Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-13358 | |
Entity Registrant Name | Capital City Bank Group, Inc. | |
Entity Incorporation State Country Code | FL | |
Entity Tax Identification Number | 59-2273542 | |
Address Line 1 | 217 North Monroe Street | |
Name of the City or Town | Tallahassee | |
Name of the state or province | FL | |
Code for the postal or zip code | 32301 | |
City Area Code | 850 | |
Local Phone Number | 402-7821 | |
Security 12b Title | Common Stock, Par value $0.01 | |
Trading Symbol | CCBG | |
Security Exchange Name | NASDAQ | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,780,276 | |
Entity Central Index Key | 0000726601 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and Due From Banks | $ 75,155,000 | $ 60,087,000 |
Federal Funds Sold and Interest Bearing Deposits | 513,273,000 | 318,336,000 |
Total Cash and Cash Equivalents | 588,428,000 | 378,423,000 |
Investment Securities, Available for Sale, at fair value | 341,180,000 | 403,601,000 |
Investment Securities, Held to Maturity, (fair value of $238,499 and $241,429 | 232,178,000 | 239,539,000 |
Total Investment Securities | 573,358,000 | 643,140,000 |
Loans held for sale, at fair value | 76,610,000 | 9,509,000 |
Loans Held for Investment, Net | 2,022,177,000 | 1,835,929,000 |
Allowance for Credit Losses | (22,457,000) | (13,905,000) |
Loans Held for Investment, Net | 1,999,720,000 | 1,822,024,000 |
Premises and Equipment, Net | 87,972,000 | 84,543,000 |
Goodwill | 89,095,000 | 84,811,000 |
Other Real Estate Owned | 1,059,000 | 953,000 |
Other assets | 83,282,000 | 65,550,000 |
Total Assets | 3,499,524,000 | 3,088,953,000 |
Deposits: | ||
Noninterest Bearing Deposits | 1,377,032,000 | 1,044,699,000 |
Interest Bearing Deposits | 1,577,964,000 | 1,600,755,000 |
Total Deposits | 2,954,996,000 | 2,645,454,000 |
Short-Term Borrowings | 63,958,000 | 6,404,000 |
Subordinated Notes Payable | 52,887,000 | 52,887,000 |
Other Long-Term Borrowings | 5,583,000 | 6,514,000 |
Other liabilities | 75,702,000 | 50,678,000 |
Total Liabilities | 3,153,126,000 | 2,761,937,000 |
Temporary Equity | 11,341,000 | 0 |
SHAREOWNERS' EQUITY | ||
Preferred Stock, $.01 par value;3,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common Stock, $.01 par value; 90,000,000 shares authorized; 16,780,276 and 16,771,544 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 168,000 | 168,000 |
Additional Paid-In Capital | 31,575,000 | 32,092,000 |
Retained Earnings | 328,570,000 | 322,937,000 |
Accumulated Other Comprehensive Loss, Net of Tax | (25,256,000) | (28,181,000) |
Total Shareowners' Equity | 335,057,000 | 327,016,000 |
Total Liabilities and Shareowners' Equity | $ 3,499,524,000 | $ 3,088,953,000 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Investment securities, held to maturity, fair value | $ 238,499 | $ 241,429 |
Preferred Stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 3,000,000 | 3,000,000 |
Common Stock, par value (in dollar per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 90,000,000 | 90,000,000 |
Common Stock, shares issued | 16,780,276 | 16,771,544 |
Common Stock, shares outstanding | 16,780,276 | 16,771,544 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
INTEREST INCOME | ||||
Loans, including Fees | $ 23,687 | $ 23,765 | $ 47,280 | $ 46,381 |
Investment Securities: | ||||
Taxable | 2,708 | 3,301 | 5,704 | 6,688 |
Tax Exempt | 29 | 92 | 48 | 218 |
Funds Sold | 88 | 1,507 | 845 | 3,100 |
Total Interest Income | 26,512 | 28,665 | 53,877 | 56,387 |
INTEREST EXPENSE | ||||
Deposits | 218 | 1,988 | 1,157 | 4,087 |
Short-Term Borrowings | 421 | 31 | 553 | 66 |
Subordinated Notes Payable | 374 | 596 | 845 | 1,204 |
Other Long-Term Borrowings | 41 | 66 | 91 | 138 |
Total Interest Expense | 1,054 | 2,681 | 2,646 | 5,495 |
NET INTEREST INCOME | 25,458 | 25,984 | 51,231 | 50,892 |
Provision for Credit Losses | 2,005 | 646 | 6,995 | 1,413 |
Net Interest Income After Provision For Loan Losses | 23,453 | 25,338 | 44,236 | 49,479 |
NONINTEREST INCOME | ||||
Other | 2,933 | 1,375 | 4,711 | 2,981 |
Total Noninterest Income | 30,199 | 12,770 | 45,677 | 25,322 |
NONINTEREST EXPENSE | ||||
Compensation | 23,658 | 16,437 | 43,394 | 32,786 |
Occupancy, Net | 5,798 | 4,537 | 10,777 | 9,046 |
Other Real Estate Owned, Net | 116 | 75 | (682) | 438 |
Other | 7,731 | 7,347 | 14,783 | 14,324 |
Total Noninterest Expense | 37,303 | 28,396 | 68,272 | 56,594 |
INCOME BEFORE INCOME TAXES | 16,349 | 9,712 | 21,641 | 18,207 |
Income Tax Expense | 2,950 | 2,387 | 4,232 | 4,446 |
NET INCOME | 13,399 | 7,325 | 17,409 | 13,761 |
Net Loss Attributable to Noncontrolling Interests | 4,253 | 0 | 3,976 | 0 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $ 9,146 | $ 7,325 | $ 13,433 | $ 13,761 |
BASIC NET INCOME PER SHARE (in dollars per shares) | $ 0.55 | $ 0.44 | $ 0.80 | $ 0.82 |
DILUTED NET INCOME PER SHARE (in dollars per shares) | $ 0.55 | $ 0.44 | $ 0.80 | $ 0.82 |
Average Basic Common Shares Outstanding (in shares) | 16,797 | 16,791 | 16,803 | 16,791 |
Average Diluted Common Shares Outstanding (in shares) | 16,839 | 16,818 | 16,844 | 16,820 |
Deposit fees [Member] | ||||
NONINTEREST INCOME | ||||
Revenue, fees and commissions | $ 3,756 | $ 4,756 | $ 8,771 | $ 9,531 |
Bank card fees [Member] | ||||
NONINTEREST INCOME | ||||
Revenue, fees and commissions | 3,142 | 3,036 | 6,193 | 5,891 |
Wealth Managment fees [Member] | ||||
NONINTEREST INCOME | ||||
Revenue, fees and commissions | 2,554 | 2,404 | 5,158 | 4,727 |
Mortgage banking [Member] | ||||
NONINTEREST INCOME | ||||
Revenue, fees and commissions | $ 17,814 | $ 1,199 | $ 20,844 | $ 2,192 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Net Income attributable to common shareowners | $ 9,146 | $ 7,325 | $ 13,433 | $ 13,761 |
Other comprehensive income, before tax: | ||||
Change in net unrealized gain/loss on securities available for sale, Before Tax | 424 | 1,736 | 3,962 | 2,985 |
Amortization of unrealized losses on securities transferred from available for sale to held to maturity | 9 | 11 | 18 | 22 |
Total Investment Securities, Before Tax | 433 | 1,747 | 3,980 | 3,007 |
Change in net unrealized gain/loss on interest rate swap | (104) | 0 | (104) | 0 |
Other Comprehensive Income, before tax | 329 | 1,747 | 3,876 | 3,007 |
Deferred tax expense related to other comprehensive income | 52 | 443 | 951 | 762 |
Other comprehensive income, net of tax | 277 | 1,304 | 2,925 | 2,245 |
Total Comprehensive Income attributable to common shareowners | $ 9,423 | $ 8,629 | $ 16,358 | $ 16,006 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Adoption of ASC 326 [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member]Adoption of ASC 326 [Member] | Accumulated Other Comprehensive Loss, Net of Taxes [Member] |
Balance at Dec. 31, 2018 | $ 302,587 | $ 167 | $ 31,058 | $ 300,177 | $ (28,815) | ||
Balance (in shares) at Dec. 31, 2018 | 16,747,571 | ||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | 13,761 | $ 0 | 0 | 13,761 | 0 | ||
Other Comprehensive Income, net of tax | 2,245 | 0 | 0 | 0 | 2,245 | ||
Cash Dividends ($0.1400 and $0.1100) per share for quarter June 30, 2020; 2019, and ($0.2800 and $0.2200) per share for YTD June 30, 2020, 2019 respectively | (3,691) | 0 | 0 | (3,691) | 0 | ||
Repurchase of Common Stock | (1,806) | $ (1) | (1,805) | 0 | 0 | ||
Repurchase of Common Stock (in shares) | (77,000) | ||||||
Stock Compensation | 885 | $ 0 | 885 | 0 | 0 | ||
Stock Compensation Plan Transactions, net | 614 | $ 1 | 613 | 0 | 0 | ||
Stock Compensation Plan Transactions, net (in shares) | 75,295 | ||||||
Balance at Jun. 30, 2019 | 314,595 | $ 167 | 30,751 | 310,247 | (26,570) | ||
Balance, Shares at Jun. 30, 2019 | 16,745,866 | ||||||
Balance at Mar. 31, 2019 | 308,986 | $ 168 | 31,929 | 304,763 | (27,874) | ||
Balance (in shares) at Mar. 31, 2019 | 16,812,460 | ||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | 7,325 | $ 0 | 0 | 7,325 | 0 | ||
Other Comprehensive Income, net of tax | 1,304 | 0 | 0 | 0 | 1,304 | ||
Cash Dividends ($0.1400 and $0.1100) per share for quarter June 30, 2020; 2019, and ($0.2800 and $0.2200) per share for YTD June 30, 2020, 2019 respectively | (1,841) | 0 | 0 | (1,841) | 0 | ||
Repurchase of Common Stock | (1,806) | $ (1) | (1,805) | 0 | 0 | ||
Repurchase of Common Stock (in shares) | (77,000) | ||||||
Stock Compensation | 386 | $ 0 | 386 | 0 | 0 | ||
Stock Compensation Plan Transactions, net | $ 241 | $ 0 | 241 | 0 | 0 | ||
Stock Compensation Plan Transactions, net (in shares) | 10,406 | 10,406 | |||||
Balance at Jun. 30, 2019 | $ 314,595 | $ 167 | 30,751 | 310,247 | (26,570) | ||
Balance, Shares at Jun. 30, 2019 | 16,745,866 | ||||||
Balance at Dec. 31, 2019 | $ 327,016 | $ (3,095) | $ 168 | 32,092 | 322,937 | $ (3,095) | (28,181) |
Balance (in shares) at Dec. 31, 2019 | 16,771,544 | 16,771,544 | |||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $ 13,433 | $ 0 | 0 | 13,433 | 0 | ||
Other Comprehensive Income, net of tax | 2,925 | 0 | 0 | 0 | 2,925 | ||
Cash Dividends ($0.1400 and $0.1100) per share for quarter June 30, 2020; 2019, and ($0.2800 and $0.2200) per share for YTD June 30, 2020, 2019 respectively | (4,705) | 0 | 0 | (4,705) | 0 | ||
Repurchase of Common Stock | (1,571) | $ (1) | (1,570) | 0 | 0 | ||
Repurchase of Common Stock (in shares) | (76,952) | ||||||
Stock Compensation | 368 | $ 0 | 368 | 0 | 0 | ||
Stock Compensation Plan Transactions, net | 686 | $ 1 | 685 | 0 | 0 | ||
Stock Compensation Plan Transactions, net (in shares) | 85,684 | ||||||
Balance at Jun. 30, 2020 | $ 335,057 | $ 168 | 31,575 | 328,570 | (25,256) | ||
Balance, Shares at Jun. 30, 2020 | 16,780,276 | 16,780,276 | |||||
Balance at Mar. 31, 2020 | $ 328,507 | $ 168 | 32,100 | 321,772 | (25,533) | ||
Balance (in shares) at Mar. 31, 2020 | 16,811,781 | 16,811,781 | |||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $ 9,146 | $ 0 | 0 | 9,146 | 0 | ||
Other Comprehensive Income, net of tax | 277 | 0 | 0 | 0 | 277 | ||
Cash Dividends ($0.1400 and $0.1100) per share for quarter June 30, 2020; 2019, and ($0.2800 and $0.2200) per share for YTD June 30, 2020, 2019 respectively | (2,348) | 0 | 0 | (2,348) | 0 | ||
Repurchase of Common Stock | (863) | $ 0 | (863) | 0 | 0 | ||
Repurchase of Common Stock (in shares) | (43,878) | ||||||
Stock Compensation | 77 | $ 0 | 77 | 0 | 0 | ||
Stock Compensation Plan Transactions, net | $ 261 | $ 0 | 261 | 0 | 0 | ||
Stock Compensation Plan Transactions, net (in shares) | 12,373 | 12,373 | |||||
Balance at Jun. 30, 2020 | $ 335,057 | $ 168 | $ 31,575 | $ 328,570 | $ (25,256) | ||
Balance, Shares at Jun. 30, 2020 | 16,780,276 | 16,780,276 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash Dividends (in dollars per share) | $ 0.1400 | $ 0.1100 | $ 0.2800 | $ 0.2200 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 13,433 | $ 13,761 |
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: | ||
Provision for Loan Losses | 6,995 | 1,413 |
Depreciation | 3,400 | 3,148 |
Amortization of Premiums, Discounts, and Fees (net) | 3,414 | 2,520 |
Originations of Loans Held for Sale | (431,775) | (94,776) |
Proceeds From Sales of Loans Held for Sale | 385,518 | 93,952 |
Gain Loss On Sale Of Mortgage Loans | (20,844) | (2,192) |
Stock Compensation | 368 | 885 |
Excess Tax Benefit From Share Based Compensation Operating Activities | (84) | (14) |
Deferred Income Taxes | (695) | 1,253 |
Net change in operating leases | 498 | 45 |
Loss on Sales and Write-Downs of Other Real Estate Owned | (915) | 204 |
Proceeds From Insurance Claim for Operating Loss | 0 | 268 |
Loss on Sale or Disposal of Premises and Equipment | 0 | (39) |
Net (Increase) Decrease in Other Assets | (23,035) | (11,628) |
Net Increase (Decrease) in Other Liabilities | 36,251 | 22,430 |
Net Cash Provided By Operating Activities | (27,471) | 31,308 |
Securities Held to Maturity: | ||
Purchases | (32,250) | (33,844) |
Payments, Maturities, and Calls | 38,362 | 20,891 |
Securities Available for Sale: | ||
Purchases | (38,364) | (31,215) |
Payments, Maturities, and Calls | 102,846 | 67,551 |
Purchases of Loans Held for Investment | (18,359) | (18,661) |
Net Increase in Loans Held for Investment | (167,587) | (43,822) |
Net Cash Paid For Brand Acquisition | (2,405) | 0 |
Proceeds From Insurance Claims on Premises | 0 | 814 |
Proceeds From Sales of Other Real Estate Owned | 1,800 | 1,703 |
Purchases of Premises and Equipment, net | (6,842) | (2,002) |
Net Cash Used In Investing Activities | (122,799) | (38,585) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net (Decrease) Increase in Deposits | 309,542 | 29,248 |
Net Increase (Decrease) in Short-Term Borrowings | 57,460 | (4,148) |
Repayment of Other Long-Term Borrowings | (837) | (895) |
Dividends Paid | (4,705) | (3,691) |
Payments to Repurchase Common Stock | (1,571) | (1,806) |
Issuance of Common Stock Under Purchase Plans | 386 | 397 |
Net Cash Used In Financing Activities | 360,275 | 19,105 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 210,005 | 11,828 |
Cash and Cash Equivalents at Beginning of Period | 378,423 | 276,000 |
Cash and Cash Equivalents at End of Period | 588,428 | 287,828 |
Supplemental Cash Flow Disclosures: | ||
Interest Paid, Net | 2,655 | 5,505 |
Income Taxes Paid | 3,613 | 1,381 |
Noncash Investing and Financing Activities: | ||
Loans Transferred to Other Real Estate Owned | $ 991 | $ 688 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2020 | |
Business and Basis of Presentation [Abstract] | |
Business and Basis of Presentation | CAPITAL CITY BANK GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – BUSINESS AND BASIS OF PRESENTATION Nature of Operations . Capital City Bank Group, Inc. (“CCBG” or the “Company”) provides a full range of banking and banking-related services to individual and corporate clients through its subsidiary, Capital City Bank, with banking offices located in Florida, Georgia, and Alabama. The Company is subject to competition from other financial institutions, is subject to regulation by certain government agencies and undergoes periodic examinations by those regulatory authorities. Basis of Presentation . The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of CCBG and its wholly owned subsidiary, Capital City Bank (“CCB” or the “Bank”). All material inter-company transactions and accounts have been eliminated. Certain previously reported amounts have been reclassified to conform to the current year’s presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated statement of financial condition at December 31, 2019 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019. Business Combination . On March 1, 2020, CCB completed its acquisition of a 51% membership interest in Brand Mortgage Group , LLC (“Brand”) which is now operated as Capital City Home Loans (“CCHL”). CCHL was consolidated into CCBG’s financial statements effective March 1, 2020. Assets acquired totaled $ 52 million (consisting primarily of loans held for sale) and liabilities assumed totaled $ 42 million (consisting primarily of warehouse line borrowings). The primary purpose of the acquisition was to gain access to an expanded residential mortgage product line-up and investor base (including a mandatory delivery channel for loan sales) and to generate other operational synergies and cost savings. CCB made a $ 7.1 million cash payment for its 51% membership interest and entered into a buyout agreement for the remaining 49% noncontrolling interest resulting in temporary equity with a fair value of $ 7.4 million. Goodwill totaling $ 4.3 million was recorded in connection with this acquisition. Factors that contributed to the purchase price resulting in goodwill include Brand’s strong management team and expertise in the mortgage industry, historical record of earnings, and operational synergies created as part of the strategic alliance. Adoption of New Accounting Standard On January 1, 2020, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments). In addition, ASC 326-30 provides a new credit loss model for available-for-sale debt securities. The most significant change requires credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities that management does not intend to sell or believes that it is not more likely than not they will be required to sell. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The adoption of ASC 326 (“CECL”) had an impact of $ 4.0 million ($3.3 million increase in the allowance for credit losses and $ 0.7 million increase in the allowance for unfunded loan commitments (liability account)) that was offset by a corresponding decrease in retained earnings of $ 3.1 million and $ 0.9 million increase in deferred tax assets. The increase in the allowance for credit losses required under the ASC 326 generally reflected the impact of reserves calculated over the life of loan, and more specifically higher reserves required for longer duration loan portfolios, and the utilization of a longer historical look-back period in the calculation of loan loss rates (loss given default). Upon analyzing the debt security portfolios, the Company determined that no allowance was required as these debt securities are government guaranteed treasuries or government agency-backed securities for which the risk of loss was deemed minimal. Further, certain municipal debt securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. The following table illustrates the impact of adopting ASC 326 on January 1, 2020. As Reported Impact of Under Pre-ASC 326 ASC 326 (Dollars in Thousands) ASC 326 Adoption Adoption Loans: Commercial, Financial and Agricultural $ 2,163 $ 1,675 $ 488 Real Estate - Construction 672 370 302 Real Estate - Commercial Mortgage 4,874 3,416 1,458 Real Estate - Residential 4,371 3,128 1,243 Real Estate - Home Equity 2,598 2,224 374 Consumer, Other Loans and Overdrafts 2,496 3,092 ( 596) Allowance for Credit Losses on Loans 17,174 13,905 3,269 Other Liabilities: Allowance for Credit Losses on Off-Balance Sheet Credit Exposures $ 815 $ 157 $ 658 Significant Accounting Policy Changes Upon adoption of ASC 326, the Company revised certain accounting policies for Investment Securities, Loans, and the Allowance for Credit Losses as detailed below. In addition, certain accounting policies were revised upon the acquisition of Brand on March 1, 2020 and are also discussed in further detail below under the Mortgage Banking Activities section. Investment Securities Investment securities are classified as held-to-maturity and carried at amortized cost when the Company has the positive intent and ability to hold them until maturity. Investment securities not classified as held-to-maturity or trading securities are classified as available-for-sale and carried at fair value. The Company determines the appropriate classification of securities at the time of purchase. For reporting and risk management purposes, we further segment investment securities by the issuer of the security which correlates to its risk profile: U.S. government treasury, U.S. government agency, state and political subdivisions, and mortgage-backed securities. Certain equity securities with limited marketability, such as stock in the Federal Reserve Bank and the Federal Home Loan Bank, are classified as available-for-sale and carried at cost. Interest income includes amortization and accretion of purchase premiums and discounts. Realized gains and losses are derived from the amortized cost of the security sold. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Securities transferred from available-for-sale to held-to-maturity are recorded at amortized cost plus or minus any unrealized gain or loss at the time of transfer. Any existing unrecognized gain or loss continues to be reported in accumulated other comprehensive income (net of tax) and amortized as an adjustment to interest income over the remaining life of the security. Any existing allowance for credit loss is reversed at the time of transfer. Subsequent to transfer, the allowance for credit losses on the transferred security is evaluated in accordance with the accounting policy for held-to-maturity securities. Additionally, any allowance amounts reversed or established as part of the transfer are presented on a gross basis in the consolidated statement of income. The accrual of interest is generally suspended on securities more than 90 days past due with respect to principal or interest. When a security is placed on nonaccrual status, all previously accrued and uncollected interest is reversed against current income and thus not included in the estimate of credit losses. Credit losses and changes thereto, are established as an allowance for credit loss through a provision for credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Certain debt securities in the Company’s investment portfolio were issued by a U.S. government entity or agency and are either explicitly or implicitly guaranteed by the U.S. government. The Company considers the long history of no credit losses on these securities indicates that the expectation of nonpayment of the amortized cost basis is zero, even if the U.S. government were to technically default. Further, certain municipal securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. Therefore, for the aforementioned securities, the Company does not assess or record expected credit losses due to the zero loss assumption. Impairment - Available-for-Sale Securities . Unrealized gains on available-for-sale securities are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). For available-for-sale securities that are in an unrealized loss position, the Company first assesses whether it intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale securities that do not meet the aforementioned criteria or have a zero loss assumption, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If the assessment indicates that a credit loss exists, the present value of cash flows to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded through a provision for credit loss expense, limited by the amount that fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Allowance for Credit Losses - Held-to-Maturity Securities. Management measures expected credit losses on each individual held-to-maturity debt security that has not been deemed to have a zero assumption. Each security that is not deemed to have zero credit losses is individually measured based on net realizable value, or the difference between the discounted value of the expected cash flows, based on the original effective rate, and the recorded amortized basis of the security. To the extent a shortfall is related to credit loss, an allowance for credit loss is recorded through a provision for credit loss expense. Any shortfall related to other noncredit-related factors is recognized in other comprehensive income. Loans Held for Investment Loans held for investment (“HFI”) are stated at amortized cost which includes the principal amount outstanding, net premiums and discounts, and net deferred loan fees and costs. Accrued interest receivable on loans is reported in other assets and is not included in the amortized cost basis of loans. Interest income is accrued on the effective yield method based on outstanding principal balances, and includes loan late fees. Fees charged to originate loans and direct loan origination costs are deferred and amortized over the life of the loan as a yield adjustment. The Company defines loans as past due when one full payment is past due or a contractual maturity is over 30 days late. The accrual of interest is generally suspended on loans more than 90 days past due with respect to principal or interest. When a loan is placed on nonaccrual status, all previously accrued and uncollected interest is reversed against current income and thus a policy election has been made to not include in the estimate of credit losses. Interest income on nonaccrual loans is recognized when the ultimate collectability is no longer considered doubtful. Loans are returned to accrual status when the principal and interest amounts contractually due are brought current or when future payments are reasonably assured. Loan charge-offs on commercial and investor real estate loans are recorded when the facts and circumstances of the individual loan confirm the loan is not fully collectible and the loss is reasonably quantifiable. Factors considered in making these determinations are the borrower’s and any guarantor’s ability and willingness to pay, the status of the account in bankruptcy court (if applicable), and collateral value. Charge-off decisions for consumer loans are dictated by the Federal Financial Institutions Examination Council’s (FFIEC) Uniform Retail Credit Classification and Account Management Policy which establishes standards for the classification and treatment of consumer loans, which generally require charge-off after 120 days of delinquency. The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures designed to maximize loan income within an acceptable level of risk. Reporting systems are used to monitor loan originations, loan ratings, concentrations, loan delinquencies, nonperforming and potential problem loans, and other credit quality metrics. The ongoing review of loan portfolio quality and trends by Management and the Credit Risk Oversight Committee support the process for estimating the allowance for credit losses. