities - - Collateralized loan obligations - - Loans held-for-sale - - Mortgage servicing rights - - Other assets (Interest rate swap agreements net of swap credit valuation) - - Other assets (Mortgage banking derivatives) - - Total $ $ $ $ Liabilities: Other liabilities (Interest rate swap agreements) $ - $ $ - $ Total $ - $ $ - $ |
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | Nine Months Ended September 30, 2016 Securities available-for-sale States and Mortgage Political Servicing Subdivisions Rights Beginning balance January 1, 2016 $ $ Transfers out of Level 3 - Total gains or losses Included in earnings (or changes in net assets) - Included in other comprehensive income - Purchases, issuances, sales, and settlements Issuances - Settlements Sales - - Ending balance September 30, 2016 $ - $ Nine Months Ended September 30, 2015 Securities available-for-sale States and Mortgage Asset- Political Servicing backed Subdivisions Rights Beginning balance January 1, 2015 $ $ $ Transfers out of Level 3 - - Total gains or losses Included in earnings (or changes in net assets) - Included in other comprehensive income - - Purchases, issuances, sales, and settlements Issuances - - Settlements - - Sales - - Ending balance September 30, 2015 $ - $ $ |
Schedule of quantitative information about level 3 fair value measurements | The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of September 30, 2016: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage Servicing rights $ Discounted Cash Flow Discount Rate 10.0-17.0% % Prepayment Speed 6.0-40.2% % The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2015: Weighted Measured at fair value Unobservable Average on a recurring basis: Fair Value Valuation Methodology Inputs Range of Input of Inputs Mortgage Servicing rights $ Discounted Cash Flow Discount Rate 10.0-15.5% % Prepayment Speed 6.0-35.2% % |
Schedule of assets and liabilities measured at fair value on a nonrecurring basis | September 30, 2016 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ $ Other real estate owned, net 2 - - Total $ - $ - $ $ 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $864,000 with a valuation allowance of $514,000 resulting in an increase of specific allocations within the allowance for loan losses of $480,000 for the nine months ending September 30, 2016. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $14.1 million, which is made up of the outstanding balance of $29.1 million, net of a valuation allowance of $13.3 million and participations of $1.7 million, at September 30, 2016. December 31, 2015 Level 1 Level 2 Level 3 Total Impaired loans 1 $ - $ - $ $ Other real estate owned, net 2 - - Total $ - $ - $ $ 1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $115,000, with a valuation allowance of $34,000, resulting in a decrease of specific allocations within the provision for loan losses of $243,000 for the year ending December 31, 2015. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $19.1 million, which is made up of the outstanding balance of $34.9 million, net of a valuation allowance of $14.1 million and participations of $1.7 million, at December 31, 2015. |
Fair Values of Financial Inst34
Fair Values of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Values of Financial Instruments | |
Schedule of carrying amount and estimated fair values of financial instruments | September 30, 2016 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ $ $ $ - $ - Interest bearing deposits with financial institutions - - Securities available-for-sale - - FHLBC and Reserve Bank Stock - - Loans held-for-sale - - Loans - - Accrued interest receivable - - Financial liabilities: Noninterest bearing deposits $ $ $ $ - $ - Interest bearing deposits - - Securities sold under repurchase agreements - - Other short-term borrowings - - - - - Junior subordinated debentures - Subordinated debenture - - Note payable and other borrowings - - Interest rate swap agreements Borrowing interest payable - - Deposit interest payable - - December 31, 2015 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ $ $ $ - $ - Interest bearing deposits with financial institutions - - Securities available-for-sale Securities held-to-maturity - - FHLBC and Reserve Bank Stock - - Loans held-for-sale - - Loans - - Accrued interest receivable - - Financial liabilities: Noninterest bearing deposits $ $ $ $ - $ - Interest bearing deposits - - Securities sold under repurchase agreements - - Other short-term borrowings - - Junior subordinated debentures - Subordinated debenture - - Note payable and other borrowings - - Interest rate swap agreements Borrowing interest payable - - Deposit interest payable - - |
Financial Instruments with Of35
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | |
Summary information about the interest rate swap designated as a cash flow hedge | Summary information about the interest rate swap designated as a cash flow hedge is as follows: As of September 30, 2016 December 31, 2015 Notional amount $ $ Unrealized loss |
Schedule of derivatives not designated as hedging instruments | Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts $ Other Assets $ Other Liabilities $ Commitments 1 Other Assets N/A - Forward contracts 2 N/A - Other Liabilities - Total $ $ 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. The following table presents derivatives not designated as hedging instruments as of December 31, 2015. Asset Derivatives Liability Derivatives Notional or Contractual Balance Sheet Balance Sheet Amount Location Fair Value Location Fair Value Interest rate swap contracts net of credit valuation $ Other Assets $ Other Liabilities $ Commitments 1 Other Assets N/A - Forward contracts 2 N/A - Other Liabilities - Total $ $ 1 Includes unused loan commitments and interest rate lock commitments. 2 Includes forward MBS contracts and forward loan contracts. |
Schedule of financial instrument commitments | September 30, 2016 December 31, 2015 Fixed Variable Total Fixed Variable Total Letters of credit: Borrower: Financial standby $ $ $ $ $ $ Commercial standby - - Performance standby Non-borrower: Performance standby - - Total letters of credit $ $ $ $ $ $ |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Dividend (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 28, 2016 | Oct. 18, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Cash dividend declared (per share) | $ 0.01 | ||||
Deposits. | $ 1,777,382 | $ 1,759,086 | |||
Loans | $ 1,202,852 | $ 1,133,715 | $ 1,132,912 | ||
Subsequent Event | Talmer | |||||
Deposits. | $ 48,900 | ||||
Loans | $ 223,400 |
Securities - Investment Portfol
Securities - Investment Portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Available-for-sale securities | |||
Held-to-maturity reclassified to available-for-sale | $ 244,800 | ||
Available-for-sale Securities | $ 531,057 | $ 456,066 | |
Pretax realized losses on sale of available-for-sale securities | 2,000 | ||
FHLB and FRB Stock | |||
FHLBC stock | 3,200 | 3,700 | |
FRB stock | 4,800 | $ 4,800 | |
Talmer | |||
Available-for-sale securities | |||
Available-for-sale Securities | $ 233,500 |
Securities - Amortized Cost and
Securities - Amortized Cost and Fair Value (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Securities Available-for-Sale | ||
Amortized Cost | $ 538,539 | $ 470,719 |
Gross Unrealized Gains | 4,498 | 383 |
Gross Unrealized Losses | (11,980) | (15,036) |
Fair Value | 531,057 | 456,066 |
Securities Held-to-Maturity | ||
Amortized Cost | 247,746 | |
Gross Unrealized Gains | 4,894 | |
Gross Unrealized Losses | (965) | |
Fair Value | 251,675 | |
U.S. Treasury | ||
Securities Available-for-Sale | ||
Amortized Cost | 1,509 | |
Fair Value | 1,509 | |
U.S. government agencies | ||
Securities Available-for-Sale | ||
Amortized Cost | 1,661 | 1,683 |
Gross Unrealized Losses | (158) | (127) |
Fair Value | 1,503 | 1,556 |
States and political subdivisions | ||
Securities Available-for-Sale | ||
Amortized Cost | 21,489 | 30,341 |
Gross Unrealized Gains | 765 | 285 |
Gross Unrealized Losses | (100) | |
Fair Value | 22,254 | 30,526 |
Corporate bonds | ||
Securities Available-for-Sale | ||
Amortized Cost | 10,958 | 30,157 |
Gross Unrealized Losses | (228) | (757) |
Fair Value | 10,730 | 29,400 |
Collateralized mortgage obligations | ||
Securities Available-for-Sale | ||
Amortized Cost | 202,670 | 68,743 |
Gross Unrealized Gains | 2,478 | 24 |
Gross Unrealized Losses | (758) | (1,847) |
Fair Value | 204,390 | 66,920 |
Securities Held-to-Maturity | ||
Amortized Cost | 211,241 | |
Gross Unrealized Gains | 3,302 | |
Gross Unrealized Losses | (965) | |
Fair Value | 213,578 | |
Asset-backed securities | ||
Securities Available-for-Sale | ||
Amortized Cost | 149,394 | 241,872 |
Gross Unrealized Gains | 431 | 74 |
Gross Unrealized Losses | (9,652) | (10,038) |
Fair Value | 140,173 | 231,908 |
FFEL | ||
Other disclosures | ||
Asset-backed securities | $ 118,900 | |
Percentage of outstanding principal amount of loans guaranteed by US Department of Education | 97 | |
Total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal | $ 12,800 | |
Percentage of total added credit enhancement in the form of overcollaterization and/or subordination of outstanding principal | 9.62 | |
Collateralized loan obligations | ||
Securities Available-for-Sale | ||
Amortized Cost | $ 109,468 | 94,374 |
Gross Unrealized Losses | (1,184) | (2,123) |
Fair Value | 108,284 | 92,251 |
U.S. government agency mortgage-backed | ||
Securities Available-for-Sale | ||
Amortized Cost | 42,899 | 2,040 |
Gross Unrealized Gains | 824 | |
Gross Unrealized Losses | (44) | |
Fair Value | $ 43,723 | 1,996 |
Securities Held-to-Maturity | ||
Amortized Cost | 36,505 | |
Gross Unrealized Gains | 1,592 | |
Fair Value | $ 38,097 |
Securities - Contractural Matur
