Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 23, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'STOCK YARDS BANCORP, INC. | ' |
Entity Central Index Key | '0000835324 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 14,710,796 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and due from banks | $38,302 | $34,519 |
Federal funds sold | 31,265 | 36,251 |
Cash and cash equivalents | 69,567 | 70,770 |
Mortgage loans held for sale | 4,069 | 1,757 |
Securities available-for-sale (amortized cost of $448,254 in 2014 and $493,066 in 2013) | 449,572 | 490,031 |
Federal Home Loan Bank stock and other securities | 6,347 | 7,347 |
Loans | 1,785,320 | 1,721,350 |
Less allowance for loan losses | 27,124 | 28,522 |
Net loans | 1,758,196 | 1,692,828 |
Premises and equipment, net | 38,821 | 39,813 |
Bank owned life insurance | 29,879 | 29,180 |
Accrued interest receivable | 5,629 | 5,712 |
Other assets | 45,791 | 51,824 |
Total assets | 2,407,871 | 2,389,262 |
Deposits: | ' | ' |
Non-interest bearing | 491,677 | 423,350 |
Interest bearing | 1,516,144 | 1,557,587 |
Total deposits | 2,007,821 | 1,980,937 |
Securities sold under agreements to repurchase | 66,955 | 62,615 |
Federal funds purchased | 16,296 | 55,295 |
Accrued interest payable | 128 | 128 |
Other liabilities | 28,306 | 26,514 |
Federal Home Loan Bank advances | 36,919 | 34,329 |
Total liabilities | 2,156,425 | 2,159,818 |
Stockholders' equity: | ' | ' |
Preferred stock, no par value. Authorized 1,000,000 shares; no shares issued or outstanding | ' | ' |
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 14,703,802 and 14,608,556 shares in 2014 and 2013, respectively | 9,898 | 9,581 |
Additional paid-in capital | 36,711 | 33,255 |
Retained earnings | 204,215 | 188,825 |
Accumulated other comprehensive income (loss) | 622 | -2,217 |
Total stockholders' equity | 251,446 | 229,444 |
Total liabilities and stockholders' equity | $2,407,871 | $2,389,262 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Securities available for sale, amortized cost (in dollars) | $448,254 | $493,066 |
Preferred stock, par value (in dollars per share) | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0 | $0 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 14,703,802 | 14,608,556 |
Common stock, shares outstanding | 14,703,802 | 14,608,556 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Interest income: | ' | ' | ' | ' |
Loans | $20,429 | $20,233 | $59,575 | $58,762 |
Federal funds sold | 73 | 63 | 215 | 215 |
Mortgage loans held for sale | 54 | 57 | 128 | 177 |
Securities - taxable | 1,845 | 1,626 | 5,506 | 4,388 |
Securities - tax-exempt | 291 | 288 | 885 | 853 |
Total interest income | 22,692 | 22,267 | 66,309 | 64,395 |
Interest expense: | ' | ' | ' | ' |
Deposits | 1,065 | 1,209 | 3,319 | 3,833 |
Fed funds purchased | 8 | 9 | 23 | 26 |
Securities sold under agreements to repurchase | 37 | 38 | 100 | 106 |
Federal Home Loan Bank advances | 219 | 221 | 621 | 657 |
Subordinated debentures | ' | 773 | ' | 2,318 |
Total interest expense | 1,329 | 2,250 | 4,063 | 6,940 |
Net interest income | 21,363 | 20,017 | 62,246 | 57,455 |
(Credit) provision for loan losses | -2,100 | 1,325 | -400 | 4,975 |
Net interest income after provision for loan losses | 23,463 | 18,692 | 62,646 | 52,480 |
Non-interest income: | ' | ' | ' | ' |
Investment management and trust services | 4,502 | 4,017 | 13,825 | 12,032 |
Service charges on deposit accounts | 2,294 | 2,348 | 6,620 | 6,592 |
Bankcard transaction revenue | 1,182 | 1,087 | 3,466 | 3,068 |
Mortgage banking revenue | 641 | 995 | 1,951 | 3,370 |
Loss on sales of securities available for sale | ' | ' | -9 | -5 |
Brokerage commissions and fees | 539 | 456 | 1,506 | 1,693 |
Bank owned life insurance income | 229 | 260 | 699 | 771 |
Gain on acquisition | ' | ' | ' | 449 |
Other | 463 | 489 | 1,324 | 1,221 |
Total non-interest income | 9,850 | 9,652 | 29,382 | 29,191 |
Non-interest expenses: | ' | ' | ' | ' |
Salaries and employee benefits | 11,855 | 10,508 | 33,697 | 30,186 |
Net occupancy expense | 1,422 | 1,522 | 4,431 | 4,188 |
Data processing expense | 1,591 | 1,520 | 4,869 | 4,695 |
Furniture and equipment expense | 269 | 269 | 796 | 846 |
FDIC insurance expense | 340 | 348 | 1,032 | 1,055 |
Loss (gain) on other real estate owned | 7 | 475 | -342 | 366 |
Acquisition costs | ' | ' | ' | 1,548 |
Other | 3,225 | 2,929 | 9,471 | 9,088 |
Total non-interest expenses | 18,709 | 17,571 | 53,954 | 51,972 |
Income before income taxes | 14,604 | 10,773 | 38,074 | 29,699 |
Income tax expense | 4,715 | 3,091 | 11,974 | 8,842 |
Net income | $9,889 | $7,682 | $26,100 | $20,857 |
Net income per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.68 | $0.53 | $1.79 | $1.47 |
Diluted (in dollars per share) | $0.67 | $0.53 | $1.77 | $1.47 |
Average common shares: | ' | ' | ' | ' |
Basic (in shares) | 14,574 | 14,408 | 14,542 | 14,144 |
Diluted (in shares) | 14,748 | 14,556 | 14,732 | 14,228 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net income | $9,889 | $7,682 | $26,100 | $20,857 |
Unrealized (losses) gains on securities available-for-sale: | ' | ' | ' | ' |
Unrealized (losses) gains arising during the period (net of tax of ($234), $45, $1,521 and ($2,974), respectively) | -435 | 83 | 2,823 | -5,523 |
Reclassification adjustment for securities losses realized in income (net of tax of $0, $0, $3, and $2, respectively) | ' | ' | 6 | 3 |
Unrealized gains on hedging instruments: | ' | ' | ' | ' |
Unrealized gains arising during the period (net of tax of $12, $0, $6 and $0, respectively) | 23 | ' | 10 | ' |
Other comprehensive (loss) income | -412 | 83 | 2,839 | -5,520 |
Comprehensive income | $9,477 | $7,765 | $28,939 | $15,337 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Unrealized (losses) gains on securities available-for-sale arising during the period, tax | ($234) | $45 | $1,521 | ($2,974) |
Reclassification adjustment for securities losses realized in income, tax | 0 | 0 | 3 | 2 |
Unrealized gains on hedging instruments arising during the period, tax | $12 | $0 | $6 | $0 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities: | ' | ' |
Net income | $26,100 | $20,857 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
(Credit) provision for loan losses | -400 | 4,975 |
Depreciation, amortization and accretion, net | 4,769 | 4,940 |
Deferred income tax benefit | -306 | -1,229 |
Loss on sale of securities available-for-sale | 9 | 5 |
Gain on sales of mortgage loans held for sale | -1,139 | -2,333 |
Origination of mortgage loans held for sale | -64,332 | -129,742 |
Proceeds from sale of mortgage loans held for sale | 63,159 | 142,293 |
Bank owned life insurance income | -699 | -771 |
(Gain) loss on the disposal of premises and equipment | -30 | 22 |
(Gain) loss on the sale of other real estate | -342 | 366 |
Gain on acquisition | ' | -449 |
Stock compensation expense | 1,459 | 1,473 |
Excess tax benefits from share-based compensation arrangements | -257 | -109 |
Decrease in accrued interest receivable and other assets | 1,107 | 3,677 |
Increase in accrued interest payable and other liabilities | 2,049 | 4,498 |
Net cash provided by operating activities | 31,147 | 48,473 |
Investing activities: | ' | ' |
Purchases of securities available-for-sale | -220,296 | -282,262 |
Proceeds from sale of securities available-for-sale | 7,732 | 701 |
Proceeds from maturities of securities available-for-sale | 256,948 | 337,762 |
Net increase in loans | -66,748 | -95,157 |
Purchases of premises and equipment | -1,517 | -1,807 |
Proceeds from disposal of premises and equipment | 344 | ' |
Acquisition, net of cash acquired | ' | 8,963 |
Proceeds from sale of foreclosed assets | 4,768 | 3,102 |
Net cash used in investing activities | -18,769 | -28,698 |
Financing activities: | ' | ' |
Net increase (decrease) in deposits | 26,884 | -19,677 |
Net (decrease) increase in securities sold under agreements to repurchase and federal funds purchased | -34,659 | 9,727 |
Proceeds from Federal Home Loan Bank advances | 32,740 | 575 |
Repayments of Federal Home Loan Bank advances | -30,150 | -35 |
Issuance of common stock for options and dividend reinvestment plan | 1,445 | 1,260 |
Excess tax benefits from share-based compensation arrangements | 257 | 109 |
Common stock repurchases | -564 | -315 |
Cash dividends paid | -9,534 | -8,602 |
Net cash used in financing activities | -13,581 | -16,958 |
Net (decrease) increase in cash and cash equivalents | -1,203 | 2,817 |
Cash and cash equivalents at beginning of period | 70,770 | 67,703 |
Cash and cash equivalents at end of period | 69,567 | 70,520 |
Supplemental cash flow information: | ' | ' |
Income tax payments | 8,764 | 6,230 |
Cash paid for interest | 4,063 | 6,984 |
Supplemental non-cash activity: | ' | ' |
Transfers from loans to other real estate owned | $1,780 | $2,382 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (USD $) | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total |
In Thousands, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $7,273 | $17,731 | $174,650 | $5,421 | $205,075 |
Balance (in shares) at Dec. 31, 2012 | 13,915 | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net income | ' | ' | 20,857 | ' | 20,857 |
Other comprehensive income (loss), net of tax | ' | ' | ' | -5,520 | -5,520 |
Stock compensation expense | ' | 1,473 | ' | ' | 1,473 |
Stock issued for exercise of stock options and dividend reinvestment plan | 309 | 1,784 | -124 | ' | 1,969 |
Stock issued for exercise of stock options and dividend reinvestment plan (in shares) | 93 | ' | ' | ' | ' |
Stock issued for non-vested restricted stock | 184 | 1,083 | -1,267 | ' | ' |
Stock issued for non-vested restricted stock (in shares) | 55 | ' | ' | ' | ' |
Stock issued for acquisition | 1,769 | 10,429 | ' | ' | 12,198 |
Stock issued for acquisition (in shares) | 531 | ' | ' | ' | ' |
Cash dividends, $0.65 and $0.60 per share for the nine months ended September 30, 2014 and 2013 respectively | ' | ' | -8,602 | ' | -8,602 |
Shares repurchased or cancelled | -137 | -882 | 104 | ' | -915 |
Shares repurchased or cancelled (in shares) | -40 | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | 9,398 | 31,618 | 185,618 | -99 | 226,535 |
Balance (in shares) at Sep. 30, 2013 | 14,554 | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | 9,581 | 33,255 | 188,825 | -2,217 | 229,444 |
Balance (in shares) at Dec. 31, 2013 | 14,609 | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net income | ' | ' | 26,100 | ' | 26,100 |
Other comprehensive income (loss), net of tax | ' | ' | ' | 2,839 | 2,839 |
Stock compensation expense | ' | 1,459 | ' | ' | 1,459 |
Stock issued for exercise of stock options and dividend reinvestment plan | 269 | 1,870 | -95 | ' | 2,044 |
Stock issued for exercise of stock options and dividend reinvestment plan (in shares) | 81 | ' | ' | ' | ' |
Stock issued for non-vested restricted stock | 160 | 994 | -1,154 | ' | ' |
Stock issued for non-vested restricted stock (in shares) | 48 | ' | ' | ' | ' |
Cash dividends, $0.65 and $0.60 per share for the nine months ended September 30, 2014 and 2013 respectively | ' | ' | -9,534 | ' | -9,534 |
Shares repurchased or cancelled | -112 | -867 | 73 | ' | -906 |
Shares repurchased or cancelled (in shares) | -34 | ' | ' | ' | ' |
Balance at Sep. 30, 2014 | $9,898 | $36,711 | $204,215 | $622 | $251,446 |
Balance (in shares) at Sep. 30, 2014 | 14,704 | ' | ' | ' | ' |
Consolidated_Statement_of_Chan1
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Consolidated Statements of Changes in Stockholders' Equity | ' | ' |
Cash dividends (in dollars per share) | $0.65 | $0.60 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
(1)Summary of Significant Accounting Policies | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and footnotes required by U.S. generally accepted accounting principles (US GAAP) for complete financial statements. The consolidated unaudited financial statements of Stock Yards Bancorp, Inc. (“Bancorp”) and its subsidiary reflect all adjustments (consisting only of adjustments of a normal recurring nature) which are, in the opinion of management, necessary for a fair presentation of financial condition and results of operations for the interim periods. | |
The unaudited consolidated financial statements include the accounts of Stock Yards Bancorp, Inc. and its wholly-owned subsidiary, Stock Yards Bank & Trust Company (“Bank”). Significant intercompany transactions and accounts have been eliminated in consolidation. In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of related revenues and expenses during the reporting period. Actual results could differ from the aforementioned estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of other real estate owned, valuation of securities, income tax assets, and estimated liabilities and expense. | |
A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2013 included in Stock Yards Bancorp, Inc.’s Annual Report on Form 10-K. Certain reclassifications have been made in the prior year financial statements to conform to current year classifications. These reclassifications had no effect on Bancorp’s total assets, liabilities, equity or net income. | |
Interim results for the three and nine month periods ended September 30, 2014 are not necessarily indicative of the results for the entire year. | |
Critical Accounting Policies | |
Management has identified the accounting policy related to the allowance and provision for loan losses as critical to the understanding of Bancorp’s results of operations and discussed this conclusion with Bancorp’s Audit Committee. Since the application of this policy requires significant management assumptions and estimates, it could result in materially different amounts to be reported if conditions or underlying circumstances were to change. Assumptions include many factors such as changes in borrowers’ financial condition which can change quickly or historical loss ratios related to certain loan portfolios which may or may not be indicative of future losses. To the extent that management’s assumptions prove incorrect, the results from operations could be materially affected by a higher or lower provision for loan losses. The accounting policy related to the allowance for loan losses is applicable to the commercial banking segment of Bancorp. | |
The allowance for loan losses is management’s estimate of probable losses in the loan portfolio. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. | |
Prior to the third quarter of 2013, management measured the appropriateness of the allowance for loan losses in its entirety using (a) quantitative (historical loss rates) and qualitative factors (management adjustment factors); (b) specific allocations on impaired loans, and (c) an unallocated amount. The unallocated amount was evaluated on the loan portfolio in its entirety and was based on additional factors, such as national and local economic trends and conditions, changes in volume and severity of past due loans, volume of non-accrual loans, volume and severity of adversely classified or graded loans and other factors and trends that affect specific loans and categories of loans, such as a heightened risk in the commercial and industrial loan portfolios. Bancorp considered the sum of all allowance amounts derived as described above, including a reasonable unallocated allowance, as an indicator of the appropriate level of allowance for loan losses. | |