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The allowance for credit losses is adjusted by a credit loss provision which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Expected credit loss inherent in non-cancellable off-balance sheet credit exposures is accounted for as a separate liability included in other liabilities. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loan default and loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information incorporate management’s view of current conditions and forecasts. The methodology for estimating the amount of credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving loans that do not share risk characteristics and the measurement of expected credit losses for such individual loans; and second, a pooled component for expected credit losses for pools of loans that share similar risk characteristics. Loans That Do Not Share Risk Characteristics (Individually Analyzed) Loans that do not share similar risk characteristics are evaluated on an individual basis. Loans deemed to be collateral dependent have differing risk characteristics and are individually analyzed to estimate the expected credit loss. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is dependent on the liquidation and sale of the underlying collateral. For collateral dependent loans where foreclosure is probable, the expected credit loss is measured based on the difference between the fair value of the collateral (less selling cost) and the amortized cost basis of the asset. For collateral dependent loans where foreclosure is not probable, the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable. For loans with balances greater than $250,000 the fair value of the collateral is obtained through independent appraisal of the underlying collateral. For loans with balances less than $250,000, the Company has made a policy election to measure expected loss for these individual loans utilizing loss rates for similar loan types. The aforementioned measurement criteria are applied for collateral dependent troubled debt restructurings. Loans That Share Similar Risk Characteristics (Pooled Loans) The general steps in determining expected credit losses for the pooled loan component of the allowance are as follows: Segment loans into pools according to similar risk characteristics Develop historical loss rates for each loan pool segment Incorporate the impact of forecasts Incorporate the impact of other qualitative factors Calculate and review pool specific allowance for credit loss estimate Methodology – A discounted cash flow (“DCF”) methodology is utilized to calculate expected cash flows for the life of each individual loan. The discounted present value of expected cash flow is then compared to the loan’s amortized cost basis to determine the credit loss estimate. Individual loan results are aggregated at the pool level in determining total reserves for each loan pool. The primary inputs used to calculate expected cash flows include historical loss rates which reflect probability of default (“PD”) and loss given default (“LGD”), and prepayment rates. The historical look-back period is a key factor in the calculation of the PD rate and is based on management’s assessment of current and forecasted conditions and may vary by loan pool. Loans subject to the Company’s risk rating process are further sub-segmented by risk rating in the calculation of PD rates. LGD rates generally reflect the historical average net loss rate by loan pool. Expected cash flows are further adjusted to incorporate the impact of loan prepayments which will vary by loan segment and interest rate conditions. In general, prepayment rates are based on observed prepayment rates occurring in the loan portfolio and consideration of forecasted interest rates. Forecast Factors – In developing loss rates, adjustments are made to incorporate the impact of forecasted conditions. Certain assumptions are also applied, including the length of the forecast and reversion periods. The forecast period is the period within which management is able to make a reasonable and supportable assessment of future conditions. The reversion period is the period beyond which management believes it can develop a reasonable and supportable forecast, and bridges the gap between the forecast period and the use of historical default and loss rates. The remainder period reflects the remaining life of the loan. The length of the forecast and reversion periods are periodically evaluated and based on management’s assessment of current and forecasted conditions and may vary by loan pool. For purposes of developing a reasonable and supportable assessment of future conditions, management utilizes established industry and economic data points and sources, including the Federal Open Market Committee forecast, with the forecasted unemployment rate being a significant factor. PD rates for the forecast period will be adjusted accordingly based on management’s assessment of future conditions. PD rates for the remainder period will reflect the historical mean PD rate. Reversion period PD rates reflect the difference between forecast and remainder period PD rates closed using a straight-line adjustment over the reversion period. Qualitative Factors – Loss rates are further adjusted to account for other risk factors that impact loan defaults and losses. These basis point adjustments are based on management’s assessment of trends and conditions that impact credit risk and resulting loan losses, more specifically internal and external factors that are independent of and not reflected in the quantitative loss rate calculations. Risk factors management considers in this assessment include trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters. Allowance for Credit Losses on Off-Balance Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense and is recorded in other liabilities. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life and applies the same estimated loss rate as determined for current outstanding loan balances by segment. Off-balance sheet credit exposures are identified and classified in the same categories as the allowance for credit losses with similar risk characteristics that have been previously mentioned. Mortgage Banking Activities Mortgage Loans Held for Sale and Revenue Recognition Mortgage loans held for sale (“HFS”) are carried at fair value under the fair value option with changes in fair value recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. The fair value of mortgage loans held for sale committed to investors is calculated using observable market information such as the investor commitment, assignment of trade (AOT) or other mandatory delivery commitment prices. The Company bases loans committed to Agency investors based on the Agency’s quoted mortgage backed security (MBS) prices. The fair value of mortgage loans held for sale not committed to investors is based on quoted best execution secondary market prices. If no such quoted price exists, the fair value is determined using quoted prices for a similar asset or assets, such as MBS prices, adjusted for the specific attributes of that loan, which would be used by other market participants. Gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. Sales proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. If the related mortgage servicing right (MSR) is sold servicing retained, the MSR addition is recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. Gain on sale of mortgage loans held for sale also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and the realized and unrealized gains and losses from derivative instruments. Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of sales proceeds from the purchaser. Derivative Instruments (IRLC/Forward Commitments) The Company holds and issues derivative financial instruments such as interest rate lock commitments (IRLCs) and other forward sale commitments. IRLCs are subject to price risk primarily related to fluctuations in market interest rates. To hedge the interest rate risk on certain IRLCs, the Company uses forward sale commitments, such as to-be-announced securities (TBAs) or mandatory delivery commitments with investors. Management expects these forward sale commitments to experience changes in fair value opposite to the changes in fair value of the IRLCs thereby reducing earnings volatility. Forward sale commitments are also used to hedge the interest rate risk on mortgage loans held for sale that are not committed to investors and still subject to price risk. If the mandatory delivery commitments are not fulfilled, the Company pays a pair-off fee. Best effort forward sale commitments are also executed with investors, whereby certain loans are locked with a borrower and simultaneously committed to an investor at a fixed price. If the best effort IRLC does not fund, there is no obligation to fulfill the investor commitment. The Company considers various factors and strategies in determining what portion of the IRLCs and uncommitted mortgage loans held for sale to economically hedge. All derivative instruments are recognized as other assets or other liabilities on the consolidated statements of financial condition at their fair value. Changes in the fair value of the derivative instruments are recognized in gain on sale of mortgage loans held for sale on the consolidated statements of income in the period in which they occur. Gains and losses resulting from the pairing-out of forward sale commitments are recognized in gain on sale of mortgage loans held for sale on the consolidated statements of income. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting. Mortgage Servicing Rights (“MSRs”) and Revenue Recognition The Company sells residential mortgage loans in the secondary market and may retain the right to service the loans sold. Upon sale, an MSR asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. As the Company has not elected to subsequently measure any class of servicing assets under the fair value measurement method, the Company follows the amortization method. MSRs are amortized to noninterest income (other income) in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. MSRs are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value, and included in other assets, net, on the consolidated statements of financial condition. The Company periodically evaluates its MSRs asset for impairment. Impairment is assessed based on fair value at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). As mortgage interest rates fall, prepayment speeds are usually faster and the value of the MSRs asset generally decreases, requiring additional valuation reserve. Conversely, as mortgage interest rates rise, prepayment speeds are usually slower and the value of the MSRs asset generally increases, requiring less valuation reserve. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the MSRs exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other-than-temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write-down of the MSRs asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the MSRs asset and valuation allowance, precluding subsequent recoveries. Derivative/Hedging Activities At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company's intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment ("fair value hedge"), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"), or (3) an instrument with no hedging designation ("standalone derivative"). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. For both types of hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | NOTE 2 – INVESTMENT SECURITIES Investment Portfolio Composition . The following table summarizes the amortized cost and related market value of investment securities available-for-sale and securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses. June 30, 2020 December 31, 2019 Amortized Unrealized Unrealized Market Amortized Unrealized Unrealized Market Cost Gains Losses Value Cost Gain Losses Value Available for Sale U.S. Government Treasury $ 158,600 $ 2,167 $ - $ 160,767 $ 231,996 $ 849 $ 67 $ 232,778 U.S. Government Agency 163,658 2,890 31 166,517 155,706 697 325 156,078 States and Political Subdivisions 5,451 122 - 5,573 6,310 9 - 6,319 Mortgage-Backed Securities 488 57 - 545 693 80 - 773 Equity Securities (1) 7,778 - - 7,778 7,653 - - 7,653 Total $ 335,975 $ 5,236 $ 31 $ 341,180 $ 402,358 $ 1,635 $ 392 $ 403,601 Held to Maturity U.S. Government Treasury $ 20,017 $ 119 $ - $ 20,136 $ 20,036 $ 15 $ 9 $ 20,042 States and Political Subdivisions - - - - 1,376 - - 1,376 Mortgage-Backed Securities 212,161 6,202 - 218,363 218,127 2,064 180 220,011 Total $ 232,178 $ 6,321 $ - $ 238,499 $ 239,539 $ 2,079 $ 189 $ 241,429 Total Investment Securities $ 568,153 $ 11,557 $ 31 $ 579,679 $ 641,897 $ 3,714 $ 581 $ 645,030 (1) Includes Federal Home Loan Bank and Federal Reserve Bank stock, recorded at cost of $ 3.0 million and $ 4.8 million, respectively, at June 30, 2020 and includes Federal Home Loan Bank and Federal Reserve Bank stock recorded at cost of $ 2.9 million and $ 4.8 million, respectively, at December 31, 2019. Securities with an amortized cost of $ 262.0 million and $ 353.8 million at June 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and for other purposes. The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required to own capital stock in the FHLB based generally upon the balances of residential and commercial real estate loans and FHLB advances. FHLB stock, which is included in equity securities, is pledged to secure FHLB advances. No ready market exists for this stock, and it has no quoted market value; however, redemption of this stock has historically been at par value. As a member of the Federal Reserve Bank of Atlanta, the Bank is required to maintain stock in the Federal Reserve Bank of Atlanta based on a specified ratio relative to the Bank’s capital. Federal Reserve Bank stock is carried at cost. Maturity Distribution . At June 30, 2020, the Company's investment securities had the following maturity distribution based on contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. Mortgage-backed securities and certain amortizing U.S. government agency securities are shown separately because they are not due at a certain maturity date. Available for Sale Held to Maturity (Dollars in Thousands) Amortized Cost Market Value Amortized Cost Market Value Due in one year or less $ 120,988 $ 122,200 $ 20,017 $ 20,136 Due after one year through five years 43,063 44,140 - - Mortgage-Backed Securities 488 545 212,161 218,363 U.S. Government Agency 163,658 166,517 - - Equity Securities 7,778 7,778 - - Total $ 335,975 $ 341,180 $ 232,178 $ 238,499 Unrealized Losses on Investment Securities. The following table summarizes the available for sale investment securities with unrealized losses aggregated by major security type and length of time in a continuous unrealized loss position: Less Than Greater Than 12 Months 12 Months Total Market Unrealized Market Unrealized Market Unrealized (Dollars in Thousands) Value Losses Value Losses Value Losses June 30, 2020 Available for Sale U.S. Government Agency $ 6,168 $ 24 $ 2,734 $ 7 $ 8,902 $ 31 Total $ 6,168 $ 24 $ 2,734 $ 7 $ 8,902 $ 31 December 31, 2019 Available for Sale U.S. Government Treasury $ 9,955 $ - $ 93,310 $ 67 $ 103,265 $ 67 U.S. Government Agency 36,361 244 17,364 81 53,725 325 States and Political Subdivisions 578 - - - 578 - Mortgage-Backed Securities 8 - - - 8 - Total $ 46,902 $ 244 $ 110,674 $ 148 $ 157,576 $ 392 At June 30, 2020, there were 18 available-for-sale (“AFS”) positions with unrealized losses totaling $ 31,000. All of these positions were U.S. government agency and mortgage-backed securities issued by U.S. government sponsored entities. Because the declines in the market value of these securities were attributable to changes in interest rates and not credit quality, and because the Company had the ability and intent to hold these investments until there is a recovery in fair value, which may be at maturity, the Company did not record any allowance for credit losses on any investment securities at June 30, 2020. Additionally, ne of the AFS or held-to-maturity securities held by the Company were past due or in nonaccrual status at June 30, 2020. Credit Quality Indicators The Company monitors the credit quality of its investment securities through various risk management procedures, including the monitoring of credit ratings. A majority of the debt securities in the Company’s investment portfolio were issued by a U.S. government entity or agency and are either explicitly or implicitly guaranteed by the U.S. government. The Company considers the long history of no credit losses on these securities indicates that the expectation of nonpayment of the amortized cost basis is zero, even if the U.S. government were to technically default. Further, certain municipal securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. Therefore, for the aforementioned securities, the Company does not assess or record expected credit losses due to the zero loss assumption. The Company monitors the credit quality of its municipal securities portfolio via credit ratings which are updated on a quarterly basis. On a quarterly basis, municipal securities in an unrealized loss position are evaluated to determine if the loss is attributable to credit related factors and if an allowance for credit loss is needed. |
LOANS HELD FOR INVESTMENT AND A
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2020 | |
Loans Held For Investment And Allowance For Credit Losses [Abstract] | |
LOANS, NET | NOTE 3 – LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES Loan Portfolio Composition . The composition of the loan portfolio was as follows: (Dollars in Thousands) June 30, 2020 December 31, 2019 Commercial, Financial and Agricultural $ 421,270 $ 255,365 Real Estate – Construction 117,794 115,018 Real Estate – Commercial Mortgage 662,434 625,556 Real Estate – Residential (1) 358,714 361,450 Real Estate – Home Equity 194,479 197,360 Consumer (2) 267,486 281,180 Loans, Net of Unearned Income $ 2,022,177 $ 1,835,929 (1) Includes loans in process with outstanding balances of $ 5.7 million and $ 8.3 million at June 30, 2020 and December 31, 2019, respectively. (2) Includes overdraft balances of $ 1.1 million and $ 1.6 million at June 30, 2020 and December 31, 2019, respectively. Net deferred fees, which include premiums on purchased loans, included in loans were $ 2.3 million at June 30, 2020 and net deferred costs were $ 1.8 million at December 31, 2019. Accrued interest receivable on loans which is excluded from amortized cost totaled $ 8.1 million at June 30, 2020 and $ 5.5 million at December 31, 2019, and is reported separately in Other Assets. The Company has pledged a blanket floating lien on all 1-4 family residential mortgage loans, commercial real estate mortgage loans, and home equity loans to support available borrowing capacity at the FHLB and has pledged a blanket floating lien on all consumer loans, commercial loans, and construction loans to support available borrowing capacity at the Federal Reserve Bank of Atlanta. Loan Purchases . The Company will periodically purchase newly originated 1-4 family real estate secured adjustable rate loans from Capital City Home Loans, a related party effective on March 1, 2020 (see Note 1). Loan purchases totaled $ 18.4 million for the six month period ended June 30, 2020, and were not credit impaired. Allowance for Credit Losses . The methodology for estimating the amount of credit losses reported in the allowance for credit losses (“ACL”) has two basic components: first, an asset-specific component involving loans that do not share risk characteristics and the measurement of expected credit losses for such individual loans; and second, a pooled component for expected credit losses for pools of loans that share similar risk characteristics. This methodology is discussed further in Note 1 – Business and Basis of Presentation/Significant Accounting Policies. The following table details the activity in the allowance for credit losses by portfolio segment. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Commercial, Real Estate Financial, Real Estate Commercial Real Estate Real Estate (Dollars in Thousands) Agricultural Construction Mortgage Residential Home Equity Consumer Total Three Months Ended June 30, 2020 Beginning Balance $ 2,247 $ 1,239 $ 5,828 $ 6,005 $ 2,701 $ 3,063 $ 21,083 Provision for Credit Losses 333 716 742 ( 615) 40 399 1,615 Charge-Offs ( 186) - - ( 1) ( 52) ( 1,175) ( 1,414) Recoveries 74 - 70 51 64 914 1,173 Net Charge-Offs ( 112) - 70 50 12 ( 261) ( 241) Ending Balance $ 2,468 $ 1,955 $ 6,640 $ 5,440 $ 2,753 $ 3,201 $ 22,457 Six Months Ended June 30, 2020 Beginning Balance $ 1,675 $ 370 $ 3,416 $ 3,128 $ 2,224 $ 3,092 $ 13,905 Impact of Adopting ASC 326 488 302 1,458 1,243 374 ( 596) 3,269 Provision for Credit Losses 739 1,283 1,516 1,089 141 1,837 6,605 Charge-Offs ( 548) - ( 11) ( 111) ( 83) ( 2,741) ( 3,494) Recoveries 114 - 261 91 97 1,609 2,172 Net Charge-Offs ( 434) - 250 ( 20) 14 ( 1,132) ( 1,322) Ending Balance $ 2,468 $ 1,955 $ 6,640 $ 5,440 $ 2,753 $ 3,201 $ 22,457 Three Months Ended June 30, 2019 Beginning Balance $ 1,630 $ 381 $ 3,993 $ 3,186 $ 2,261 $ 2,669 $ 14,120 Provision for Credit Losses 195 140 ( 204) ( 134) 107 542 646 Charge-Offs ( 235) - - ( 65) ( 45) ( 520) ( 865) Recoveries 58 - 100 223 60 251 692 Net Charge-Offs ( 177) - 100 158 15 ( 269) ( 173) Ending Balance $ 1,648 $ 521 $ 3,889 $ 3,210 $ 2,383 $ 2,942 $ 14,593 Six Months Ended June 30, 2019 Beginning Balance $ 1,434 $ 280 $ 4,181 $ 3,400 $ 2,301 $ 2,614 $ 14,210 Provision for Credit Losses 412 241 ( 307) ( 128) 87 1,108 1,413 Charge-Offs ( 330) - ( 155) ( 329) ( 97) ( 1,315) ( 2,226) Recoveries 132 - 170 267 92 535 1,196 Net Charge-Offs ( 198) - 15 ( 62) ( 5) ( 780) ( 1,030) Ending Balance $ 1,648 $ 521 $ 3,889 $ 3,210 $ 2,383 $ 2,942 $ 14,593 On January 1, 2020, we adopted ASC 326 and recorded a pre-tax cumulative effect transition adjustment of $ 3.3 million. The adoption of ASC 326 is discussed further in Note 1 – Business and Basis of Presentation/Accounting Standards Updates. For the first six months ended June, 30, 2020, the provision for credit losses totaled $ 6.6 million for held for investment loans and net loan charge-offs totaled $ 1.3 million. See Note 7 – Commitments and Contingencies for information on the provision for credit losses related to off-balance sheet commitments. The additional $ 3.9 million increase in the allowance for credit losses was attributable to an expected decline in economic conditions, primarily a higher rate of unemployment due to the COVID-19 pandemic and its effect on rates of default. Three unemployment rate forecast scenarios were utilized to estimate probability of default and were weighted based on management’s estimate of probability. The mitigating impact of the unprecedented fiscal stimulus, including direct payments to individuals, increased unemployment benefits, as well as various government sponsored loan programs, was also considered. Nonaccrual Loans . Loans are generally placed on nonaccrual status if principal or interest payments become 90 days past due and/or management deems the collectability of the principal and/or interest to be doubtful. Loans are returned to accrual status when the principal and interest amounts contractually due are brought current or when future payments are reasonably assured. The following table presents the amortized cost basis of loans in nonaccrual status and loans past due over 90 days and still on accrual by class of loans. June 30, 2020 December 31, 2019 Nonaccrual Nonaccrual Total With No 90 + Days Total With No 90 + Days (Dollars in Thousands) Nonaccrual ACL Still Accruing Nonaccrual ACL Still Accruing Commercial, Financial and Agricultural $ 548 $ - $ - $ 446 $ - $ - Real Estate – Construction 146 - - - - - Real Estate – Commercial Mortgage 2,580 1,789 - 1,434 958 - Real Estate – Residential 2,400 1,516 - 1,392 227 - Real Estate – Home Equity 1,010 - - 797 - - Consumer 282 - - 403 - - Total Nonaccrual Loans $ 6,966 $ 3,305 $ - $ 4,472 $ 1,185 $ - The Company recognized $ 10,000 of interest income on nonaccrual loans for the six months ended June 30, 2020. Collateral Dependent Loans. The following table presents the amortized cost basis of collateral-dependent loans at June 30, 2020. June 30, 2020 Real Estate Non Real Estate (Dollars in Thousands) Secured Secured Commercial, Financial and Agricultural $ 106 $ - Real Estate - Commercial Mortgage 4,939 - Real Estate - Residential 2,358 - Real Estate - Home Equity 429 - Consumer - - Total $ 7,832 $ - A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is dependent on the sale or operation of the underlying collateral. The Bank’s collateral dependent loan portfolio is comprised primarily of real estate secured loans, collateralized by either residential or commercial collateral types. The loans are carried at fair value based on current values determined by either independent appraisals or internal evaluations, adjusted for selling costs or other amounts to be deducted when estimating expected net sales proceeds. Loan Portfolio Aging. A loan is defined as a past due loan when one full payment is past due or a contractual maturity is over 30 days past due (“DPD”). The following table presents the aging of the amortized cost basis in accruing past due loans by class of loans. 30-59 60-89 90 + Total Total Total (Dollars in Thousands) DPD DPD DPD Past Due Current Loans (1) June 30, 2020 Commercial, Financial and Agricultural $ 165 $ 220 $ - $ 385 $ 420,337 $ 421,270 Real Estate – Construction - 130 - 130 117,518 117,794 Real Estate – Commercial Mortgage 83 - - 83 659,771 662,434 Real Estate – Residential 143 583 - 726 355,588 358,714 Real Estate – Home Equity 122 26 - 148 193,321 194,479 Consumer 1,110 366 - 1,476 265,728 267,486 Total Loans $ 1,623 $ 1,325 $ - $ 2,948 $ 2,012,263 $ 2,022,177 December 31, 2019 Commercial, Financial and Agricultural $ 489 $ 191 $ - $ 680 $ 254,239 $ 255,365 Real Estate – Construction 300 10 - 310 114,708 115,018 Real Estate – Commercial Mortgage 148 84 - 232 623,890 625,556 Real Estate – Residential 629 196 - 825 359,233 361,450 Real Estate – Home Equity 155 20 - 175 196,388 197,360 Consumer 2,000 649 - 2,649 278,128 281,180 Total Loans $ 3,721 $ 1,150 $ - $ 4,871 $ 1,826,586 $ 1,835,929 (1) 7.0.0 million and $ 4.5 million at June 30, 2020 and December 31, 2019, respectively. Residential Real Estate Loans In Process of Foreclosure . At June 30, 2020 and December 31, 2019, the Company had $ 1.3 million and $ 0.6 million, respectively, in 1-4 family residential real estate loans for which formal foreclosure proceedings were in process. Troubled Debt Restructurings (“TDRs”) . TDRs are loans in which the borrower is experiencing financial difficulty and the Company has granted an economic concession to the borrower that it would not otherwise consider. In these instances, as part of a work-out alternative, the Company will make concessions including the extension of the loan term, a principal moratorium, a reduction in the interest rate, or a combination thereof. The impact of the TDR modifications and defaults are factored into the allowance for credit losses on a loan-by-loan basis as all TDRs are, by definition, impaired loans. Thus, specific reserves are established based upon the results of either a discounted cash flow analysis or the underlying collateral value, if the loan is deemed to be collateral dependent. A TDR classification can be removed if the borrower’s financial condition improves such that the borrower is no longer in financial difficulty, the loan has not had any forgiveness of principal or interest, and the loan is subsequently refinanced or restructured at market terms and qualifies as a new loan. At June 30, 2020, the Company had $ 16.0 million in TDRs, of which $ 15.1 million were performing in accordance with the modified terms. At December 31, 2019 the Company had $ 17.6 million in TDRs, of which $ 16.9 million were performing in accordance with modified terms. For TDRs, the Company estimated $ 1.0 million and $ 1.5 million of credit loss reserves at June 30, 2020 and December 31, 2019, respectively. The modifications made to TDRs involved either an extension of the loan term, a principal moratorium, a reduction in the interest rate, or a combination thereof. For the three months ended June 30, 2020, there were two loans modified with a recorded investment totaling $ 34,000. For the three months ended June 30, 2019, there was one loan modified with a recorded investment of $ 0.1 million. For the six months period ended June 30, 2020, there were three loans modified with a recorded investment totaling $ 0.2 million. For the six months period ended June 30, 2019, there were three loans modified with a recorded investment totaling $ 0.2 million. The financial impact of these modifications was not material. For the three months ended June 30, 2020, there were no loans classified as TDRs, for which there was a payment default and the loans were modified within the 12 months prior to default. For the six months ended June 30, 2020, there were two loans totaling $ 0.1 million classified as TDRs, for which there was a payment default and the loans were modified within the 12 months prior to default. For the three and six months ended June 30, 2019, there were no loans classified as TDRs, for which there was a payment default and the loans were modified within the 12 months prior to default . Credit Risk Management . The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures designed to maximize loan income within an acceptable level of risk. Management and the Board of Directors review and approve these policies and procedures on a regular basis (at least annually). Reporting systems are used to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans. Management and the Credit Risk Oversight Committee periodically review our lines of business to monitor asset quality trends and the appropriateness of credit policies. In addition, total borrower exposure limits are established and concentration risk is monitored. As part of this process, the overall composition of the portfolio is reviewed to gauge diversification of risk, client concentrations, industry group, loan type, geographic area, or other relevant classifications of loans. Specific segments of the loan portfolio are monitored and reported to the Board on a quarterly basis and have strategic plans in place to supplement Board approved credit policies governing exposure limits and underwriting standards. Detailed below are the types of loans within the Company’s loan portfolio and risk characteristics unique to each. Commercial, Financial, and Agricultural – Loans in this category are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral and personal or other guarantees. Lending policy establishes debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. The majority of these loans are secured by the assets being financed or other business assets such as accounts receivable, inventory, or equipment. Collateral values are determined based upon third party appraisals and evaluations. Loan to value ratios at origination are governed by established policy guidelines. Real Estate Construction – Loans in this category consist of short-term construction loans, revolving and non-revolving credit lines and construction/permanent loans made to individuals and investors to finance the acquisition, development, construction or rehabilitation of real property. These loans are primarily made based on identified cash flows of the borrower or project and generally secured by the property being financed, including 1-4 family residential properties and commercial properties that are either owner-occupied or investment in nature. These properties may include either vacant or improved property. Construction loans are generally based upon estimates of costs and value associated with the completed project. Collateral values are determined based upon third party appraisals and evaluations. Loan to value ratios at origination are governed by established policy guidelines. The disbursement of funds for construction loans is made in relation to the progress of the project and as such these loans are closely monitored by on-site inspections. Real Estate Commercial Mortgage – Loans in this category consists of commercial mortgage loans secured by property that is either owner-occupied or investment in nature. These loans are primarily made based on identified cash flows of the borrower or project with consideration given to underlying real estate collateral and personal guarantees. Lending policy establishes debt service coverage ratios and loan to value ratios specific to the property type. Collateral values are determined based upon third party appraisals and evaluations. Real Estate Residential – Residential mortgage loans held in the Company’s loan portfolio are made to borrowers that demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current income, employment status, current assets, and other financial resources, credit history, and the value of the collateral. Collateral consists of mortgage liens on 1-4 family residential properties. Collateral values are determined based upon third party appraisals and evaluations. The Company does not originate sub-prime loans. Real Estate Home Equity – Home equity loans and lines are made to qualified individuals for legitimate purposes generally secured by senior or junior mortgage liens on owner-occupied 1-4 family homes or vacation homes. Borrower qualifications include favorable credit history combined with supportive income and debt ratio requirements and combined loan to value ratios within established policy guidelines. Collateral values are determined based upon third party appraisals and evaluations. Consumer Loans – This loan portfolio includes personal installment loans, direct and indirect automobile financing, and overdraft lines of credit. The majority of the consumer loan portfolio consists of indirect and direct automobile loans. Lending policy establishes maximum debt to income ratios, minimum credit scores, and includes guidelines for verification of applicants’ income and receipt of credit reports. Credit Quality Indicators . As part of the ongoing monitoring of the Company’s loan portfolio quality, management categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment performance, credit documentation, and current economic and market trends, among other factors. Risk ratings are assigned to each loan and revised as needed through established monitoring procedures for individual loan relationships over a predetermined amount and review of smaller balance homogenous loan pools. The Company uses the definitions noted below for categorizing and managing its criticized loans. Loans categorized as “Pass” do not meet the criteria set forth below and are not considered criticized. Special Mention – Loans in this category are presently protected from loss, but weaknesses are apparent which, if not corrected, could cause future problems. Loans in this category may not meet required underwriting criteria and have no mitigating factors. More than the ordinary amount of attention is warranted for these loans. Substandard – Loans in this category exhibit well-defined weaknesses that would typically bring normal repayment into jeopardy. These loans are no longer adequately protected due to well-defined weaknesses that affect the repayment capacity of the borrower. The possibility of loss is much more evident and above average supervision is required for these loans. Doubtful – Loans in this category have all the weaknesses inherent in a loan categorized as Substandard, with the characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Performing/Nonperforming – Loans within certain homogenous loan pools (home equity and consumer) are not individually reviewed, but are monitored for credit quality via the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following table summarizes gross loans held for investment by years of origination and internally assigned credit risk ratings (refer to Credit Risk Management section for detail on risk rating system). Term Loans by Origination Year Revolving (Dollars in Thousands) 2020 2019 2018 2017 2016 Prior Loans Total As of June 30, 2020 Commercial, Financial, Agriculture: Pass $ 214,844 $ 54,639 $ 49,571 $ 19,873 $ 16,582 $ 14,016 $ 50,597 $ 420,122 Special Mention - 4 61 9 - 64 - 138 Substandard - 11 553 312 39 92 3 1,010 Total $ 214,844 $ 54,654 $ 50,185 $ 20,194 $ 16,621 $ 14,172 $ 50,600 $ 421,270 Real Estate - Construction: Pass $ 27,315 $ 73,360 $ 11,162 $ 2,148 $ - $ - $ 3,533 $ 117,518 Substandard - 276 - - - - - 276 Total $ 27,315 $ 73,636 $ 11,162 $ 2,148 $ - $ - $ 3,533 $ 117,794 Real Estate - Commercial Mortgage: Pass $ 89,447 $ 118,464 $ 148,746 $ 99,444 $ 53,748 $ 106,278 $ 21,014 $ 637,141 Special Mention 6,116 123 5,141 216 - 6,494 - 18,090 Substandard 154 279 295 2,853 31 3,097 494 7,203 Total $ 95,717 $ 118,866 $ 154,182 $ 102,513 $ 53,779 $ 115,869 $ 21,508 $ 662,434 Real Estate - Residential: Pass $ 53,539 $ 82,903 $ 57,856 $ 49,232 $ 23,327 $ 77,875 $ 6,800 $ 351,532 Special Mention 143 26 128 178 96 345 - 916 Substandard - 1,126 1,118 563 1,005 2,369 85 6,266 Total $ 53,682 $ 84,055 $ 59,102 $ 49,973 $ 24,428 $ 80,589 $ 6,885 $ 358,714 Real Estate - Home Equity: Performing $ 1,558 $ 378 $ 252 $ 780 $ 200 $ 2,780 $ 187,703 $ 193,651 Nonperforming - 20 25 81 - 24 678 828 Total $ 1,558 $ 398 $ 277 $ 861 $ 200 $ 2,804 $ 188,381 $ 194,479 Consumer: Performing $ 46,790 $ 89,192 $ 67,729 $ 35,130 $ 16,947 $ 6,200 $ 5,215 $ 267,203 Nonperforming - 105 138 - 20 20 - 283 Total $ 46,790 $ 89,297 $ 67,867 $ 35,130 $ 16,967 $ 6,220 $ 5,215 $ 267,486 |
MORTGAGE BANKING ACTIVITIES
MORTGAGE BANKING ACTIVITIES | 6 Months Ended |
Jun. 30, 2020 | |
Mortgage Banking Activities [Abstract] | |
Mortgage Banking Activities [Text Block] | NOTE 4 – MORTGAGE BANKING ACTIVITIES Pursuant to the Brand acquisition on March 1, 2020, the Company’s mortgage banking activities at its subsidiary Capital City Homes Loans have expanded to include mandatory delivery loan sales, forward sales contracts used to manage residential loan pipeline price risk, utilization of warehouse lines to fund secondary market residential loan closings, and residential mortgage servicing. Information provided below reflects CCHL activities post acquisition for the period March 1, 2020 to June 30, 2020 and CCB legacy residential real estate activities for the period January 1, 2020 to March 1, 2020. Residential Mortgage Loan Production The Company originates, markets, and services conventional and government-sponsored residential mortgage loans. Generally, conforming fixed rate residential mortgage loans are held for sale in the secondary market and non-conforming and adjustable-rate residential mortgage loans may be held for investment. The volume of residential mortgage loans originated for sale and secondary market prices are the primary drivers of origination revenue. Residential mortgage loan commitments are generally outstanding for 30 to 90 days, which represents the typical period from commitment to originate a residential mortgage loan to when the closed loan is sold to an investor. Residential mortgage loan commitments are subject to both credit and price risk. Credit risk is managed through underwriting policies and procedures, including collateral requirements, which are generally accepted by the secondary loan markets. Price risk is primarily related to interest rate fluctuations and is partially managed through forward sales of residential mortgage-backed securities (primarily to-be announced securities, or TBAs) or mandatory delivery commitments with investors. The unpaid principal balance of residential mortgage loans held for sale, notional amounts of derivative contracts related to residential mortgage loan commitments and forward contract sales and their related fair values are set- forth below . June 30, 2020 Unpaid Principal (Dollars in Thousands) Balance/Notional Fair Value Residential Mortgage Loans Held for Sale $ 73,498 $ 76,610 Residential Mortgage Loan Commitments ("IRLCs") (1) 154,759 5,342 Forward Sales Contracts (2) 178,500 ( 963) $ 80,989 (1) Recorded in other assets at fair value (2) Recorded in other liabilities at fair value Residential mortgage loans held for sale that were 90 days or more outstanding or on nonaccrual totaled $ 0.7 million at June 30, 2020. Mortgage banking revenue was as follows: Three Months Ended Six Months Ended (Dollars in Thousands) June 30, 2020 June 30, 2020 Net Realized Gains on Sales of Mortgage Loans $ 14,580 $ 17,987 Net Change in Unrealized Gain on Mortgage Loans Held for Sale 1,092 1,830 Net Change in the Fair Value of Mortgage Loan Commitments (IRLCs) 1,487 3,142 Net Change in the Fair Value of Forward Sales Contracts 1,625 231 Pair-Offs on Net Settlement of Forward Sales Contracts ( 3,019) ( 4,395) Mortgage Servicing Rights Additions 2,049 2,049 Total Mortgage Banking Revenues $ 17,814 $ 20,844 Residential Mortgage Servicing The Company may retain the right to service residential mortgage loans sold. The unpaid principal balance of loans serviced for others is the primary driver of servicing revenue. The following represents a summary of mortgage servicing rights. (Dollars in Thousands) June 30, 2020 Number of Residential Mortgage Loans Serviced for Others 1,375 Outstanding Principal Balance of Residential Mortgage Loans Serviced for Others $ 355,778 Weighted Average Interest Rate 3.94% Remaining Contractual Term (in months) 318 Conforming conventional loans serviced by the Company are sold to FNMA on a non-recourse basis, whereby foreclosure losses are generally the responsibility of FNMA and not the Company. The government loans serviced by the Company are secured through GNMA, whereby the Company is insured against loss by the Federal Housing Administration or partially guaranteed against loss by the Veterans Administration. At June 30, 2020, the servicing portfolio balance consisted of the following loan types: FNMA ( 53%), GNMA ( 16%), and private investor ( 31%). FNMA and private investor loans are structured as actual/actual payment remittance. Activity in the capitalized mortgage servicing rights for the three month period ended June 30, 2020 was as follows: (Dollars in Thousands) Beginning Balance $ 910 Additions due to loans sold with servicing retained 2,049 Deletions and amortization ( 97) Ending Balance $ 2,862 The Company did not record any permanent impairment losses on mortgage servicing rights for the second quarter of 2020. At June 30, 2020, the key unobservable inputs used in determining the fair value of the Company’s mortgage servicing rights were as follows: Minimum Maximum Discount Rates 11.00% 15.00% Annual prepayment speeds 10.02% 62.88% Cost of Servicing (basis points) 90 110 Changes in residential mortgage interest rates directly affect the prepayment speeds used in valuing the Company’s mortgage servicing rights. A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors. The weighted average annual prepayment speed was 17.04% at June 30, 2020. Warehouse Line Borrowings The Company has the following warehouse lines of credit and master repurchase agreements with various financial institutions at June 30, 2020. Amounts (Dollars in Thousands) Outstanding $ 25 million warehouse line of credit agreement expiring October 2020. Interest is at LIBOR plus 2.25%, with a floor rate of 3.50%. A cash pledge deposit of $ 0.1 million is required by the lender. $ 16,220 $ 50 million master repurchase agreement without defined expiration. Interest is at the LIBOR plus 2.24% to 3.00%. A cash pledge deposit of $ 0.5 million is required by the lender. 27,844 $ 50 million warehouse line of credit agreement expiring in September 2020. Interest is at the LIBOR plus 2.25% 16,663 $ 60,727 Warehouse line borrowings are classified as short-term borrowings. At June 30, 2020, the Company had mortgage loans held for sale pledged as collateral under the above warehouse lines of credit and master repurchase agreements. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquid assets, maximum debt to net worth ratio and positive net income, as defined in the agreements. The Company was in compliance with all significant debt covenants at June 30, 2020. The Company intends to renew the warehouse lines of credit and master repurchase agreements when they mature. The Company has extended a $ 30 million warehouse line of credit to CCHL, a 51% owned subsidiary entity. Balances and transactions under this line of credit are eliminated in the Company’s consolidated financial statements and thus not included in the total short term borrowings noted on the consolidated statement of financial condition. The balance of this line of credit at June 30, 2020 was $ 10.2 million. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2020 | |