Securities - Contractural Maturities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Securities Available-for-Sale, Amortized Cost | ||
Due in one year or less | $ 410 | |
Due after one year through five years | 11,575 | |
Due after five years through ten years | 18,573 | |
Due after ten years | 3,550 | |
Debt securities excluding securities not due at a single maturity date | 34,108 | |
Total | $ 538,539 | $ 470,719 |
Securities Available-for-Sale, Weighted Average Yield | ||
Due in one year or less (as a percent) | 4.60% | |
Due after one year through five years (as a percent) | 2.31% | |
Due after five years through ten years (as a percent) | 2.43% | |
Due after ten years (as a percent) | 2.77% | |
Debt securities (as a percent) | 2.45% | |
Total (as a percent) | 2.55% | |
Securities Available-for-Sale, Fair Value | ||
Due in one year or less | $ 420 | |
Due after one year through five years | 11,734 | |
Due after five years through ten years | 18,538 | |
Due after ten years | 3,795 | |
Debt securities | 34,487 | |
Fair Value | 531,057 | 456,066 |
Securities Held-to-Maturity, Amortized Cost | ||
Amortized Cost | 247,746 | |
Securities Held-to-Maturity, Fair Value | ||
Fair Value | 251,675 | |
Collateralized mortgage obligations | ||
Securities Available-for-Sale, Amortized Cost | ||
Total | 202,670 | 68,743 |
Securities Available-for-Sale, Fair Value | ||
Fair Value | 204,390 | 66,920 |
Securities Held-to-Maturity, Amortized Cost | ||
Amortized Cost | 211,241 | |
Securities Held-to-Maturity, Fair Value | ||
Fair Value | 213,578 | |
Asset-backed securities | ||
Securities Available-for-Sale, Amortized Cost | ||
Securities not due at a single maturity date | 149,394 | |
Total | $ 149,394 | 241,872 |
Securities Available-for-Sale, Weighted Average Yield | ||
Securities not due at a single maturity date, Weighted Average Yield (as a percent) | 1.95% | |
Securities Available-for-Sale, Fair Value | ||
Securities not due at a single maturity date | $ 140,173 | |
Fair Value | 140,173 | 231,908 |
Collateralized loan obligations | ||
Securities Available-for-Sale, Amortized Cost | ||
Securities not due at a single maturity date | 109,468 | |
Total | $ 109,468 | 94,374 |
Securities Available-for-Sale, Weighted Average Yield | ||
Securities not due at a single maturity date, Weighted Average Yield (as a percent) | 3.66% | |
Securities Available-for-Sale, Fair Value | ||
Securities not due at a single maturity date | $ 108,284 | |
Fair Value | 108,284 | $ 92,251 |
Mortgage-backed and collateralized mortgage obligations | ||
Securities Available-for-Sale, Amortized Cost | ||
Securities not due at a single maturity date | $ 245,569 | |
Securities Available-for-Sale, Weighted Average Yield | ||
Securities not due at a single maturity date, Weighted Average Yield (as a percent) | 2.43% | |
Securities Available-for-Sale, Fair Value | ||
Securities not due at a single maturity date | $ 248,113 |
Securities - Unrealized Loss Po
Securities - Unrealized Loss Positions (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)security | Sep. 30, 2016USD ($)security | |
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 26 | 20 |
Greater than 12 months in an unrealized loss position | security | 29 | 31 |
Total | security | 55 | 51 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 3,215 | $ 1,209 |
Greater than 12 months in an unrealized loss position | 11,821 | 10,771 |
Total | 15,036 | 11,980 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 142,402 | 92,145 |
Greater than 12 months in an unrealized loss position | 245,409 | 204,599 |
Total | $ 387,811 | $ 296,744 |
Securities Held-to-Maturity, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 8 | |
Greater than 12 months in an unrealized loss position | security | 2 | |
Total | security | 10 | |
Securities Held-to-Maturity, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 505 | |
Greater than 12 months in an unrealized loss position | 460 | |
Total | 965 | |
Securities Held-to-Maturity, Fair Value | ||
Less than 12 months in an unrealized loss position | 40,307 | |
Greater than 12 months in an unrealized loss position | 33,842 | |
Total | $ 74,149 | |
U.S. Treasury | ||
Securities Available-for-Sale, Number of Securities | ||
Greater than 12 months in an unrealized loss position | security | 1 | |
Total | security | 1 | |
Securities Available-for-Sale, Unrealized Losses | ||
Greater than 12 months in an unrealized loss position | $ 127 | |
Total | 127 | |
Securities Available-for-Sale, Fair Value | ||
Greater than 12 months in an unrealized loss position | 1,556 | |
Total | $ 1,556 | |
U.S. government agencies | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 1 | |
Greater than 12 months in an unrealized loss position | security | 1 | |
Total | security | 1 | 1 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 44 | |
Greater than 12 months in an unrealized loss position | $ 158 | |
Total | 44 | 158 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 1,996 | |
Greater than 12 months in an unrealized loss position | 1,503 | |
Total | $ 1,996 | $ 1,503 |
States and political subdivisions | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 2 | |
Greater than 12 months in an unrealized loss position | security | 1 | |
Total | security | 3 | |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 19 | |
Greater than 12 months in an unrealized loss position | 81 | |
Total | 100 | |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 1,541 | |
Greater than 12 months in an unrealized loss position | 1,713 | |
Total | $ 3,254 | |
Corporate bonds | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 5 | 2 |
Greater than 12 months in an unrealized loss position | security | 3 | 2 |
Total | security | 8 | 4 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 292 | $ 52 |
Greater than 12 months in an unrealized loss position | 465 | 176 |
Total | 757 | 228 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 14,866 | 5,423 |
Greater than 12 months in an unrealized loss position | 14,534 | 5,307 |
Total | $ 29,400 | $ 10,730 |
Collateralized mortgage obligations | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 4 | 10 |
Greater than 12 months in an unrealized loss position | security | 7 | 6 |
Total | security | 11 | 16 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 334 | $ 415 |
Greater than 12 months in an unrealized loss position | 1,513 | 343 |
Total | 1,847 | 758 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 16,218 | 50,958 |
Greater than 12 months in an unrealized loss position | 43,618 | 17,020 |
Total | $ 59,836 | $ 67,978 |
Securities Held-to-Maturity, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 8 | |
Greater than 12 months in an unrealized loss position | security | 2 | |
Total | security | 10 | |
Securities Held-to-Maturity, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 505 | |
Greater than 12 months in an unrealized loss position | 460 | |
Total | 965 | |
Securities Held-to-Maturity, Fair Value | ||
Less than 12 months in an unrealized loss position | 40,307 | |
Greater than 12 months in an unrealized loss position | 33,842 | |
Total | $ 74,149 | |
Asset-backed securities | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 9 | 6 |
Greater than 12 months in an unrealized loss position | security | 8 | 10 |
Total | security | 17 | 16 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 2,080 | $ 694 |
Greater than 12 months in an unrealized loss position | 7,958 | 8,958 |
Total | 10,038 | 9,652 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 78,301 | 23,817 |
Greater than 12 months in an unrealized loss position | 121,217 | 99,432 |
Total | $ 199,518 | $ 123,249 |
Collateralized loan obligations | ||
Securities Available-for-Sale, Number of Securities | ||
Less than 12 months in an unrealized loss position | security | 5 | 2 |
Greater than 12 months in an unrealized loss position | security | 9 | 12 |
Total | security | 14 | 14 |
Securities Available-for-Sale, Unrealized Losses | ||
Less than 12 months in an unrealized loss position | $ 446 | $ 48 |
Greater than 12 months in an unrealized loss position | 1,677 | 1,136 |
Total | 2,123 | 1,184 |
Securities Available-for-Sale, Fair Value | ||
Less than 12 months in an unrealized loss position | 29,480 | 11,947 |
Greater than 12 months in an unrealized loss position | 62,771 | 81,337 |
Total | $ 92,251 | $ 93,284 |
Loans - Major Classifications (
Loans - Major Classifications (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Loans | |||
Total loans, gross | $ 1,201,788 | $ 1,132,678 | |
Net deferred loan fees | 1,064 | 1,037 | |
Total Loans | 1,202,852 | 1,133,715 | $ 1,132,912 |
Overdraft | |||
Loans | |||
Total loans, gross | 403 | 483 | |
Other | |||
Loans | |||
Total loans, gross | 10,114 | 10,130 | |
Commercial | |||
Loans | |||
Total loans, gross | 169,824 | 130,362 | |
Total Loans | 184,034 | 141,315 | 129,733 |
Real estate - commercial | |||
Loans | |||
Total loans, gross | 617,280 | 605,721 | |
Total Loans | 617,280 | 609,937 | |
Real estate - commercial | Construction Loans | |||
Loans | |||
Total loans, gross | 28,786 | 19,806 | |
Total Loans | 28,786 | 23,461 | |
Real estate - residential | |||
Loans | |||
Total loans, gross | 357,846 | 351,007 | |
Total Loans | 357,846 | 354,106 | |
Consumer | |||
Loans | |||
Total loans, gross | 3,325 | 4,216 | |
Total Loans | 3,325 | 4,216 | $ 4,005 |
Lease financing receivables | |||
Loans | |||
Total loans, gross | $ 14,210 | $ 10,953 |
Loans - Major Classifications -
Loans - Major Classifications - Loan Concentrations (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Total real estate | Loan receivables | Customer concentration risk | ||
Loans | ||
Loans receivable as a percentage of total portfolio | 83.50% | 86.10% |
Loans - Aging Analysis (Details