During the third quarter of 2013, Bancorp refined its allowance calculation to allocate the portion of allowance that was previously deemed to be unallocated based on management’s determination of appropriate qualitative adjustments. This calculation includes specific allowance allocations for qualitative factors including, among other factors, (i) national and local economic conditions, (ii) the quality and experience of lending staff and management, (iii) changes in lending policies and procedures, (iv) changes in volume and severity of past due loans, classified loans and non-performing loans, (v) potential impact of any concentrations of credit, (vi) changes in the nature and terms of loans such as growth rates and utilization rates, (vii) changes in the value of underlying collateral for collateral-dependent loans, considering Bancorp’s disposition bias, and (viii) the effect of other external factors such as the legal and regulatory environment. Bancorp may also consider other qualitative factors for additional allowance allocations, including changes in Bancorp’s loan review process. Changes in the criteria used in this evaluation or the availability of new information could cause the allowance to be increased or decreased in future periods. In addition, bank regulatory agencies, as part of their examination process, may require adjustments to the allowance for loan losses based on their judgments and estimates. | |
Management has also identified the accounting policy related to accounting for income taxes as critical to the understanding of Bancorp’s results of operations and discussed this conclusion with the Audit Committee of the Board of Directors. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in Bancorp’s financial statements or tax returns. Fluctuations in the actual outcome of these future tax consequences, including the effects of periodic IRS and state agency examinations, could materially impact Bancorp’s financial position and its results from operations. | |
Acquisition
Acquisition | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Acquisition | ' | ||||||||||
Acquisition | ' | ||||||||||
(2)Acquisition | |||||||||||
On April 30, 2013, Bancorp completed the acquisition of 100% of the outstanding shares of THE BANCorp, Inc. (“Oldham”), parent company of THE BANK — Oldham County, Inc. As a result of the transaction, THE BANK — Oldham County merged into Stock Yards Bank & Trust Company. Since the acquisition date, results of operations acquired in the Oldham transaction have been included in Bancorp’s financial results. | |||||||||||
The Oldham transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration transferred were recorded at estimated fair value on the acquisition date. Assets acquired totaled approximately $146.0 million, including $39.8 million of loans. Liabilities assumed totaled $125.1 million, including $120.4 million of deposits. Fair value adjustments resulted in net assets acquired in excess of the consideration paid. Accordingly, a non-taxable gain of $449 thousand was recognized. | |||||||||||
The following table summarizes the consideration paid and the amounts of assets acquired and liabilities assumed, adjusted for fair value at the acquisition date. | |||||||||||
(dollars in thousands) | Dollars | ||||||||||
Purchase price: | |||||||||||
Value of: | |||||||||||
Cash | $ | 8,297 | |||||||||
Equity instruments (531,288 common shares of Bancorp) | 12,198 | ||||||||||
Total purchase price | 20,495 | ||||||||||
Identifiable assets: | |||||||||||
Cash and federal funds sold | 17,260 | ||||||||||
Investment securities | 81,827 | ||||||||||
Loans | 39,755 | ||||||||||
Premises and equipment | 4,008 | ||||||||||
Core deposit intangible | 2,543 | ||||||||||
Other assets | 605 | ||||||||||
Total identifiable assets: | 145,998 | ||||||||||
Identifiable liabilities: | |||||||||||
Deposits | 120,435 | ||||||||||
Securities sold under agreement to repurchase | 2,762 | ||||||||||
Other liabilities | 1,857 | ||||||||||
Total identifiable liabilities | 125,054 | ||||||||||
Net gain resulting from acquisition | $ | 449 | |||||||||
Acquisition costs (included in other non-interest expenses in Bancorp’s income statement for the nine months ended September 30, 2013) | $ | 1,548 | |||||||||
Fair value of the common shares issued as part of the consideration paid was determined based on the closing market price of Bancorp’s common shares on the acquisition date. | |||||||||||
Bancorp recorded a core deposit intangible of $2.5 million which is being amortized using methods that anticipate the life of the underlying deposits to which the intangible is attributable. At September 30, 2014, the unamortized core deposit intangible was $1.9 million. See Note 7 for details on the core deposit intangible. | |||||||||||
In many cases, determining the fair value of acquired assets and assumed liabilities required Bancorp to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of these determinations related to the valuation of acquired loans. Below is an analysis of the fair value of acquired loans as of September 30, 2014. | |||||||||||
(in thousands) | Acquired | Acquired non- | Total | ||||||||
impaired | impaired | acquired | |||||||||
loans | loans | loans | |||||||||
Contractually required principal and interest at acquisition | $ | 3,285 | $ | 37,763 | $ | 41,048 | |||||
Contractual cash flows not expected to be collected | (372 | ) | (723 | ) | (1,095 | ) | |||||
Expected cash flows at acquisition | 2,913 | 37,040 | 39,953 | ||||||||
Interest component of expected cash flows | (174 | ) | (24 | ) | (198 | ) | |||||
Basis in acquired loans at acquisition - estimated fair value | $ | 2,739 | $ | 37,016 | $ | 39,755 | |||||
Fair values of checking, savings and money market deposit accounts acquired from Oldham were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificate of deposit accounts were valued at the present value of the certificates’ expected contractual payments discounted at market rates as of the acquisition date for similar certificates. | |||||||||||
In connection with the Oldham acquisition, Bancorp incurred expenses related to executing the transaction and integrating and conforming acquired operations with and into Bancorp. Those expenses consisted largely of conversion of systems and/or integration of operations. | |||||||||||
Securities
Securities | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Securities | ' | |||||||||||||||||||
Securities | ' | |||||||||||||||||||
(3)Securities | ||||||||||||||||||||
The amortized cost, unrealized gains and losses, and fair value of securities available-for-sale follow: | ||||||||||||||||||||
(in thousands) | Amortized | Unrealized | ||||||||||||||||||
September 30, 2014 | cost | Gains | Losses | Fair value | ||||||||||||||||
Government sponsored enterprise obligations | $ | 204,992 | $ | 1,535 | $ | 1,122 | $ | 205,405 | ||||||||||||
Mortgage-backed securities - government agencies | 180,890 | 1,379 | 2,419 | 179,850 | ||||||||||||||||
Obligations of states and political subdivisions | 61,616 | 1,808 | 65 | 63,359 | ||||||||||||||||
Corporate equity securities | 756 | 202 | — | 958 | ||||||||||||||||
Total securities available-for-sale | $ | 448,254 | $ | 4,924 | $ | 3,606 | $ | 449,572 | ||||||||||||
(in thousands) | Amortized | Unrealized | ||||||||||||||||||
December 31, 2013 | cost | Gains | Losses | Fair value | ||||||||||||||||
U.S. Treasury and other U.S. government obligations | $ | 110,000 | $ | — | $ | — | $ | 110,000 | ||||||||||||
Government sponsored enterprise obligations | 138,094 | 1,623 | 1,872 | 137,845 | ||||||||||||||||
Mortgage-backed securities - government agencies | 176,524 | 1,391 | 5,222 | 172,693 | ||||||||||||||||
Obligations of states and political subdivisions | 68,448 | 1,473 | 428 | 69,493 | ||||||||||||||||
Total securities available-for-sale | $ | 493,066 | $ | 4,487 | $ | 7,522 | $ | 490,031 | ||||||||||||
There were no securities held-to-maturity as of September 30, 2014 or December 31, 2013. | ||||||||||||||||||||
Corporate equity securities, included in the available-for-sale portfolio at September 30, 2014, consist of common stock in a public-traded small business investment company. | ||||||||||||||||||||
In the second quarter of 2014, Bancorp sold securities with total fair market value of $7.7 million, generating a net loss of $9 thousand. These securities consisted of mortgage-backed securities with small remaining balances, obligations of state and political subdivisions, and agency securities. In the second quarter of 2013, Bancorp sold obligations of state and political subdivisions with total fair market value of $696 thousand, generating a loss of $5 thousand. These sales were made in the ordinary course of portfolio management. Management has the intent and ability to hold all remaining investment securities available-for-sale for the foreseeable future. | ||||||||||||||||||||
A summary of the available-for-sale investment securities by maturity groupings as of September 30, 2014 is shown below. | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Securities available-for-sale | Amortized cost | Fair value | ||||||||||||||||||
Due within 1 year | $ | 52,895 | $ | 53,174 | ||||||||||||||||
Due after 1 but within 5 years | 131,963 | 133,441 | ||||||||||||||||||
Due after 5 but within 10 years | 23,117 | 23,695 | ||||||||||||||||||
Due after 10 years | 58,633 | 58,454 | ||||||||||||||||||
Mortgage-backed securities | 180,890 | 179,850 | ||||||||||||||||||
Corporate equity securities | 756 | 958 | ||||||||||||||||||
Total securities available-for-sale | $ | 448,254 | $ | 449,572 | ||||||||||||||||
Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations. In addition to equity securities, the investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as the FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they may have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral. | ||||||||||||||||||||
Securities with a carrying value of approximately $209.2 million at September 30, 2014 and $243.5 million at December 31, 2013 were pledged to secure accounts of commercial depositors in cash management accounts, public deposits, and cash balances for certain investment management and trust accounts. | ||||||||||||||||||||
Securities with unrealized losses at September 30, 2014 and December 31, 2013, not recognized in the statements of income are as follows: | ||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||
(in thousands) | value | losses | value | losses | value | losses | ||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Government sponsored enterprise obligations | $ | 45,050 | $ | 163 | $ | 33,565 | $ | 959 | $ | 78,615 | $ | 1,122 | ||||||||
Mortgage-backed securities - government agencies | 45,123 | 445 | 45,133 | 1,974 | 90,256 | 2,419 | ||||||||||||||
Obligations of states and political subdivisions | 1,924 | 12 | 6,341 | 53 | 8,265 | 65 | ||||||||||||||
Total temporarily impaired securities | $ | 92,097 | $ | 620 | $ | 85,039 | $ | 2,986 | $ | 177,136 | $ | 3,606 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Government sponsored enterprise obligations | $ | 76,755 | $ | 1,429 | $ | 4,353 | $ | 443 | $ | 81,108 | $ | 1,872 | ||||||||
Mortgage-backed securities - government agencies | 112,652 | 4,400 | 8,752 | 822 | 121,404 | 5,222 | ||||||||||||||
Obligations of states and political subdivisions | 22,092 | 405 | 1,211 | 23 | 23,303 | 428 | ||||||||||||||
Total temporarily impaired securities | $ | 211,499 | $ | 6,234 | $ | 14,316 | $ | 1,288 | $ | 225,815 | $ | 7,522 | ||||||||
The applicable dates for determining when securities are in an unrealized loss position are September 30, 2014 and December 31, 2013. As such, it is possible that a security had a market value less than its amortized cost on other days during the past twelve months, but is not in the “Investments with an unrealized loss of less than 12 months” category above. | ||||||||||||||||||||
Unrealized losses on Bancorp’s investment securities portfolio have not been recognized as expense because the securities are of high credit quality, and the decline in fair values is largely due to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach their maturity date and/or the interest rate environment returns to conditions similar to when these securities were purchased. These investments consist of 73 and 155 separate investment positions as of September 30, 2014 and December 31, 2013, respectively. Because management does not intend to sell the investments, and it is not likely that Bancorp will be required to sell the investments | ||||||||||||||||||||
before recovery of their amortized cost bases, which may be maturity, Bancorp does not consider these securities to be other-than-temporarily impaired at September 30, 2014. | ||||||||||||||||||||
FHLB stock and other securities are investments held by Bancorp which are not readily marketable and are carried at cost. This category includes holdings of Federal Home Loan Bank of Cincinnati (FHLB) stock which are required for access to FHLB borrowing, and are classified as restricted securities. As of December 31, 2013, FHLB Stock and other securities included a $1 million Community Reinvestment Act (CRA) investment which matured in the second quarter of 2014.. | ||||||||||||||||||||
Loans
Loans | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
(4)Loans | |||||||||||||||||||||||
The composition of loans by primary loan portfolio segment follows: | |||||||||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 550,487 | $ | 510,739 | |||||||||||||||||||
Construction and development, excluding undeveloped land | 93,964 | 99,719 | |||||||||||||||||||||
Undeveloped land | 27,177 | 29,871 | |||||||||||||||||||||
Real estate mortgage | 1,085,537 | 1,046,823 | |||||||||||||||||||||
Consumer | 28,155 | 34,198 | |||||||||||||||||||||
Total loans | $ | 1,785,320 | $ | 1,721,350 | |||||||||||||||||||
The following table presents the balance in the recorded investment in loans and roll-forward of allowance for loan losses by portfolio segment and based on impairment evaluation method as of September 30, 2014 and December 31, 2013. | |||||||||||||||||||||||
Type of loan | |||||||||||||||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
(in thousands) | and | undeveloped | Undeveloped | Real estate | |||||||||||||||||||
September 30, 2014 | industrial | land | land | mortgage | Consumer | Total | |||||||||||||||||