Derivatives [Abstract] | |
Derivatives | NOTE 5 – DERIVATIVES The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s subordinated debt. Cash Flow Hedges of Interest Rate Risk Interest rate swaps with notional amounts totaling $ 30 million at June 30, 2020 were designed as a cash flow hedge for subordinated debt. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (“AOCI”) and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate subordinated debt. The following table reflects the cash flow hedges included in the consolidated statements of financial condition at June 30, 2020 Weighted Weighted Weighted Balance Average Average Average Notional Fair Sheet Rate Received Rate Paid Maturity (Dollars in Thousands) Amount Value Location (Floating) (Fixed) (Years) Interest rate swaps related to subordinated debt $ 30,000 $ ( 108) Other Liabilities 2.15% 2.50% 10.0 The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income related to the cash flow derivative instruments at June 30, 2020. Amount of Gain Amount of Gain (Loss) Recognized (Loss) Reclassified (Dollars in Thousands) in AOCI Category from AOCI to Income Interest rate swaps related to subordinated debt $ ( 108) Interest Expense $ ( 3) The Company estimates there will be approximately $ 0.1 million reclassified as an increase to interest expense within the next 12 months. At June 30, 2020, the Company has not posted any collateral related to these agreements. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | NOTE 6 – LEASES Operating leases in which the Company is the lessee are recorded as operating lease right of use (“ROU”) assets and operating liabilities, included in other assets and liabilities, respectively, on its consolidated statement of financial condition. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the consolidated statements of income. The Company’s operating leases primarily relate to banking offices with remaining lease terms from 1 to 30 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of Topic 842. Operating leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. At June 30, 2020, the operating lease ROU assets and liabilities were $ 6.5 million and $ 7.4 million, respectively. The Company does not have any finance leases or any significant lessor agreements. The table below summarizes our lease expense and other information related to the Company’s operating leases . Three Months Ended Six Months Ended June 30, June 30, (Dollars in Thousands) 2020 2019 2020 2019 Operating lease expense $ 265 $ 81 $ 422 $ 162 Short-term lease expense 154 29 233 63 Total lease expense $ 419 $ 110 $ 655 $ 225 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 263 $ 84 $ 424 $ 169 Right-of-use assets obtained in exchange for new operating lease liabilities - - 5,120 1,860 Weighted-average remaining lease term — operating leases (in years) 15.5 7.2 15.5 7.2 Weighted-average discount rate — operating leases 2.4% 2.9% 2.4% 2.9% The table below summarizes the maturity of remaining lease liabilities: (Dollars in Thousands) June 30, 2020 2020 $ 609 2021 1,200 2022 1,052 2023 680 2024 630 2025 and thereafter 4,840 Total $ 9,011 Less: Interest ( 1,624) Present Value of Lease liability $ 7,387 At June 30, 2020, the Company had additional operating lease payments for banking offices (to be constructed) that have not yet commenced of $ 4.8 million based on the initial contract term of 15 years. Payments for the banking office are expected to commence after the construction period ends, which is expected to occur during the second half of 2021. A related party is the lessor in an operating lease with the Company. The Company’s minimum payment is $ 0.2 million annually through 2024, for an aggregate remaining obligation of $ 0.9 million at June 30, 2020. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2020 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 7 - EMPLOYEE BENEFIT PLANS The Company has a defined benefit pension plan covering substantially all full-time and eligible part-time associates and a Supplemental Executive Retirement Plan (“SERP”) and a Supplemental Executive Retirement Plan II (“SERP II”) covering its executive officers. The defined benefit plan was amended in December 2019 to remove plan eligibility for new associates hired after December 31, 2019. The SERP II was adopted by the Company’s Board on May 21, 2020 and covers certain executive officers that were not covered by the SERP. The components of the net periodic benefit cost for the Company's qualified benefit pension plan were as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Service Cost $ 1,457 $ 1,529 $ 2,914 $ 3,057 Interest Cost 1,400 1,545 2,811 3,089 Expected Return on Plan Assets ( 2,748) ( 2,382) ( 5,496) ( 4,764) Prior Service Cost Amortization 4 4 8 8 Net Loss Amortization 974 965 1,985 1,931 Special Termination Charge - - 61 - Net Periodic Benefit Cost $ 1,087 $ 1,661 $ 2,283 $ 3,321 Discount Rate 3.53% 4.43% 3.53% 4.43% Long-term Rate of Return on Assets 7.00% 7.25% 7.00% 7.25% The components of the net periodic benefit cost for the Company's SERP and SERP II were as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Service Cost $ 10 $ - $ 10 $ - Interest Cost $ 83 $ 87 $ 155 $ 174 Prior Service Cost Amortization 109 - 109 - Net Loss Amortization 71 190 318 380 Net Periodic Benefit Cost $ 273 $ 277 $ 592 $ 554 Discount Rate 3.16% 4.23% 3.16% 4.23% The service cost component of net periodic benefit cost is reflected in compensation expense in the accompanying statements of income. The other components of net periodic cost are included in “other” within the noninterest expense category in the statements of income. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES Lending Commitments . The Company is a party to financial instruments with off-balance sheet risks in the normal course of business to meet the financing needs of its clients. These financial instruments consist of commitments to extend credit and standby letters of credit. The Company’s maximum exposure to credit loss under standby letters of credit and commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in establishing commitments and issuing letters of credit as it does for on-balance sheet instruments. The amounts associated with the Company’s off-balance sheet obligations were as follows: June 30, 2020 December 31, 2019 (Dollars in Thousands) Fixed Variable Total Fixed Variable Total Commitments to Extend Credit (1) $ 119,458 $ 524,196 $ 643,654 $ 114,903 $ 404,345 $ 519,248 Standby Letters of Credit 6,944 - 6,944 5,783 - 5,783 Total $ 126,402 $ 524,196 $ 650,598 $ 120,686 $ 404,345 $ 525,031 (1) Commitments include unfunded loans, revolving lines of credit, and off-balance sheet residential loan commitments. Commitments to extend credit are agreements to lend to a client so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. In general, management does not anticipate any material losses as a result of participating in these types of transactions. However, any potential losses arising from such transactions are reserved for in the same manner as management reserves for its other credit facilities. For both on- and off-balance sheet financial instruments, the Company requires collateral to support such instruments when it is deemed necessary. The Company evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include deposits held in financial institutions; U.S. Treasury securities; other marketable securities; real estate; accounts receivable; property, plant and equipment; and inventory. The allowance for credit losses for off-balance sheet credit commitments that are not unconditionally cancellable by the bank totaled $ 1.4 million at June 30, 2020 and $ 0.2 million at December 31, 2019. The allowance is adjusted as a provision for credit loss expense and is recorded in other liabilities. The allowance was increased by $ 0.7 million on January 1, 2020 upon the adoption of ASC 326. The following table shows the activity in the allowance. Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Beginning Balance $ 1,033 $ 160 $ 157 $ 160 Impact of Adoption of ASC 326 - - 658 - Provision for Credit Losses 391 ( 3) 609 ( 3) Ending Balance $ 1,424 $ 157 $ 1,424 $ 157 Contingencies . The Company is a party to lawsuits and claims arising out of the normal course of business. In management's opinion, there are no known pending claims or litigation, the outcome of which would, individually or in the aggregate, have a material effect on the consolidated results of operations, financial position, or cash flows of the Company. Indemnification Obligation . The Company is a member of the Visa U.S.A. network. Visa U.S.A member banks are required to indemnify the Visa U.S.A. network for potential future settlement of certain litigation (the “Covered Litigation”) that relates to several antitrust lawsuits challenging the practices of Visa and MasterCard International. In 2008, the Company, as a member of the Visa U.S.A. network, obtained Class B shares of Visa, Inc. upon its initial public offering. Since its initial public offering, Visa, Inc. has funded a litigation reserve for the Covered Litigation resulting in a reduction in the Class B shares held by the Company. During the first quarter of 2011, the Company sold its remaining Class B shares. Associated with this sale, the Company entered into a swap contract with the purchaser of the shares that requires a payment to the counterparty in the event that Visa, Inc. makes subsequent revisions to the conversion ratio for its Class B shares. Fixed charges included in the swap liability are payable quarterly until the litigation reserve is fully liquidated and at which time the aforementioned swap contract will be terminated. Quarterly fixed payments approximate $ 168,000. Conversion ratio payments and ongoing fixed quarterly charges are reflected in earnings in the period incurred. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 9 – FAIR VALUE MEASUREMENTS The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date . Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from, or corroborated, by market data by correlation or other means . Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Assets and Liabilities Measured at Fair Value on a Recurring Basis Securities Available for Sale. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. Other securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, credit information and the bond’s terms and conditions, among other things. In general, the Company does not purchase securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are U.S. Treasury obligations, federal agency bullet or mortgage pass-through securities, or general obligation or revenue-based municipal bonds. Pricing for such instruments is easily obtained. At least annually, the Company will validate prices supplied by the independent pricing service by comparing them to prices obtained from an independent third-party source. Loans Held for Sale . The fair value of residential mortgage loans held for sale based on Level 2 inputs is determined, when possible, using either quoted secondary-market prices or investor commitments. If no such quoted price exists, the fair value is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan, which would be used by other market participants. The Company has elected the fair value option accounting for its held for sale loans. Mortgage Banking Derivative Instruments. The fair values of interest rate lock commitments (“IRLCs”) are derived by valuation models incorporating market pricing for instruments with similar characteristics, commonly referred to as best execution pricing, or investor commitment prices for best effort IRLCs which have unobservable inputs, such as an estimate of the fair value of the servicing rights expected to be recorded upon sale of the loans, net estimated costs to originate the loans, and the pull-through rate, and are therefore classified as Level 3 within the fair value hierarchy. The fair value of forward sale commitments is based on observable market pricing for similar instruments and are therefore classified as Level 2 within the fair value hierarchy. Interest Rate Swap. The Company’s derivative positions are classified as level 2 within the fair value hierarchy and are valued using models generally accepted in the financial services industry and that use actively quoted or observable market input values from external market data providers. The fair value derivatives are determined using discounted cash flow models. Fair Value Swap . The Company entered into a stand-alone derivative contract with the purchaser of its Visa Class B shares. The valuation represents the amount due and payable to the counterparty based upon the revised share conversion rate, if any, during the period. A summary of fair values for assets and liabilities consisted of the following: Level 1 Level 2 Level 3 Total Fair (Dollars in Thousands) Inputs Inputs Inputs Value June 30, 2020 ASSETS: Securities Available for Sale: U.S. Government Treasury $ 160,767 $ - $ - $ 160,767 U.S. Government Agency - 166,517 - 166,517 States and Political Subdivisions - 5,573 - 5,573 Mortgage-Backed Securities - 545 - 545 Equity Securities - 7,778 - 7,778 Loans Held for Sale - 76,610 - 76,610 Mortgage Banking Derivative Asset - - 5,342 5,342 LIABILITIES: Mortgage Banking Derivative Liability - 963 - 963 Interest Rate Swap Derivative Liability - 108 - 108 December 31, 2019 ASSETS: Securities Available for Sale: U.S. Government Treasury $ 232,778 $ - $ - $ 232,778 U.S. Government Agency - 156,078 - 156,078 States and Political Subdivisions - 6,319 - 6,319 Mortgage-Backed Securities - 773 - 773 Equity Securities - 7,653 - 7,653 Mortgage Banking Activities . The Company had Level 3 issuances and transfers of $ 14.6 million and $ 19.4 million, respectively, for the period March 1, 2020 to June 30, 2020 related to mortgage banking activities. Issuances are valued based on the change in fair value of the underlying mortgage loan from inception of the IRLC to the balance sheet date, adjusted for pull-through rates and costs to originate. IRLCs transferred out of Level 3 represent IRLCs that were funded and moved to mortgage loans held for sale, at fair value. Assets Measured at Fair Value on a Non-Recurring Basis Certain assets are measured at fair value on a non-recurring basis (i.e., the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances). An example would be assets exhibiting evidence of impairment. The following is a description of valuation methodologies used for assets measured on a non-recurring basis. Collateral Dependent Loans . Impairment for collateral dependent loans is measured using the fair value of the collateral less selling costs. The fair value of collateral is determined by an independent valuation or professional appraisal in conformance with banking regulations. Collateral values are estimated using Level 3 inputs due to the volatility in the real estate market, and the judgment and estimation involved in the real estate appraisal process. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. Valuation techniques are consistent with those techniques applied in prior periods. Collateral-dependent loans had a carrying value of $ 7.8 million with a valuation allowance of $ 0.1 million at June 30, 2020 and $ 6.6 million and $ 0.5 million, respectively, at December 31, 2019. Other Real Estate Owned . During the first six months of 2020, certain foreclosed assets, upon initial recognition, were measured and reported at fair value through a charge-off to the allowance for credit losses based on the fair value of the foreclosed asset less estimated cost to sell. The fair value of the foreclosed asset is determined by an independent valuation or professional appraisal in conformance with banking regulations. On an ongoing basis, we obtain updated appraisals on foreclosed assets and realize valuation adjustments as necessary. The fair value of foreclosed assets is estimated using Level 3 inputs due to the judgment and estimation involved in the real estate valuation process. Mortgage Servicing Rights . Residential mortgage loan servicing rights are evaluated for impairment at each reporting period based upon the fair value of the rights as compared to the carrying amount. Fair value is determined by a third party valuation model using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). The fair value is estimated using Level 3 inputs, including a discount rate, weighted average prepayment speed, and the cost of loan servicing. Further detail on the key inputs utilized are provided in Note 4 – Mortgage Banking Activities. At June 30, 2020, there was no valuation allowance for loan servicing rights. Assets and Liabilities Disclosed at Fair Value The Company is required to disclose the estimated fair value of financial instruments, both assets and liabilities, for which it is practical to estimate fair value and the following is a description of valuation methodologies used for those assets and liabilities. Cash and Short-Term Investments. The carrying amount of cash and short-term investments is used to approximate fair value, given the short time frame to maturity and as such assets do not present unanticipated credit concerns. Securities Held to Maturity . Securities held to maturity are valued in accordance with the methodology previously noted in this footnote under the caption “Assets and Liabilities Measured at Fair Value on a Recurring Basis – Securities Available for Sale”. Loans. The loan portfolio is segregated into categories and the fair value of each loan category is calculated using present value techniques based upon projected cash flows, estimated discount rates, and incorporates a liquidity discount to meet the objective of “exit price” valuation. Deposits. The fair value of Noninterest Bearing Deposits, NOW Accounts, Money Market Accounts and Savings Accounts are the amounts payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using present value techniques and rates currently offered for deposits of similar remaining maturities. Subordinated Notes Payable. The fair value of each note is calculated using present value techniques, based upon projected cash flows and estimated discount rates as well as rates being offered for similar obligations. Short-Term and Long-Term Borrowings. The fair value of each note is calculated using present value techniques, based upon projected cash flows and estimated discount rates as well as rates being offered for similar debt. A summary of estimated fair values of significant financial instruments consisted of the following: June 30, 2020 Carrying Level 1 Level 2 Level 3 (Dollars in Thousands) Value Inputs Inputs Inputs ASSETS: Cash $ 75,155 $ 75,155 $ - $ - Short-Term Investments 513,273 513,273 - - Investment Securities, Available for Sale 341,180 160,767 180,413 - Investment Securities, Held to Maturity 232,178 20,136 218,363 - Equity Securities (1) 3,588 - 3,588 - Loans Held for Sale 76,610 - 76,610 - Loans, Net of Allowance for Credit Losses 1,999,720 - - 2,006,877 Mortgage Banking Derivative Asset 5,342 - - 5,342 Mortgage Servicing Rights 2,862 - - 2,827 LIABILITIES: Deposits $ 2,954,996 $ - $ 3,063,239 $ - Short-Term Borrowings 63,958 - 63,958 - Subordinated Notes Payable 52,887 - 41,835 - Long-Term Borrowings 5,583 - 5,763 - Mortgage Banking Derivative Liability 963 - 963 - Interest Rate Swap Derivative Liability 108 - 108 - December 31, 2019 Carrying Level 1 Level 2 Level 3 (Dollars in Thousands) Value Inputs Inputs Inputs ASSETS: Cash $ 60,087 $ 60,087 $ - $ - Short-Term Investments 318,336 318,336 - - Investment Securities, Available for Sale 403,601 232,778 170,823 - Investment Securities, Held to Maturity 239,539 20,042 221,387 - Loans Held for Sale 9,509 - 9,509 - Equity Securities (1) 3,591 - 3,591 - Loans, Net of Allowance for Credit Losses 1,822,024 - - 1,804,930 LIABILITIES: Deposits $ 2,645,454 $ - $ 2,644,430 $ - Short-Term Borrowings 6,404 - 6,404 - Subordinated Notes Payable 52,887 - 40,280 - Long-Term Borrowings 6,514 - 6,623 - (1) All non-financial instruments are excluded from the above table. The disclosures also do not include goodwill. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME | NOTE 10 – OTHER COMPREHENSIVE INCOME The amounts allocated to other comprehensive income are presented in the table below. Reclassification adjustments related to securities held for sale are included in net gain (loss) on securities transactions in the accompanying consolidated statements of comprehensive income. For the periods presented, reclassifications adjustments related to securities held for sale was not material. Before Tax Net of Tax (Expense) Tax (Dollars in Thousands) Amount Benefit Amount Three Months Ended June 30, 2020 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 424 $ ( 75) $ 349 Amortization of losses on securities transferred from available for sale to held to maturity 9 ( 2) 7 Total Investment Securities 433 ( 77) 356 Change in net unrealized gain/loss on interest rate swap ( 104) 25 ( 79) Total Other Comprehensive Income $ 329 $ ( 52) $ 277 Six Months Ended June 30, 2020 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 3,962 $ ( 972) $ 2,990 Amortization of losses on securities transferred from available for sale to held to maturity 18 ( 4) 14 Total Investment Securities 3,980 ( 976) 3,004 Change in net unrealized gain/loss on interest rate swap ( 104) 25 ( 79) Total Other Comprehensive Income $ 3,876 $ ( 951) $ 2,925 Before Tax Net of Tax (Expense) Tax (Dollars in Thousands) Amount Benefit Amount Three Months Ended June 30, 2019 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 1,736 $ ( 439) $ 1,297 Amortization of losses on securities transferred from available for sale to held to maturity 11 ( 4) 7 Total Other Comprehensive Income $ 1,747 $ ( 443) $ 1,304 Six Months Ended June 30, 2019 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 2,985 $ ( 756) $ 2,229 Amortization of losses on securities transferred from available for sale to held to maturity 22 ( 6) 16 Total Other Comprehensive Income $ 3,007 $ ( 762) $ 2,245 Accumulated other comprehensive loss was comprised of the following components: Accumulated Securities Other Available Interest Rate Retirement Comprehensive (Dollars in Thousands) for Sale Swap Plans Loss Balance as of January 1, 2020 $ 864 $ - $ ( 29,045) $ ( 28,181) Other comprehensive income during the period 3,004 ( 79) - 2,925 Balance as of June 30, 2020 $ 3,868 $ ( 79) $ ( 29,045) $ ( 25,256) Balance as of January 1, 2019 $ ( 2,008) $ - $ ( 26,807) $ ( 28,815) Other comprehensive income during the period 2,245 - - 2,245 Balance as of June 30, 2019 $ 237 $ - $ ( 26,807) $ ( 26,570) |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Business and Basis of Presentation [Abstract] | |
Nature of Operations | Nature of Operations . Capital City Bank Group, Inc. (“CCBG” or the “Company”) provides a full range of banking and banking-related services to individual and corporate clients through its subsidiary, Capital City Bank, with banking offices located in Florida, Georgia, and Alabama. The Company is subject to competition from other financial institutions, is subject to regulation by certain government agencies and undergoes periodic examinations by those regulatory authorities. |