Loans - Aging Analysis (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Aged analysis of past due loans | |||
Total Past Due | $ 3,869 | $ 3,717 | |
Current | 1,182,247 | 1,115,609 | |
Nonaccrual | 16,736 | 14,389 | |
Total Loans | 1,202,852 | 1,133,715 | $ 1,132,912 |
Recorded Investment 90 days or Greater Past Due and Accruing | 483 | 65 | |
30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 1,732 | 2,942 | |
60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 1,654 | 710 | |
90 Days or Greater Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 483 | 65 | |
Commercial | |||
Aged analysis of past due loans | |||
Total Past Due | 182 | 394 | |
Current | 183,269 | 140,848 | |
Nonaccrual | 583 | 73 | |
Total Loans | 184,034 | 141,315 | 129,733 |
Commercial | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 182 | 394 | |
Real estate - commercial | |||
Aged analysis of past due loans | |||
Total Loans | 617,280 | 609,937 | |
Real estate - commercial | Owner occupied general purpose | |||
Aged analysis of past due loans | |||
Total Past Due | 96 | 771 | |
Current | 125,733 | 123,479 | |
Nonaccrual | 1,492 | 1,254 | |
Total Loans | 127,321 | 125,504 | |
Real estate - commercial | Owner occupied general purpose | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 96 | 652 | |
Real estate - commercial | Owner occupied general purpose | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 119 | ||
Real estate - commercial | Owner occupied special purpose | |||
Aged analysis of past due loans | |||
Total Past Due | 358 | ||
Current | 167,664 | 170,827 | |
Nonaccrual | 397 | 763 | |
Total Loans | 168,061 | 171,948 | |
Real estate - commercial | Owner occupied special purpose | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 358 | ||
Real estate - commercial | Non-owner occupied general purpose | |||
Aged analysis of past due loans | |||
Total Past Due | 789 | ||
Current | 159,923 | 166,668 | |
Nonaccrual | 2,463 | 975 | |
Total Loans | 163,175 | 167,643 | |
Real estate - commercial | Non-owner occupied general purpose | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 789 | ||
Real estate - commercial | Non-owner occupied special purpose | |||
Aged analysis of past due loans | |||
Current | 103,990 | 92,387 | |
Nonaccrual | 1,013 | ||
Total Loans | 105,003 | 92,387 | |
Real estate - commercial | Retail properties | |||
Aged analysis of past due loans | |||
Current | 37,685 | 34,352 | |
Nonaccrual | 1,980 | ||
Total Loans | 39,665 | 34,352 | |
Real estate - commercial | Farm | |||
Aged analysis of past due loans | |||
Total Past Due | 1,372 | ||
Current | 12,683 | 12,615 | |
Nonaccrual | 1,272 | ||
Total Loans | 14,055 | 13,887 | |
Real estate - commercial | Farm | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 22 | ||
Real estate - commercial | Farm | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 1,350 | ||
Real estate - residential | |||
Aged analysis of past due loans | |||
Total Loans | 357,846 | 354,106 | |
Real estate - residential | Investor | |||
Aged analysis of past due loans | |||
Total Past Due | 1,005 | 101 | |
Current | 129,302 | 125,611 | |
Nonaccrual | 910 | 972 | |
Total Loans | 131,217 | 126,684 | |
Recorded Investment 90 days or Greater Past Due and Accruing | 454 | ||
Real estate - residential | Investor | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 419 | 101 | |
Real estate - residential | Investor | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 132 | ||
Real estate - residential | Investor | 90 Days or Greater Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 454 | ||
Real estate - residential | Owner occupied | |||
Aged analysis of past due loans | |||
Total Past Due | 70 | 1,529 | |
Current | 119,854 | 110,885 | |
Nonaccrual | 5,654 | 6,378 | |
Total Loans | 125,578 | 118,792 | |
Real estate - residential | Owner occupied | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 1,083 | ||
Real estate - residential | Owner occupied | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 70 | 446 | |
Real estate - residential | Revolving and junior liens | |||
Aged analysis of past due loans | |||
Total Past Due | 243 | 412 | |
Current | 98,640 | 102,500 | |
Nonaccrual | 2,168 | 2,619 | |
Total Loans | 101,051 | 105,531 | |
Recorded Investment 90 days or Greater Past Due and Accruing | 29 | ||
Real estate - residential | Revolving and junior liens | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 112 | 344 | |
Real estate - residential | Revolving and junior liens | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 102 | 68 | |
Real estate - residential | Revolving and junior liens | 90 Days or Greater Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 29 | ||
Consumer | |||
Aged analysis of past due loans | |||
Total Past Due | 10 | 4 | |
Current | 3,315 | 4,212 | |
Total Loans | 3,325 | 4,216 | 4,005 |
Consumer | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 10 | 4 | |
All other | |||
Aged analysis of past due loans | |||
Current | 11,581 | 11,650 | |
Total Loans | 11,581 | 11,650 | 11,670 |
Construction Loans | Real estate - commercial | |||
Aged analysis of past due loans | |||
Total Loans | 28,786 | $ 23,461 | |
Construction Loans | Real estate - commercial | Homebuilder | |||
Aged analysis of past due loans | |||
Current | 612 | 2,604 | |
Total Loans | 612 | 2,604 | |
Construction Loans | Real estate - commercial | Land | |||
Aged analysis of past due loans | |||
Current | 1,237 | 1,137 | |
Total Loans | 1,237 | 1,137 | |
Construction Loans | Real estate - commercial | Commercial speculative | |||
Aged analysis of past due loans | |||
Current | 8,901 | 2,117 | |
Nonaccrual | 76 | 83 | |
Total Loans | 8,977 | 2,200 | |
Construction Loans | Real estate - commercial | All other | |||
Aged analysis of past due loans | |||
Total Past Due | 102 | 148 | |
Current | 17,858 | 13,717 | |
Total Loans | 17,960 | 13,865 | |
Recorded Investment 90 days or Greater Past Due and Accruing | 65 | ||
Construction Loans | Real estate - commercial | All other | 30 to 59 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | $ 102 | 6 | |
Construction Loans | Real estate - commercial | All other | 60 to 89 Days Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | 77 | ||
Construction Loans | Real estate - commercial | All other | 90 Days or Greater Past Due | |||
Aged analysis of past due loans | |||
Total Past Due | $ 65 |
Loans - Inclusion (Details)
Loans - Inclusion (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Minimum | |
Loans by risk rating | |
Loan commitment for inclusion in credit quality analysis | $ 50,000 |
Loans - Credit Quality (Details
Loans - Credit Quality (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Loans by risk rating | |||
Total Loans | $ 1,202,852 | $ 1,133,715 | $ 1,132,912 |
Commercial | |||
Loans by risk rating | |||
Total Loans | 184,034 | 141,315 | 129,733 |
Real estate - commercial | |||
Loans by risk rating | |||
Total Loans | 617,280 | 609,937 | |
Real estate - commercial | Owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 127,321 | 125,504 | |
Real estate - commercial | Owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 168,061 | 171,948 | |
Real estate - commercial | Non-owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 163,175 | 167,643 | |
Real estate - commercial | Non-owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 105,003 | 92,387 | |
Real estate - commercial | Retail properties | |||
Loans by risk rating | |||
Total Loans | 39,665 | 34,352 | |
Real estate - commercial | Farm | |||
Loans by risk rating | |||
Total Loans | 14,055 | 13,887 | |
Real estate - residential | |||
Loans by risk rating | |||
Total Loans | 357,846 | 354,106 | |
Real estate - residential | Investor | |||
Loans by risk rating | |||
Total Loans | 131,217 | 126,684 | |
Real estate - residential | Owner occupied | |||
Loans by risk rating | |||
Total Loans | 125,578 | 118,792 | |
Real estate - residential | Revolving and junior liens | |||
Loans by risk rating | |||
Total Loans | 101,051 | 105,531 | |
Consumer | |||
Loans by risk rating | |||
Total Loans | 3,325 | 4,216 | 4,005 |
All other | |||
Loans by risk rating | |||
Total Loans | 11,581 | 11,650 | 11,670 |
Pass | |||
Loans by risk rating | |||
Total Loans | 1,165,452 | 1,101,886 | |
Pass | Commercial | |||
Loans by risk rating | |||
Total Loans | 177,082 | 136,078 | |
Pass | Real estate - commercial | Owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 124,359 | 123,827 | |
Pass | Real estate - commercial | Owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 165,333 | 171,185 | |
Pass | Real estate - commercial | Non-owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 160,463 | 163,956 | |
Pass | Real estate - commercial | Non-owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 100,191 | 88,468 | |
Pass | Real estate - commercial | Retail properties | |||
Loans by risk rating | |||
Total Loans | 36,435 | 30,432 | |
Pass | Real estate - commercial | Farm | |||
Loans by risk rating | |||
Total Loans | 11,014 | 12,615 | |
Pass | Real estate - residential | Investor | |||
Loans by risk rating | |||
Total Loans | 130,046 | 125,548 | |
Pass | Real estate - residential | Owner occupied | |||
Loans by risk rating | |||
Total Loans | 119,146 | 111,713 | |
Pass | Real estate - residential | Revolving and junior liens | |||
Loans by risk rating | |||
Total Loans | 97,973 | 102,476 | |
Pass | Consumer | |||
Loans by risk rating | |||
Total Loans | 3,324 | 4,215 | |
Pass | All other | |||
Loans by risk rating | |||
Total Loans | 11,554 | 11,650 | |
Special Mention | |||
Loans by risk rating | |||
Total Loans | 9,141 | 6,606 | |
Special Mention | Commercial | |||
Loans by risk rating | |||
Total Loans | 4,650 | 3,208 | |
Special Mention | Real estate - commercial | Owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 645 | ||