Loans | $ | 550,487 | $ | 93,964 | $ | 27,177 | $ | 1,085,537 | $ | 28,155 | $ | 1,785,320 | |||||||||||
Loans individually evaluated for impairment | $ | 8,778 | $ | 516 | $ | 6,722 | $ | 4,207 | $ | 78 | $ | 20,301 | |||||||||||
Loans collectively evaluated for impairment | $ | 541,626 | $ | 92,835 | $ | 20,455 | $ | 1,080,853 | $ | 28,065 | $ | 1,763,834 | |||||||||||
Loans acquired with deteriorated credit quality | $ | 83 | $ | 613 | $ | — | $ | 477 | $ | 12 | $ | 1,185 | |||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
and | undeveloped | Undeveloped | Real estate | ||||||||||||||||||||
industrial | land | land | mortgage | Consumer | Unallocated | Total | |||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||
At December 31, 2013 | $ | 7,644 | $ | 2,555 | $ | 5,376 | $ | 12,604 | $ | 343 | $ | — | $ | 28,522 | |||||||||
Provision (credit) | 1,897 | (1,011 | ) | (4,294 | ) | 2,963 | 45 | — | (400 | ) | |||||||||||||
Charge-offs | (582 | ) | — | (30 | ) | (810 | ) | (400 | ) | — | (1,822 | ) | |||||||||||
Recoveries | 211 | — | 166 | 98 | 349 | — | 824 | ||||||||||||||||
At September 30, 2014 | $ | 9,170 | $ | 1,544 | $ | 1,218 | $ | 14,855 | $ | 337 | $ | — | $ | 27,124 | |||||||||
Allowance for loans individually evaluated for impairment | $ | 1,559 | $ | 90 | $ | — | $ | 432 | $ | 78 | $ | — | $ | 2,159 | |||||||||
Allowance for loans collectively evaluated for impairment | $ | 7,611 | $ | 1,454 | $ | 1,218 | $ | 14,423 | $ | 259 | $ | — | $ | 24,965 | |||||||||
Balance: loans acquired with deteriorated credit quality | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Type of loan | |||||||||||||||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
(in thousands) | and | undeveloped | Undeveloped | Real estate | |||||||||||||||||||
December 31, 2013 | industrial | land | land | mortgage | Consumer | Total | |||||||||||||||||
Loans | $ | 510,739 | $ | 99,719 | $ | 29,871 | $ | 1,046,823 | $ | 34,198 | $ | 1,721,350 | |||||||||||
Loans individually evaluated for impairment | $ | 7,579 | $ | 26 | $ | 7,340 | $ | 7,478 | $ | 84 | $ | 22,507 | |||||||||||
Loans collectively evaluated for impairment | $ | 502,535 | $ | 98,428 | $ | 22,531 | $ | 1,038,824 | $ | 34,095 | $ | 1,696,413 | |||||||||||
Loans acquired with deteriorated credit quality | $ | 625 | $ | 1,265 | $ | — | $ | 521 | $ | 19 | $ | 2,430 | |||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
and | undeveloped | Undeveloped | Real estate | ||||||||||||||||||||
industrial | land | land | mortgage | Consumer | Unallocated | Total | |||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||
At December 31, 2012 | $ | 5,949 | $ | 1,638 | $ | 2,898 | $ | 14,288 | $ | 362 | $ | 6,746 | $ | 31,881 | |||||||||
Provision | 1,583 | 779 | 10,358 | 490 | 86 | (6,746 | ) | 6,550 | |||||||||||||||
Charge-offs | (457 | ) | (25 | ) | (7,961 | ) | (2,758 | ) | (763 | ) | — | (11,964 | ) | ||||||||||
Recoveries | 569 | 163 | 81 | 584 | 658 | — | 2,055 | ||||||||||||||||
At December 31, 2013 | $ | 7,644 | $ | 2,555 | $ | 5,376 | $ | 12,604 | $ | 343 | $ | — | $ | 28,522 | |||||||||
Allowance for loans individually evaluated for impairment | $ | 762 | $ | — | $ | — | $ | 606 | $ | 84 | $ | — | $ | 1,452 | |||||||||
Allowance for loans collectively evaluated for impairment | $ | 6,882 | $ | 2,555 | $ | 5,376 | $ | 11,998 | $ | 259 | $ | — | $ | 27,070 | |||||||||
Balance: loans acquired with deteriorated credit quality | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Management uses the following portfolio segments of loans when assessing and monitoring the risk and performance of the loan portfolio: | |||||||||||||||||||||||
· | Commercial and industrial | ||||||||||||||||||||||
· | Construction and development, excluding undeveloped land | ||||||||||||||||||||||
· | Undeveloped land | ||||||||||||||||||||||
· | Real estate mortgage | ||||||||||||||||||||||
· | Consumer | ||||||||||||||||||||||
Bancorp has loans that were acquired in the Oldham acquisition, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is included in the balance sheet amounts of loans at September 30, 2014 and December 31, 2013. Changes in the interest component of the fair value adjustment for acquired impaired loans for the year ended December 31, 2013 and the nine months ended September 30, 2014 are shown in the following table: | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||||
Additions due to Oldham acquisition | 174 | ||||||||||||||||||||||
Accretion | (37 | ) | |||||||||||||||||||||
Reclassifications from (to) non-accretable difference | — | ||||||||||||||||||||||
Disposals | — | ||||||||||||||||||||||
Balance at December 31, 2013 | 137 | ||||||||||||||||||||||
Accretion | (61 | ) | |||||||||||||||||||||
Reclassifications from (to) non-accretable difference | — | ||||||||||||||||||||||
Disposals | — | ||||||||||||||||||||||
Balance at September 30, 2014 | $ | 76 | |||||||||||||||||||||
The following table presents loans individually evaluated for impairment as of September 30, 2014 and December 31, 2013. | |||||||||||||||||||||||
Unpaid | Average | ||||||||||||||||||||||
(in thousands) | Recorded | principal | Related | recorded | |||||||||||||||||||
September 30, 2014 | investment | balance | allowance | investment | |||||||||||||||||||
Loans with no related allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 617 | $ | 761 | $ | — | $ | 1,021 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 26 | |||||||||||||||||||
Undeveloped land | 6,722 | 8,785 | — | 7,010 | |||||||||||||||||||
Real estate mortgage | 2,308 | 2,773 | — | 3,048 | |||||||||||||||||||
Consumer | — | — | — | — | |||||||||||||||||||
Subtotal | 9,673 | 12,470 | — | 11,105 | |||||||||||||||||||
Loans with an allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 8,161 | $ | 8,636 | $ | 1,559 | $ | 6,911 | |||||||||||||||
Construction and development, excluding undeveloped land | 490 | 490 | 90 | 123 | |||||||||||||||||||
Undeveloped land | — | — | — | — | |||||||||||||||||||
Real estate mortgage | 1,899 | 1,899 | 432 | 2,264 | |||||||||||||||||||
Consumer | 78 | 78 | 78 | 81 | |||||||||||||||||||
Subtotal | 10,628 | 11,103 | 2,159 | 9,379 | |||||||||||||||||||
Total | |||||||||||||||||||||||
Commercial and industrial | $ | 8,778 | $ | 9,397 | $ | 1,559 | $ | 7,932 | |||||||||||||||
Construction and development, excluding undeveloped land | 516 | 641 | 90 | 149 | |||||||||||||||||||
Undeveloped land | 6,722 | 8,785 | — | 7,010 | |||||||||||||||||||
Real estate mortgage | 4,207 | 4,672 | 432 | 5,312 | |||||||||||||||||||
Consumer | 78 | 78 | 78 | 81 | |||||||||||||||||||
Total | $ | 20,301 | $ | 23,573 | $ | 2,159 | $ | 20,484 | |||||||||||||||
Unpaid | Average | ||||||||||||||||||||||
(in thousands) | Recorded | principal | Related | recorded | |||||||||||||||||||
December 31, 2013 | investment | balance | allowance | investment | |||||||||||||||||||
Loans with no related allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 830 | $ | 974 | $ | — | $ | 4,499 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 54 | |||||||||||||||||||
Undeveloped land | 7,340 | 9,932 | — | 3,272 | |||||||||||||||||||
Real estate mortgage | 3,731 | 5,069 | — | 5,559 | |||||||||||||||||||
Consumer | — | — | — | 3 | |||||||||||||||||||
Subtotal | 11,927 | 16,126 | — | 13,387 | |||||||||||||||||||
Loans with an allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 6,749 | $ | 6,749 | $ | 762 | $ | 3,806 | |||||||||||||||
Construction and development, excluding undeveloped land | — | — | — | 259 | |||||||||||||||||||
Undeveloped land | — | — | — | 7,152 | |||||||||||||||||||
Real estate mortgage | 3,747 | 4,065 | 606 | 3,705 | |||||||||||||||||||
Consumer | 84 | 84 | 84 | 34 | |||||||||||||||||||
Subtotal | 10,580 | 10,898 | 1,452 | 14,956 | |||||||||||||||||||
Total | |||||||||||||||||||||||
Commercial and industrial | $ | 7,579 | $ | 7,723 | $ | 762 | $ | 8,305 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 313 | |||||||||||||||||||
Undeveloped land | 7,340 | 9,932 | — | 10,424 | |||||||||||||||||||
Real estate mortgage | 7,478 | 9,134 | 606 | 9,264 | |||||||||||||||||||
Consumer | 84 | 84 | 84 | 37 | |||||||||||||||||||
Total | $ | 22,507 | $ | 27,024 | $ | 1,452 | $ | 28,343 | |||||||||||||||
Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the life of loans and fair value adjustments recorded for loans acquired. | |||||||||||||||||||||||
Impaired loans include non-accrual loans and loans accounted for as troubled debt restructurings (TDR), which continue to accrue interest. Non-performing loans include the balance of impaired loans plus any loans over 90 days past due and still accruing interest. Loans past due more than 90 days or more and still accruing interest amounted to $207 thousand at September 30, 2014 and $437 thousand at December 31, 2013. | |||||||||||||||||||||||
The following table presents the recorded investment in non-accrual loans as of September 30, 2014 and December 31, 2013. | |||||||||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 2,825 | $ | 846 | |||||||||||||||||||
Construction and development, excluding undeveloped land | 516 | 26 | |||||||||||||||||||||
Undeveloped land | 6,722 | 7,340 | |||||||||||||||||||||
Real estate mortgage | 3,782 | 7,046 | |||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||
Total | $ | 13,845 | $ | 15,258 | |||||||||||||||||||
At September 30, 2014 and December 31, 2013, Bancorp had accruing loans classified as TDR of $6.5 million and $7.2 million, respectively. | |||||||||||||||||||||||
Bancorp did not modify and classify any loans as TDR during the nine months ended September 30, 2014. The following table presents the recorded investment in loans modified and classified as TDR during the nine months ended September 30, 2013. | |||||||||||||||||||||||
(dollars in thousands) | Number of | Recorded | |||||||||||||||||||||
September 30, 2013 | contracts | investment | |||||||||||||||||||||
Commercial & industrial | 1 | $ | 796 | ||||||||||||||||||||
Consumer | 1 | 86 | |||||||||||||||||||||
Total | 2 | $ | 882 | ||||||||||||||||||||
Bancorp did not have any loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of September 30, 2014. The following table presents the recorded investment in loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of September 30, 2013. | |||||||||||||||||||||||
(dollars in thousands) | Number of | Recorded | |||||||||||||||||||||
September 30, 2013 | contracts | investment | |||||||||||||||||||||
Real estate mortgage | 2 | $ | 2,426 | ||||||||||||||||||||
Total | 2 | $ | 2,426 | ||||||||||||||||||||
Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, modifications of amortization periods or temporary suspension of principal payments due to customer financial difficulties. Loans accounted for as TDR, which have not defaulted, are individually evaluated for impairment and, at September 30, 2014, had a total allowance allocation of $706 thousand, compared to $942 thousand at December 31, 2013. | |||||||||||||||||||||||
At September 30, 2014, Bancorp had no outstanding commitments to lend additional funds for loans classified as TDR. At December 31, 2013, Bancorp had outstanding commitments to lend additional funds totaling $262 thousand for loans classified as TDR. | |||||||||||||||||||||||
The following table presents the aging of loans as of September 30, 2014 and December 31, 2013. | |||||||||||||||||||||||
Greater | |||||||||||||||||||||||
than | Recorded | ||||||||||||||||||||||
90 days | investment | ||||||||||||||||||||||
past due | > 90 days | ||||||||||||||||||||||
30-59 days | 60-89 days | (includes | Total | Total | and | ||||||||||||||||||
(in thousands) | past due | past due | non-accrual) | past due | Current | loans | accruing | ||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Commercial and industrial | $ | 85 | $ | 276 | $ | 2,827 | $ | 3,188 | $ | 547,299 | $ | 550,487 | $ | 2 | |||||||||
Construction and development, excluding undeveloped land | — | 242 | 516 | 758 | 93,206 | 93,964 | — | ||||||||||||||||
Undeveloped land | 87 | — | 6,722 | 6,809 | 20,368 | 27,177 | — | ||||||||||||||||
Real estate mortgage | 3,514 | 730 | 3,986 | 8,230 | 1,077,307 | 1,085,537 | 205 | ||||||||||||||||
Consumer | 702 | 18 | — | 720 | 27,435 | 28,155 | — | ||||||||||||||||
Total | $ | 4,388 | $ | 1,266 | $ | 14,051 | $ | 19,705 | $ | 1,765,615 | $ | 1,785,320 | $ | 207 | |||||||||
December 31, 2013 | |||||||||||||||||||||||
Commercial and industrial | $ | 808 | $ | 201 | $ | 1,268 | $ | 2,277 | $ | 508,462 | $ | 510,739 | $ | 421 | |||||||||
Construction and development, excluding undeveloped land | 429 | — | 26 | 455 | 99,264 | 99,719 | — | ||||||||||||||||
Undeveloped land | — | — | 7,340 | 7,340 | 22,531 | 29,871 | — | ||||||||||||||||
Real estate mortgage | 4,529 | 1,180 | 7,062 | 12,771 | 1,034,052 | 1,046,823 | 16 | ||||||||||||||||
Consumer | 110 | — | — | 110 | 34,088 | 34,198 | — | ||||||||||||||||
Total | $ | 5,876 | $ | 1,381 | $ | 15,696 | $ | 22,953 | $ | 1,698,397 | $ | 1,721,350 | $ | 437 | |||||||||
Consistent with regulatory guidance, Bancorp categorizes loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans included all risk-rated loans other than those classified as special mention, substandard, and doubtful, which are defined below: | |||||||||||||||||||||||
· | Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp’s credit position at some future date. | ||||||||||||||||||||||
· | Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize repayment of the debt. They are characterized by the distinct possibility that Bancorp will sustain some loss if the deficiencies are not corrected. | ||||||||||||||||||||||
· | Substandard non-performing: Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as troubled debt restructurings. | ||||||||||||||||||||||
· | Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. | ||||||||||||||||||||||
As of September 30, 2014 and December 31, 2013, the internally assigned risk grades of loans by category were as follows: | |||||||||||||||||||||||
(in thousands) | Commercial | Construction | Undeveloped | Real estate | Consumer | Total | |||||||||||||||||
and industrial | and | land | mortgage | ||||||||||||||||||||
development, | |||||||||||||||||||||||
excluding | |||||||||||||||||||||||
undeveloped | |||||||||||||||||||||||
land | |||||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Grade | |||||||||||||||||||||||
Pass | $ | 525,362 | $ | 82,319 | $ | 19,761 | $ | 1,065,631 | $ | 27,999 | $ | 1,721,072 | |||||||||||
Special mention | 6,039 | 5,137 | 533 | 12,679 | 78 | 24,466 | |||||||||||||||||
Substandard | 10,306 | 5,992 | 161 | 2,816 | — | 19,275 | |||||||||||||||||
Substandard non-performing | 8,780 | 516 | 6,722 | 4,411 | 78 | 20,507 | |||||||||||||||||
Doubtful | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 550,487 | $ | 93,964 | $ | 27,177 | $ | 1,085,537 | $ | 28,155 | $ | 1,785,320 | |||||||||||
December 31, 2013 | |||||||||||||||||||||||
Grade | |||||||||||||||||||||||