Basis of Presentation | Basis of Presentation . The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of CCBG and its wholly owned subsidiary, Capital City Bank (“CCB” or the “Bank”). All material inter-company transactions and accounts have been eliminated. Certain previously reported amounts have been reclassified to conform to the current year’s presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated statement of financial condition at December 31, 2019 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019. |
Business Combination | Business Combination . On March 1, 2020, CCB completed its acquisition of a 51% membership interest in Brand Mortgage Group , LLC (“Brand”) which is now operated as Capital City Home Loans (“CCHL”). CCHL was consolidated into CCBG’s financial statements effective March 1, 2020. Assets acquired totaled $ 52 million (consisting primarily of loans held for sale) and liabilities assumed totaled $ 42 million (consisting primarily of warehouse line borrowings). The primary purpose of the acquisition was to gain access to an expanded residential mortgage product line-up and investor base (including a mandatory delivery channel for loan sales) and to generate other operational synergies and cost savings. CCB made a $ 7.1 million cash payment for its 51% membership interest and entered into a buyout agreement for the remaining 49% noncontrolling interest resulting in temporary equity with a fair value of $ 7.4 million. Goodwill totaling $ 4.3 million was recorded in connection with this acquisition. Factors that contributed to the purchase price resulting in goodwill include Brand’s strong management team and expertise in the mortgage industry, historical record of earnings, and operational synergies created as part of the strategic alliance. |
Adoption of New Accounting Standard | Adoption of New Accounting Standard On January 1, 2020, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments). In addition, ASC 326-30 provides a new credit loss model for available-for-sale debt securities. The most significant change requires credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities that management does not intend to sell or believes that it is not more likely than not they will be required to sell. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The adoption of ASC 326 (“CECL”) had an impact of $ 4.0 million ($3.3 million increase in the allowance for credit losses and $ 0.7 million increase in the allowance for unfunded loan commitments (liability account)) that was offset by a corresponding decrease in retained earnings of $ 3.1 million and $ 0.9 million increase in deferred tax assets. The increase in the allowance for credit losses required under the ASC 326 generally reflected the impact of reserves calculated over the life of loan, and more specifically higher reserves required for longer duration loan portfolios, and the utilization of a longer historical look-back period in the calculation of loan loss rates (loss given default). Upon analyzing the debt security portfolios, the Company determined that no allowance was required as these debt securities are government guaranteed treasuries or government agency-backed securities for which the risk of loss was deemed minimal. Further, certain municipal debt securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. As Reported Impact of Under Pre-ASC 326 ASC 326 (Dollars in Thousands) ASC 326 Adoption Adoption Loans: Commercial, Financial and Agricultural $ 2,163 $ 1,675 $ 488 Real Estate - Construction 672 370 302 Real Estate - Commercial Mortgage 4,874 3,416 1,458 Real Estate - Residential 4,371 3,128 1,243 Real Estate - Home Equity 2,598 2,224 374 Consumer, Other Loans and Overdrafts 2,496 3,092 ( 596) Allowance for Credit Losses on Loans 17,174 13,905 3,269 Other Liabilities: Allowance for Credit Losses on Off-Balance Sheet Credit Exposures $ 815 $ 157 $ 658 Significant Accounting Policy Changes Upon adoption of ASC 326, the Company revised certain accounting policies for Investment Securities, Loans, and the Allowance for Credit Losses as detailed below. In addition, certain accounting policies were revised upon the acquisition of Brand on March 1, 2020 and are also discussed in further detail below under the Mortgage Banking Activities section. |
Investment Securities | Investment Securities Investment securities are classified as held-to-maturity and carried at amortized cost when the Company has the positive intent and ability to hold them until maturity. Investment securities not classified as held-to-maturity or trading securities are classified as available-for-sale and carried at fair value. The Company determines the appropriate classification of securities at the time of purchase. For reporting and risk management purposes, we further segment investment securities by the issuer of the security which correlates to its risk profile: U.S. government treasury, U.S. government agency, state and political subdivisions, and mortgage-backed securities. Certain equity securities with limited marketability, such as stock in the Federal Reserve Bank and the Federal Home Loan Bank, are classified as available-for-sale and carried at cost. Interest income includes amortization and accretion of purchase premiums and discounts. Realized gains and losses are derived from the amortized cost of the security sold. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Securities transferred from available-for-sale to held-to-maturity are recorded at amortized cost plus or minus any unrealized gain or loss at the time of transfer. Any existing unrecognized gain or loss continues to be reported in accumulated other comprehensive income (net of tax) and amortized as an adjustment to interest income over the remaining life of the security. Any existing allowance for credit loss is reversed at the time of transfer. Subsequent to transfer, the allowance for credit losses on the transferred security is evaluated in accordance with the accounting policy for held-to-maturity securities. Additionally, any allowance amounts reversed or established as part of the transfer are presented on a gross basis in the consolidated statement of income. The accrual of interest is generally suspended on securities more than 90 days past due with respect to principal or interest. When a security is placed on nonaccrual status, all previously accrued and uncollected interest is reversed against current income and thus not included in the estimate of credit losses. Credit losses and changes thereto, are established as an allowance for credit loss through a provision for credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Certain debt securities in the Company’s investment portfolio were issued by a U.S. government entity or agency and are either explicitly or implicitly guaranteed by the U.S. government. The Company considers the long history of no credit losses on these securities indicates that the expectation of nonpayment of the amortized cost basis is zero, even if the U.S. government were to technically default. Further, certain municipal securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. Therefore, for the aforementioned securities, the Company does not assess or record expected credit losses due to the zero loss assumption. Impairment - Available-for-Sale Securities . Unrealized gains on available-for-sale securities are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). For available-for-sale securities that are in an unrealized loss position, the Company first assesses whether it intends to sell, or whether it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale securities that do not meet the aforementioned criteria or have a zero loss assumption, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If the assessment indicates that a credit loss exists, the present value of cash flows to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded through a provision for credit loss expense, limited by the amount that fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Allowance for Credit Losses - Held-to-Maturity Securities. Management measures expected credit losses on each individual held-to-maturity debt security that has not been deemed to have a zero assumption. Each security that is not deemed to have zero credit losses is individually measured based on net realizable value, or the difference between the discounted value of the expected cash flows, based on the original effective rate, and the recorded amortized basis of the security. To the extent a shortfall is related to credit loss, an allowance for credit loss is recorded through a provision for credit loss expense. Any shortfall related to other noncredit-related factors is recognized in other comprehensive income. |
Loans Held for Investment | Loans Held for Investment Loans held for investment (“HFI”) are stated at amortized cost which includes the principal amount outstanding, net premiums and discounts, and net deferred loan fees and costs. Accrued interest receivable on loans is reported in other assets and is not included in the amortized cost basis of loans. Interest income is accrued on the effective yield method based on outstanding principal balances, and includes loan late fees. Fees charged to originate loans and direct loan origination costs are deferred and amortized over the life of the loan as a yield adjustment. The Company defines loans as past due when one full payment is past due or a contractual maturity is over 30 days late. The accrual of interest is generally suspended on loans more than 90 days past due with respect to principal or interest. When a loan is placed on nonaccrual status, all previously accrued and uncollected interest is reversed against current income and thus a policy election has been made to not include in the estimate of credit losses. Interest income on nonaccrual loans is recognized when the ultimate collectability is no longer considered doubtful. Loans are returned to accrual status when the principal and interest amounts contractually due are brought current or when future payments are reasonably assured. Loan charge-offs on commercial and investor real estate loans are recorded when the facts and circumstances of the individual loan confirm the loan is not fully collectible and the loss is reasonably quantifiable. Factors considered in making these determinations are the borrower’s and any guarantor’s ability and willingness to pay, the status of the account in bankruptcy court (if applicable), and collateral value. Charge-off decisions for consumer loans are dictated by the Federal Financial Institutions Examination Council’s (FFIEC) Uniform Retail Credit Classification and Account Management Policy which establishes standards for the classification and treatment of consumer loans, which generally require charge-off after 120 days of delinquency. The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures designed to maximize loan income within an acceptable level of risk. Reporting systems are used to monitor loan originations, loan ratings, concentrations, loan delinquencies, nonperforming and potential problem loans, and other credit quality metrics. The ongoing review of loan portfolio quality and trends by Management and the Credit Risk Oversight Committee support the process for estimating the allowance for credit losses. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The allowance for credit losses is adjusted by a credit loss provision which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Expected credit loss inherent in non-cancellable off-balance sheet credit exposures is accounted for as a separate liability included in other liabilities. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loan default and loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information incorporate management’s view of current conditions and forecasts. The methodology for estimating the amount of credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving loans that do not share risk characteristics and the measurement of expected credit losses for such individual loans; and second, a pooled component for expected credit losses for pools of loans that share similar risk characteristics. Loans That Do Not Share Risk Characteristics (Individually Analyzed) Loans that do not share similar risk characteristics are evaluated on an individual basis. Loans deemed to be collateral dependent have differing risk characteristics and are individually analyzed to estimate the expected credit loss. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is dependent on the liquidation and sale of the underlying collateral. For collateral dependent loans where foreclosure is probable, the expected credit loss is measured based on the difference between the fair value of the collateral (less selling cost) and the amortized cost basis of the asset. For collateral dependent loans where foreclosure is not probable, the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable. For loans with balances greater than $250,000 the fair value of the collateral is obtained through independent appraisal of the underlying collateral. For loans with balances less than $250,000, the Company has made a policy election to measure expected loss for these individual loans utilizing loss rates for similar loan types. The aforementioned measurement criteria are applied for collateral dependent troubled debt restructurings. Loans That Share Similar Risk Characteristics (Pooled Loans) The general steps in determining expected credit losses for the pooled loan component of the allowance are as follows: Segment loans into pools according to similar risk characteristics Develop historical loss rates for each loan pool segment Incorporate the impact of forecasts Incorporate the impact of other qualitative factors Calculate and review pool specific allowance for credit loss estimate Methodology – A discounted cash flow (“DCF”) methodology is utilized to calculate expected cash flows for the life of each individual loan. The discounted present value of expected cash flow is then compared to the loan’s amortized cost basis to determine the credit loss estimate. Individual loan results are aggregated at the pool level in determining total reserves for each loan pool. The primary inputs used to calculate expected cash flows include historical loss rates which reflect probability of default (“PD”) and loss given default (“LGD”), and prepayment rates. The historical look-back period is a key factor in the calculation of the PD rate and is based on management’s assessment of current and forecasted conditions and may vary by loan pool. Loans subject to the Company’s risk rating process are further sub-segmented by risk rating in the calculation of PD rates. LGD rates generally reflect the historical average net loss rate by loan pool. Expected cash flows are further adjusted to incorporate the impact of loan prepayments which will vary by loan segment and interest rate conditions. In general, prepayment rates are based on observed prepayment rates occurring in the loan portfolio and consideration of forecasted interest rates. Forecast Factors – In developing loss rates, adjustments are made to incorporate the impact of forecasted conditions. Certain assumptions are also applied, including the length of the forecast and reversion periods. The forecast period is the period within which management is able to make a reasonable and supportable assessment of future conditions. The reversion period is the period beyond which management believes it can develop a reasonable and supportable forecast, and bridges the gap between the forecast period and the use of historical default and loss rates. The remainder period reflects the remaining life of the loan. The length of the forecast and reversion periods are periodically evaluated and based on management’s assessment of current and forecasted conditions and may vary by loan pool. For purposes of developing a reasonable and supportable assessment of future conditions, management utilizes established industry and economic data points and sources, including the Federal Open Market Committee forecast, with the forecasted unemployment rate being a significant factor. PD rates for the forecast period will be adjusted accordingly based on management’s assessment of future conditions. PD rates for the remainder period will reflect the historical mean PD rate. Reversion period PD rates reflect the difference between forecast and remainder period PD rates closed using a straight-line adjustment over the reversion period. Qualitative Factors – Loss rates are further adjusted to account for other risk factors that impact loan defaults and losses. These basis point adjustments are based on management’s assessment of trends and conditions that impact credit risk and resulting loan losses, more specifically internal and external factors that are independent of and not reflected in the quantitative loss rate calculations. Risk factors management considers in this assessment include trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters. Allowance for Credit Losses on Off-Balance Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense and is recorded in other liabilities. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life and applies the same estimated loss rate as determined for current outstanding loan balances by segment. Off-balance sheet credit exposures are identified and classified in the same categories as the allowance for credit losses with similar risk characteristics that have been previously mentioned. |
Mortgage Banking Activities | Mortgage Banking Activities Mortgage Loans Held for Sale and Revenue Recognition Mortgage loans held for sale (“HFS”) are carried at fair value under the fair value option with changes in fair value recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. The fair value of mortgage loans held for sale committed to investors is calculated using observable market information such as the investor commitment, assignment of trade (AOT) or other mandatory delivery commitment prices. The Company bases loans committed to Agency investors based on the Agency’s quoted mortgage backed security (MBS) prices. The fair value of mortgage loans held for sale not committed to investors is based on quoted best execution secondary market prices. If no such quoted price exists, the fair value is determined using quoted prices for a similar asset or assets, such as MBS prices, adjusted for the specific attributes of that loan, which would be used by other market participants. Gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. Sales proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. If the related mortgage servicing right (MSR) is sold servicing retained, the MSR addition is recorded in gain on sale of mortgage loans held for sale on the consolidated statements of income. Gain on sale of mortgage loans held for sale also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and the realized and unrealized gains and losses from derivative instruments. Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of sales proceeds from the purchaser. Derivative Instruments (IRLC/Forward Commitments) The Company holds and issues derivative financial instruments such as interest rate lock commitments (IRLCs) and other forward sale commitments. IRLCs are subject to price risk primarily related to fluctuations in market interest rates. To hedge the interest rate risk on certain IRLCs, the Company uses forward sale commitments, such as to-be-announced securities (TBAs) or mandatory delivery commitments with investors. Management expects these forward sale commitments to experience changes in fair value opposite to the changes in fair value of the IRLCs thereby reducing earnings volatility. Forward sale commitments are also used to hedge the interest rate risk on mortgage loans held for sale that are not committed to investors and still subject to price risk. If the mandatory delivery commitments are not fulfilled, the Company pays a pair-off fee. Best effort forward sale commitments are also executed with investors, whereby certain loans are locked with a borrower and simultaneously committed to an investor at a fixed price. If the best effort IRLC does not fund, there is no obligation to fulfill the investor commitment. The Company considers various factors and strategies in determining what portion of the IRLCs and uncommitted mortgage loans held for sale to economically hedge. All derivative instruments are recognized as other assets or other liabilities on the consolidated statements of financial condition at their fair value. Changes in the fair value of the derivative instruments are recognized in gain on sale of mortgage loans held for sale on the consolidated statements of income in the period in which they occur. Gains and losses resulting from the pairing-out of forward sale commitments are recognized in gain on sale of mortgage loans held for sale on the consolidated statements of income. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting. Mortgage Servicing Rights (“MSRs”) and Revenue Recognition The Company sells residential mortgage loans in the secondary market and may retain the right to service the loans sold. Upon sale, an MSR asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. As the Company has not elected to subsequently measure any class of servicing assets under the fair value measurement method, the Company follows the amortization method. MSRs are amortized to noninterest income (other income) in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. MSRs are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value, and included in other assets, net, on the consolidated statements of financial condition. The Company periodically evaluates its MSRs asset for impairment. Impairment is assessed based on fair value at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). As mortgage interest rates fall, prepayment speeds are usually faster and the value of the MSRs asset generally decreases, requiring additional valuation reserve. Conversely, as mortgage interest rates rise, prepayment speeds are usually slower and the value of the MSRs asset generally increases, requiring less valuation reserve. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the MSRs exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other-than-temporary impairment (i.e., recoverability is considered remote when considering interest rates and loan pay off activity) is recognized as a write-down of the MSRs asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the MSRs asset and valuation allowance, precluding subsequent recoveries. |
Derivative/Hedging Activities | Derivative/Hedging Activities At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company's intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment ("fair value hedge"), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"), or (3) an instrument with no hedging designation ("standalone derivative"). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. For both types of hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods, in which the hedged transactions will affect earnings. |