Special Mention | Real estate - commercial | Owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 2,330 | ||
Special Mention | Real estate - commercial | Non-owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 249 | 1,908 | |
Special Mention | Real estate - commercial | Retail properties | |||
Loans by risk rating | |||
Total Loans | 1,490 | ||
Special Mention | Real estate - commercial | Farm | |||
Loans by risk rating | |||
Total Loans | 1,240 | ||
Special Mention | All other | |||
Loans by risk rating | |||
Total Loans | 27 | ||
Substandard | |||
Loans by risk rating | |||
Total Loans | 28,259 | 25,223 | |
Substandard | Commercial | |||
Loans by risk rating | |||
Total Loans | 2,302 | 2,029 | |
Substandard | Real estate - commercial | Owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 2,317 | 1,677 | |
Substandard | Real estate - commercial | Owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 398 | 763 | |
Substandard | Real estate - commercial | Non-owner occupied general purpose | |||
Loans by risk rating | |||
Total Loans | 2,463 | 1,779 | |
Substandard | Real estate - commercial | Non-owner occupied special purpose | |||
Loans by risk rating | |||
Total Loans | 4,812 | 3,919 | |
Substandard | Real estate - commercial | Retail properties | |||
Loans by risk rating | |||
Total Loans | 3,230 | 2,430 | |
Substandard | Real estate - commercial | Farm | |||
Loans by risk rating | |||
Total Loans | 1,801 | 1,272 | |
Substandard | Real estate - residential | Investor | |||
Loans by risk rating | |||
Total Loans | 1,171 | 1,136 | |
Substandard | Real estate - residential | Owner occupied | |||
Loans by risk rating | |||
Total Loans | 6,432 | 7,079 | |
Substandard | Real estate - residential | Revolving and junior liens | |||
Loans by risk rating | |||
Total Loans | 3,078 | 3,055 | |
Substandard | Consumer | |||
Loans by risk rating | |||
Total Loans | 1 | 1 | |
Construction Loans | Real estate - commercial | |||
Loans by risk rating | |||
Total Loans | 28,786 | $ 23,461 | |
Construction Loans | Real estate - commercial | Homebuilder | |||
Loans by risk rating | |||
Total Loans | 612 | 2,604 | |
Construction Loans | Real estate - commercial | Land | |||
Loans by risk rating | |||
Total Loans | 1,237 | 1,137 | |
Construction Loans | Real estate - commercial | Commercial speculative | |||
Loans by risk rating | |||
Total Loans | 8,977 | 2,200 | |
Construction Loans | Real estate - commercial | All other | |||
Loans by risk rating | |||
Total Loans | 17,960 | 13,865 | |
Construction Loans | Pass | Real estate - commercial | Homebuilder | |||
Loans by risk rating | |||
Total Loans | 612 | 2,604 | |
Construction Loans | Pass | Real estate - commercial | Land | |||
Loans by risk rating | |||
Total Loans | 1,237 | 1,137 | |
Construction Loans | Pass | Real estate - commercial | Commercial speculative | |||
Loans by risk rating | |||
Total Loans | 8,901 | 2,117 | |
Construction Loans | Pass | Real estate - commercial | All other | |||
Loans by risk rating | |||
Total Loans | 17,782 | 13,865 | |
Construction Loans | Substandard | Real estate - commercial | Commercial speculative | |||
Loans by risk rating | |||
Total Loans | 76 | $ 83 | |
Construction Loans | Substandard | Real estate - commercial | All other | |||
Loans by risk rating | |||
Total Loans | $ 178 |
Loans - Repossessed Assets (Det
Loans - Repossessed Assets (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Real estate - residential | ||
Repossessed and foreclosed assets | ||
Real estate assets in process of foreclosure | $ 2.2 | $ 3.9 |
Loans - Impaired Loans - Record
Loans - Impaired Loans - Recorded Investment, Unpaid Principal Balance and Related Allowance (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Recorded Investment | ||
With no related allowance recorded | $ 22,259 | $ 20,725 |
With an allowance recorded | 864 | 161 |
Total impaired loans | 23,123 | 20,886 |
Unpaid Principal Balance | ||
With no related allowance recorded | 26,830 | 24,718 |
With an allowance recorded | 1,242 | 166 |
Total impaired loans | 28,072 | 24,884 |
Related Allowance | ||
With an allowance recorded | 514 | 34 |
Commercial | ||
Recorded Investment | ||
With no related allowance recorded | 382 | 70 |
With an allowance recorded | 3 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 464 | 149 |
With an allowance recorded | 8 | |
Related Allowance | ||
With an allowance recorded | 3 | |
Real estate - commercial | Owner occupied general purpose | ||
Recorded Investment | ||
With no related allowance recorded | 2,509 | 2,314 |
Unpaid Principal Balance | ||
With no related allowance recorded | 2,807 | 3,004 |
Real estate - commercial | Owner occupied special purpose | ||
Recorded Investment | ||
With no related allowance recorded | 397 | 763 |
Unpaid Principal Balance | ||
With no related allowance recorded | 525 | 871 |
Real estate - commercial | Non-owner occupied general purpose | ||
Recorded Investment | ||
With no related allowance recorded | 2,263 | 1,047 |
With an allowance recorded | 264 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 2,458 | 1,065 |
With an allowance recorded | 603 | |
Related Allowance | ||
With an allowance recorded | 264 | |
Real estate - commercial | Non-owner occupied special purpose | ||
Recorded Investment | ||
With no related allowance recorded | 1,013 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 1,649 | |
Real estate - commercial | Retail properties | ||
Recorded Investment | ||
With no related allowance recorded | 1,980 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 2,364 | |
Real estate - commercial | Farm | ||
Recorded Investment | ||
With no related allowance recorded | 1,272 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 1,338 | |
Real estate - residential | Investor | ||
Recorded Investment | ||
With no related allowance recorded | 1,822 | 1,906 |
Unpaid Principal Balance | ||
With no related allowance recorded | 2,156 | 2,259 |
Real estate - residential | Owner occupied | ||
Recorded Investment | ||
With no related allowance recorded | 9,294 | 10,539 |
With an allowance recorded | 600 | 112 |
Unpaid Principal Balance | ||
With no related allowance recorded | 10,720 | 11,999 |
With an allowance recorded | 639 | 112 |
Related Allowance | ||
With an allowance recorded | 250 | 31 |
Real estate - residential | Revolving and junior liens | ||
Recorded Investment | ||
With no related allowance recorded | 2,322 | 2,731 |
With an allowance recorded | 46 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 3,336 | 3,947 |
With an allowance recorded | 46 | |
Consumer | ||
Recorded Investment | ||
With no related allowance recorded | 201 | |
Unpaid Principal Balance | ||
With no related allowance recorded | 268 | |
Construction Loans | Real estate - commercial | Commercial speculative | ||
Recorded Investment | ||
With no related allowance recorded | 76 | 83 |
Unpaid Principal Balance | ||
With no related allowance recorded | $ 83 | $ 86 |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Average Recorded Investment | ||
With no related allowance recorded | $ 21,492 | $ 29,891 |
With an allowance recorded | 513 | 618 |
Total impaired loans | 22,005 | 30,509 |
Interest Income Recognized | ||
With no related allowance recorded | 232 | 227 |
With an allowance recorded | 31 | 2 |
Total impaired loans | 263 | 229 |
Commercial | ||
Average Recorded Investment | ||
With no related allowance recorded | 226 | 1,014 |
With an allowance recorded | 2 | 2 |
Real estate - commercial | Owner occupied general purpose | ||
Average Recorded Investment | ||
With no related allowance recorded | 2,412 | 4,857 |
Interest Income Recognized | ||
With no related allowance recorded | 66 | 62 |
Real estate - commercial | Owner occupied special purpose | ||
Average Recorded Investment | ||
With no related allowance recorded | 580 | 1,288 |
Real estate - commercial | Non-owner occupied general purpose | ||
Average Recorded Investment | ||
With no related allowance recorded | 1,655 | 2,583 |
With an allowance recorded | 132 | 38 |
Interest Income Recognized | ||
With no related allowance recorded | 2 | |
With an allowance recorded | 31 | |
Real estate - commercial | Non-owner occupied special purpose | ||
Average Recorded Investment | ||
With no related allowance recorded | 506 | 712 |
Real estate - commercial | Retail properties | ||
Average Recorded Investment | ||
With no related allowance recorded | 990 | |
Real estate - commercial | Farm | ||
Average Recorded Investment | ||
With no related allowance recorded | 636 | 636 |
Real estate - residential | Investor | ||
Average Recorded Investment | ||
With no related allowance recorded | 1,864 | 2,050 |
With an allowance recorded | 67 | |
Interest Income Recognized | ||
With no related allowance recorded | 35 | 33 |
Real estate - residential | Owner occupied | ||
Average Recorded Investment | ||
With no related allowance recorded | 9,916 | 11,309 |
With an allowance recorded | 356 | 12 |
Interest Income Recognized | ||
With no related allowance recorded | 120 | 128 |
Real estate - residential | Revolving and junior liens | ||
Average Recorded Investment | ||
With no related allowance recorded | 2,527 | 2,500 |
With an allowance recorded | 23 | 364 |
Interest Income Recognized | ||
With no related allowance recorded | 9 | 4 |
With an allowance recorded | 2 | |
Consumer | ||
Average Recorded Investment | ||
With no related allowance recorded | 100 | |
Construction Loans | Real estate - commercial | Homebuilder | ||
Average Recorded Investment | ||
With no related allowance recorded | 896 | |
Construction Loans | Real estate - commercial | Commercial speculative | ||
Average Recorded Investment | ||
With no related allowance recorded | $ 80 | 1,780 |
Construction Loans | Real estate - commercial | All other | ||
Average Recorded Investment | ||