Pass | $ | 486,140 | $ | 87,896 | $ | 22,366 | $ | 1,014,216 | $ | 34,028 | $ | 1,644,646 | |||||||||||
Special mention | 12,983 | 7,091 | — | 17,916 | 86 | 38,076 | |||||||||||||||||
Substandard | 3,616 | 4,706 | 165 | 7,197 | — | 15,684 | |||||||||||||||||
Substandard non-performing | 8,000 | 26 | 7,340 | 7,494 | 84 | 22,944 | |||||||||||||||||
Doubtful | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 510,739 | $ | 99,719 | $ | 29,871 | $ | 1,046,823 | $ | 34,198 | $ | 1,721,350 | |||||||||||
Federal_Home_Loan_Bank_Advance
Federal Home Loan Bank Advances | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Federal Home Loan Bank Advances | ' | |||||||||||
Federal Home Loan Bank Advances | ' | |||||||||||
(5)Federal Home Loan Bank Advances | ||||||||||||
Bancorp had outstanding borrowings of $36.9 million at September 30, 2014, via seven separate fixed-rate advances. For two advances totaling $30 million, both of which are non-callable, interest payments are due monthly, with principal due at maturity. For the remaining advances totaling $6.9 million, principal and interest payments are due monthly based on an amortization schedule. | ||||||||||||
The following is a summary of the contractual maturities and average effective rates of outstanding advances: | ||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||
(In thousands) | Advance | Fixed rate | Advance | Fixed rate | ||||||||
2014 | $ | 10,000 | 0.21 | % | $ | 10,000 | 0.21 | % | ||||
15 | 20,000 | 3.34 | % | 20,000 | 3.34 | % | ||||||
2020 | 1,896 | 2.23 | % | 1,931 | 2.23 | % | ||||||
2021 | 514 | 2.12 | % | 564 | 2.12 | % | ||||||
2024 | 3,113 | 2.36 | % | 408 | 2.40 | % | ||||||
2028 | 1,396 | 1.47 | % | 1,426 | 1.46 | % | ||||||
$ | 36,919 | 2.26 | % | $ | 34,329 | 2.26 | % | |||||
Advances from the FHLB are collateralized by certain commercial and residential real estate mortgage loans under a blanket mortgage collateral agreement and FHLB stock. Bancorp views the borrowings as an effective alternative to higher cost time deposits to fund loan growth. At September 30 2014, the amount of available credit from the FHLB totaled $422.9 million. | ||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||
(6)Derivative Financial Instruments | |||||||||||||||
Occasionally, Bancorp enters into free-standing interest rate swaps for the benefits of its commercial customers who desire to hedge their exposure to changing interest rates. Bancorp offsets its interest rate exposure on commercial customer transactions by entering into swap agreements with approved reputable independent counterparties with substantially matching terms. These undesignated derivative instruments are recognized on the consolidated balance sheet at fair value. Because of matching terms of offsetting contracts and the collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition are expected to have an insignificant effect on earnings. Exchanges of cash flows related to the undesignated interest rate swap agreements for the first nine months of 2014 were offsetting and therefore had no net effect on Bancorp’s earnings or cash flows. | |||||||||||||||
Interest rate swap agreements derive their value from underlying interest rates. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Bancorp is exposed to credit-related losses in the event of nonperformance by the counterparties to these agreements. Bancorp mitigates the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. | |||||||||||||||
At September 30, 2014 and December 31, 2013, Bancorp had outstanding undesignated interest rate swap contracts as follows: | |||||||||||||||
Receiving | Paying | ||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||
(dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Notional amount | $ | 7,381 | $ | 5,159 | $ | 7,381 | $ | 5,159 | |||||||
Weighted average maturity (years) | 7 | 6.4 | 7 | 6.4 | |||||||||||
Fair value | $ | (337 | ) | $ | (275 | ) | $ | 337 | $ | 275 | |||||
In December 2013, Bancorp entered into an interest rate swap to hedge cash flows of a $10 million floating-rate FHLB borrowing. The interest rate swap involves exchange of Bancorp’s floating rate interest payments for fixed rate swap payments on the underlying principal amount. This swap was designated, and qualified, for cash-flow hedge accounting. The term of the swap began December 6, 2013 and ends December 6, 2016. For derivative instruments that are designated and qualify as hedging instruments, the effective portion of gains or losses is reported as a component of other comprehensive income, and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings. The following table details Bancorp’s derivative position designated as a cash flow hedge, and the fair values as of September 30, 2014 and December 31, 2013: | |||||||||||||||
(dollars in thousands) | |||||||||||||||
Notional | Maturity | Receive (variable) | Pay fixed | Fair value | Fair value | ||||||||||
amount | date | index | swap rate | September 30, 2014 | December 31, 2013 | ||||||||||
$ | 10,000 | 12/6/16 | US$3 Month LIBOR | 0.715 | % | $ | 40 | $ | 24 | ||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Goodwill and Intangible Assets | ' | |||||||
(7)Goodwill and Intangible Assets | ||||||||
US GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually. Annual evaluations have resulted in no indication of impairment. Bancorp currently has goodwill in the amount of $682 thousand from the 1996 acquisition of an Indiana bank. This goodwill is assigned to the commercial banking segment of Bancorp. | ||||||||
Bancorp recorded a core deposit intangible totaling $2.5 million arising from the Oldham acquisition. Through the first quarter of 2014, this intangible asset was being amortized over a ten-year period using an accelerated method which anticipated the life of the underlying deposits to which the intangible asset is attributable. Bancorp reevaluated the deposits and determined that for money market, savings and interest bearing checking accounts, it is more appropriate to amortize the intangible asset using a straight line method over 15 years. This revision was applied prospectively beginning in the second quarter of 2014. At September 30, 2014, the unamortized core deposit intangible was $1.9 million. | ||||||||
Mortgage servicing rights (MSRs) are initially recognized at fair value when mortgage loans are sold and amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions. MSRs are evaluated quarterly for impairment by comparing carrying value to fair value. The estimated fair values of MSRs at September 30, 2014 and December 31, 2013 were $3.5 million and $4.0 million, respectively. The total outstanding principal balances of loans serviced for others were $427.2 million and $435.3 million at September 30, 2014, and December 31, 2013, respectively. | ||||||||
Changes in the net carrying amount of MSRs for the nine months ended September 30, 2014 and 2013 are shown in the following table: | ||||||||
For nine months | ||||||||
ended September 30, | ||||||||
(in thousands) | 2014 | 2013 | ||||||
Balance at beginning of period | $ | 1,832 | $ | 2,088 | ||||
Additions for mortgage loans sold | 197 | 682 | ||||||
Amortization | (713 | ) | (755 | ) | ||||
Balance at September 30 | $ | 1,316 | $ | 2,015 | ||||
Defined_Benefit_Retirement_Pla
Defined Benefit Retirement Plan | 9 Months Ended |
Sep. 30, 2014 | |
Defined Benefit Retirement Plan | ' |
Defined Benefit Retirement Plan | ' |
(8)Defined Benefit Retirement Plan | |
Bancorp sponsors an unfunded, non-qualified, defined benefit retirement plan for four key officers (two current, and two retired), and has no plans to increase the number of participants. Benefits vest based on 25 years of service. The actuarially determined pension costs are expensed and accrued over the service period, and benefits are paid from Bancorp’s assets. The net periodic benefits costs, which include interest cost and amortization of net losses, totaled $32 thousand and $36 thousand, for the three months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014 and 2013, the net periodic benefit costs totaled $95 thousand and $107 thousand, respectively. | |
Commitments_and_Contingent_Lia
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingent Liabilities | ' |
Commitments and Contingent Liabilities | ' |
(9)Commitments and Contingent Liabilities | |
As of September 30, 2014, Bancorp had various commitments outstanding that arose in the normal course of business, including standby letters of credit and commitments to extend credit, which are properly not reflected in the consolidated financial statements. In management’s opinion, commitments to extend credit of $479.4 million including standby letters of credit of $11.7 million represent normal banking transactions, and no significant losses are anticipated to result from these commitments as of September 30, 2014. Commitments to extend credit were $464.2 million, including letters of credit of $15.2 million, as of December 31, 2013. Bancorp’s maximum exposure to credit loss in the event of nonperformance by the other party to these commitments is represented by the contractual amount of these instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Commitments to extend credit are mainly comprised of commercial lines of credit, construction and home equity credit lines. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Bancorp uses the same credit and collateral policies in making commitments and conditional guarantees as for on-balance sheet instruments. Bancorp evaluates each customer’s creditworthiness on a case by case basis. The amount of collateral obtained is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, equipment, and real estate. | |
Standby letters of credit and financial guarantees written are conditional commitments issued by Bancorp to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private commercial transactions. Standby letters of credit generally have maturities of one to two years. | |
To provide service to commercial accounts, Bancorp aids customers with letters of credits or other financial contracts with other financial institutions. Accordingly, Bancorp has entered into agreements to guarantee performance of several customers’ contracts with other financial institutions. Bancorp will make payments under these agreements if a customer defaults on its obligations to the other financial institutions. The terms of the agreements range from 1 to 22 months. The maximum potential future payment guaranteed by Bancorp at September 30, 2014 was $4.4 million. If an event of default on all contracts had occurred at September 30, 2014, Bancorp would have been required to make payments of approximately $2.9 million. No payments have ever been required as a result of default on these contracts. These agreements are normally secured by collateral acceptable to Bancorp, which limits credit risk associated with the agreements. | |
Also, as of September 30, 2014, in the normal course of business, there were pending legal actions and proceedings in which claims for damages are asserted. Management, after discussion with legal counsel, believes the ultimate result of these legal actions and proceedings will not have a material adverse effect on the consolidated financial position or results of operations of Bancorp. | |
Preferred_Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2014 | |
Preferred Stock | ' |
Preferred Stock | ' |
(10)Preferred Stock | |
Bancorp has a class of preferred stock (no par value; 1,000,000 shares authorized), the relative rights, preferences and other terms of which or any series within the class will be determined by the Board of Directors prior to any issuance. None of this stock has been issued to date. | |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
(11)Stock-Based Compensation | ||||||||||||||||||
The fair value of all awards granted, net of estimated forfeitures, is recognized as compensation expense over the respective service period. | ||||||||||||||||||
Bancorp currently has one stock-based compensation plan. Initially, in the 2005 Stock Incentive Plan, there were 735,000 shares of common stock reserved for issuance of stock based awards. In 2010, shareholders approved an additional 700,000 shares of common stock for issuance under the plan. As of September 30, 2014, there were 449,428 shares available for future awards. Bancorp’s 1995 Stock Incentive Plan expired in 2005; however, options granted under this plan expire as late as 2015. | ||||||||||||||||||
Options and stock appreciation rights (SARs) granted generally have a vesting schedule of 20% per year. Options and SARs expire ten years after the grant date unless forfeited due to employment termination. No stock options have been granted since 2007. | ||||||||||||||||||
Restricted shares granted to officers generally vest over five years. All restricted shares have been granted at a price equal to the market value of common stock at the time of grant. Because grantees are entitled to dividend payments during the performance period, the fair value of these restricted shares is equal to the market value of the shares on the date of grant. | ||||||||||||||||||
Grants of performance stock units (PSUs) to executive officers vest based upon service and a single three-year performance period which begins January 1 of the first year of the performance period. Because grantees are not entitled to dividend payments during the performance period, the fair value of these PSUs is estimated based upon the fair value of the underlying shares on the date of grant, adjusted for non-payment of dividends. | ||||||||||||||||||
Grants of restricted stock units (RSUs) to directors are time-based and vest based upon one year of service. Because grantees are entitled to deferred dividend payments at the end of the vesting period, the fair value of the RSUs are estimated based on the fair value of the underlying shares on the date of grant. | ||||||||||||||||||
Bancorp has recognized stock-based compensation expense, within salaries and employee benefits for employees, and within other non-interest expense for directors, in the consolidated statements of income as follows: | ||||||||||||||||||
For three months ended | For nine months ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock-based compensation expense before income taxes | $ | 691 | $ | 488 | $ | 1,459 | $ | 1,473 | ||||||||||
Less: deferred tax benefit | (242 | ) | (171 | ) | (510 | ) | (516 | ) | ||||||||||
Reduction of net income | $ | 449 | $ | 317 | $ | 949 | $ | 957 | ||||||||||
Bancorp expects to record an additional $499 thousand of stock-based compensation expense in 2014 for equity grants outstanding as of September 30, 2014. As of September 30, 2014, Bancorp has $3.7 million of unrecognized stock-based compensation expense that is expected to be recorded as compensation expense over the next five years as awards vest. Bancorp received cash of $1.4 million and $1.3 million from the exercise of options during the first nine months of 2014 and 2013, respectively. | ||||||||||||||||||