Accounting Standards Updates | Accounting Standards Updates ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation when there is a loss from continuing operations or a gain from other items and the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for the Company January 1, 2021 and is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). ASU 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company on January 1, 2021 and is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2020-02, "Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842)". ASU 2020-02 incorporates SEC SAB 119 (updated from SAB 102) into the Accounting Standards Codification (the "Codification") by aligning SEC recommended policies and procedures with ASC 326. ASU 2020-02 was effective on January 1, 2020 and had no material impact on the Company’s documentation requirements. ASU 2020-03, "Codification Improvements to Financial Instruments". ASU 2020-03 revised a wide variety of topics in the Codification with the intent to make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. ASU 2020-03 was effective immediately upon its release in March 2020 and did not have a material impact on the Company’s consolidated financial statements. ASU 2020-04, "Reference Rate Reform (Topic 848). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered "minor" so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or re-measurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. An entity may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. It is anticipated this ASU will simplify any modifications executed between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. The Company is evaluating the impact of this ASU and has not yet determined if the LIBOR transition and this ASU will have material effects on the Company’s business operations and consolidated financial statements. |
BUSINESS AND BASIS OF PRESENT_3
BUSINESS AND BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business and Basis of Presentation [Abstract] | |
Tablular illustration of the impact of adopting ASC 326 | As Reported Impact of Under Pre-ASC 326 ASC 326 (Dollars in Thousands) ASC 326 Adoption Adoption Loans: Commercial, Financial and Agricultural $ 2,163 $ 1,675 $ 488 Real Estate - Construction 672 370 302 Real Estate - Commercial Mortgage 4,874 3,416 1,458 Real Estate - Residential 4,371 3,128 1,243 Real Estate - Home Equity 2,598 2,224 374 Consumer, Other Loans and Overdrafts 2,496 3,092 ( 596) Allowance for Credit Losses on Loans 17,174 13,905 3,269 Other Liabilities: Allowance for Credit Losses on Off-Balance Sheet Credit Exposures $ 815 $ 157 $ 658 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and related market value of investment securities available-for-sale | NOTE 2 – INVESTMENT SECURITIES Investment Portfolio Composition . The following table summarizes the amortized cost and related market value of investment securities available-for-sale and securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses. June 30, 2020 December 31, 2019 Amortized Unrealized Unrealized Market Amortized Unrealized Unrealized Market Cost Gains Losses Value Cost Gain Losses Value Available for Sale U.S. Government Treasury $ 158,600 $ 2,167 $ - $ 160,767 $ 231,996 $ 849 $ 67 $ 232,778 U.S. Government Agency 163,658 2,890 31 166,517 155,706 697 325 156,078 States and Political Subdivisions 5,451 122 - 5,573 6,310 9 - 6,319 Mortgage-Backed Securities 488 57 - 545 693 80 - 773 Equity Securities (1) 7,778 - - 7,778 7,653 - - 7,653 Total $ 335,975 $ 5,236 $ 31 $ 341,180 $ 402,358 $ 1,635 $ 392 $ 403,601 Held to Maturity U.S. Government Treasury $ 20,017 $ 119 $ - $ 20,136 $ 20,036 $ 15 $ 9 $ 20,042 States and Political Subdivisions - - - - 1,376 - - 1,376 Mortgage-Backed Securities 212,161 6,202 - 218,363 218,127 2,064 180 220,011 Total $ 232,178 $ 6,321 $ - $ 238,499 $ 239,539 $ 2,079 $ 189 $ 241,429 Total Investment Securities $ 568,153 $ 11,557 $ 31 $ 579,679 $ 641,897 $ 3,714 $ 581 $ 645,030 (1) Includes Federal Home Loan Bank and Federal Reserve Bank stock, recorded at cost of $ 3.0 million and $ 4.8 million, respectively, at June 30, 2020 and includes Federal Home Loan Bank and Federal Reserve Bank stock recorded at cost of $ 2.9 million and $ 4.8 million, respectively, at December 31, 2019. |
Schedule of investment securities with maturity distribution based on contractual maturities | Available for Sale Held to Maturity (Dollars in Thousands) Amortized Cost Market Value Amortized Cost Market Value Due in one year or less $ 120,988 $ 122,200 $ 20,017 $ 20,136 Due after one year through five years 43,063 44,140 - - Mortgage-Backed Securities 488 545 212,161 218,363 U.S. Government Agency 163,658 166,517 - - Equity Securities 7,778 7,778 - - Total $ 335,975 $ 341,180 $ 232,178 $ 238,499 |
Schedule of investment securities with continuous unrealized loss position | Less Than Greater Than 12 Months 12 Months Total Market Unrealized Market Unrealized Market Unrealized (Dollars in Thousands) Value Losses Value Losses Value Losses June 30, 2020 Available for Sale U.S. Government Agency $ 6,168 $ 24 $ 2,734 $ 7 $ 8,902 $ 31 Total $ 6,168 $ 24 $ 2,734 $ 7 $ 8,902 $ 31 December 31, 2019 Available for Sale U.S. Government Treasury $ 9,955 $ - $ 93,310 $ 67 $ 103,265 $ 67 U.S. Government Agency 36,361 244 17,364 81 53,725 325 States and Political Subdivisions 578 - - - 578 - Mortgage-Backed Securities 8 - - - 8 - Total $ 46,902 $ 244 $ 110,674 $ 148 $ 157,576 $ 392 |
LOANS HELD FOR INVESTMENT AND_2
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans Held For Investment And Allowance For Credit Losses [Abstract] | |
Schedule of composition of the loan portfolio | (Dollars in Thousands) June 30, 2020 December 31, 2019 Commercial, Financial and Agricultural $ 421,270 $ 255,365 Real Estate – Construction 117,794 115,018 Real Estate – Commercial Mortgage 662,434 625,556 Real Estate – Residential (1) 358,714 361,450 Real Estate – Home Equity 194,479 197,360 Consumer (2) 267,486 281,180 Loans, Net of Unearned Income $ 2,022,177 $ 1,835,929 (1) Includes loans in process with outstanding balances of $ 5.7 million and $ 8.3 million at June 30, 2020 and December 31, 2019, respectively. (2) Includes overdraft balances of $ 1.1 million and $ 1.6 million at June 30, 2020 and December 31, 2019, respectively. |
Schedule of activity in the allowance for loan losses by portfolio class | Commercial, Real Estate Financial, Real Estate Commercial Real Estate Real Estate (Dollars in Thousands) Agricultural Construction Mortgage Residential Home Equity Consumer Total Three Months Ended June 30, 2020 Beginning Balance $ 2,247 $ 1,239 $ 5,828 $ 6,005 $ 2,701 $ 3,063 $ 21,083 Provision for Credit Losses 333 716 742 ( 615) 40 399 1,615 Charge-Offs ( 186) - - ( 1) ( 52) ( 1,175) ( 1,414) Recoveries 74 - 70 51 64 914 1,173 Net Charge-Offs ( 112) - 70 50 12 ( 261) ( 241) Ending Balance $ 2,468 $ 1,955 $ 6,640 $ 5,440 $ 2,753 $ 3,201 $ 22,457 Six Months Ended June 30, 2020 Beginning Balance $ 1,675 $ 370 $ 3,416 $ 3,128 $ 2,224 $ 3,092 $ 13,905 Impact of Adopting ASC 326 488 302 1,458 1,243 374 ( 596) 3,269 Provision for Credit Losses 739 1,283 1,516 1,089 141 1,837 6,605 Charge-Offs ( 548) - ( 11) ( 111) ( 83) ( 2,741) ( 3,494) Recoveries 114 - 261 91 97 1,609 2,172 Net Charge-Offs ( 434) - 250 ( 20) 14 ( 1,132) ( 1,322) Ending Balance $ 2,468 $ 1,955 $ 6,640 $ 5,440 $ 2,753 $ 3,201 $ 22,457 Three Months Ended June 30, 2019 Beginning Balance $ 1,630 $ 381 $ 3,993 $ 3,186 $ 2,261 $ 2,669 $ 14,120 Provision for Credit Losses 195 140 ( 204) ( 134) 107 542 646 Charge-Offs ( 235) - - ( 65) ( 45) ( 520) ( 865) Recoveries 58 - 100 223 60 251 692 Net Charge-Offs ( 177) - 100 158 15 ( 269) ( 173) Ending Balance $ 1,648 $ 521 $ 3,889 $ 3,210 $ 2,383 $ 2,942 $ 14,593 Six Months Ended June 30, 2019 Beginning Balance $ 1,434 $ 280 $ 4,181 $ 3,400 $ 2,301 $ 2,614 $ 14,210 Provision for Credit Losses 412 241 ( 307) ( 128) 87 1,108 1,413 Charge-Offs ( 330) - ( 155) ( 329) ( 97) ( 1,315) ( 2,226) Recoveries 132 - 170 267 92 535 1,196 Net Charge-Offs ( 198) - 15 ( 62) ( 5) ( 780) ( 1,030) Ending Balance $ 1,648 $ 521 $ 3,889 $ 3,210 $ 2,383 $ 2,942 $ 14,593 |
Schedule of recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | June 30, 2020 December 31, 2019 Nonaccrual Nonaccrual Total With No 90 + Days Total With No 90 + Days (Dollars in Thousands) Nonaccrual ACL Still Accruing Nonaccrual ACL Still Accruing Commercial, Financial and Agricultural $ 548 $ - $ - $ 446 $ - $ - Real Estate – Construction 146 - - - - - Real Estate – Commercial Mortgage 2,580 1,789 - 1,434 958 - Real Estate – Residential 2,400 1,516 - 1,392 227 - Real Estate – Home Equity 1,010 - - 797 - - Consumer 282 - - 403 - - Total Nonaccrual Loans $ 6,966 $ 3,305 $ - $ 4,472 $ 1,185 $ - |
Amortized cost basis of collateral-dependent loans | June 30, 2020 Real Estate Non Real Estate (Dollars in Thousands) Secured Secured Commercial, Financial and Agricultural $ 106 $ - Real Estate - Commercial Mortgage 4,939 - Real Estate - Residential 2,358 - Real Estate - Home Equity 429 - Consumer - - Total $ 7,832 $ - |
Schedule of aging of the recorded investment in accruing past due loans by class of loans | 30-59 60-89 90 + Total Total Total (Dollars in Thousands) DPD DPD DPD Past Due Current Loans (1) June 30, 2020 Commercial, Financial and Agricultural $ 165 $ 220 $ - $ 385 $ 420,337 $ 421,270 Real Estate – Construction - 130 - 130 117,518 117,794 Real Estate – Commercial Mortgage 83 - - 83 659,771 662,434 Real Estate – Residential 143 583 - 726 355,588 358,714 Real Estate – Home Equity 122 26 - 148 193,321 194,479 Consumer 1,110 366 - 1,476 265,728 267,486 Total Loans $ 1,623 $ 1,325 $ - $ 2,948 $ 2,012,263 $ 2,022,177 December 31, 2019 Commercial, Financial and Agricultural $ 489 $ 191 $ - $ 680 $ 254,239 $ 255,365 Real Estate – Construction 300 10 - 310 114,708 115,018 Real Estate – Commercial Mortgage 148 84 - 232 623,890 625,556 Real Estate – Residential 629 196 - 825 359,233 361,450 Real Estate – Home Equity 155 20 - 175 196,388 197,360 Consumer 2,000 649 - 2,649 278,128 281,180 Total Loans $ 3,721 $ 1,150 $ - $ 4,871 $ 1,826,586 $ 1,835,929 (1) 7.0.0 million and $ 4.5 million at June 30, 2020 and December 31, 2019, respectively. |
Summary of gross loans held for investment by years of origination | The following table summarizes gross loans held for investment by years of origination and internally assigned credit risk ratings (refer to Credit Risk Management section for detail on risk rating system). Term Loans by Origination Year Revolving (Dollars in Thousands) 2020 2019 2018 2017 2016 Prior Loans Total As of June 30, 2020 Commercial, Financial, Agriculture: Pass $ 214,844 $ 54,639 $ 49,571 $ 19,873 $ 16,582 $ 14,016 $ 50,597 $ 420,122 Special Mention - 4 61 9 - 64 - 138 Substandard - 11 553 312 39 92 3 1,010 Total $ 214,844 $ 54,654 $ 50,185 $ 20,194 $ 16,621 $ 14,172 $ 50,600 $ 421,270 Real Estate - Construction: Pass $ 27,315 $ 73,360 $ 11,162 $ 2,148 $ - $ - $ 3,533 $ 117,518 Substandard - 276 - - - - - 276 Total $ 27,315 $ 73,636 $ 11,162 $ 2,148 $ - $ - $ 3,533 $ 117,794 Real Estate - Commercial Mortgage: Pass $ 89,447 $ 118,464 $ 148,746 $ 99,444 $ 53,748 $ 106,278 $ 21,014 $ 637,141 Special Mention 6,116 123 5,141 216 - 6,494 - 18,090 Substandard 154 279 295 2,853 31 3,097 494 7,203 Total $ 95,717 $ 118,866 $ 154,182 $ 102,513 $ 53,779 $ 115,869 $ 21,508 $ 662,434 Real Estate - Residential: Pass $ 53,539 $ 82,903 $ 57,856 $ 49,232 $ 23,327 $ 77,875 $ 6,800 $ 351,532 Special Mention 143 26 128 178 96 345 - 916 Substandard - 1,126 1,118 563 1,005 2,369 85 6,266 Total $ 53,682 $ 84,055 $ 59,102 $ 49,973 $ 24,428 $ 80,589 $ 6,885 $ 358,714 Real Estate - Home Equity: Performing $ 1,558 $ 378 $ 252 $ 780 $ 200 $ 2,780 $ 187,703 $ 193,651 Nonperforming - 20 25 81 - 24 678 828 Total $ 1,558 $ 398 $ 277 $ 861 $ 200 $ 2,804 $ 188,381 $ 194,479 Consumer: Performing $ 46,790 $ 89,192 $ 67,729 $ 35,130 $ 16,947 $ 6,200 $ 5,215 $ 267,203 Nonperforming - 105 138 - 20 20 - 283 Total $ 46,790 $ 89,297 $ 67,867 $ 35,130 $ 16,967 $ 6,220 $ 5,215 $ 267,486 |
MORTGAGE BANKING ACTIVITIES (Ta
MORTGAGE BANKING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Mortgage Banking Activities [Abstract] | |
Residential Mortgage Loan Production | June 30, 2020 Unpaid Principal (Dollars in Thousands) Balance/Notional Fair Value Residential Mortgage Loans Held for Sale $ 73,498 $ 76,610 Residential Mortgage Loan Commitments ("IRLCs") (1) 154,759 5,342 Forward Sales Contracts (2) 178,500 ( 963) $ 80,989 (1) Recorded in other assets at fair value (2) Recorded in other liabilities at fair value |
Mortgage banking revenue | Three Months Ended Six Months Ended (Dollars in Thousands) June 30, 2020 June 30, 2020 Net Realized Gains on Sales of Mortgage Loans $ 14,580 $ 17,987 Net Change in Unrealized Gain on Mortgage Loans Held for Sale 1,092 1,830 Net Change in the Fair Value of Mortgage Loan Commitments (IRLCs) 1,487 3,142 Net Change in the Fair Value of Forward Sales Contracts 1,625 231 Pair-Offs on Net Settlement of Forward Sales Contracts ( 3,019) ( 4,395) Mortgage Servicing Rights Additions 2,049 2,049 Total Mortgage Banking Revenues $ 17,814 $ 20,844 |
Summary of mortgage servicing rights | (Dollars in Thousands) June 30, 2020 Number of Residential Mortgage Loans Serviced for Others 1,375 Outstanding Principal Balance of Residential Mortgage Loans Serviced for Others $ 355,778 Weighted Average Interest Rate 3.94% Remaining Contractual Term (in months) 318 |
Summary of mortgage servicing rights | (Dollars in Thousands) Beginning Balance $ 910 Additions due to loans sold with servicing retained 2,049 Deletions and amortization ( 97) Ending Balance $ 2,862 |
Key unobservable inputs used in determining the fair value of mortgage servicing rights | Minimum Maximum Discount Rates 11.00% 15.00% Annual prepayment speeds 10.02% 62.88% Cost of Servicing (basis points) 90 110 |
Warehouse Line Borrowings | Amounts (Dollars in Thousands) Outstanding $ 25 million warehouse line of credit agreement expiring October 2020. Interest is at LIBOR plus 2.25%, with a floor rate of 3.50%. A cash pledge deposit of $ 0.1 million is required by the lender. $ 16,220 $ 50 million master repurchase agreement without defined expiration. Interest is at the LIBOR plus 2.24% to 3.00%. A cash pledge deposit of $ 0.5 million is required by the lender. 27,844 $ 50 million warehouse line of credit agreement expiring in September 2020. Interest is at the LIBOR plus 2.25% 16,663 $ 60,727 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivatives [Abstract] | |
Cash flow hedges included in the Consolidated Statement of Financial Condition | Weighted Weighted Weighted Balance Average Average Average Notional Fair Sheet Rate Received Rate Paid Maturity (Dollars in Thousands) Amount Value Location (Floating) (Fixed) (Years) Interest rate swaps related to subordinated debt $ 30,000 $ ( 108) Other Liabilities 2.15% 2.50% 10.0 |
Net gains (losses) recorded in accumulated other comprehensive income | Amount of Gain Amount of Gain (Loss) Recognized (Loss) Reclassified (Dollars in Thousands) in AOCI Category from AOCI to Income Interest rate swaps related to subordinated debt $ ( 108) Interest Expense $ ( 3) |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Summary of lease expense and other information related to operating leases | Three Months Ended Six Months Ended June 30, June 30, (Dollars in Thousands) 2020 2019 2020 2019 Operating lease expense $ 265 $ 81 $ 422 $ 162 Short-term lease expense 154 29 233 63 Total lease expense $ 419 $ 110 $ 655 $ 225 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 263 $ 84 $ 424 $ 169 Right-of-use assets obtained in exchange for new operating lease liabilities - - 5,120 1,860 Weighted-average remaining lease term — operating leases (in years) 15.5 7.2 15.5 7.2 Weighted-average discount rate — operating leases 2.4% 2.9% 2.4% 2.9% |
Summary of maturity of remaining lease liabilities | The table below summarizes the maturity of remaining lease liabilities: (Dollars in Thousands) June 30, 2020 2020 $ 609 2021 1,200 2022 1,052 2023 680 2024 630 2025 and thereafter 4,840 Total $ 9,011 Less: Interest ( 1,624) Present Value of Lease liability $ 7,387 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Defined Benefit Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Benefit Costs | Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Service Cost $ 1,457 $ 1,529 $ 2,914 $ 3,057 Interest Cost 1,400 1,545 2,811 3,089 Expected Return on Plan Assets ( 2,748) ( 2,382) ( 5,496) ( 4,764) Prior Service Cost Amortization 4 4 8 8 Net Loss Amortization 974 965 1,985 1,931 Special Termination Charge - - 61 - Net Periodic Benefit Cost $ 1,087 $ 1,661 $ 2,283 $ 3,321 Discount Rate 3.53% 4.43% 3.53% 4.43% Long-term Rate of Return on Assets 7.00% 7.25% 7.00% 7.25% |
Supplemental Executive Retirement Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Benefit Costs | The components of the net periodic benefit cost for the Company's SERP and SERP II were as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Service Cost $ 10 $ - $ 10 $ - Interest Cost $ 83 $ 87 $ 155 $ 174 Prior Service Cost Amortization 109 - 109 - Net Loss Amortization 71 190 318 380 Net Periodic Benefit Cost $ 273 $ 277 $ 592 $ 554 Discount Rate 3.16% 4.23% 3.16% 4.23% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of amounts associated with the entities off-balance sheet obligations | June 30, 2020 December 31, 2019 (Dollars in Thousands) Fixed Variable Total Fixed Variable Total Commitments to Extend Credit (1) $ 119,458 $ 524,196 $ 643,654 $ 114,903 $ 404,345 $ 519,248 Standby Letters of Credit 6,944 - 6,944 5,783 - 5,783 Total $ 126,402 $ 524,196 $ 650,598 $ 120,686 $ 404,345 $ 525,031 (1) Commitments include unfunded loans, revolving lines of credit, and off-balance sheet residential loan commitments. |
Allowance for credit losses for off-balance sheet credit commitments | Three Months Ended June 30, Six Months Ended June 30, (Dollars in Thousands) 2020 2019 2020 2019 Beginning Balance $ 1,033 $ 160 $ 157 $ 160 Impact of Adoption of ASC 326 - - 658 - Provision for Credit Losses 391 ( 3) 609 ( 3) Ending Balance $ 1,424 $ 157 $ 1,424 $ 157 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Total Fair (Dollars in Thousands) Inputs Inputs Inputs Value June 30, 2020 ASSETS: Securities Available for Sale: U.S. Government Treasury $ 160,767 $ - $ - $ 160,767 U.S. Government Agency - 166,517 - 166,517 States and Political Subdivisions - 5,573 - 5,573 Mortgage-Backed Securities - 545 - 545 Equity Securities - 7,778 - 7,778 Loans Held for Sale - 76,610 - 76,610 Mortgage Banking Derivative Asset - - 5,342 5,342 LIABILITIES: Mortgage Banking Derivative Liability - 963 - 963 Interest Rate Swap Derivative Liability - 108 - 108 December 31, 2019 ASSETS: Securities Available for Sale: U.S. Government Treasury $ 232,778 $ - $ - $ 232,778 U.S. Government Agency - 156,078 - 156,078 States and Political Subdivisions - 6,319 - 6,319 Mortgage-Backed Securities - 773 - 773 Equity Securities - 7,653 - 7,653 |
Schedule of financial instruments with estimated fair values | June 30, 2020 Carrying Level 1 Level 2 Level 3 (Dollars in Thousands) Value Inputs Inputs Inputs ASSETS: Cash $ 75,155 $ 75,155 $ - $ - Short-Term Investments 513,273 513,273 - - Investment Securities, Available for Sale 341,180 160,767 180,413 - Investment Securities, Held to Maturity 232,178 20,136 218,363 - Equity Securities (1) 3,588 - 3,588 - Loans Held for Sale 76,610 - 76,610 - Loans, Net of Allowance for Credit Losses 1,999,720 - - 2,006,877 Mortgage Banking Derivative Asset 5,342 - - 5,342 Mortgage Servicing Rights 2,862 - - 2,827 LIABILITIES: Deposits $ 2,954,996 $ - $ 3,063,239 $ - Short-Term Borrowings 63,958 - 63,958 - Subordinated Notes Payable 52,887 - 41,835 - Long-Term Borrowings 5,583 - 5,763 - Mortgage Banking Derivative Liability 963 - 963 - Interest Rate Swap Derivative Liability 108 - 108 - December 31, 2019 Carrying Level 1 Level 2 Level 3 (Dollars in Thousands) Value Inputs Inputs Inputs ASSETS: Cash $ 60,087 $ 60,087 $ - $ - Short-Term Investments 318,336 318,336 - - Investment Securities, Available for Sale 403,601 232,778 170,823 - Investment Securities, Held to Maturity 239,539 20,042 221,387 - Loans Held for Sale 9,509 - 9,509 - Equity Securities (1) 3,591 - 3,591 - Loans, Net of Allowance for Credit Losses 1,822,024 - - 1,804,930 LIABILITIES: Deposits $ 2,645,454 $ - $ 2,644,430 $ - Short-Term Borrowings 6,404 - 6,404 - Subordinated Notes Payable 52,887 - 40,280 - Long-Term Borrowings 6,514 - 6,623 - (1) |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of other comprehensive income loss | Before Tax Net of Tax (Expense) Tax (Dollars in Thousands) Amount Benefit Amount Three Months Ended June 30, 2020 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 424 $ ( 75) $ 349 Amortization of losses on securities transferred from available for sale to held to maturity 9 ( 2) 7 Total Investment Securities 433 ( 77) 356 Change in net unrealized gain/loss on interest rate swap ( 104) 25 ( 79) Total Other Comprehensive Income $ 329 $ ( 52) $ 277 Six Months Ended June 30, 2020 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 3,962 $ ( 972) $ 2,990 Amortization of losses on securities transferred from available for sale to held to maturity 18 ( 4) 14 Total Investment Securities 3,980 ( 976) 3,004 Change in net unrealized gain/loss on interest rate swap ( 104) 25 ( 79) Total Other Comprehensive Income $ 3,876 $ ( 951) $ 2,925 Before Tax Net of Tax (Expense) Tax (Dollars in Thousands) Amount Benefit Amount Three Months Ended June 30, 2019 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 1,736 $ ( 439) $ 1,297 Amortization of losses on securities transferred from available for sale to held to maturity 11 ( 4) 7 Total Other Comprehensive Income $ 1,747 $ ( 443) $ 1,304 Six Months Ended June 30, 2019 Investment Securities: Change in net unrealized gain/loss on securities available for sale $ 2,985 $ ( 756) $ 2,229 Amortization of losses on securities transferred from available for sale to held to maturity 22 ( 6) 16 Total Other Comprehensive Income $ 3,007 $ ( 762) $ 2,245 |
Schedule of activity in accumulated other comprehensive loss, net of tax | Accumulated other comprehensive loss was comprised of the following components: Accumulated Securities Other Available Interest Rate Retirement Comprehensive (Dollars in Thousands) for Sale Swap Plans Loss Balance as of January 1, 2020 $ 864 $ - $ ( 29,045) $ ( 28,181) Other comprehensive income during the period 3,004 ( 79) - 2,925 Balance as of June 30, 2020 $ 3,868 $ ( 79) $ ( 29,045) $ ( 25,256) Balance as of January 1, 2019 $ ( 2,008) $ - $ ( 26,807) $ ( 28,815) Other comprehensive income during the period 2,245 - - 2,245 Balance as of June 30, 2019 $ 237 $ - $ ( 26,807) $ ( 26,570) |
BUSINESS AND BASIS OF PRESENT_4
BUSINESS AND BASIS OF PRESENTATION (Impact of adopting ASC 326) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | $ 22,457 | $ 21,083 | $ 17,174 | $ 13,905 | $ 14,593 | $ 14,120 | $ 14,210 |
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures | 1,424 | 1,033 | 815 | 157 | 157 | 160 | 160 |
Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 3,269 | ||||||
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures | 658 | ||||||
Commercial, Financial and Agricultural [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 2,468 | 2,247 | 2,163 | 1,675 | 1,648 | 1,630 | 1,434 |
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures | 488 | ||||||
Commercial, Financial and Agricultural [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 488 | ||||||
Real Estate - Construction [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 1,955 | 1,239 | 672 | 370 | 521 | 381 | 280 |
Real Estate - Construction [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 302 | ||||||