With no related allowance recorded | 266 | |
With an allowance recorded | $ 135 |
Loans - TDR (Details)
Loans - TDR (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)contract | Sep. 30, 2015USD ($)contract | Sep. 30, 2016USD ($)contract | Sep. 30, 2015USD ($)contract | Dec. 31, 2015USD ($) | |
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 1 | 4 | 8 | 10 | |
Pre-modification recorded investment | $ 70 | $ 423 | $ 1,090 | $ 960 | |
Post-modification recorded investment | $ 70 | $ 360 | $ 949 | $ 903 | |
TDR's defaulted | |||||
# of contracts | contract | 0 | 0 | 0 | 0 | |
Other information | |||||
Total Past Due | $ 3,869 | $ 3,869 | $ 3,717 | ||
Other | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 1 | 3 | 1 | 3 | |
Pre-modification recorded investment | $ 70 | $ 378 | $ 70 | $ 378 | |
Post-modification recorded investment | 70 | $ 349 | $ 70 | $ 349 | |
HAMP | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 1 | 4 | |||
Pre-modification recorded investment | $ 45 | $ 178 | |||
Post-modification recorded investment | $ 11 | $ 142 | |||
Real estate - commercial | Other | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 2 | ||||
Pre-modification recorded investment | $ 312 | ||||
Post-modification recorded investment | 211 | ||||
Real estate - commercial | Owner occupied special purpose | |||||
Other information | |||||
Total Past Due | 358 | ||||
Real estate - commercial | Owner occupied general purpose | |||||
Other information | |||||
Total Past Due | 96 | 96 | 771 | ||
Real estate - commercial | Non-owner occupied general purpose | |||||
Other information | |||||
Total Past Due | 789 | 789 | |||
Real estate - residential | Investor | |||||
Other information | |||||
Total Past Due | 1,005 | 1,005 | 101 | ||
Real estate - residential | Owner occupied | |||||
Other information | |||||
Total Past Due | 70 | $ 70 | 1,529 | ||
Real estate - residential | Owner occupied | Other | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 3 | ||||
Pre-modification recorded investment | $ 404 | ||||
Post-modification recorded investment | $ 412 | ||||
Real estate - residential | Owner occupied | HAMP | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 1 | ||||
Pre-modification recorded investment | $ 239 | ||||
Post-modification recorded investment | 235 | ||||
Real estate - residential | Revolving and junior liens | |||||
Other information | |||||
Total Past Due | 243 | $ 243 | 412 | ||
Real estate - residential | Revolving and junior liens | HAMP | |||||
Troubled debt restructurings - modified during the period | |||||
# of contracts | contract | 4 | ||||
Pre-modification recorded investment | $ 469 | ||||
Post-modification recorded investment | 433 | ||||
Commercial | |||||
Other information | |||||
Total Past Due | 182 | 182 | 394 | ||
90 Days or Greater Past Due | |||||
Other information | |||||
Total Past Due | 483 | 483 | $ 65 | ||
90 Days or Greater Past Due | Real estate - residential | Investor | |||||
Other information | |||||
Total Past Due | 454 | 454 | |||
90 Days or Greater Past Due | Real estate - residential | Revolving and junior liens | |||||
Other information | |||||
Total Past Due | $ 29 | $ 29 |
Allowance for Loan Losses (Deta
Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Allowance for loan losses: | |||||
Beginning Balance | $ 15,822 | $ 18,321 | $ 16,223 | $ 21,637 | |
Charge-offs | 1,197 | 576 | 2,508 | 3,982 | |
Recoveries | 358 | 968 | 1,268 | 3,358 | |
(Release) provision | (2,100) | (4,400) | |||
Ending Balance | 14,983 | 16,613 | 14,983 | 16,613 | |
Ending balance: Individually evaluated for impairment | 514 | 25 | 514 | 25 | |
Ending balance: Collectively evaluated for impairment | 14,469 | 16,588 | 14,469 | 16,588 | |
Loans: | |||||
Ending balance | 1,202,852 | 1,132,912 | 1,202,852 | 1,132,912 | $ 1,133,715 |
Ending balance: Individually evaluated for impairment | 23,123 | 25,132 | 23,123 | 25,132 | |
Ending balance: Collectively evaluated for impairment | 1,179,729 | 1,107,780 | 1,179,729 | 1,107,780 | |
Commercial | |||||
Allowance for loan losses: | |||||
Beginning Balance | 1,695 | 1,632 | 2,096 | 1,644 | |
Charge-offs | 76 | 101 | 108 | 991 | |
Recoveries | 10 | 213 | 22 | 437 | |
(Release) provision | 212 | 340 | (169) | 994 | |
Ending Balance | 1,841 | 2,084 | 1,841 | 2,084 | |
Ending balance: Individually evaluated for impairment | 5 | 5 | |||
Ending balance: Collectively evaluated for impairment | 1,841 | 2,079 | 1,841 | 2,079 | |
Loans: | |||||
Ending balance | 184,034 | 129,733 | 184,034 | 129,733 | 141,315 |
Ending balance: Individually evaluated for impairment | 382 | 532 | 382 | 532 | |
Ending balance: Collectively evaluated for impairment | 183,652 | 129,201 | 183,652 | 129,201 | |
Real estate - commercial | |||||
Allowance for loan losses: | |||||
Beginning Balance | 8,954 | 10,201 | 9,013 | 12,577 | |
Charge-offs | 792 | 21 | 1,484 | 1,547 | |
Recoveries | 27 | 275 | 255 | 1,570 | |
(Release) provision | 753 | (1,296) | 1,158 | (3,441) | |
Ending Balance | 8,942 | 9,159 | 8,942 | 9,159 | |
Ending balance: Individually evaluated for impairment | 264 | 264 | |||
Ending balance: Collectively evaluated for impairment | 8,678 | 9,159 | 8,678 | 9,159 | |
Loans: | |||||
Ending balance | 617,280 | 609,937 | 617,280 | 609,937 | |
Ending balance: Individually evaluated for impairment | 8,426 | 4,974 | 8,426 | 4,974 | |
Ending balance: Collectively evaluated for impairment | 608,854 | 604,963 | 608,854 | 604,963 | |
Real estate - residential | |||||
Allowance for loan losses: | |||||
Beginning Balance | 2,933 | 1,860 | 1,694 | 1,981 | |
Charge-offs | 220 | 342 | 657 | 1,119 | |
Recoveries | 199 | 192 | 718 | 819 | |
(Release) provision | (577) | (42) | 580 | (13) | |
Ending Balance | 2,335 | 1,668 | 2,335 | 1,668 | |
Ending balance: Individually evaluated for impairment | 250 | 20 | 250 | 20 | |
Ending balance: Collectively evaluated for impairment | 2,085 | 1,648 | 2,085 | 1,648 | |
Loans: | |||||
Ending balance | 357,846 | 354,106 | 357,846 | 354,106 | |
Ending balance: Individually evaluated for impairment | 14,038 | 15,823 | 14,038 | 15,823 | |
Ending balance: Collectively evaluated for impairment | 343,808 | 338,283 | 343,808 | 338,283 | |
Consumer | |||||
Allowance for loan losses: | |||||
Beginning Balance | 862 | 1,249 | 1,190 | 1,454 | |
Charge-offs | 100 | 112 | 250 | 323 | |
Recoveries | 62 | 84 | 202 | 262 | |
(Release) provision | 113 | (68) | (205) | (240) | |
Ending Balance | 937 | 1,153 | 937 | 1,153 | |
Ending balance: Collectively evaluated for impairment | 937 | 1,153 | 937 | 1,153 | |
Loans: | |||||
Ending balance | 3,325 | 4,005 | 3,325 | 4,005 | 4,216 |
Ending balance: Individually evaluated for impairment | 201 | 201 | |||
Ending balance: Collectively evaluated for impairment | 3,124 | 4,005 | 3,124 | 4,005 | |
All other | |||||
Allowance for loan losses: | |||||
Beginning Balance | 998 | 2,717 | 1,965 | 2,506 | |
(Release) provision | (540) | (613) | (1,507) | (402) | |
Ending Balance | 458 | 2,104 | 458 | 2,104 | |
Ending balance: Collectively evaluated for impairment | 458 | 2,104 | 458 | 2,104 | |
Loans: | |||||
Ending balance | 11,581 | 11,670 | 11,581 | 11,670 | $ 11,650 |
Ending balance: Collectively evaluated for impairment | 11,581 | 11,670 | 11,581 | 11,670 | |
Construction Loans | Real estate - commercial | |||||
Allowance for loan losses: | |||||
Beginning Balance | 380 | 662 | 265 | 1,475 | |
Charge-offs | 9 | 9 | 2 | ||
Recoveries | 60 | 204 | 71 | 270 | |
(Release) provision | 39 | (421) | 143 | (1,298) | |
Ending Balance | 470 | 445 | 470 | 445 | |
Ending balance: Collectively evaluated for impairment | 470 | 445 | 470 | 445 | |
Loans: | |||||
Ending balance | 28,786 | 23,461 | 28,786 | 23,461 | |
Ending balance: Individually evaluated for impairment | 76 | 3,803 | 76 | 3,803 | |
Ending balance: Collectively evaluated for impairment | $ 28,710 | $ 19,658 | $ 28,710 | $ 19,658 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Activity in the other real estate owned (OREO) portfolio, net of valuation reserve | ||||
Balance at beginning of period | $ 16,252 | $ 31,964 | $ 19,141 | $ 31,982 |
Property additions | 255 | 846 | 1,223 | 7,861 |
Property improvements | 4 | 16 | ||
Less: Property disposals, net of gains/losses | 2,002 | 7,231 | 4,931 | 11,567 |
Less: Period valuation adjustments | 365 | 1,128 | 1,305 | 3,825 |
Balance at end of period | 14,144 | 24,451 | 14,144 | 24,451 |
Activity in the valuation allowance | ||||
Balance at beginning of period | 13,377 | 20,069 | 14,127 | 19,229 |
Provision for unrealized losses | 365 | 1,128 | 1,305 | 3,825 |
Reductions taken on sales | (488) | (1,325) | (2,178) | (3,275) |
Balance at end of period | 13,254 | 19,872 | 13,254 | 19,872 |
Expenses related to foreclosed assets, net of lease revenue | ||||
Gain on sales, net | (249) | (432) | (316) | (769) |
Provision for unrealized losses | 365 | 1,128 | 1,305 | 3,825 |
Operating expenses | 361 | 518 | 1,217 | 2,268 |
Less: Lease revenue | 51 | 237 | 163 | 607 |
Expenses related to OREO, net of lease revenue | $ 426 | $ 977 | $ 2,043 | $ 4,717 |
Deposits - Components and Matur
Deposits - Components and Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Deposits | ||
Noninterest bearing demand | $ 473,477 | $ 442,639 |
Savings | 253,454 | 252,169 |
NOW accounts | 391,188 | 376,720 |
Money market accounts | 259,495 | 279,709 |
Certificates of deposit of less than $100,000 | 230,748 | 235,336 |
Certificates of deposit of $100,000 up to $250,000 | 105,868 | 109,855 |
Certificates of deposit of $250,000 or more | 63,152 | 62,658 |
Total deposits | $ 1,777,382 | $ 1,759,086 |
Borrowings - Summary (Details)
Borrowings - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Borrowings | ||
Total borrowings | $ 149,685 | $ 152,113 |
Securities sold under repurchase agreements | ||
Borrowings | ||