The fair values of Bancorp’s stock options and SARs are estimated at the date of grant using the Black-Scholes option pricing model, a leading formula for calculating the value of stock options and SARs. This model requires the input of subjective assumptions, changes to which can materially affect the fair value estimate. The fair value of restricted shares is determined by Bancorp’s closing stock price on the date of grant. The following assumptions were used in SAR valuations at the grant date in each year: | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Dividend yield | 2.94 | % | 2.80 | % | ||||||||||||||
Expected volatility | 23.66 | % | 22.54 | % | ||||||||||||||
Risk free interest rate | 2.22 | % | 1.26 | % | ||||||||||||||
Expected life of SARs | 7.0 years | 6.6 years | ||||||||||||||||
Dividend yield and expected volatility are based on historical information corresponding to the expected life of options and SARs granted. Expected volatility is the volatility of the underlying shares for the expected term on a monthly basis. The risk free interest rate is the implied yield currently available on U.S. Treasury issues with a remaining term equal to the expected life of the options. The expected life of SARs is based on actual experience of past like-term options. Bancorp evaluates historical exercise and post-vesting termination behavior when determining the expected life. | ||||||||||||||||||
A summary of stock option and SARs activity and related information for the nine months ended September 30, 2014 follows: | ||||||||||||||||||
Weighted | ||||||||||||||||||
Weighted | Aggregate | Weighted | average | |||||||||||||||
Options | average | intrinsic | average | remaining | ||||||||||||||
and SARs | Exercise | exercise | value | fair | contractual | |||||||||||||
(in thousands) | price | price | (in thousands) | value | life (in years) | |||||||||||||
At December 31, 2013 | ||||||||||||||||||
Vested and exercisable | 579 | $ | 20.25-26.83 | $ | 23.83 | $ | 4,685 | $ | 5.43 | 3.4 | ||||||||
Unvested | 218 | 21.03-24.87 | 22.7 | 2,011 | 4.36 | 7.7 | ||||||||||||
Total outstanding | 797 | 20.25-26.83 | 23.52 | 6,696 | 5.14 | 4.6 | ||||||||||||
Granted | 62 | 29.05-29.16 | 29.05 | 65 | 5.37 | |||||||||||||
Exercised | (89 | ) | 20.25-26.83 | 22.94 | 656 | 5.23 | ||||||||||||
Forfeited | (6 | ) | 21.03-23.76 | 22.78 | 46 | 4.43 | ||||||||||||
At September 30, 2014 | ||||||||||||||||||
Vested and exercisable | 570 | 20.90-26.83 | 23.79 | 3,601 | 5.35 | 3.5 | ||||||||||||
Unvested | 194 | 21.03-29.16 | 24.83 | 1,022 | 4.57 | 8 | ||||||||||||
Total outstanding | 764 | 20.90-29.16 | 24.05 | $ | 4,623 | 5.15 | 4.6 | |||||||||||
Vested year-to-date | 80 | $ | 21.03-24.87 | $ | 22.49 | $ | 611 | $ | 4.63 | |||||||||
Intrinsic value for stock options and SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price. | ||||||||||||||||||
For the periods ending December 31, 2013 and September 30, 2014, Bancorp granted shares of restricted common stock as outlined in the following table: | ||||||||||||||||||
Grant date | ||||||||||||||||||
weighted- | ||||||||||||||||||
Number | average cost | |||||||||||||||||
Unvested at December 31, 2012 | 113,910 | $ | 22.55 | |||||||||||||||
Shares awarded | 55,275 | 22.93 | ||||||||||||||||
Restrictions lapsed and shares released to employees/directors | (39,909 | ) | 22.29 | |||||||||||||||
Shares forfeited | (4,720 | ) | 23.45 | |||||||||||||||
Unvested at December 31, 2013 | 124,556 | $ | 22.77 | |||||||||||||||
Shares awarded | 39,730 | 29.12 | ||||||||||||||||
Restrictions lapsed and shares released to employees/directors | (44,724 | ) | 22.69 | |||||||||||||||
Shares forfeited | (3,164 | ) | 23.29 | |||||||||||||||
Unvested at September 30, 2014 | 116,398 | $ | 24.95 | |||||||||||||||
Bancorp awarded PSUs to executive officers of Bancorp, the single three-year performance period for which began January 1 of the award year. The following table outlines the PSU grants. | ||||||||||||||||||
Fair | ||||||||||||||||||
Vesting | value at | Expected | ||||||||||||||||
Grant | period | grant | shares to | |||||||||||||||
year | in years | date | be awarded | |||||||||||||||
2012 | 3 | 20.57 | 28,079 | |||||||||||||||
2013 | 3 | 20.38 | 36,792 | |||||||||||||||
2014 | 3 | 26.42 | 16,675 | |||||||||||||||
In the first quarter of 2014, Bancorp awarded 3,920 RSUs to directors of Bancorp. | ||||||||||||||||||
Net_Income_Per_Share
Net Income Per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Net Income Per Share | ' | |||||||||||||
Net Income Per Share | ' | |||||||||||||
(12)Net Income Per Share | ||||||||||||||
The following table reflects, for the three and nine months ended September 30, 2014 and 2013, net income (the numerator) and average shares outstanding (the denominator) for the basic and diluted net income per share computations: | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30 | September 30 | |||||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 9,889 | $ | 7,682 | $ | 26,100 | $ | 20,857 | ||||||
Average shares outstanding | 14,574 | 14,408 | 14,542 | 14,144 | ||||||||||
Dilutive securities | 174 | 148 | 190 | 84 | ||||||||||
Average shares outstanding including dilutive securities | 14,748 | 14,556 | 14,732 | 14,228 | ||||||||||
Net income per share, basic | $ | 0.68 | $ | 0.53 | $ | 1.79 | $ | 1.47 | ||||||
Net income per share, diluted | $ | 0.67 | $ | 0.53 | $ | 1.77 | $ | 1.47 | ||||||
Segments
Segments | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Segments | ' | ||||||||||
Segments | ' | ||||||||||
(13)Segments | |||||||||||
Bancorp’s principal activities include commercial banking and investment management and trust. Commercial banking provides a full range of loan and deposit products to individual consumers and businesses. Commercial banking also includes Bancorp’s mortgage origination and securities brokerage activity. Investment management and trust provides wealth management services including investment management, trust and estate administration, and retirement plan services. | |||||||||||
Financial information for each business segment reflects that which is specifically identifiable or allocated based on an internal allocation method. Income taxes are allocated based on the effective federal income tax rate adjusted for any tax exempt activity. All tax exempt activity and provision for loan losses have been allocated to the commercial banking segment. The measurement of the performance of the business segments is based on the management structure of Bancorp and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments’ operations if they were independent entities. | |||||||||||
Selected financial information by business segment for the three and nine month periods ended September 30, 2014 and 2013 follows: | |||||||||||
Investment | |||||||||||
Commercial | management | ||||||||||
(in thousands) | banking | and trust | Total | ||||||||
Three months ended September 30, 2014 | |||||||||||
Net interest income | $ | 21,317 | $ | 46 | $ | 21,363 | |||||
(Credit) provision for loan losses | (2,100 | ) | — | (2,100 | ) | ||||||
Investment management and trust services | — | 4,502 | 4,502 | ||||||||
All other non-interest income | 5,348 | — | 5,348 | ||||||||
Non-interest expense | 15,971 | 2,738 | 18,709 | ||||||||
Income before income taxes | 12,794 | 1,810 | 14,604 | ||||||||
Tax expense | 4,071 | 644 | 4,715 | ||||||||
Net income | $ | 8,723 | $ | 1,166 | $ | 9,889 | |||||
Three months ended September 30, 2013 | |||||||||||
Net interest income | $ | 19,978 | $ | 39 | $ | 20,017 | |||||
Provision for loan losses | 1,325 | — | 1,325 | ||||||||
Investment management and trust services | — | 4,017 | 4,017 | ||||||||
All other non-interest income | 5,621 | 14 | 5,635 | ||||||||
Non-interest expense | 15,215 | 2,356 | 17,571 | ||||||||
Income before income taxes | 9,059 | 1,714 | 10,773 | ||||||||
Tax expense | 2,485 | 606 | 3,091 | ||||||||
Net income | $ | 6,574 | $ | 1,108 | $ | 7,682 | |||||
Investment | |||||||||||
Commercial | management | ||||||||||
(in thousands) | banking | and trust | Total | ||||||||
Nine months ended September 30, 2014 | |||||||||||
Net interest income | $ | 62,110 | $ | 136 | $ | 62,246 | |||||
(Credit) provision for loan losses | (400 | ) | — | (400 | ) | ||||||
Investment management and trust services | — | 13,825 | 13,825 | ||||||||
All other non-interest income | 15,527 | 30 | 15,557 | ||||||||
Non-interest expense | 46,036 | 7,918 | 53,954 | ||||||||
Income before income taxes | 32,001 | 6,073 | 38,074 | ||||||||
Tax expense | 9,814 | 2,160 | 11,974 | ||||||||
Net income | $ | 22,187 | $ | 3,913 | $ | 26,100 | |||||
Nine months ended September 30, 2013 | |||||||||||
Net interest income | $ | 57,347 | $ | 108 | $ | 57,455 | |||||
Provision for loan losses | 4,975 | — | 4,975 | ||||||||
Investment management and trust services | — | 12,032 | 12,032 | ||||||||
All other non-interest income | 17,114 | 45 | 17,159 | ||||||||
Non-interest expense | 45,176 | 6,796 | 51,972 | ||||||||
Income before income taxes | 24,310 | 5,389 | 29,699 | ||||||||
Tax expense | 6,938 | 1,904 | 8,842 | ||||||||
Net income | $ | 17,372 | $ | 3,485 | $ | 20,857 | |||||
Income_Taxes
Income Taxes | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Income Taxes | ' | |||||
Income Taxes | ' | |||||
(14)Income Taxes | ||||||
An analysis of the difference between the statutory and effective tax rates for the nine months ended September 30, 2014 and 2013 follows: | ||||||
Nine months ended September 30 | ||||||
2014 | 2013 | |||||
U.S. federal statutory tax rate | 35 | % | 35 | % | ||
Tax exempt interest income | (1.5 | ) | (2.0 | ) | ||
Tax credits | (1.5 | ) | (2.2 | ) | ||
Cash surrender value of life insurance | (1.3 | ) | (1.8 | ) | ||
State income taxes | 0.9 | 0.7 | ||||
Other, net | (0.2 | ) | 0.1 | |||
Effective tax rate | 31.4 | % | 29.8 | % | ||
US GAAP provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns. As of September 30, 2014 and December 31, 2013, the gross amount of unrecognized tax benefits was $37 thousand and $41 thousand, respectively. If recognized, the tax benefits would reduce tax expense and accordingly, increase net income. The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examination, litigation and legislative activity and the addition or elimination of uncertain tax positions. | ||||||
During the second quarter of 2014, the IRS completed the examination of Bancorp’s 2011 corporate income tax return. There were no significant adjustments to taxable income. Federal income tax returns are subject to examination for the years after 2011 and state income tax returns are subject to examination for the years after 2010. | ||||||
Bancorp’s policy is to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense. As of both September 30, 2014 and December 31, 2013, the amount accrued for the potential payment of interest and penalties was $2 thousand. | ||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
(15)Fair Value Measurements | |||||||||||||||||
Bancorp follows the provisions of the authoritative guidance for fair value measurements. This guidance is definitional and disclosure oriented and addresses how companies should approach measuring fair value when required by US GAAP. The guidance also prescribes various disclosures about financial statement categories and amounts which are measured at fair value, if such disclosures are not already specified elsewhere in US GAAP. | |||||||||||||||||
The authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. The guidance also establishes a hierarchy to group assets and liabilities carried at fair value in three levels based upon the markets in which the assets and liabilities trade and the reliability of assumptions used to determine fair value. These levels are: | |||||||||||||||||
· | Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. | ||||||||||||||||
· | Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. | ||||||||||||||||
· | Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions would reflect internal estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques could include pricing models, discounted cash flows and other similar techniques. | ||||||||||||||||
Authoritative guidance requires maximization of use of observable inputs and minimization of use of unobservable inputs in fair value measurements. Where there exists limited or no observable market data, Bancorp derives its own estimates by generally considering characteristics of the asset/liability, the current economic and competitive environment and other factors. For this reason, results cannot be determined with precision and may not be realized on an actual sale or immediate settlement of the asset or liability. | |||||||||||||||||
Bancorp’s investment securities available-for-sale and interest rate swaps are recorded at fair value on a recurring basis. Other accounts including mortgage loans held for sale, mortgage servicing rights, impaired loans and other real estate owned may be recorded at fair value on a non-recurring basis, generally in the application of lower of cost or market adjustments or write-downs of specific assets. | |||||||||||||||||
The portfolio of investment securities available-for-sale is comprised of U.S. Treasury and other U.S. government obligations, debt securities of U.S. government-sponsored corporations (including mortgage-backed securities), obligations of state and political subdivisions and corporate equity securities. Corporate equity securities, included in the 2014 table, are priced using quoted prices of identical securities in an active market. These measurements are classified as Level 1 in the hierarchy above. All other securities are priced using standard industry models or matrices with various assumptions such as yield curves, volatility, prepayment speeds, default rates, time value, credit rating and market prices for similar instruments. These assumptions are generally observable in the market place and can be derived from or supported by observable data. These measurements are classified as Level 2 in the hierarchy above. | |||||||||||||||||
Interest rate swaps are valued using primarily Level 2 inputs. Fair value measurements generally based on dealer quotes, benchmark forward yield curves, and other relevant observable market data. For purposes of potential valuation adjustments to derivative positions, Bancorp evaluates the credit risk of its counterparties as well as its own credit risk. To date, Bancorp has not realized any losses due to a counterparty’s inability to perform and the change in value of derivative assets and liabilities attributable to credit risk was not significant during 2014. | |||||||||||||||||
Below are the carrying values of assets measured at fair value on a recurring basis. | |||||||||||||||||