Real Estate - Commercial Mortgage [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 6,640 | 5,828 | 4,874 | 3,416 | 3,889 | 3,993 | 4,181 |
Real Estate - Commercial Mortgage [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 1,458 | ||||||
Real Estate - Residential [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 5,440 | 6,005 | 4,371 | 3,128 | 3,210 | 3,186 | 3,400 |
Real Estate - Residential [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 1,243 | ||||||
Real Estate - Home Equity [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 2,753 | 2,701 | 2,598 | 2,224 | 2,383 | 2,261 | 2,301 |
Real Estate - Home Equity [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | 374 | ||||||
Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | $ 3,201 | $ 3,063 | $ 2,496 | 3,092 | $ 2,942 | $ 2,669 | $ 2,614 |
Consumer [Member] | Impact of Adoption of ASC 326 [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | $ (596) |
BUSINESS AND BASIS OF PRESENT_5
BUSINESS AND BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Thousands | Mar. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Business and Basis of Presentation [Abstract] | ||||||||||
Business Acquisition, Name of Acquired Entity | Brand Mortgage Group | |||||||||
Membership interest in Brand Mortgage Group | 51.00% | |||||||||
Total assets acquired | $ 52,000 | |||||||||
Liabilities assumed | 42,000 | |||||||||
Payments to Acquire Businesses, Gross | 7,100 | |||||||||
Temporary Equity | $ 7,400 | $ 11,341 | $ 11,341 | $ 0 | ||||||
Noncontrolling interest in subsidiary | 49.00% | |||||||||
Additional goodwill, Brand Mortgage Group | $ 4,300 | |||||||||
Net Loss Attributable to Noncontrolling Interests | (4,253) | $ 0 | (3,976) | $ 0 | ||||||
Impact of ASC 326 [Line Items] | ||||||||||
Liabilities | 3,153,126 | 3,153,126 | 2,761,937 | |||||||
Loans and Leases Receivable, Allowance | 22,457 | 14,593 | 22,457 | 14,593 | 13,905 | |||||
Retained Earnings | 328,570 | 328,570 | 322,937 | |||||||
Financing Receivable, Allowance for Credit Loss | $ 22,457 | $ 14,593 | $ 22,457 | $ 14,593 | $ 21,083 | $ 17,174 | 13,905 | $ 14,120 | $ 14,210 | |
Impact of Adoption of ASC 326 [Member] | ||||||||||
Impact of ASC 326 [Line Items] | ||||||||||
Liabilities | 4,000 | |||||||||
Financing Receivable, Allowance for Credit Loss | $ 3,269 | |||||||||
Impact of Adoption of ASC 326 [Member] | Unfunded Loan Commitment [Member] | ||||||||||
Impact of ASC 326 [Line Items] | ||||||||||
Retained Earnings | (3,100) | |||||||||
Deferred Tax Assets | 900 | |||||||||
Financing Receivable, Allowance for Credit Loss | $ 700 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale | ||
Amortized Cost | $ 335,975 | $ 402,358 |
Unrealized Gains | 5,236 | 1,635 |
Unrealized Losses | 31 | 392 |
Market Value | 341,180 | 403,601 |
Federal Home Loan Bank | 3,000 | 2,900 |
Federal Reserve Bank stock | 4,800 | 4,800 |
Held to Maturity | ||
Amortized Cost | 232,178 | 239,539 |
Unrealized Gains | 6,321 | 2,079 |
Unrealized Losses | 0 | 189 |
Market Value | 238,499 | 241,429 |
Total | ||
Amortized Cost | 568,153 | 641,897 |
Unrealized Gain | 11,557 | 3,714 |
Unrealized Loss | 31 | 581 |
Fair Value | 579,679 | 645,030 |
U.S. Government Treasury [Member] | ||
Available-for-sale | ||
Amortized Cost | 158,600 | 231,996 |
Unrealized Gains | 2,167 | 849 |
Unrealized Losses | 0 | 67 |
Market Value | 160,767 | 232,778 |
Held to Maturity | ||
Amortized Cost | 20,017 | 20,036 |
Unrealized Gains | 119 | 15 |
Unrealized Losses | 0 | 9 |
Market Value | 20,136 | 20,042 |
U.S. Government Agency [Member] | ||
Available-for-sale | ||
Amortized Cost | 163,658 | 155,706 |
Unrealized Gains | 2,890 | 697 |
Unrealized Losses | 31 | 325 |
Market Value | 166,517 | 156,078 |
States and Political Subdivisions [Member] | ||
Available-for-sale | ||
Amortized Cost | 5,451 | 6,310 |
Unrealized Gains | 122 | 9 |
Unrealized Losses | 0 | 0 |
Market Value | 5,573 | 6,319 |
Held to Maturity | ||
Amortized Cost | 0 | 1,376 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Market Value | 0 | 1,376 |
Mortgage-Backed Securities [Member] | ||
Available-for-sale | ||
Amortized Cost | 488 | 693 |
Unrealized Gains | 57 | 80 |
Unrealized Losses | 0 | 0 |
Market Value | 545 | 773 |
Held to Maturity | ||
Amortized Cost | 212,161 | 218,127 |
Unrealized Gains | 6,202 | 2,064 |
Unrealized Losses | 0 | 180 |
Market Value | 218,363 | 220,011 |
Equity Securities [Member] | ||
Available-for-sale | ||
Amortized Cost | 7,778 | 7,653 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Market Value | $ 7,778 | $ 7,653 |
INVESTMENT SECURITIES (Maturity
INVESTMENT SECURITIES (Maturity Distribution) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in one year or less | $ 120,988 | |
Due after one through five years | 43,063 | |
Total Investment Securities | 335,975 | |
Market Value | ||
Due in one year or less | 122,200 | |
Due after one through five years | 44,140 | |
Total Investment Securities | 341,180 | |
Amortized Cost | ||
Due in one year or less | 20,017 | |
Due after one through five years | 0 | |
Total Investment Securities | 232,178 | $ 239,539 |
Market Value | ||
Due in one year or less | 20,136 | |
Due after one through five years | 0 | |
Total Investment Securities | 238,499 | 241,429 |
Mortgage-Backed Securities [Member] | ||
Amortized Cost | ||
Due without single maturity date | 488 | |
Market Value | ||
Due without single maturity date | 545 | |
Amortized Cost | ||
Due without single maturity date | 212,161 | |
Total Investment Securities | 212,161 | 218,127 |
Market Value | ||
Due without single maturity date | 218,363 | |
Total Investment Securities | 218,363 | $ 220,011 |
U.S. Government Agency [Member] | ||
Amortized Cost | ||
Due without single maturity date | 163,658 | |
Market Value | ||
Due without single maturity date | 166,517 | |
Amortized Cost | ||
Due without single maturity date | 0 | |
Market Value | ||
Due without single maturity date | 0 | |
Equity Securities [Member] | ||
Amortized Cost | ||
Due without single maturity date | 7,778 | |
Market Value | ||
Due without single maturity date | $ 7,778 |
INVESTMENT SECURITIES (Unrealiz
INVESTMENT SECURITIES (Unrealized Losses on Investment Securities) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale securities | ||
Less Than 12 Months, Fair Value | $ 6,168,000 | $ 46,902,000 |
Less Than 12 Months, Unrealized Losses | 24,000 | 244,000 |
12 Months Or Longer, Fair Value | 2,734,000 | 110,674,000 |
12 Months Or Longer, Unrealized Losses | 7,000 | 148,000 |
Total Fair Value | 8,902,000 | 157,576,000 |
Total Unrealized Losses | 31,000 | 392,000 |
U.S. Government Treasury [Member] | ||
Available-for-sale securities | ||
Less Than 12 Months, Fair Value | 9,955,000 | |
Less Than 12 Months, Unrealized Losses | 0 | |
12 Months Or Longer, Fair Value | 93,310,000 | |
12 Months Or Longer, Unrealized Losses | 67,000 | |
Total Fair Value | 103,265,000 | |
Total Unrealized Losses | 67,000 | |
U.S. Government Agency [Member] | ||
Available-for-sale securities | ||
Less Than 12 Months, Fair Value | 6,168,000 | 36,361,000 |
Less Than 12 Months, Unrealized Losses | 24,000 | 244,000 |
12 Months Or Longer, Fair Value | 2,734,000 | 17,364,000 |
12 Months Or Longer, Unrealized Losses | 7,000 | 81,000 |
Total Fair Value | 8,902,000 | 53,725,000 |
Total Unrealized Losses | $ 31,000 | 325,000 |
States and Political Subdivisions [Member] | ||
Available-for-sale securities | ||
Less Than 12 Months, Fair Value | 578,000 | |
Less Than 12 Months, Unrealized Losses | 0 | |
12 Months Or Longer, Fair Value | 0 | |
12 Months Or Longer, Unrealized Losses | 0 | |
Total Fair Value | 578,000 | |
Total Unrealized Losses | 0 | |
Mortgage-Backed Securities [Member] | ||
Available-for-sale securities | ||
Less Than 12 Months, Fair Value | 8,000 | |
Less Than 12 Months, Unrealized Losses | 0 | |
12 Months Or Longer, Fair Value | 0 | |
12 Months Or Longer, Unrealized Losses | 0 | |
Total Fair Value | 8,000 | |
Total Unrealized Losses | $ 0 |
INVESTMENT SECURITIES (Narrativ
INVESTMENT SECURITIES (Narrative) (Details) | Jun. 30, 2020USD ($)Investment_Positions | Mar. 31, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Investments, Debt and Equity Securities [Abstract] | |||||||
Securities pledged to secure public deposits | $ 262,000,000 | $ 353,800,000 | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Available-for-sale Securities and Held-to-maturity investments in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total | Investment_Positions | 18 | ||||||
Available-for-sale Securities and Held-To-Maturity, Continuous Unrealized Loss Position Fair Value, Total | $ 31,000 | ||||||
Financing Receivable, Allowance for Credit Loss | 22,457,000 | $ 21,083,000 | $ 17,174,000 | 13,905,000 | $ 14,593,000 | $ 14,120,000 | $ 14,210,000 |
Nonaccrual | 6,966,000 | 4,472,000 | |||||
Financing Receivable, Past Due | 2,948,000 | $ 4,871,000 | |||||
AFS and HTM [Member] | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Nonaccrual | 0 | ||||||
Financing Receivable, Past Due | 0 | ||||||
Investment securities [Member] | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Financing Receivable, Allowance for Credit Loss | $ 0 |
LOANS HELD FOR INVESTMENT AND_3
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Portfolio Composition) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Loan Portfolio Composition | |||
Loans Held for Investment, Net | $ 2,022,177 | $ 1,835,929 | |
Net deferred fees | 2,300 | ||
Commercial, Financial and Agricultural [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | 421,270 | 255,365 | |
Real Estate - Construction [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | 117,794 | 115,018 | |
Real Estate - Commercial Mortgage [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | 662,434 | 625,556 | |
Real Estate - Residential [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | [1] | 358,714 | 361,450 |
Loans in Process with outstanding balances | 5,700 | 8,300 | |
Real Estate - Home Equity [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | 194,479 | 197,360 | |
Consumer [Member] | |||
Loan Portfolio Composition | |||
Loans Held for Investment, Net | 267,486 | 281,180 | |
Overdraft Balances | $ 1,100 | $ 1,600 | |
[1] | Includes loans in process with outstanding balances of $ 5.7 million and $ 8.3 million at June 30, 2020 and December 31, 2019, respectively. (2) Includes overdraft balances of $ 1.1 million and $ 1.6 million at June 30, 2020 and December 31, 2019, respectively. |
LOANS HELD FOR INVESTMENT AND_4
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Activity in the allowance for credit losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Activity in the allowance for loan losses by portfolio class | ||||
Beginning Balance | $ 13,905 | |||
Provision for Loan Losses | $ 646 | 6,995 | $ 1,413 | |
Charge-Offs | (865) | (2,226) | ||
Recoveries | 692 | 1,196 | ||
Net Charge-Offs | (173) | (1,030) | ||
Ending Balance | $ 22,457 | 14,593 | 22,457 | 14,593 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 21,083 | 14,120 | 13,905 | 14,210 |
Provision for credit losses | 1,615 | 6,605 | ||
Charge-Offs | (1,414) | (3,494) | ||
Recoveries | 1,173 | 2,172 | ||
Net Charge-Offs | (241) | (1,322) | ||
Ending Balance | 22,457 | 14,593 | 22,457 | 14,593 |
Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 3,269 | |||
Commercial, Financial and Agricultural [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | 195 | 412 | ||
Charge-Offs | (235) | (330) | ||
Recoveries | 58 | 132 | ||
Net Charge-Offs | (177) | (198) | ||
Ending Balance | 1,648 | 1,648 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 2,247 | 1,630 | 1,675 | 1,434 |
Provision for credit losses | 333 | 739 | ||
Charge-Offs | (186) | (548) | ||
Recoveries | 74 | 114 | ||
Net Charge-Offs | (112) | (434) | ||
Ending Balance | 2,468 | 1,648 | 2,468 | 1,648 |
Commercial, Financial and Agricultural [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 488 | |||
Real Estate - Construction [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | 140 | 241 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Net Charge-Offs | 0 | 0 | ||
Ending Balance | 521 | 521 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,239 | 381 | 370 | 280 |
Provision for credit losses | 716 | 1,283 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Net Charge-Offs | 0 | 0 | ||
Ending Balance | 1,955 | 521 | 1,955 | 521 |
Real Estate - Construction [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 302 | |||
Real Estate - Commercial Mortgage [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | (204) | (307) | ||
Charge-Offs | 0 | (155) | ||
Recoveries | 100 | 170 | ||
Net Charge-Offs | 100 | 15 | ||
Ending Balance | 3,889 | 3,889 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 5,828 | 3,993 | 3,416 | 4,181 |
Provision for credit losses | 742 | 1,516 | ||
Charge-Offs | 0 | (11) | ||
Recoveries | 70 | 261 | ||
Net Charge-Offs | 70 | 250 | ||
Ending Balance | 6,640 | 3,889 | 6,640 | 3,889 |
Real Estate - Commercial Mortgage [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,458 | |||
Real Estate - Residential [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | (134) | (128) | ||
Charge-Offs | (65) | (329) | ||
Recoveries | 223 | 267 | ||
Net Charge-Offs | 158 | (62) | ||
Ending Balance | 3,210 | 3,210 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 6,005 | 3,186 | 3,128 | 3,400 |
Provision for credit losses | (615) | 1,089 | ||
Charge-Offs | (1) | (111) | ||
Recoveries | 51 | 91 | ||
Net Charge-Offs | 50 | (20) | ||
Ending Balance | 5,440 | 3,210 | 5,440 | 3,210 |
Real Estate - Residential [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,243 | |||
Real Estate - Home Equity [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | 107 | 87 | ||
Charge-Offs | (45) | (97) | ||
Recoveries | 60 | 92 | ||
Net Charge-Offs | 15 | (5) | ||
Ending Balance | 2,383 | 2,383 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 2,701 | 2,261 | 2,224 | 2,301 |
Provision for credit losses | 40 | 141 | ||
Charge-Offs | (52) | (83) | ||
Recoveries | 64 | 97 | ||
Net Charge-Offs | 12 | 14 | ||
Ending Balance | 2,753 | 2,383 | 2,753 | 2,383 |
Real Estate - Home Equity [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 374 | |||
Consumer [Member] | ||||
Activity in the allowance for loan losses by portfolio class | ||||
Provision for Loan Losses | 542 | 1,108 | ||
Charge-Offs | (520) | (1,315) | ||
Recoveries | 251 | 535 | ||
Net Charge-Offs | (269) | (780) | ||
Ending Balance | 2,942 | 2,942 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 3,063 | 2,669 | 3,092 | 2,614 |
Provision for credit losses | 399 | 1,837 | ||
Charge-Offs | (1,175) | (2,741) | ||
Recoveries | 914 | 1,609 | ||
Net Charge-Offs | (261) | (1,132) | ||
Ending Balance | $ 3,201 | $ 2,942 | 3,201 | $ 2,942 |
Consumer [Member] | Impact of Adoption of ASC 326 [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ (596) |
LOANS HELD FOR INVESTMENT AND_5
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Recorded Investment In Nonaccrual and Past Due Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | $ 6,966 | $ 4,472 |
Nonaccrual With No Allowance Credit Loss | 3,305 | 1,185 |
90+ Days Still Accruing | 0 | 0 |
Commercial, Financial and Agricultural [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 548 | 446 |
Nonaccrual With No Allowance Credit Loss | 0 | 0 |
90+ Days Still Accruing | 0 | 0 |
Real Estate - Construction [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 146 | 0 |
Nonaccrual With No Allowance Credit Loss | 0 | 0 |
90+ Days Still Accruing | 0 | 0 |
Real Estate - Commercial Mortgage [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 2,580 | 1,434 |
Nonaccrual With No Allowance Credit Loss | 1,789 | 958 |
90+ Days Still Accruing | 0 | 0 |
Real Estate - Residential [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 2,400 | 1,392 |
Nonaccrual With No Allowance Credit Loss | 1,516 | 227 |
90+ Days Still Accruing | 0 | 0 |
Real Estate - Home Equity [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 1,010 | 797 |
Nonaccrual With No Allowance Credit Loss | 0 | 0 |
90+ Days Still Accruing | 0 | 0 |
Consumer [Member] | ||
Recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans | ||
Total Nonaccrual | 282 | 403 |
Nonaccrual With No Allowance Credit Loss | 0 | 0 |
90+ Days Still Accruing | $ 0 | $ 0 |
LOANS HELD FOR INVESTMENT AND_6
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Loan Portfolio Aging) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | $ 2,948 | $ 4,871 | |
Total Current | 2,012,263 | 1,826,586 | |
Total Loans | 2,022,177 | 1,835,929 | |
30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,623 | 3,721 | |
60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,325 | 1,150 | |
90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Commercial, Financial and Agricultural [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 385 | 680 | |
Total Current | 420,337 | 254,239 | |
Total Loans | 421,270 | 255,365 | |
Commercial, Financial and Agricultural [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 165 | 489 | |
Commercial, Financial and Agricultural [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 220 | 191 | |
Commercial, Financial and Agricultural [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Real Estate - Construction [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 130 | 310 | |
Total Current | 117,518 | 114,708 | |
Total Loans | 117,794 | 115,018 | |
Real Estate - Construction [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 300 | |
Real Estate - Construction [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 130 | 10 | |
Real Estate - Construction [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Real Estate - Commercial Mortgage [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 83 | 232 | |
Total Current | 659,771 | 623,890 | |
Total Loans | 662,434 | 625,556 | |
Real Estate - Commercial Mortgage [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 83 | 148 | |
Real Estate - Commercial Mortgage [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 84 | |
Real Estate - Commercial Mortgage [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Real Estate - Residential [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 726 | 825 | |
Total Current | 355,588 | 359,233 | |
Total Loans | [1] | 358,714 | 361,450 |
Real Estate - Residential [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 143 | 629 | |
Real Estate - Residential [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 583 | 196 | |
Real Estate - Residential [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Real Estate - Home Equity [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 148 | 175 | |
Total Current | 193,321 | 196,388 | |
Total Loans | 194,479 | 197,360 | |
Real Estate - Home Equity [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 122 | 155 | |
Real Estate - Home Equity [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 26 | 20 | |
Real Estate - Home Equity [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 0 | 0 | |
Consumer [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,476 | 2,649 | |
Total Current | 265,728 | 278,128 | |
Total Loans | 267,486 | 281,180 | |
Consumer [Member] | 30-59 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,110 | 2,000 | |
Consumer [Member] | 60-89 DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 366 | 649 | |
Consumer [Member] | 90 +DPD [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | $ 0 | $ 0 | |
[1] | Includes loans in process with outstanding balances of $ 5.7 million and $ 8.3 million at June 30, 2020 and December 31, 2019, respectively. (2) Includes overdraft balances of $ 1.1 million and $ 1.6 million at June 30, 2020 and December 31, 2019, respectively. |
LOANS HELD FOR INVESTMENT AND_7
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Collateral-dependent loans) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | $ 7,800 | $ 6,600 |
Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 7,832 | |
Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Commercial, Financial and Agricultural [Member] | Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 106 | |
Commercial, Financial and Agricultural [Member] | Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Real Estate - Commercial Mortgage [Member] | Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 4,939 | |
Real Estate - Commercial Mortgage [Member] | Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Real Estate - Residential [Member] | Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 2,358 | |
Real Estate - Residential [Member] | Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Real Estate - Home Equity [Member] | Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 429 | |
Real Estate - Home Equity [Member] | Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Consumer [Member] | Real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | 0 | |
Consumer [Member] | Non real estate secured [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Collateral-dependent loans | $ 0 |
LOANS HELD FOR INVESTMENT AND_8
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES (Loans held for investment by years of origination) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Commercial, Financial and Agricultural [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | $ 214,844 |
2019 | 54,654 |
2018 | 50,185 |
2017 | 20,194 |
2016 | 16,621 |
Prior | 14,172 |
Revolving Loans | 50,600 |
Total | 421,270 |
Real Estate - Construction [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 27,315 |
2019 | 73,636 |
2018 | 11,162 |
2017 | 2,148 |
2016 | 0 |
Prior | 0 |
Revolving Loans | 3,533 |
Total | 117,794 |
Real Estate - Commercial Mortgage [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 95,717 |
2019 | 118,866 |
2018 | 154,182 |
2017 | 102,513 |
2016 | 53,779 |
Prior | 115,869 |
Revolving Loans | 21,508 |
Total | 662,434 |
Real Estate - Residential [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 53,682 |
2019 | 84,055 |
2018 | 59,102 |
2017 | 49,973 |
2016 | 24,428 |
Prior | 80,589 |
Revolving Loans | 6,885 |
Total | 358,714 |
Real Estate - Home Equity [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 1,558 |
2019 | 398 |
2018 | 277 |
2017 | 861 |
2016 | 200 |
Prior | 2,804 |
Revolving Loans | 188,381 |
Total | 194,479 |
Real Estate - Home Equity [Member] | Performing Financial Instruments [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 1,558 |
2019 | 378 |
2018 | 252 |
2017 | 780 |
2016 | 200 |
Prior | 2,780 |
Revolving Loans | 187,703 |
Total | 193,651 |
Real Estate - Home Equity [Member] | Nonperforming Financial Instruments [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 20 |
2018 | 25 |
2017 | 81 |
2016 | 0 |
Prior | 24 |
Revolving Loans | 678 |
Total | 828 |
Consumer [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 46,790 |
2019 | 89,297 |
2018 | 67,867 |
2017 | 35,130 |
2016 | 16,967 |
Prior | 6,220 |
Revolving Loans | 5,215 |
Total | 267,486 |
Consumer [Member] | Performing Financial Instruments [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 46,790 |
2019 | 89,192 |
2018 | 67,729 |
2017 | 35,130 |
2016 | 16,947 |
Prior | 6,200 |
Revolving Loans | 5,215 |
Total | 267,203 |
Consumer [Member] | Nonperforming Financial Instruments [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 105 |
2018 | 138 |
2017 | 0 |
2016 | 20 |
Prior | 20 |
Revolving Loans | 0 |
Total | 283 |
Pass [Member] | Commercial, Financial and Agricultural [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 214,844 |