Total borrowings | 46,606 | 34,070 |
FHLBC advances | ||
Borrowings | ||
Total borrowings | 15,000 | |
Junior subordinated debentures | ||
Borrowings | ||
Total borrowings | 57,579 | 57,543 |
Subordinated debt | ||
Borrowings | ||
Total borrowings | 45,000 | 45,000 |
Notes payable and other borrowings | ||
Borrowings | ||
Total borrowings | $ 500 | $ 500 |
Borrowings - Additional informa
Borrowings - Additional information (Details) | 9 Months Ended | ||
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | Jan. 31, 2008USD ($) | |
Borrowings | |||
Bank owned FHLBC stock | $ 3,200,000 | $ 3,700,000 | |
Total borrowings | 149,685,000 | 152,113,000 | |
Securities sold under repurchase agreements | |||
Borrowings | |||
Carrying amount of securities secured | 46,600,000 | 34,100,000 | |
Fair value of the pledged collateral | $ 47,600,000 | 45,400,000 | |
Number of customers having secured balances exceeding specified percentage of stockholders equity | item | 1 | ||
Total borrowings | $ 46,606,000 | 34,070,000 | |
Securities sold under repurchase agreements | Minimum | |||
Borrowings | |||
Threshold percentage of stockholders' equity | 10.00% | ||
FHLBC advances | |||
Borrowings | |||
Borrowings at FHLBC as percentage of total assets | 35.00% | ||
Borrowings at FHLBC as percentage of book value of certain mortgage loans | 60.00% | ||
FHLBC advance amount | 15,000,000 | ||
Bank owned FHLBC stock | $ 3,200,000 | ||
Fair value of securities collateralized | 65,400,000 | ||
Principal balance of loans collateralized | 176,400,000 | ||
Combined collateral value | 178,600,000 | ||
Amount available for additional borrowings | 142,300,000 | ||
Total borrowings | 15,000,000 | ||
Subordinated debt | |||
Borrowings | |||
Face amount | 45,000,000 | ||
Total borrowings | $ 45,000,000 | 45,000,000 | |
Subordinated debt | LIBOR | |||
Borrowings | |||
Variable interest rate base | three-month LIBOR | ||
Basis points added to reference rate (as a percent) | 1.50% | ||
Notes payable and other borrowings | |||
Borrowings | |||
Total borrowings | $ 500,000 | 500,000 | |
Correspondent Bank | |||
Borrowings | |||
Maximum borrowing capacity | $ 45,500,000 | ||
Senior debt facility | |||
Borrowings | |||
Maximum borrowing capacity | $ 30,500,000 | ||
Senior debt facility | LIBOR | |||
Borrowings | |||
Variable interest rate base | three-month LIBOR | ||
Basis points added to reference rate (as a percent) | 0.90% | ||
Senior debt facility | Prime rate | |||
Borrowings | |||
Variable interest rate base | prime | ||
Term debt | |||
Borrowings | |||
Maximum borrowing capacity | $ 500,000 | ||
Total borrowings | 500,000 | 500,000 | |
Junior subordinated debentures | |||
Borrowings | |||
Total borrowings | $ 57,579,000 | $ 57,543,000 |
Junior Subordinated Debentures
Junior Subordinated Debentures - Issuance (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Apr. 30, 2007 | Jul. 31, 2003 | Jun. 30, 2003 | Sep. 30, 2016 | Dec. 31, 2015 | |
Junior subordinated debentures | |||||
Junior subordinated debentures | $ 57,579 | $ 57,543 | |||
Old Second Capital Trust I | |||||
Junior subordinated debentures | |||||
Proceeds from sale of cumulative trust preferred securities | $ 4,100 | $ 27,500 | |||
Maturity Period | 30 years | ||||
Cash distribution rate of trust preferred securities (as a percent) | 7.80% | ||||
Old Second Capital Trust II | |||||
Junior subordinated debentures | |||||
Proceeds from sale of cumulative trust preferred securities | $ 25,000 | ||||
Maturity Period | 30 years | ||||
Old Second Capital Trust II | Debt Instrument, Redemption, Period One [Member] | |||||
Junior subordinated debentures | |||||
Cash distribution fixed rate of trust preferred securities (as a percent) | 6.77% | ||||
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member] | |||||
Junior subordinated debentures | |||||
Basis points added to cash distribution floating rate base (as a percent) | 1.50% | ||||
Old Second Capital Trust II | Debt Instrument, Redemption, Period Two [Member] | LIBOR | |||||
Junior subordinated debentures | |||||
Cash distribution, floating rate base | three-month LIBOR | ||||
Junior subordinated debentures | Old Second Capital Trust I | |||||
Junior subordinated debentures | |||||
Junior subordinated debentures | $ 32,600 | ||||
Junior subordinated debentures | Old Second Capital Trust II | |||||
Junior subordinated debentures | |||||
Junior subordinated debentures | $ 25,800 |
Equity Compensation Plans - Opt
Equity Compensation Plans - Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity Compensation Plans | ||||
Total compensation cost | $ 482,000 | |||
2014 Plan | ||||
Equity Compensation Plans | ||||
Number of shares issuable | 596,007 | 596,007 | ||
Stock options | ||||
Equity Compensation Plans | ||||
Granted (in shares) | 0 | 0 | ||
Term of stock options granted | 10 years | |||
Exercised (in shares) | 0 | 0 | 0 | 0 |
Total unrecognized compensation cost | $ 0 | $ 0 | ||
Shares | ||||
Beginning outstanding (in shares) | 162,500 | |||
Ending outstanding (in shares) | 162,500 | 162,500 | ||
Exercisable at end of period (in shares) | 162,500 | 162,500 | ||
Weighted Average Exercise Price | ||||
Beginning outstanding (in dollars per share) | $ 27.03 | |||
Ending outstanding (in dollars per share) | $ 27.03 | 27.03 | ||
Exercisable at end of period (in dollars per share) | $ 27.03 | $ 27.03 | ||
Weighted Average Remaining Contractual Term (years) | ||||
Ending outstanding (in years) | 10 months 24 days | |||
Exercisable at end of period | 10 months 24 days |
Equity Compensation Plans - Res
Equity Compensation Plans - Restricted Stock and RSUs (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity Compensation Plans | |||
Vesting period | 3 years | ||
Changes in unvested awards | |||
Nonvested at the beginning of the period (in shares) | 348,000 | ||
Granted (in shares) | 101,500 | 130,000 | 101,500 |
Vested (in shares) | (105,500) | ||
Forfeited (in shares) | (1,500) | ||
Nonvested at the end of the period (in shares) | 371,000 | ||
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 4.50 | ||
Granted (in dollars per share) | 6.89 | ||
Vested (in dollars per share) | 3.28 | ||
Forfeited (in dollars per share) | 6.81 | ||
Nonvested at the end of the period (in dollars per share) | $ 5.68 | ||
Additional information | |||
Total unrecognized compensation cost of restricted awards | $ 869 | $ 1,100 | $ 869 |
Expected weighted-average period for recognition of unrecognized compensation | 2 years 1 month 13 days | 1 year 11 months 27 days |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Basic earnings per share: | ||||
Weighted-average common shares outstanding | 29,554,716 | 29,478,429 | 29,524,796 | 29,474,833 |
Net income | $ 3,499 | $ 3,924 | $ 10,666 | $ 11,552 |
Preferred stock dividends and accretion | 339 | 1,873 | ||
Preferred stock dividends and accretion of discount | 339 | 1,873 | ||
Net income available to common stockholders | $ 3,499 | $ 3,585 | $ 10,666 | $ 9,679 |
Basic earnings per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.33 |
Diluted earnings per share: | ||||
Weighted-average common shares outstanding | 29,554,716 | 29,478,429 | 29,524,796 | 29,474,833 |
Diluted average common shares outstanding | 29,838,182 | 29,746,429 | 29,828,430 | 29,724,234 |
Net earnings available to common stockholders | $ 3,499 | $ 3,585 | $ 10,666 | $ 9,679 |
Diluted earnings per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.33 |
Number of antidilutive options and warrants excluded from the diluted earnings per share calculation (in shares) | 1,238 | 413 | ||
Antidilutive options and warrants | ||||
Diluted earnings per share: | ||||
Number of antidilutive options and warrants excluded from the diluted earnings per share calculation (in shares) | 967,339 | 1,044,339 | 977,426 | 1,044,339 |
Warrants | ||||
Diluted earnings per share: | ||||
Number of antidilutive options and warrants excluded from the diluted earnings per share calculation (in shares) | 815,339 | 815,339 | ||
Warrants, exercise price (in dollars per share) | $ 13.43 | $ 13.43 | $ 13.43 | $ 13.43 |
Restricted stock and restricted stock units | ||||
Diluted earnings per share: | ||||
Dilutive effect of nonvested restricted awards (in shares) | 282,228 | 268,000 | 303,221 | 249,401 |
Regulatory & Capital Matters (D
Regulatory & Capital Matters (Details) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Regulatory & Capital Matters | ||
Tier 1 capital leverage ratio (as a percent) | 9.32% | 8.69% |
Total capital ratio (as a percent) | 15.42% | 15.56% |
Old Second National Bank | ||
Regulatory & Capital Matters | ||
Tier 1 capital leverage ratio (as a percent) | 10.65% | 9.94% |
Tier One leverage ratio, basis point increase (as a percent) | 0.71% | |
Total capital ratio (as a percent) | 16.24% | 15.23% |
Risk-based capital ratio, basis point decrease (as a percent) | 1.01% | |
Old Second National Bank | Minimum | ||
Regulatory & Capital Matters | ||
Tier 1 capital leverage ratio, board-designated threshold | 8.00% | |
Total Capital Ratio, board-designated threshold (as a percent) | 12.00% |
Regulatory & Capital Matters -
Regulatory & Capital Matters - Capital Levels and Industry Defined Regulatory Minimums (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Common equity tier 1 capital to risk weighted assets | ||
Actual | $ 157,172 | $ 151,410 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | $ 75,422 | $ 64,582 |
Common equity tier 1 capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 10.68% | 10.55% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 5.125% | 4.50% |
Total capital to risk weighted assets, Amount | ||
Actual at period end | $ 226,785 | $ 223,311 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | $ 126,850 | $ 114,813 |
Total capital to risk weighted assets, Ratio | ||