Fair value at September 30, 2014 | |||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||||
Investment securities available-for-sale | |||||||||||||||||
Government sponsored enterprise obligations | $ | 205,405 | $ | — | $ | 205,405 | $ | — | |||||||||
Mortgage-backed securities - government agencies | 179,850 | — | 179,850 | — | |||||||||||||
Obligations of states and political subdivisions | 63,359 | — | 63,359 | — | |||||||||||||
Corporate equity securities | 958 | 958 | — | — | |||||||||||||
Total investment securities available-for-sale | 449,572 | 958 | 448,614 | — | |||||||||||||
Interest rate swaps | 377 | — | 377 | — | |||||||||||||
Total assets | $ | 449,949 | $ | 958 | $ | 448,991 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Interest rate swaps | $ | 337 | $ | — | $ | 337 | $ | — | |||||||||
Fair value at December 31, 2013 | |||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||||
Investment securities available-for-sale | |||||||||||||||||
U.S. Treasury and other U.S. government obligations | $ | 110,000 | $ | — | $ | 110,000 | $ | — | |||||||||
Government sponsored enterprise obligations | 137,845 | — | 137,845 | — | |||||||||||||
Mortgage-backed securities - government agencies | 172,693 | — | 172,693 | — | |||||||||||||
Obligations of states and political subdivisions | 69,493 | — | 69,493 | — | |||||||||||||
Total investment securities available for sale | 490,031 | — | 490,031 | — | |||||||||||||
Interest rate swaps | 299 | — | 299 | — | |||||||||||||
Total assets | $ | 490,330 | $ | — | $ | 490,330 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Interest rate swaps | $ | 275 | $ | — | $ | 275 | $ | — | |||||||||
Bancorp did not have any financial instruments classified within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis at September 30, 2014 or December 31, 2013. | |||||||||||||||||
MSRs are recorded at fair value upon capitalization, are amortized to correspond with estimated servicing income, and are quarterly assessed for impairment based on fair value at the reporting date. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The model incorporates assumptions that market participants would use in estimating future net servicing income. These measurements are classified as Level 3. At September 30, 2014 and December 31, 2013 there was no valuation allowance for the mortgage servicing rights, as the fair value exceeded the amortized cost. Accordingly, the MSRs are not included in either table below for September 30, 2014 or December 31, 2013. | |||||||||||||||||
Mortgage loans held for sale are recorded at the lower of cost or market value. The portfolio is comprised of residential real estate loans and fair value is based on specific prices of underlying contracts for sales to investors. These measurements are classified as Level 2. Because the fair value of the loans held for sale exceeded carrying value, mortgage loans held for sale are not included in either table below for September 30, 2014 or December 31, 2013. | |||||||||||||||||
Other real estate owned, which is carried at the lower of cost or fair value, is periodically assessed for impairment based on fair value at the reporting date. Fair value is based on appraisals performed by external parties which use judgments and assumptions that are property-specific and sensitive to changes in the overall economic environment. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. At September 30, 2014 and December 31, 2013, the carrying value of other real estate owned was $2.8 million and $5.6 million, respectively. Other real estate owned is not included in either table below, as the fair value of the properties exceeded their carrying value at September 30, 2014 and December 31, 2013. | |||||||||||||||||
For impaired loans in the table below, the fair value is calculated as the carrying value of only loans with a specific valuation allowance, less the specific allowance. As of September 30, 2014, total impaired loans with a valuation allowance were $10.6 million, and the specific allowance totaled $2.1 million, resulting in a fair value of $8.5 million, compared to total impaired loans with a valuation allowance of $10.6 million, and the specific allowance allocation totaling $1.5 million, resulting in a fair value of $9.1 million at December 31, 2013. The losses represent the change in the specific allowances for the period indicated. | |||||||||||||||||
Below are the carrying values of assets measured at fair value on a non-recurring basis. | |||||||||||||||||
Losses for 9 month | |||||||||||||||||
Fair value at September 30, 2014 | period ended | ||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | September 30, 2014 | ||||||||||||
Impaired loans | $ | 8,470 | $ | — | $ | — | $ | 8,470 | $ | (1,148 | ) | ||||||
Losses for 9 month | |||||||||||||||||
Fair value at December 31, 2013 | period ended | ||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | September 30, 2013 | ||||||||||||
Impaired loans | $ | 9,128 | $ | — | $ | — | $ | 9,128 | $ | (1,181 | ) | ||||||
In the case of the securities portfolio, Bancorp monitors the valuation technique utilized by pricing agencies to ascertain when transfers between levels have occurred. The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare. For the nine months ended September 30, 2014, there were no transfers between Levels 1, 2, or 3. | |||||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
(16)Fair Value of Financial Instruments | |||||||||||||||||
US GAAP requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The carrying amounts, estimated fair values, and placement in the fair value hierarchy of Bancorp’s financial instruments are as follows: | |||||||||||||||||
(in thousands) | Carrying | ||||||||||||||||
September 30, 2014 | Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial assets | |||||||||||||||||
Cash and short-term investments | $ | 69,567 | $ | 69,567 | $ | 69,567 | $ | — | $ | — | |||||||
Mortgage loans held for sale | 4,069 | 4,239 | — | 4,239 | — | ||||||||||||
Federal Home Loan Bank stock and other securities | 6,347 | 6,347 | — | 6,347 | — | ||||||||||||
Loans, net | 1,758,196 | 1,767,171 | — | — | 1,767,171 | ||||||||||||
Accrued interest receivable | 5,629 | 5,629 | 5,629 | — | — | ||||||||||||
Financial liabilities | |||||||||||||||||
Deposits | $ | 2,007,821 | $ | 2,008,818 | $ | — | $ | 2,008,818 | $ | — | |||||||
Short-term borrowings | 83,251 | 83,251 | — | 83,251 | — | ||||||||||||
FHLB advances | 36,919 | 37,481 | — | 37,481 | — | ||||||||||||
Accrued interest payable | 128 | 128 | 128 | — | — | ||||||||||||
(in thousands) | Carrying | ||||||||||||||||
December 31, 2013 | Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial assets | |||||||||||||||||
Cash and short-term investments | $ | 70,770 | $ | 70,770 | $ | 70,770 | $ | — | $ | — | |||||||
Mortgage loans held for sale | 1,757 | 1,817 | — | 1,817 | — | ||||||||||||
Federal Home Loan Bank stock and other securities | 7,347 | 7,347 | — | 7,347 | — | ||||||||||||
Loans, net | 1,692,828 | 1,703,291 | — | — | 1,703,291 | ||||||||||||
Accrued interest receivable | 5,712 | 5,712 | 5,712 | — | — | ||||||||||||
Financial liabilities | |||||||||||||||||
Deposits | $ | 1,980,937 | $ | 1,983,029 | $ | — | $ | 1,983,029 | $ | — | |||||||
Short-term borrowings | 117,910 | 117,910 | — | 117,910 | — | ||||||||||||
FHLB advances | 34,329 | 35,166 | — | 35,166 | — | ||||||||||||
Accrued interest payable | 128 | 128 | 128 | — | — | ||||||||||||
Management used the following methods and assumptions to estimate the fair value of each class of financial instrument for which it is practicable to estimate the value. | |||||||||||||||||
Cash, short-term investments, accrued interest receivable/payable and short-term borrowings | |||||||||||||||||
For these short-term instruments, carrying amount is a reasonable estimate of fair value. | |||||||||||||||||
Federal Home Loan Bank stock and other securities | |||||||||||||||||
For these securities without readily available market values, the carrying amount is a reasonable estimate of fair value. | |||||||||||||||||
Mortgage loans held for sale | |||||||||||||||||
The fair value of mortgage loans held for sale is determined by market quotes for similar loans based on loan type, term, rate, size and the borrower’s credit score. | |||||||||||||||||
Loans, net | |||||||||||||||||
US GAAP prescribes the exit price concept for estimating fair value of loans. Because there is not an active market (exit price) for trading virtually all types of loans in Bancorp’s portfolio, fair value of loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities (e.g. entrance price). | |||||||||||||||||
Deposits | |||||||||||||||||
Fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. Fair value of fixed-rate certificates of deposits is estimated by discounting future cash flows using the rates currently offered for deposits of similar remaining maturities. | |||||||||||||||||
Federal Home Loan Bank advances | |||||||||||||||||
Fair value of FHLB advances is estimated by discounting future cash flows using estimates of current market rate for instruments with similar terms and remaining maturities. | |||||||||||||||||
Commitments to extend credit and standby letters of credit | |||||||||||||||||
Fair values of commitments to extend credit are estimated using fees currently charged to enter into similar agreements and the creditworthiness of the customers. Fair values of standby letters of credit are based on fees currently charged for similar agreements or estimated cost to terminate them or otherwise settle obligations with counterparties at the reporting date. Fair value of commitments to extend credit, letters of credit and lines of credit is not presented since management believes the fair value to be insignificant. | |||||||||||||||||
Limitations | |||||||||||||||||
Fair value estimates are made at a specific point in time based on relevant market information and information about financial instruments. Because no market exists for a significant portion of Bancorp’s financial instruments, fair value estimates are based on judgments regarding future expected losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument. Changes in assumptions could significantly affect estimates. | |||||||||||||||||
Regulatory_Matters
Regulatory Matters | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
(17)Regulatory Matters | |||||||||||||||||
Bancorp and the Bank are subject to various capital requirements prescribed by banking regulations and administered by state and federal banking agencies. Under these requirements, Bancorp and the Bank must meet minimum amounts and percentages of Tier I and total capital, as defined, to risk weighted assets and Tier I capital to average assets. Risk weighted assets are determined by applying certain risk weightings prescribed by the regulations to various categories of assets and off-balance sheet commitments. Capital and risk weighted assets may be further subject to qualitative judgments by regulators as to components, risk weighting and other factors. Failure to meet the capital requirements can result in certain mandatory, and possibly discretionary, corrective actions prescribed by the regulations or determined to be necessary by the regulators, which could materially affect the unaudited consolidated financial statements. Bancorp and the Bank met all capital requirements to which they were subject as of September 30, 2014. | |||||||||||||||||
The following table sets forth consolidated Bancorp’s and the Bank’s risk based capital amounts and ratios as of September 30, 2014 and December 31, 2013. | |||||||||||||||||
Actual | Minimum for adequately | Minimum for well | |||||||||||||||
capitalized | capitalized | ||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
September 30, 2014 | |||||||||||||||||
Total risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 272,796 | 13.92 | % | $ | 156,779 | 8.00 | % | NA | NA | |||||||
Bank | 264,784 | 13.53 | % | 156,561 | 8.00 | % | $ | 195,701 | 10.00 | % | |||||||
Tier I risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 248,264 | 12.67 | % | $ | 78,379 | 4.00 | % | NA | NA | |||||||
Bank | 240,287 | 12.28 | % | 78,269 | 4.00 | % | $ | 117,404 | 6.00 | % | |||||||
Leverage (2) | |||||||||||||||||
Consolidated | $ | 248,264 | 10.38 | % | $ | 71,753 | 3.00 | % | NA | NA | |||||||
Bank | 240,287 | 10.07 | % | 71,585 | 3.00 | % | $ | 119,308 | 5.00 | % | |||||||
December 31, 2013 | |||||||||||||||||
Total risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 252,171 | 13.54 | % | $ | 148,993 | 8.00 | % | NA | NA | |||||||
Bank | 239,577 | 12.90 | % | 148,575 | 8.00 | % | $ | 185,719 | 10.00 | % | |||||||
Tier I risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 228,827 | 12.29 | % | $ | 74,476 | 4.00 | % | NA | NA | |||||||
Bank | 219,299 | 11.65 | % | 75,296 | 4.00 | % | $ | 112,944 | 6.00 | % | |||||||
Leverage (2) | |||||||||||||||||
Consolidated | $ | 228,827 | 9.75 | % | $ | 70,408 | 3.00 | % | NA | NA | |||||||
Bank | 219,299 | 9.24 | % | 71,201 | 3.00 | % | $ | 118,668 | 5.00 | % | |||||||
-1 | Ratio is computed in relation to risk-weighted assets. | ||||||||||||||||
-2 | Ratio is computed in relation to average assets. | ||||||||||||||||
NA – Not applicable. Regulatory framework does not define well capitalized for holding companies. | |||||||||||||||||
Acquisition_Tables
Acquisition (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Acquisition | ' | ||||||||||
Summary of consideration paid and the amounts of assets acquired and liabilities assumed, adjusted for fair value at the acquisition date | ' | ||||||||||
(dollars in thousands) | Dollars | ||||||||||
Purchase price: | |||||||||||
Value of: | |||||||||||
Cash | $ | 8,297 | |||||||||
Equity instruments (531,288 common shares of Bancorp) | 12,198 | ||||||||||
Total purchase price | 20,495 | ||||||||||
Identifiable assets: | |||||||||||
Cash and federal funds sold | 17,260 | ||||||||||
Investment securities | 81,827 | ||||||||||
Loans | 39,755 | ||||||||||
Premises and equipment | 4,008 | ||||||||||
Core deposit intangible | 2,543 | ||||||||||
Other assets | 605 | ||||||||||
Total identifiable assets: | 145,998 | ||||||||||
Identifiable liabilities: | |||||||||||
Deposits | 120,435 | ||||||||||
Securities sold under agreement to repurchase | 2,762 | ||||||||||
Other liabilities | 1,857 | ||||||||||
Total identifiable liabilities | 125,054 | ||||||||||
Net gain resulting from acquisition | $ | 449 | |||||||||
Acquisition costs (included in other non-interest expenses in Bancorp’s income statement for the nine months ended September 30, 2013) | $ | 1,548 | |||||||||
Schedule of fair value of acquired loans | ' | ||||||||||
Below is an analysis of the fair value of acquired loans as of September 30, 2014. | |||||||||||
(in thousands) | Acquired | Acquired non- | Total | ||||||||
impaired | impaired | acquired | |||||||||
loans | loans | loans | |||||||||