2019 | 54,639 |
2018 | 49,571 |
2017 | 19,873 |
2016 | 16,582 |
Prior | 14,016 |
Revolving Loans | 50,597 |
Total | 420,122 |
Pass [Member] | Real Estate - Construction [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 27,315 |
2019 | 73,360 |
2018 | 11,162 |
2017 | 2,148 |
2016 | 0 |
Prior | 0 |
Revolving Loans | 3,533 |
Total | 117,518 |
Pass [Member] | Real Estate - Commercial Mortgage [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 89,447 |
2019 | 118,464 |
2018 | 148,746 |
2017 | 99,444 |
2016 | 53,748 |
Prior | 106,278 |
Revolving Loans | 21,014 |
Total | 637,141 |
Pass [Member] | Real Estate - Residential [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 53,539 |
2019 | 82,903 |
2018 | 57,856 |
2017 | 49,232 |
2016 | 23,327 |
Prior | 77,875 |
Revolving Loans | 6,800 |
Total | 351,532 |
Special Mention [Member] | Commercial, Financial and Agricultural [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 4 |
2018 | 61 |
2017 | 9 |
2016 | 0 |
Prior | 64 |
Revolving Loans | 0 |
Total | 138 |
Special Mention [Member] | Real Estate - Commercial Mortgage [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 6,116 |
2019 | 123 |
2018 | 5,141 |
2017 | 216 |
2016 | 0 |
Prior | 6,494 |
Revolving Loans | 0 |
Total | 18,090 |
Special Mention [Member] | Real Estate - Residential [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 143 |
2019 | 26 |
2018 | 128 |
2017 | 178 |
2016 | 96 |
Prior | 345 |
Revolving Loans | 0 |
Total | 916 |
Substandard [Member] | Commercial, Financial and Agricultural [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 11 |
2018 | 553 |
2017 | 312 |
2016 | 39 |
Prior | 92 |
Revolving Loans | 3 |
Total | 1,010 |
Substandard [Member] | Real Estate - Construction [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 276 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Revolving Loans | 0 |
Total | 276 |
Substandard [Member] | Real Estate - Commercial Mortgage [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 154 |
2019 | 279 |
2018 | 295 |
2017 | 2,853 |
2016 | 31 |
Prior | 3,097 |
Revolving Loans | 494 |
Total | 7,203 |
Substandard [Member] | Real Estate - Residential [Member] | |
Financing Receivable, Recorded Investment [Line Items] | |
2020 | 0 |
2019 | 1,126 |
2018 | 1,118 |
2017 | 563 |
2016 | 1,005 |
Prior | 2,369 |
Revolving Loans | 85 |
Total | $ 6,266 |
LOANS HELD FOR INVESTMENT AND_9
LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES, (Narratives) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Jan. 01, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss | $ 22,457,000 | $ 14,593,000 | $ 22,457,000 | $ 14,593,000 | $ 13,905,000 | $ 21,083,000 | $ 17,174,000 | $ 14,120,000 | $ 14,210,000 |
Loans extended | 1,999,720,000 | 1,999,720,000 | 1,822,024,000 | ||||||
Accrued interest receivable | 8,100,000 | 8,100,000 | 5,500,000 | ||||||
Provision for credit losses | 1,615,000 | 6,605,000 | |||||||
Net loan charge-offs | 241,000 | 1,322,000 | |||||||
Interest income on nonaccrual loans | 10,000 | ||||||||
Nonaccrual loans | 6,966,000 | 6,966,000 | 4,472,000 | ||||||
Real estate loans for which formal foreclosure proceedings were in process | 1,300,000 | 1,300,000 | 600,000 | ||||||
TDRs | 16,000,000 | 16,000,000 | 17,600,000 | ||||||
TDRs performing in accordance with modified terms | 15,100,000 | 16,900,000 | |||||||
Estimated loan loss reserves | 1,000,000 | 1,000,000 | 1,500,000 | ||||||
TDRs, for which there was a payment default and the loans were modified within the twelve months prior to default | 0 | 0 | 100,000 | 0 | |||||
Loan modified with a recorded investment | 34,000 | $ 100,000 | 200,000 | $ 200,000 | |||||
Purchase of real estate secured adjustable rate loans | 18,400,000 | ||||||||
Net deferred fees | 2,300,000 | 2,300,000 | |||||||
Loans and Leases Receivable net deferred costs | 1,800,000 | 1,800,000 | |||||||
Adjustments related to Covid 19 [Member] | |||||||||
Financing Receivable, Allowance for Credit Loss | $ 3,900,000 | $ 3,900,000 | |||||||
Impact of Adoption of ASC 326 [Member] | |||||||||
Financing Receivable, Allowance for Credit Loss | $ 3,269,000 | ||||||||
Pre-tax cumulative effect transition adjustment | $ 3,300,000 |
MORTGAGE BANKING ACTIVITIES (Un
MORTGAGE BANKING ACTIVITIES (Unpaid principal balance of residential mortgage loans) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other assets | $ 83,282 | $ 65,550 |
Other liabilities | 75,702 | 50,678 |
Loans held for sale, at fair value | 76,610 | $ 9,509 |
Fair value | 80,989 | |
Residential Mortgage [Member] | ||
Loans held-for-sale | 73,498 | |
Loans held for sale, at fair value | 76,610 | |
Residential Mortgage [Member] | Loan Commitments (IRLCs) [Member] | ||
Other assets | 154,759 | |
Other assets fair value | 5,342 | |
Residential Mortgage [Member] | Forward Sales Contracts [Member] | ||
Other liabilities | 178,500 | |
Other liabilities at fair value | $ (963) |
MORTGAGE BANKING ACTIVITIES (Mo
MORTGAGE BANKING ACTIVITIES (Mortgage banking revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Mortgage Servicing Rights Additions | $ 2,049 | |||
Mortgage banking [Member] | ||||
Net Realized Gains on Sales of Mortgage Loans | $ 14,580 | 17,987 | ||
Net Change in Unrealized Gain on Mortgage Loans Held for Sale | 1,092 | 1,830 | ||
Net Change in the Fair Value of Mortgage Loan Commitments (IRLCs) | 1,487 | 3,142 | ||
Net Change in the Fair Value of Forward Sales Contracts | 1,625 | 231 | ||
Pair-Offs on Net Settlement of Forward Sales Contracts | (3,019) | (4,395) | ||
Mortgage Servicing Rights Additions | 2,049 | 2,049 | ||
Total Revenue | $ 17,814 | $ 1,199 | $ 20,844 | $ 2,192 |
MORTGAGE BANKING ACTIVITIES (Su
MORTGAGE BANKING ACTIVITIES (Summary of mortgage servicing rights) (Details) - Residential Mortgage [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)Contracts | |
Servicing Assets at Fair Value [Line Items] | |
Number of Residential Mortgage Loans Serviced for Others | Contracts | 1,375 |
Outstanding Principal Balance of Residential Mortgage Loans Serviced for Others | $ | $ 355,778 |
Weighted Average Interest Rate | 3.94% |
Remaining contratual term related to mortgage serviced for others | 318 months |
MORTGAGE BANKING ACTIVITIES (Ca
MORTGAGE BANKING ACTIVITIES (Capitalized mortgage servicing rights) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Servicing Asset at Fair Value, Amount [Roll Forward | |
Beginning Balance | $ 910 |
Additions due to loans sold with servicing retained | 2,049 |
Deletions and amortization | (97) |
Ending Balance | $ 2,862 |
MORTGAGE BANKING ACTIVITIES (ke
MORTGAGE BANKING ACTIVITIES (key unobservable inputs used in determining the fair value) (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Maximum [Member] | |
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | |
Discount Rates | 11.00% |
Annual prepayment speeds | 10.02% |
Cost of Servicing (Basis points) | 0.90% |
Minimum [Member] | |
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract] | |
Discount Rates | 15.00% |
Annual prepayment speeds | 62.88% |
Cost of Servicing (Basis points) | 1.10% |
MORTGAGE BANKING ACTIVITIES (Wa
MORTGAGE BANKING ACTIVITIES (Warehouse Line Borrowings) (Details) - Warehouse Line Borrowings [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Short-term Debt [Line Items] | |
Line of credit outstanding | $ 60,727 |
Line of credit agreement expiring Ocotber 2020 [Member] | |
Short-term Debt [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 25,000 |
Debt Instrument, Description of Variable Rate Basis | Interest is at LIBOR plus 2.25% |
Debt Instrument, Basis Spread on Variable Rate | 2.25% |
Floor rate | 3.50% |
Line of credit outstanding | $ 16,220 |
Cash pledge deposit | 100 |
Master Repurchase Agreement [Member] | |
Short-term Debt [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 |
Debt Instrument, Description of Variable Rate Basis | Interest is at the LIBOR plus 2.24% to 3.00% |
Line of credit outstanding | $ 27,844 |
Cash pledge deposit | $ 500 |
Master Repurchase Agreement [Member] | Maximum [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 3.00% |
Master Repurchase Agreement [Member] | Minimum [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 2.24% |
Line of credit expiring September 2020 [Member] | |
Short-term Debt [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 |
Debt Instrument, Description of Variable Rate Basis | Interest is at the LIBOR plus 2.25% |
Debt Instrument, Basis Spread on Variable Rate | 2.25% |
Line of credit outstanding | $ 16,663 |
MORTGAGE BANKING ACTIVITIES (Na
MORTGAGE BANKING ACTIVITIES (Narrative) (Details) $ in Millions | Jun. 30, 2020USD ($) |
Mortgage Banking Activities [Abstract] | |
Residential mortgage loans held for sale that were 90 days or more outstanding | $ 0.7 |
Percentage of FNMA loan type of total loans serviced | 53.00% |
Percentage of GNMA loan type of total loans serviced | 16.00% |
Percentage of Private Investor loan type of total loans serviced | 31.00% |
Weighted average prepayment speed | 17.04% |
Warehouse lines of credit extended to CCHL | $ 30 |
Ownership interest in CCHL, subsidiary | 51.00% |
Balance of lines of credit receivable from CCHL | $ 10.2 |
DERIVATIVES (Cash flow hedges i
DERIVATIVES (Cash flow hedges included in the Consolidated Statement of Financial Condition) (Details) - Interest rate swaps related to subordinated debt [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 30,000 |
Fair Value | $ (108) |
Weighted average rate paid (floating) | 2.15% |
Weighted average rate paid (fixed) | 2.50% |
Weighted average maturity years | 10 years |
DERIVATIVES (Net gains (losses)
DERIVATIVES (Net gains (losses) recorded in accumulated other comprehensive income) (Details) - Interest rate product [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Amount of Gain (Loss) Recognized in AOCI | $ (108) |
Amount of Gain (Loss) Reclassified from AOCI to Income | (3) |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ 100 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Lesse lease description [Line Items] | ||
Lessee operating lease term of contract | 15 years | 15 years |
Lesse operating lease description | Operating leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term | |
Operating lease right of use asset | $ 6,500 | $ 6,500 |
Operating lease liabilties | 7,387 | $ 7,387 |
Lessee, Operating Lease, Lease Not yet Commenced, Description | Payments for the banking office are expected to commence after the construction period ends, which is expected to occur during the second half of 2021. | |
Operating lease liabilities, not yet commenced | 4,800 | $ 4,800 |
Lease payment transaction [Member] | ||
Lesse lease description [Line Items] | ||
Operating lease liabilties | 900 | 900 |
Operating lease, minimum annual payment | $ 200 | $ 200 |
Minimum [Member] | ||
Lesse lease description [Line Items] | ||
Lessee operating lease term of contract | 1 year | 1 year |
Maximum [Member] | ||
Lesse lease description [Line Items] | ||
Lessee operating lease term of contract | 30 years | 30 years |
LEASES - Lease information (Det
LEASES - Lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease expenses: | ||||
Operating lease expense | $ 265 | $ 81 | $ 422 | $ 162 |
Short term lease expense | 154 | 29 | 233 | 63 |
Total lease expense | 419 | 110 | 655 | 225 |
Other information related to leases [Abstract] | ||||
Operating cash flows from operating leases | 263 | 84 | 424 | 169 |
Right-of-use asset obtained in exchange for operating lease liability | $ 0 | $ 0 | $ 5,120 | $ 1,860 |
Weighted Average remaining lease term | 15 years 6 months | 7 years 2 months 12 days | 15 years 6 months | 7 years 2 months 12 days |
Weighted-average discount rate - operating leases | 2.40% | 2.90% | 2.40% | 2.90% |
LEASES - Maturity of remaining
LEASES - Maturity of remaining lease liabilities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Summary of the maturity of remaining lease liabilities: | |
2020 | $ 609 |
2021 | 1,200 |
2022 | 1,052 |
2023 | 680 |
2024 | 630 |
2025 and thereafter | 4,840 |
Total | 9,011 |
Less: Interest | (1,624) |
Present Value of Lease Liabilities | $ 7,387 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Defined Benefit Pension Plan [Member] | ||||
Components of Net Periodic Benefit Costs: | ||||
Service Cost | $ 1,457 | $ 1,529 | $ 2,914 | $ 3,057 |
Interest Cost | 1,400 | 1,545 | 2,811 | 3,089 |
Expected Return on Plan Assets | (2,748) | (2,382) | (5,496) | (4,764) |
Prior Service Cost Amortization | 4 | 4 | 8 | 8 |
Net Gain (Loss) Amortization | 974 | 965 | 1,985 | 1,931 |
Special Termination Charge | 0 | 0 | 61 | 0 |
Net Periodic Benefit Cost (Income) | $ 1,087 | $ 1,661 | $ 2,283 | $ 3,321 |
Discount Rate (in percent) | 3.53% | 4.43% | 3.53% | 4.43% |
Long-Term Rate of Return on Assets (in percent) | 7.00% | 7.25% | 7.00% | 7.25% |
Supplemental Executive Retirement Plan [Member] | ||||
Components of Net Periodic Benefit Costs: | ||||
Service Cost | $ 10 | $ 0 | $ 10 | $ 0 |
Interest Cost | 83 | 87 | 155 | 174 |
Prior Service Cost Amortization | 109 | 0 | 109 | 0 |
Net Gain (Loss) Amortization | 71 | 190 | 318 | 380 |
Net Periodic Benefit Cost (Income) | $ 273 | $ 277 | $ 592 | $ 554 |
Discount Rate (in percent) | 3.16% | 4.23% | 3.16% | 4.23% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
Fixed | $ 126,402 | $ 120,686 |
Variable | 524,196 | 404,345 |
Total | 650,598 | 525,031 |
Commitments to Extend Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Fixed | 119,458 | 114,903 |
Variable | 524,196 | 404,345 |
Total | 643,654 | 519,248 |
Standby Letters of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Fixed | 6,944 | 5,783 |
Variable | 0 | 0 |
Total | $ 6,944 | $ 5,783 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Allowance for credit losses for off-balance sheet credit commitments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning Balance | $ 1,033 | $ 160 | $ 157 | $ 160 |
Impact of Adoption of ASC 326 | 0 | 0 | 658 | 0 |
Provision for Credit Losses | 391 | (3) | 609 | (3) |
Ending Balance | $ 1,424 | $ 157 | $ 1,424 | $ 157 |
COMMITMENTS AND CONTINGENCIES N
COMMITMENTS AND CONTINGENCIES Narratives (Details) - USD ($) | 3 Months Ended | ||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||||||
Loss Contingency Quarterly Accrual Payments until settled | $ 168,000 | ||||||
Off-Balance Sheet, Credit Loss, Liability | $ 1,424,000 | $ 1,033,000 | $ 815,000 | $ 157,000 | $ 157,000 | $ 160,000 | $ 160,000 |
Adoption of ASC 326 [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Off-Balance Sheet, Credit Loss, Liability | $ 658,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans held for sale [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | $ 76,610 | |
U.S. Government Treasury [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 160,767 | $ 232,778 |
U.S. Government Agency [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 166,517 | 156,078 |
States and Political Subdivisions [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 5,573 | 6,319 |
Mortgage-Backed Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 545 | 773 |
Equity Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 7,778 | 7,653 |
Mortgage Banking Derivative Asset [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 5,342 | |
Mortgage Banking Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 963 | |
Interest Rate Swap Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 108 | |
Level 1 Inputs [Member] | Loans held for sale [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | |
Level 1 Inputs [Member] | U.S. Government Treasury [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 160,767 | 232,778 |
Level 1 Inputs [Member] | U.S. Government Agency [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Level 1 Inputs [Member] | States and Political Subdivisions [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Level 1 Inputs [Member] | Mortgage-Backed Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Level 1 Inputs [Member] | Equity Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Level 1 Inputs [Member] | Mortgage Banking Derivative Asset [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | |
Level 1 Inputs [Member] | Mortgage Banking Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 0 | |
Level 1 Inputs [Member] | Interest Rate Swap Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 2 [Member] | Loans held for sale [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 76,610 | |
Fair Value, Inputs, Level 2 [Member] | U.S. Government Treasury [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | U.S. Government Agency [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 166,517 | 156,078 |
Fair Value, Inputs, Level 2 [Member] | States and Political Subdivisions [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 5,573 | 6,319 |
Fair Value, Inputs, Level 2 [Member] | Mortgage-Backed Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 545 | 773 |
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 7,778 | 7,653 |
Fair Value, Inputs, Level 2 [Member] | Mortgage Banking Derivative Asset [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 2 [Member] | Mortgage Banking Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 963 | |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 108 | |
Fair Value, Inputs, Level 3 [Member] | Loans held for sale [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 3 [Member] | U.S. Government Treasury [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | U.S. Government Agency [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | States and Political Subdivisions [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Mortgage-Backed Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 0 | $ 0 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative Asset [Member] | ||
ASSETS: | ||
Assets, Fair Value Disclosure | 5,342 | |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap Derivative Liability [Member] | ||
LIABILITIES: | ||
Financial Liabilities Fair Value Disclosure | $ 0 |
FAIR VALUE MEASUREMENTS (Financ
FAIR VALUE MEASUREMENTS (Financial Instruments) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS: | ||
Investment Securities, Available for Sale | $ 341,180,000 | $ 403,601,000 |
Investment securities, held to maturity, fair value | 238,499,000 | 241,429,000 |
Loans held for sale, at fair value | 76,610,000 | 9,509,000 |
Mortgage Servicing Rights | 2,862,000 | 910,000 |
Level 1 Inputs [Member] | ||
ASSETS: | ||
Cash | 75,155,000 | 60,087,000 |
Short-Term Investments | 513,273,000 | 318,336,000 |
Investment Securities, Available for Sale | 160,767,000 | 232,778,000 |
Investment Securities, Held to Maturity | 20,136,000 | 20,042,000 |
Fair Value, Inputs, Level 2 [Member] | ||
ASSETS: | ||
Investment Securities, Available for Sale | 180,413,000 | 170,823,000 |
Investment Securities, Held to Maturity | 218,363,000 | 221,387,000 |
Other Investments And Securities At Cost | 3,588,000 | 3,591,000 |
Loans held for sale, at fair value | 76,610,000 | 9,509,000 |
LIABILITIES: | ||
Deposits | 3,063,239,000 | 2,644,430,000 |
Short-Term Borrowings | 63,958,000 | 6,404,000 |
Subordinated Notes Payable | 41,835,000 | 40,280,000 |
Long-Term Borrowings | 5,763,000 | 6,623,000 |
Mortgage Banking Derivative Liability | 963,000 | |
Interest Rate Swap Derivative Liability | 108,000 | |
Fair Value, Inputs, Level 3 [Member] | ||
ASSETS: | ||
Loans, Net of Allowance for Loan Losses | 2,006,877,000 | 1,804,930,000 |
Mortgage Banking Derivative Asset | 5,342,000 | |
Mortgage Servicing Rights | 2,827,000 | |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||
ASSETS: | ||
Cash | 75,155,000 | 60,087,000 |
Short-Term Investments | 513,273,000 | 318,336,000 |
Investment Securities, Available for Sale | 341,180,000 | 403,601,000 |
Investment Securities, Held to Maturity | 232,178,000 | 239,539,000 |
Other Investments And Securities At Cost | 3,588,000 | 3,591,000 |
Loans held for sale, at fair value | 76,610,000 | 9,509,000 |
Loans, Net of Allowance for Loan Losses | 1,999,720,000 | 1,822,024,000 |
Mortgage Banking Derivative Asset | 5,342,000 | |
Mortgage Servicing Rights | 2,862,000 | |
LIABILITIES: | ||
Deposits | 2,954,996,000 | 2,645,454,000 |
Short-Term Borrowings | 63,958,000 | 6,404,000 |
Subordinated Notes Payable | 52,887,000 | 52,887,000 |
Long-Term Borrowings | 5,583,000 | $ 6,514,000 |
Mortgage Banking Derivative Liability | 963,000 | |
Interest Rate Swap Derivative Liability | $ 108,000 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narratives) (Details) - USD ($) $ in Millions | 4 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Level 3 issuances | $ 14.6 | |
Level 3 transfers | 19.4 | |
Collateral-dependent loans | 7.8 | $ 6.6 |
valuation allowance | $ 0.1 | $ 0.5 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investment Securities Before Tax Amount [Abstract] | ||||
Change in net unrealized gain/loss on securities available for sale, Before Tax | $ 424 | $ 1,736 | $ 3,962 | $ 2,985 |
Amortization of unrealized losses on securities transferred from available for sale to held to maturity, before tax | 9 | 11 | 18 | 22 |
Total Investment Securities, Before Tax | 433 | 1,747 | 3,980 | 3,007 |
Change in net unrealized gain/loss on interest rate swap, before tax | (104) | 0 | (104) | 0 |
Other Comprehensive Income, before tax | 329 | 1,747 | 3,876 | 3,007 |
Investment Securities Tax Expense (Benefit) [Abstract] | ||||
Change in net unrealized gain/loss on securities available for sale, Tax | (75) | (439) | (972) | (756) |
Amortization of unrealized losses on securities transferred from available for sale to held to maturity tax expense (benefit) | (2) | (4) | (4) | (6) |
Total Investment Securities, Tax | (77) | (976) | ||
Change in net unrealized gain/loss on interest rate swap, Tax | 25 | 25 | ||
Total Other Comprehensive Income, Tax (Expense) Benefit | (52) | (443) | (951) | (762) |
Investment Securities Net of Tax Amount [Abstract] | ||||
Change in net unrealized gain/loss on securities available for sale Net of Tax amount | 349 | 1,297 | 2,990 | 2,229 |
Amortization of unrealized losses on securities transferred from available for sale to held to maturity net of tax | 7 | 7 | 14 | 16 |
Total Investment Securities, Net of Tax | 356 | 3,004 | ||
Change in net unrealized gain/loss on interest rate swap, net of tax | (79) | (79) | ||
Total Other Comprehensive Income, Net of Tax | $ 277 | $ 1,304 | $ 2,925 | $ 2,245 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Activity in accumulated other comprehensive loss, net of tax | ||||
Balance, Begining | $ (28,181) | $ (28,815) | ||
Other comprehensive loss during the period | $ 277 | $ 1,304 | 2,925 | 2,245 |
Balance, Ending | (25,256) | (26,570) | (25,256) | (26,570) |
Interest rate swap [Member] | ||||
Activity in accumulated other comprehensive loss, net of tax | ||||
Balance, Begining | 0 | 0 | ||
Other comprehensive loss during the period | (79) | 0 | ||
Balance, Ending | (79) | 0 | (79) | 0 |
Securities Available for Sale [Member] | ||||
Activity in accumulated other comprehensive loss, net of tax | ||||
Balance, Begining | 864 | (2,008) | ||
Other comprehensive loss during the period | 3,004 | 2,245 | ||
Balance, Ending | 3,868 | 237 | 3,868 | 237 |
Retirement Plans [Member] | ||||
Activity in accumulated other comprehensive loss, net of tax | ||||
Balance, Begining | (29,045) | (26,807) | ||
Other comprehensive loss during the period | 0 | 0 | ||
Balance, Ending | $ (29,045) | $ (26,807) | $ (29,045) | $ (26,807) |