Risk-based capital ratio (as a percent) | 15.42% | 15.56% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 8.625% | 8.00% |
Tier 1 capital to risk weighted assets, Amount | ||
Actual | $ 194,910 | $ 176,625 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | $ 97,455 | $ 86,159 |
Tier 1 capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 13.25% | 12.30% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 6.625% | 6.00% |
Tier 1 capital to average assets, Amount | ||
Actual | $ 194,910 | $ 176,625 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | $ 83,652 | $ 81,300 |
Tier 1 capital to average assets, Ratio | ||
Tier 1 capital leverage ratio (as a percent) | 9.32% | 8.69% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 4.00% | 4.00% |
Old Second National Bank | ||
Common equity tier 1 capital to risk weighted assets | ||
Actual | $ 223,359 | $ 202,158 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | 75,211 | 64,519 |
Minimum Required to Be Well Capitalized | $ 95,390 | $ 93,193 |
Common equity tier 1 capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 15.22% | 14.10% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 5.125% | 4.50% |
Minimum Required to Be Well Capitalized (as a percent) | 6.50% | 6.50% |
Total capital to risk weighted assets, Amount | ||
Actual at period end | $ 238,337 | $ 218,375 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | 126,580 | 114,708 |
Minimum Required to Be Well Capitalized | $ 146,759 | $ 143,385 |
Total capital to risk weighted assets, Ratio | ||
Risk-based capital ratio (as a percent) | 16.24% | 15.23% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 8.625% | 8.00% |
Minimum Required to Be Well Capitalized (as a percent) | 10.00% | 10.00% |
Tier 1 capital to risk weighted assets, Amount | ||
Actual | $ 223,359 | $ 202,158 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | 97,224 | 86,025 |
Minimum Required to Be Well Capitalized | $ 117,403 | $ 114,700 |
Tier 1 capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 15.22% | 14.10% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 6.625% | 6.00% |
Minimum Required to Be Well Capitalized (as a percent) | 8.00% | 8.00% |
Tier 1 capital to average assets, Amount | ||
Actual | $ 223,359 | $ 202,158 |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable | 83,891 | 81,351 |
Minimum Required to Be Well Capitalized | $ 104,863 | $ 101,689 |
Tier 1 capital to average assets, Ratio | ||
Tier 1 capital leverage ratio (as a percent) | 10.65% | 9.94% |
Minimum Required for Capital Adequacy Purposes with Capital Conservation Buffer if applicable (as a percent) | 4.00% | 4.00% |
Minimum Required to Be Well Capitalized (as a percent) | 5.00% | 5.00% |
Regulatory & Capital Matters 61
Regulatory & Capital Matters - Dividend Restrictions and Deferrals (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Dividend Restrictions and Deferrals | |
Number of previous years retained profit considered for dividend payment | 2 years |
Minimum capital requirements, minimum percentage required, 2016 | 0.625% |
Minimum capital requirements, minimum percentage required, 2017 | 1.25% |
Minimum capital requirements, minimum percentage required, 2018 | 1.875% |
Minimum capital requirements, minimum percentage required, 2019 and thereafter | 2.50% |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Securities available-for-sale | $ 531,057 | $ 456,066 |
Mortgage servicing rights | 5,075 | 5,847 |
U.S. Treasury | ||
Assets: | ||
Securities available-for-sale | 1,509 | |
U.S. government agencies | ||
Assets: | ||
Securities available-for-sale | 1,503 | 1,556 |
U.S. government agency mortgage-backed | ||
Assets: | ||
Securities available-for-sale | 43,723 | 1,996 |
States and political subdivisions | ||
Assets: | ||
Securities available-for-sale | 22,254 | 30,526 |
Corporate bonds | ||
Assets: | ||
Securities available-for-sale | 10,730 | 29,400 |
Collateralized mortgage obligations | ||
Assets: | ||
Securities available-for-sale | 204,390 | 66,920 |
Asset-backed securities | ||
Assets: | ||
Securities available-for-sale | 140,173 | 231,908 |
Collateralized loan obligations | ||
Assets: | ||
Securities available-for-sale | 108,284 | 92,251 |
Level 1 | ||
Assets: | ||
Securities available-for-sale | 1,509 | |
Level 2 | ||
Assets: | ||
Securities available-for-sale | 531,057 | 454,446 |
Loans held-for-sale | 3,750 | 2,849 |
Liabilities: | ||
Other liabilities | 4,910 | 631 |
Level 3 | ||
Assets: | ||
Securities available-for-sale | 111 | |
Recurring | ||
Assets: | ||
Total financial assets | 540,963 | 465,064 |
Liabilities: | ||
Total | 5,698 | 745 |
Recurring | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Loans held-for-sale | 3,750 | 2,849 |
Mortgage servicing rights | 5,075 | 5,847 |
Recurring | Interest rate swap agreements net of swap credit valuation | ||
Liabilities: | ||
Other liabilities | 5,698 | 745 |
Recurring | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Other assets | 788 | 114 |
Recurring | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Other assets | 293 | 188 |
Recurring | U.S. Treasury | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 1,509 | |
Recurring | U.S. government agencies | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 1,503 | 1,556 |
Recurring | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 43,723 | 1,996 |
Recurring | States and political subdivisions | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 22,254 | 30,526 |
Recurring | Corporate bonds | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 10,730 | 29,400 |
Recurring | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 204,390 | 66,920 |
Recurring | Asset-backed securities | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 140,173 | 231,908 |
Recurring | Collateralized loan obligations | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 108,284 | 92,251 |
Recurring | Level 1 | ||
Assets: | ||
Total financial assets | 1,509 | |
Recurring | Level 1 | U.S. Treasury | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 1,509 | |
Recurring | Level 2 | ||
Assets: | ||
Total financial assets | 535,888 | 457,597 |
Liabilities: | ||
Total | 5,698 | 745 |
Recurring | Level 2 | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Loans held-for-sale | 3,750 | 2,849 |
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | ||
Liabilities: | ||
Other liabilities | 5,698 | 745 |
Recurring | Level 2 | Interest rate swap agreements net of swap credit valuation | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Other assets | 788 | 114 |
Recurring | Level 2 | Forward MBS contracts and forward loan contracts | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Other assets | 293 | 188 |
Recurring | Level 2 | U.S. government agencies | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 1,503 | 1,556 |
Recurring | Level 2 | U.S. government agency mortgage-backed | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 43,723 | 1,996 |
Recurring | Level 2 | States and political subdivisions | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 22,254 | 30,415 |
Recurring | Level 2 | Corporate bonds | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 10,730 | 29,400 |
Recurring | Level 2 | Collateralized mortgage obligations | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 204,390 | 66,920 |
Recurring | Level 2 | Asset-backed securities | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 140,173 | 231,908 |
Recurring | Level 2 | Collateralized loan obligations | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | 108,284 | 92,251 |
Recurring | Level 3 | ||
Assets: | ||
Total financial assets | 5,075 | 5,958 |
Recurring | Level 3 | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Mortgage servicing rights | $ 5,075 | 5,847 |
Recurring | Level 3 | States and political subdivisions | Finite-Lived Intangible Assets [Member] | ||
Assets: | ||
Securities available-for-sale | $ 111 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Asset-backed securities | |||
Changes in Level 3 | |||
Beginning balance | $ 52,941 | ||
Total gains or losses | |||
Included in earnings (or changes in net assets) | (28) | ||
Included in other comprehensive income | (541) | ||
Purchases, issuances, sales, and settlements | |||
Sales | $ (27,455) | ||
Transfers out of Level 3 | (24,917) | ||
States and political subdivisions | |||
Changes in Level 3 | |||
Beginning balance | $ 111 | 118 | |
Total gains or losses | |||
Included in other comprehensive income | 9 | ||
Purchases, issuances, sales, and settlements | |||
Settlements | (78) | ||
Ending balance | 118 | 118 | |
Transfers out of Level 3 | (42) | ||
Mortgage servicing rights | |||
Changes in Level 3 | |||
Beginning balance | 5,847 | 5,462 | |
Total gains or losses | |||
Included in earnings (or changes in net assets) | (1,394) | (668) | |
Purchases, issuances, sales, and settlements | |||
Issuances | 1,209 | 1,148 | |
Settlements | (533) | (526) | |
Ending balance | $ 5,470 | $ 5,075 | $ 5,470 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative and Qualitative Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Quantitative information about Level 3 fair value measurements | ||
Mortgage servicing rights, fair value | $ 5,075,000 | $ 5,847,000 |
Minimum | ||
Quantitative information about Level 3 fair value measurements | ||
Prepayment speed (as a percent) | 6.00% | |
Maximum | ||
Quantitative information about Level 3 fair value measurements | ||
Prepayment speed (as a percent) | 35.20% | |
Weighted Average | ||
Quantitative information about Level 3 fair value measurements | ||
Prepayment speed (as a percent) | 10.10% | |
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | ||
Quantitative information about Level 3 fair value measurements | ||
Mortgage servicing rights, fair value | $ 5,075,000 | $ 5,847,000 |