Contractually required principal and interest at acquisition | $ | 3,285 | $ | 37,763 | $ | 41,048 | |||||
Contractual cash flows not expected to be collected | (372 | ) | (723 | ) | (1,095 | ) | |||||
Expected cash flows at acquisition | 2,913 | 37,040 | 39,953 | ||||||||
Interest component of expected cash flows | (174 | ) | (24 | ) | (198 | ) | |||||
Basis in acquired loans at acquisition - estimated fair value | $ | 2,739 | $ | 37,016 | $ | 39,755 | |||||
Securities_Tables
Securities (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Securities | ' | |||||||||||||||||||
Schedule of amortized cost, unrealized gains and losses, and fair value of securities available for sale | ' | |||||||||||||||||||
(in thousands) | Amortized | Unrealized | ||||||||||||||||||
September 30, 2014 | cost | Gains | Losses | Fair value | ||||||||||||||||
Government sponsored enterprise obligations | $ | 204,992 | $ | 1,535 | $ | 1,122 | $ | 205,405 | ||||||||||||
Mortgage-backed securities - government agencies | 180,890 | 1,379 | 2,419 | 179,850 | ||||||||||||||||
Obligations of states and political subdivisions | 61,616 | 1,808 | 65 | 63,359 | ||||||||||||||||
Corporate equity securities | 756 | 202 | — | 958 | ||||||||||||||||
Total securities available-for-sale | $ | 448,254 | $ | 4,924 | $ | 3,606 | $ | 449,572 | ||||||||||||
(in thousands) | Amortized | Unrealized | ||||||||||||||||||
December 31, 2013 | cost | Gains | Losses | Fair value | ||||||||||||||||
U.S. Treasury and other U.S. government obligations | $ | 110,000 | $ | — | $ | — | $ | 110,000 | ||||||||||||
Government sponsored enterprise obligations | 138,094 | 1,623 | 1,872 | 137,845 | ||||||||||||||||
Mortgage-backed securities - government agencies | 176,524 | 1,391 | 5,222 | 172,693 | ||||||||||||||||
Obligations of states and political subdivisions | 68,448 | 1,473 | 428 | 69,493 | ||||||||||||||||
Total securities available-for-sale | $ | 493,066 | $ | 4,487 | $ | 7,522 | $ | 490,031 | ||||||||||||
Summary of securities based on contractual maturity | ' | |||||||||||||||||||
A summary of the available-for-sale investment securities by maturity groupings as of September 30, 2014 is shown below. | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Securities available-for-sale | Amortized cost | Fair value | ||||||||||||||||||
Due within 1 year | $ | 52,895 | $ | 53,174 | ||||||||||||||||
Due after 1 but within 5 years | 131,963 | 133,441 | ||||||||||||||||||
Due after 5 but within 10 years | 23,117 | 23,695 | ||||||||||||||||||
Due after 10 years | 58,633 | 58,454 | ||||||||||||||||||
Mortgage-backed securities | 180,890 | 179,850 | ||||||||||||||||||
Corporate equity securities | 756 | 958 | ||||||||||||||||||
Total securities available-for-sale | $ | 448,254 | $ | 449,572 | ||||||||||||||||
Schedule of securities with unrealized losses not recognized in the statements of income | ' | |||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||
(in thousands) | value | losses | value | losses | value | losses | ||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Government sponsored enterprise obligations | $ | 45,050 | $ | 163 | $ | 33,565 | $ | 959 | $ | 78,615 | $ | 1,122 | ||||||||
Mortgage-backed securities - government agencies | 45,123 | 445 | 45,133 | 1,974 | 90,256 | 2,419 | ||||||||||||||
Obligations of states and political subdivisions | 1,924 | 12 | 6,341 | 53 | 8,265 | 65 | ||||||||||||||
Total temporarily impaired securities | $ | 92,097 | $ | 620 | $ | 85,039 | $ | 2,986 | $ | 177,136 | $ | 3,606 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Government sponsored enterprise obligations | $ | 76,755 | $ | 1,429 | $ | 4,353 | $ | 443 | $ | 81,108 | $ | 1,872 | ||||||||
Mortgage-backed securities - government agencies | 112,652 | 4,400 | 8,752 | 822 | 121,404 | 5,222 | ||||||||||||||
Obligations of states and political subdivisions | 22,092 | 405 | 1,211 | 23 | 23,303 | 428 | ||||||||||||||
Total temporarily impaired securities | $ | 211,499 | $ | 6,234 | $ | 14,316 | $ | 1,288 | $ | 225,815 | $ | 7,522 | ||||||||
Loans_Tables
Loans (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
Schedule of loans by primary loan portfolio segment | ' | ||||||||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 550,487 | $ | 510,739 | |||||||||||||||||||
Construction and development, excluding undeveloped land | 93,964 | 99,719 | |||||||||||||||||||||
Undeveloped land | 27,177 | 29,871 | |||||||||||||||||||||
Real estate mortgage | 1,085,537 | 1,046,823 | |||||||||||||||||||||
Consumer | 28,155 | 34,198 | |||||||||||||||||||||
Total loans | $ | 1,785,320 | $ | 1,721,350 | |||||||||||||||||||
Schedule of the balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ||||||||||||||||||||||
Type of loan | |||||||||||||||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
(in thousands) | and | undeveloped | Undeveloped | Real estate | |||||||||||||||||||
September 30, 2014 | industrial | land | land | mortgage | Consumer | Total | |||||||||||||||||
Loans | $ | 550,487 | $ | 93,964 | $ | 27,177 | $ | 1,085,537 | $ | 28,155 | $ | 1,785,320 | |||||||||||
Loans individually evaluated for impairment | $ | 8,778 | $ | 516 | $ | 6,722 | $ | 4,207 | $ | 78 | $ | 20,301 | |||||||||||
Loans collectively evaluated for impairment | $ | 541,626 | $ | 92,835 | $ | 20,455 | $ | 1,080,853 | $ | 28,065 | $ | 1,763,834 | |||||||||||
Loans acquired with deteriorated credit quality | $ | 83 | $ | 613 | $ | — | $ | 477 | $ | 12 | $ | 1,185 | |||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
and | undeveloped | Undeveloped | Real estate | ||||||||||||||||||||
industrial | land | land | mortgage | Consumer | Unallocated | Total | |||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||
At December 31, 2013 | $ | 7,644 | $ | 2,555 | $ | 5,376 | $ | 12,604 | $ | 343 | $ | — | $ | 28,522 | |||||||||
Provision (credit) | 1,897 | (1,011 | ) | (4,294 | ) | 2,963 | 45 | — | (400 | ) | |||||||||||||
Charge-offs | (582 | ) | — | (30 | ) | (810 | ) | (400 | ) | — | (1,822 | ) | |||||||||||
Recoveries | 211 | — | 166 | 98 | 349 | — | 824 | ||||||||||||||||
At September 30, 2014 | $ | 9,170 | $ | 1,544 | $ | 1,218 | $ | 14,855 | $ | 337 | $ | — | $ | 27,124 | |||||||||
Allowance for loans individually evaluated for impairment | $ | 1,559 | $ | 90 | $ | — | $ | 432 | $ | 78 | $ | — | $ | 2,159 | |||||||||
Allowance for loans collectively evaluated for impairment | $ | 7,611 | $ | 1,454 | $ | 1,218 | $ | 14,423 | $ | 259 | $ | — | $ | 24,965 | |||||||||
Balance: loans acquired with deteriorated credit quality | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Type of loan | |||||||||||||||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
(in thousands) | and | undeveloped | Undeveloped | Real estate | |||||||||||||||||||
December 31, 2013 | industrial | land | land | mortgage | Consumer | Total | |||||||||||||||||
Loans | $ | 510,739 | $ | 99,719 | $ | 29,871 | $ | 1,046,823 | $ | 34,198 | $ | 1,721,350 | |||||||||||
Loans individually evaluated for impairment | $ | 7,579 | $ | 26 | $ | 7,340 | $ | 7,478 | $ | 84 | $ | 22,507 | |||||||||||
Loans collectively evaluated for impairment | $ | 502,535 | $ | 98,428 | $ | 22,531 | $ | 1,038,824 | $ | 34,095 | $ | 1,696,413 | |||||||||||
Loans acquired with deteriorated credit quality | $ | 625 | $ | 1,265 | $ | — | $ | 521 | $ | 19 | $ | 2,430 | |||||||||||
Construction | |||||||||||||||||||||||
and development | |||||||||||||||||||||||
Commercial | excluding | ||||||||||||||||||||||
and | undeveloped | Undeveloped | Real estate | ||||||||||||||||||||
industrial | land | land | mortgage | Consumer | Unallocated | Total | |||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||
At December 31, 2012 | $ | 5,949 | $ | 1,638 | $ | 2,898 | $ | 14,288 | $ | 362 | $ | 6,746 | $ | 31,881 | |||||||||
Provision | 1,583 | 779 | 10,358 | 490 | 86 | (6,746 | ) | 6,550 | |||||||||||||||
Charge-offs | (457 | ) | (25 | ) | (7,961 | ) | (2,758 | ) | (763 | ) | — | (11,964 | ) | ||||||||||
Recoveries | 569 | 163 | 81 | 584 | 658 | — | 2,055 | ||||||||||||||||
At December 31, 2013 | $ | 7,644 | $ | 2,555 | $ | 5,376 | $ | 12,604 | $ | 343 | $ | — | $ | 28,522 | |||||||||
Allowance for loans individually evaluated for impairment | $ | 762 | $ | — | $ | — | $ | 606 | $ | 84 | $ | — | $ | 1,452 | |||||||||
Allowance for loans collectively evaluated for impairment | $ | 6,882 | $ | 2,555 | $ | 5,376 | $ | 11,998 | $ | 259 | $ | — | $ | 27,070 | |||||||||
Balance: loans acquired with deteriorated credit quality | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Schedule of changes in the interest component of the fair value adjustment for acquired impaired loans | ' | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||||
Additions due to Oldham acquisition | 174 | ||||||||||||||||||||||
Accretion | (37 | ) | |||||||||||||||||||||
Reclassifications from (to) non-accretable difference | — | ||||||||||||||||||||||
Disposals | — | ||||||||||||||||||||||
Balance at December 31, 2013 | 137 | ||||||||||||||||||||||
Accretion | (61 | ) | |||||||||||||||||||||
Reclassifications from (to) non-accretable difference | — | ||||||||||||||||||||||
Disposals | — | ||||||||||||||||||||||
Balance at September 30, 2014 | $ | 76 | |||||||||||||||||||||
Schedule of loans individually evaluated for impairment | ' | ||||||||||||||||||||||
Unpaid | Average | ||||||||||||||||||||||
(in thousands) | Recorded | principal | Related | recorded | |||||||||||||||||||
September 30, 2014 | investment | balance | allowance | investment | |||||||||||||||||||
Loans with no related allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 617 | $ | 761 | $ | — | $ | 1,021 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 26 | |||||||||||||||||||
Undeveloped land | 6,722 | 8,785 | — | 7,010 | |||||||||||||||||||
Real estate mortgage | 2,308 | 2,773 | — | 3,048 | |||||||||||||||||||
Consumer | — | — | — | — | |||||||||||||||||||
Subtotal | 9,673 | 12,470 | — | 11,105 | |||||||||||||||||||
Loans with an allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 8,161 | $ | 8,636 | $ | 1,559 | $ | 6,911 | |||||||||||||||
Construction and development, excluding undeveloped land | 490 | 490 | 90 | 123 | |||||||||||||||||||
Undeveloped land | — | — | — | — | |||||||||||||||||||
Real estate mortgage | 1,899 | 1,899 | 432 | 2,264 | |||||||||||||||||||
Consumer | 78 | 78 | 78 | 81 | |||||||||||||||||||
Subtotal | 10,628 | 11,103 | 2,159 | 9,379 | |||||||||||||||||||
Total | |||||||||||||||||||||||
Commercial and industrial | $ | 8,778 | $ | 9,397 | $ | 1,559 | $ | 7,932 | |||||||||||||||
Construction and development, excluding undeveloped land | 516 | 641 | 90 | 149 | |||||||||||||||||||
Undeveloped land | 6,722 | 8,785 | — | 7,010 | |||||||||||||||||||
Real estate mortgage | 4,207 | 4,672 | 432 | 5,312 | |||||||||||||||||||
Consumer | 78 | 78 | 78 | 81 | |||||||||||||||||||
Total | $ | 20,301 | $ | 23,573 | $ | 2,159 | $ | 20,484 | |||||||||||||||
Unpaid | Average | ||||||||||||||||||||||
(in thousands) | Recorded | principal | Related | recorded | |||||||||||||||||||
December 31, 2013 | investment | balance | allowance | investment | |||||||||||||||||||
Loans with no related allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 830 | $ | 974 | $ | — | $ | 4,499 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 54 | |||||||||||||||||||
Undeveloped land | 7,340 | 9,932 | — | 3,272 | |||||||||||||||||||
Real estate mortgage | 3,731 | 5,069 | — | 5,559 | |||||||||||||||||||
Consumer | — | — | — | 3 | |||||||||||||||||||
Subtotal | 11,927 | 16,126 | — | 13,387 | |||||||||||||||||||
Loans with an allowance recorded | |||||||||||||||||||||||
Commercial and industrial | $ | 6,749 | $ | 6,749 | $ | 762 | $ | 3,806 | |||||||||||||||
Construction and development, excluding undeveloped land | — | — | — | 259 | |||||||||||||||||||
Undeveloped land | — | — | — | 7,152 | |||||||||||||||||||
Real estate mortgage | 3,747 | 4,065 | 606 | 3,705 | |||||||||||||||||||
Consumer | 84 | 84 | 84 | 34 | |||||||||||||||||||
Subtotal | 10,580 | 10,898 | 1,452 | 14,956 | |||||||||||||||||||
Total | |||||||||||||||||||||||
Commercial and industrial | $ | 7,579 | $ | 7,723 | $ | 762 | $ | 8,305 | |||||||||||||||
Construction and development, excluding undeveloped land | 26 | 151 | — | 313 | |||||||||||||||||||
Undeveloped land | 7,340 | 9,932 | — | 10,424 | |||||||||||||||||||
Real estate mortgage | 7,478 | 9,134 | 606 | 9,264 | |||||||||||||||||||
Consumer | 84 | 84 | 84 | 37 | |||||||||||||||||||
Total | $ | 22,507 | $ | 27,024 | $ | 1,452 | $ | 28,343 | |||||||||||||||
Schedule of recorded investment in non-accrual loans | ' | ||||||||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||||||||
Commercial and industrial | $ | 2,825 | $ | 846 | |||||||||||||||||||
Construction and development, excluding undeveloped land | 516 | 26 | |||||||||||||||||||||
Undeveloped land | 6,722 | 7,340 | |||||||||||||||||||||
Real estate mortgage | 3,782 | 7,046 | |||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||
Total | $ | 13,845 | $ | 15,258 | |||||||||||||||||||
Schedule of the recorded investment in loans modified and classified as TDR | ' | ||||||||||||||||||||||
(dollars in thousands) | Number of | Recorded | |||||||||||||||||||||
September 30, 2013 | contracts | investment | |||||||||||||||||||||
Commercial & industrial | 1 | $ | 796 | ||||||||||||||||||||
Consumer | 1 | 86 | |||||||||||||||||||||
Total | 2 | $ | 882 | ||||||||||||||||||||
Schedule of the recorded investment in loans accounted for as TDR that were restructured and experienced a payment default | ' | ||||||||||||||||||||||
(dollars in thousands) | Number of | Recorded | |||||||||||||||||||||
September 30, 2013 | contracts | investment | |||||||||||||||||||||
Real estate mortgage | 2 | $ | 2,426 | ||||||||||||||||||||
Total | 2 | $ | 2,426 | ||||||||||||||||||||
Schedule of aging of loans | ' | ||||||||||||||||||||||
Greater | |||||||||||||||||||||||
than | Recorded | ||||||||||||||||||||||
90 days | investment | ||||||||||||||||||||||
past due | > 90 days | ||||||||||||||||||||||
30-59 days | 60-89 days | (includes | Total | Total | and | ||||||||||||||||||
(in thousands) | past due | past due | non-accrual) | past due | Current | loans | accruing | ||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Commercial and industrial | $ | 85 | $ | 276 | $ | 2,827 | $ | 3,188 | $ | 547,299 | $ | 550,487 | $ | 2 | |||||||||
Construction and development, excluding undeveloped land | — | 242 | 516 | 758 | 93,206 | 93,964 | — | ||||||||||||||||
Undeveloped land | 87 | — | 6,722 | 6,809 | 20,368 | 27,177 | — | ||||||||||||||||
Real estate mortgage | 3,514 | 730 | 3,986 | 8,230 | 1,077,307 | 1,085,537 | 205 | ||||||||||||||||
Consumer | 702 | 18 | — | 720 | 27,435 | 28,155 | — | ||||||||||||||||
Total | $ | 4,388 | $ | 1,266 | $ | 14,051 | $ | 19,705 | $ | 1,765,615 | $ | 1,785,320 | $ | 207 | |||||||||
December 31, 2013 | |||||||||||||||||||||||
Commercial and industrial | $ | 808 | $ | 201 | $ | 1,268 | $ | 2,277 | $ | 508,462 | $ | 510,739 | $ | 421 | |||||||||