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Minimum | ||
Quantitative information about Level 3 fair value measurements | ||
Mortgage servicing rights, fair value | 10 | |
Discount rate (as a percent) | 10.00% | |
Prepayment speed (as a percent) | 6.00% | |
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Maximum | ||
Quantitative information about Level 3 fair value measurements | ||
Mortgage servicing rights, fair value | 15.5 | |
Discount rate (as a percent) | 17.00% | |
Prepayment speed (as a percent) | 40.20% | |
Recurring | Mortgage servicing rights | Discounted Cash Flow | Level 3 | Weighted Average | ||
Quantitative information about Level 3 fair value measurements | ||
Mortgage servicing rights, fair value | $ 10.2 | |
Discount rate (as a percent) | 10.20% | |
Prepayment speed (as a percent) | 14.10% |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Assets and liabilities measured at fair value | ||||||
Valuation allowance | $ 514,000 | $ 34,000 | ||||
Carrying value of other real estate owned | 14,144,000 | 19,141,000 | $ 16,252,000 | $ 24,451,000 | $ 31,964,000 | $ 31,982,000 |
OREO Valuation allowance | 13,254,000 | 14,127,000 | $ 13,377,000 | $ 19,872,000 | $ 20,069,000 | $ 19,229,000 |
Nonrecurring | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 14,494,000 | 19,222,000 | ||||
Nonrecurring | Impaired loans | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 350,000 | 81,000 | ||||
Valuation allowance | 514,000 | 34,000 | ||||
Decrease of specific allocations within the provision for loan losses | 480,000 | (243,000) | ||||
Nonrecurring | Impaired loans | Carrying Amount | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 864,000 | 115,000 | ||||
Nonrecurring | Other real estate owned | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 14,144,000 | 19,141,000 | ||||
Carrying value of other real estate owned | 14,100,000 | 19,100,000 | ||||
Outstanding balance | 29,100,000 | 34,900,000 | ||||
OREO Valuation allowance | 13,300,000 | 14,100,000 | ||||
OREO participations | 1,700,000 | 1,700,000 | ||||
Nonrecurring | Level 3 | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 14,494,000 | 19,222,000 | ||||
Nonrecurring | Level 3 | Impaired loans | ||||||
Assets and liabilities measured at fair value | ||||||
Total | 350,000 | 81,000 | ||||
Nonrecurring | Level 3 | Other real estate owned | ||||||
Assets and liabilities measured at fair value | ||||||
Total | $ 14,144,000 | $ 19,141,000 |
Fair Values of Financial Inst66
Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Financial assets: | ||
Cash and due from banks | $ 29,203 | $ 26,975 |
Interest bearing deposits with financial institutions | 160,744 | 13,363 |
Securities available-for-sale | 531,057 | 456,066 |
Securities held-to-maturity | 247,746 | |
FHLBC and Reserve Bank Stock | 7,918 | 8,518 |
Bank-owned life insurance | 60,036 | 59,049 |
Financial liabilities: | ||
Noninterest bearing deposits | 473,477 | 442,639 |
Other short-term borrowings | 15,000 | |
Junior subordinated debentures | 57,579 | 57,543 |
Carrying Amount | ||
Financial assets: | ||
Cash and due from banks | 29,203 | 26,975 |
Interest bearing deposits with financial institutions | 160,744 | 13,363 |
Securities available-for-sale | 531,057 | 456,066 |
Securities held-to-maturity | 247,746 | |
FHLBC and Reserve Bank Stock | 7,918 | 8,518 |
Loans held for sale | 3,750 | 2,849 |
Loans, net | 1,202,852 | 1,117,492 |
Accrued interest receivable | 4,402 | 4,464 |
Financial liabilities: | ||
Noninterest bearing deposits | 473,477 | 442,639 |
Interest bearing deposits | 1,303,905 | 1,316,447 |
Securities sold under repurchase agreements | 46,606 | 34,070 |
Other short-term borrowings | 15,000 | |
Junior subordinated debentures | 57,579 | 57,543 |
Subordinated debenture | 45,000 | 45,000 |
Note payable and other borrowings | 500 | 500 |
Interest rate swap | 4,910 | 631 |
Borrowing interest payable | 73 | 75 |
Deposit interest payable | 500 | 445 |
Total Fair Value | ||
Financial assets: | ||
Cash and due from banks | 29,203 | 26,975 |
Interest bearing deposits with financial institutions | 160,744 | 13,363 |
Securities available-for-sale | 531,057 | 456,066 |
Securities held-to-maturity | 251,675 | |
FHLBC and Reserve Bank Stock | 7,918 | 8,518 |
Loans held for sale | 3,750 | 2,849 |
Loans, net | 1,187,889 | 1,126,959 |
Accrued interest receivable | 4,402 | 4,464 |
Financial liabilities: | ||
Noninterest bearing deposits | 473,477 | 442,639 |
Interest bearing deposits | 1,304,543 | 1,316,550 |
Securities sold under repurchase agreements | 46,606 | 34,070 |
Other short-term borrowings | 15,000 | |
Junior subordinated debentures | 56,388 | 53,851 |
Subordinated debenture | 42,626 | 41,101 |
Note payable and other borrowings | 465 | 445 |
Interest rate swap | 4,910 | 631 |
Borrowing interest payable | 73 | 75 |
Deposit interest payable | 500 | 445 |
Level 1 | ||
Financial assets: | ||
Cash and due from banks | 29,203 | 26,975 |
Interest bearing deposits with financial institutions | 160,744 | 13,363 |
Securities available-for-sale | 1,509 | |
Financial liabilities: | ||
Noninterest bearing deposits | 473,477 | 442,639 |
Junior subordinated debentures | 33,452 | 31,606 |
Level 2 | ||
Financial assets: | ||
Securities available-for-sale | 531,057 | 454,446 |
Securities held-to-maturity | 251,675 | |
FHLBC and Reserve Bank Stock | 7,918 | 8,518 |
Loans held for sale | 3,750 | 2,849 |
Accrued interest receivable | 4,402 | 4,464 |
Financial liabilities: | ||
Interest bearing deposits | 1,304,543 | 1,316,550 |
Securities sold under repurchase agreements | 46,606 | 34,070 |
Other short-term borrowings | 15,000 | |
Junior subordinated debentures | 22,936 | 22,245 |
Subordinated debenture | 42,626 | 41,101 |
Note payable and other borrowings | 465 | 445 |
Interest rate swap | 4,910 | 631 |
Borrowing interest payable | 73 | 75 |
Deposit interest payable | 500 | 445 |
Level 3 | ||
Financial assets: | ||
Securities available-for-sale | 111 | |
Loans, net | $ 1,187,889 | $ 1,126,959 |
Financial Instruments with Of67
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Interest Rate Derivatives (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($)item | |
Not designated | ||
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | ||
Asset Derivatives, Fair Value | $ 1,081 | $ 302 |
Liability Derivatives, Fair Value | 788 | 114 |
Interest rate swap agreements net of swap credit valuation | Cash Flow Hedging [Member] | ||
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | ||
Unrealized loss | (4,909) | (631) |
Notional or Contractual Amount | 25,774 | 25,774 |
Interest rate swap agreements net of swap credit valuation | Not designated | ||
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | ||
Investment securities pledged with financial institutions, dollars | $ 7,500 | $ 2,400 |
Number of correspondent financial institutions where investment securities are pledged | item | 2 | 2 |
Weighted average maturity | 7 years | 5 years 1 month 6 days |
Notional or Contractual Amount | $ 66,880 | $ 20,708 |
Asset Derivatives, Fair Value | 788 | 114 |
Liability Derivatives, Fair Value | 788 | 114 |
Commitments | Not designated | ||
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | ||
Notional or Contractual Amount | 253,544 | 226,346 |
Asset Derivatives, Fair Value | 293 | 188 |
Forward MBS contracts and forward loan contracts | Not designated | ||
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions | ||
Notional or Contractual Amount | $ 27,000 | $ 15,500 |
Financial Instruments with Of68
Financial Instruments with Off-Balance Sheet Risk and Derivative Transactions - Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Company's contractual commitments due to letters of credit | ||
Total letters of credit | $ 13,311 | $ 11,670 |
Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 305 | 126 |
Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 13,006 | 11,544 |
Borrower | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 12,682 | 11,095 |
Borrower | Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 210 | 126 |
Borrower | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 12,472 | 10,969 |
Borrower | Financial standby | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 3,794 | 3,632 |
Borrower | Financial standby | Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 127 | 60 |
Borrower | Financial standby | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 3,667 | 3,572 |
Borrower | Commercial standby | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 126 | 47 |
Borrower | Commercial standby | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 126 | 47 |
Borrower | Performance standby | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 8,762 | 7,416 |
Borrower | Performance standby | Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 83 | 66 |
Borrower | Performance standby | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 8,679 | 7,350 |
Nonborrower | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 629 | 575 |
Nonborrower | Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 95 | |
Nonborrower | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 534 | 575 |
Nonborrower | Performance standby | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 629 | 575 |
Nonborrower | Performance standby | Fixed | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | 95 | |
Nonborrower | Performance standby | Variable | ||
Company's contractual commitments due to letters of credit | ||
Total letters of credit | $ 534 | $ 575 |
Series B Preferred Stock - (Det
Series B Preferred Stock - (Details) - Series B Stock - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Preferred Stock | |||||
Shares redeemed (in shares) | 13,553 | 15,778 | 25,669 | ||
Payments of Dividends | $ 2.4 | $ 12.4 |