Construction and development, excluding undeveloped land | 429 | — | 26 | 455 | 99,264 | 99,719 | — | ||||||||||||||||
Undeveloped land | — | — | 7,340 | 7,340 | 22,531 | 29,871 | — | ||||||||||||||||
Real estate mortgage | 4,529 | 1,180 | 7,062 | 12,771 | 1,034,052 | 1,046,823 | 16 | ||||||||||||||||
Consumer | 110 | — | — | 110 | 34,088 | 34,198 | — | ||||||||||||||||
Total | $ | 5,876 | $ | 1,381 | $ | 15,696 | $ | 22,953 | $ | 1,698,397 | $ | 1,721,350 | $ | 437 | |||||||||
Schedule of credit risk profile by internally assigned grade | ' | ||||||||||||||||||||||
(in thousands) | Commercial | Construction | Undeveloped | Real estate | Consumer | Total | |||||||||||||||||
and industrial | and | land | mortgage | ||||||||||||||||||||
development, | |||||||||||||||||||||||
excluding | |||||||||||||||||||||||
undeveloped | |||||||||||||||||||||||
land | |||||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Grade | |||||||||||||||||||||||
Pass | $ | 525,362 | $ | 82,319 | $ | 19,761 | $ | 1,065,631 | $ | 27,999 | $ | 1,721,072 | |||||||||||
Special mention | 6,039 | 5,137 | 533 | 12,679 | 78 | 24,466 | |||||||||||||||||
Substandard | 10,306 | 5,992 | 161 | 2,816 | — | 19,275 | |||||||||||||||||
Substandard non-performing | 8,780 | 516 | 6,722 | 4,411 | 78 | 20,507 | |||||||||||||||||
Doubtful | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 550,487 | $ | 93,964 | $ | 27,177 | $ | 1,085,537 | $ | 28,155 | $ | 1,785,320 | |||||||||||
December 31, 2013 | |||||||||||||||||||||||
Grade | |||||||||||||||||||||||
Pass | $ | 486,140 | $ | 87,896 | $ | 22,366 | $ | 1,014,216 | $ | 34,028 | $ | 1,644,646 | |||||||||||
Special mention | 12,983 | 7,091 | — | 17,916 | 86 | 38,076 | |||||||||||||||||
Substandard | 3,616 | 4,706 | 165 | 7,197 | — | 15,684 | |||||||||||||||||
Substandard non-performing | 8,000 | 26 | 7,340 | 7,494 | 84 | 22,944 | |||||||||||||||||
Doubtful | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 510,739 | $ | 99,719 | $ | 29,871 | $ | 1,046,823 | $ | 34,198 | $ | 1,721,350 | |||||||||||
Federal_Home_Loan_Bank_Advance1
Federal Home Loan Bank Advances (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Federal Home Loan Bank Advances | ' | |||||||||||
Summary of the contractual maturities and average effective rates of outstanding advances | ' | |||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||
(In thousands) | Advance | Fixed rate | Advance | Fixed rate | ||||||||
2014 | $ | 10,000 | 0.21 | % | $ | 10,000 | 0.21 | % | ||||
2015 | 20,000 | 3.34 | % | 20,000 | 3.34 | % | ||||||
2020 | 1,896 | 2.23 | % | 1,931 | 2.23 | % | ||||||
2021 | 514 | 2.12 | % | 564 | 2.12 | % | ||||||
2024 | 3,113 | 2.36 | % | 408 | 2.40 | % | ||||||
2028 | 1,396 | 1.47 | % | 1,426 | 1.46 | % | ||||||
$ | 36,919 | 2.26 | % | $ | 34,329 | 2.26 | % | |||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Undesignated | ' | ||||||||||||||
Derivative financial instruments | ' | ||||||||||||||
Schedule of outstanding interest rate swap contracts | ' | ||||||||||||||
Receiving | Paying | ||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||
(dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Notional amount | $ | 7,381 | $ | 5,159 | $ | 7,381 | $ | 5,159 | |||||||
Weighted average maturity (years) | 7 | 6.4 | 7 | 6.4 | |||||||||||
Fair value | $ | (337 | ) | $ | (275 | ) | $ | 337 | $ | 275 | |||||
Designated as hedges | ' | ||||||||||||||
Derivative financial instruments | ' | ||||||||||||||
Schedule of outstanding interest rate swap contracts | ' | ||||||||||||||
The following table details Bancorp’s derivative position designated as a cash flow hedge, and the fair values as of September 30, 2014 and December 31, 2013: | |||||||||||||||
(dollars in thousands) | |||||||||||||||
Notional | Maturity | Receive (variable) | Pay fixed | Fair value | Fair value | ||||||||||
amount | date | index | swap rate | September 30, 2014 | December 31, 2013 | ||||||||||
$ | 10,000 | 12/6/16 | US$3 Month LIBOR | 0.715 | % | $ | 40 | $ | 24 | ||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Schedule of changes in net carrying amount of MSRs | ' | |||||||
For nine months | ||||||||
ended September 30, | ||||||||
(in thousands) | 2014 | 2013 | ||||||
Balance at beginning of period | $ | 1,832 | $ | 2,088 | ||||
Additions for mortgage loans sold | 197 | 682 | ||||||
Amortization | (713 | ) | (755 | ) | ||||
Balance at September 30 | $ | 1,316 | $ | 2,015 | ||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
Schedule of stock-based compensation expense, within salaries and employee benefits | ' | |||||||||||||||||
For three months ended | For nine months ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock-based compensation expense before income taxes | $ | 691 | $ | 488 | $ | 1,459 | $ | 1,473 | ||||||||||
Less: deferred tax benefit | (242 | ) | (171 | ) | (510 | ) | (516 | ) | ||||||||||
Reduction of net income | $ | 449 | $ | 317 | $ | 949 | $ | 957 | ||||||||||
Schedule of assumptions used in SAR valuations | ' | |||||||||||||||||
2014 | 2013 | |||||||||||||||||
Dividend yield | 2.94 | % | 2.80 | % | ||||||||||||||
Expected volatility | 23.66 | % | 22.54 | % | ||||||||||||||
Risk free interest rate | 2.22 | % | 1.26 | % | ||||||||||||||
Expected life of SARs | 7.0 years | 6.6 years | ||||||||||||||||
Schedule of stock option and SARs activity and related information | ' | |||||||||||||||||
Weighted | ||||||||||||||||||
Weighted | Aggregate | Weighted | average | |||||||||||||||
Options | average | intrinsic | average | remaining | ||||||||||||||
and SARs | Exercise | exercise | value | fair | contractual | |||||||||||||
(in thousands) | price | price | (in thousands) | value | life (in years) | |||||||||||||
At December 31, 2013 | ||||||||||||||||||
Vested and exercisable | 579 | $ | 20.25-26.83 | $ | 23.83 | $ | 4,685 | $ | 5.43 | 3.4 | ||||||||
Unvested | 218 | 21.03-24.87 | 22.7 | 2,011 | 4.36 | 7.7 | ||||||||||||
Total outstanding | 797 | 20.25-26.83 | 23.52 | 6,696 | 5.14 | 4.6 | ||||||||||||
Granted | 62 | 29.05-29.16 | 29.05 | 65 | 5.37 | |||||||||||||
Exercised | (89 | ) | 20.25-26.83 | 22.94 | 656 | 5.23 | ||||||||||||
Forfeited | (6 | ) | 21.03-23.76 | 22.78 | 46 | 4.43 | ||||||||||||
At September 30, 2014 | ||||||||||||||||||
Vested and exercisable | 570 | 20.90-26.83 | 23.79 | 3,601 | 5.35 | 3.5 | ||||||||||||
Unvested | 194 | 21.03-29.16 | 24.83 | 1,022 | 4.57 | 8 | ||||||||||||
Total outstanding | 764 | 20.90-29.16 | 24.05 | $ | 4,623 | 5.15 | 4.6 | |||||||||||
Vested year-to-date | 80 | $ | 21.03-24.87 | $ | 22.49 | $ | 611 | $ | 4.63 | |||||||||
Schedule of restricted common stock activity | ' | |||||||||||||||||
Grant date | ||||||||||||||||||
weighted- | ||||||||||||||||||
Number | average cost | |||||||||||||||||
Unvested at December 31, 2012 | 113,910 | $ | 22.55 | |||||||||||||||
Shares awarded | 55,275 | 22.93 | ||||||||||||||||
Restrictions lapsed and shares released to employees/directors | (39,909 | ) | 22.29 | |||||||||||||||
Shares forfeited | (4,720 | ) | 23.45 | |||||||||||||||
Unvested at December 31, 2013 | 124,556 | $ | 22.77 | |||||||||||||||
Shares awarded | 39,730 | 29.12 | ||||||||||||||||
Restrictions lapsed and shares released to employees/directors | (44,724 | ) | 22.69 | |||||||||||||||
Shares forfeited | (3,164 | ) | 23.29 | |||||||||||||||
Unvested at September 30, 2014 | 116,398 | $ | 24.95 | |||||||||||||||
Schedule of PSU grants | ' | |||||||||||||||||
Fair | ||||||||||||||||||
Vesting | value at | Expected | ||||||||||||||||
Grant | period | grant | shares to | |||||||||||||||
year | in years | date | be awarded | |||||||||||||||
2012 | 3 | 20.57 | 28,079 | |||||||||||||||
2013 | 3 | 20.38 | 36,792 | |||||||||||||||
2014 | 3 | 26.42 | 16,675 | |||||||||||||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Net Income Per Share | ' | |||||||||||||
Schedule of net income (the numerator) and average shares outstanding (the denominator) for the basic and diluted net income per share computations | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30 | September 30 | |||||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 9,889 | $ | 7,682 | $ | 26,100 | $ | 20,857 | ||||||
Average shares outstanding | 14,574 | 14,408 | 14,542 | 14,144 | ||||||||||
Dilutive securities | 174 | 148 | 190 | 84 | ||||||||||
Average shares outstanding including dilutive securities | 14,748 | 14,556 | 14,732 | 14,228 | ||||||||||
Net income per share, basic | $ | 0.68 | $ | 0.53 | $ | 1.79 | $ | 1.47 | ||||||
Net income per share, diluted | $ | 0.67 | $ | 0.53 | $ | 1.77 | $ | 1.47 | ||||||
Segments_Tables
Segments (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Segments | ' | ||||||||||
Summary of selected financial information by business segment | ' | ||||||||||
Investment | |||||||||||
Commercial | management | ||||||||||
(in thousands) | banking | and trust | Total | ||||||||
Three months ended September 30, 2014 | |||||||||||
Net interest income | $ | 21,317 | $ | 46 | $ | 21,363 | |||||
(Credit) provision for loan losses | (2,100 | ) | — | (2,100 | ) | ||||||
Investment management and trust services | — | 4,502 | 4,502 | ||||||||
All other non-interest income | 5,348 | — | 5,348 | ||||||||
Non-interest expense | 15,971 | 2,738 | 18,709 | ||||||||
Income before income taxes | 12,794 | 1,810 | 14,604 | ||||||||
Tax expense | 4,071 | 644 | 4,715 | ||||||||
Net income | $ | 8,723 | $ | 1,166 | $ | 9,889 | |||||
Three months ended September 30, 2013 | |||||||||||
Net interest income | $ | 19,978 | $ | 39 | $ | 20,017 | |||||
Provision for loan losses | 1,325 | — | 1,325 | ||||||||
Investment management and trust services | — | 4,017 | 4,017 | ||||||||
All other non-interest income | 5,621 | 14 | 5,635 | ||||||||
Non-interest expense | 15,215 | 2,356 | 17,571 | ||||||||
Income before income taxes | 9,059 | 1,714 | 10,773 | ||||||||
Tax expense | 2,485 | 606 | 3,091 | ||||||||
Net income | $ | 6,574 | $ | 1,108 | $ | 7,682 | |||||
Investment | |||||||||||
Commercial | management | ||||||||||
(in thousands) | banking | and trust | Total | ||||||||
Nine months ended September 30, 2014 | |||||||||||
Net interest income | $ | 62,110 | $ | 136 | $ | 62,246 | |||||
(Credit) provision for loan losses | (400 | ) | — | (400 | ) | ||||||
Investment management and trust services | — | 13,825 | 13,825 | ||||||||
All other non-interest income | 15,527 | 30 | 15,557 | ||||||||
Non-interest expense | 46,036 | 7,918 | 53,954 | ||||||||
Income before income taxes | 32,001 | 6,073 | 38,074 | ||||||||
Tax expense | 9,814 | 2,160 | 11,974 | ||||||||
Net income | $ | 22,187 | $ | 3,913 | $ | 26,100 | |||||
Nine months ended September 30, 2013 | |||||||||||
Net interest income | $ | 57,347 | $ | 108 | $ | 57,455 | |||||
Provision for loan losses | 4,975 | — | 4,975 | ||||||||
Investment management and trust services | — | 12,032 | 12,032 | ||||||||
All other non-interest income | 17,114 | 45 | 17,159 | ||||||||
Non-interest expense | 45,176 | 6,796 | 51,972 | ||||||||
Income before income taxes | 24,310 | 5,389 | 29,699 | ||||||||
Tax expense | 6,938 | 1,904 | 8,842 | ||||||||
Net income | $ | 17,372 | $ | 3,485 | $ | 20,857 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Income Taxes | ' | |||||
Schedule of analysis of the difference between the statutory and effective tax rates from operations | ' | |||||
Nine months ended September 30 | ||||||
2014 | 2013 | |||||
U.S. federal statutory tax rate | 35 | % | 35 | % | ||
Tax exempt interest income | (1.5 | ) | (2.0 | ) | ||
Tax credits | (1.5 | ) | (2.2 | ) | ||
Cash surrender value of life insurance | (1.3 | ) | (1.8 | ) | ||
State income taxes | 0.9 | 0.7 | ||||
Other, net | (0.2 | ) | 0.1 | |||
Effective tax rate | 31.4 | % | 29.8 | % | ||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Schedule of the carrying values of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
Fair value at September 30, 2014 | |||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||||
Investment securities available-for-sale | |||||||||||||||||
Government sponsored enterprise obligations | $ | 205,405 | $ | — | $ | 205,405 | $ | — | |||||||||
Mortgage-backed securities - government agencies | 179,850 | — | 179,850 | — | |||||||||||||
Obligations of states and political subdivisions | 63,359 | — | 63,359 | — | |||||||||||||
Corporate equity securities | 958 | 958 | — | — | |||||||||||||
Total investment securities available-for-sale | 449,572 | 958 | 448,614 | — | |||||||||||||
Interest rate swaps | 377 | — | 377 | — | |||||||||||||
Total assets | $ | 449,949 | $ | 958 | $ | 448,991 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Interest rate swaps | $ | 337 | $ | — | $ | 337 | $ | — | |||||||||
Fair value at December 31, 2013 | |||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||||
Investment securities available-for-sale | |||||||||||||||||
U.S. Treasury and other U.S. government obligations | $ | 110,000 | $ | — | $ | 110,000 | $ | — | |||||||||
Government sponsored enterprise obligations | 137,845 | — | 137,845 | — | |||||||||||||
Mortgage-backed securities - government agencies | 172,693 | — | 172,693 | — | |||||||||||||
Obligations of states and political subdivisions | 69,493 | — | 69,493 | — | |||||||||||||
Total investment securities available for sale | 490,031 | — | 490,031 | — | |||||||||||||
Interest rate swaps | 299 | — | 299 | — | |||||||||||||
Total assets | $ | 490,330 | $ | — | $ | 490,330 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Interest rate swaps | $ | 275 | $ | — | $ | 275 | $ | — | |||||||||
Schedule of the carrying values of assets measured at fair value on a non-recurring basis | ' | ||||||||||||||||
Losses for 9 month | |||||||||||||||||
Fair value at September 30, 2014 | period ended | ||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | September 30, 2014 | ||||||||||||
Impaired loans | $ | 8,470 | $ | — | $ | — | $ | 8,470 | $ | (1,148 | ) | ||||||
Losses for 9 month | |||||||||||||||||
Fair value at December 31, 2013 | period ended | ||||||||||||||||
(in thousands) | Total | Level 1 | Level 2 | Level 3 | September 30, 2013 | ||||||||||||
Impaired loans | $ | 9,128 | $ | — | $ | — | $ | 9,128 | $ | (1,181 | ) | ||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Schedule of carrying amounts, estimated fair values, and placement in the fair value hierarchy of Bancorp's financial instruments | ' | ||||||||||||||||
(in thousands) | Carrying | ||||||||||||||||
September 30, 2014 | Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial assets | |||||||||||||||||
Cash and short-term investments | $ | 69,567 | $ | 69,567 | $ | 69,567 | $ | — | $ | — | |||||||
Mortgage loans held for sale | 4,069 | 4,239 | — | 4,239 | — | ||||||||||||
Federal Home Loan Bank stock and other securities | 6,347 | 6,347 | — | 6,347 | — | ||||||||||||
Loans, net | 1,758,196 | 1,767,171 | — | — | 1,767,171 | ||||||||||||
Accrued interest receivable | 5,629 | 5,629 | 5,629 | — | — | ||||||||||||
Financial liabilities | |||||||||||||||||
Deposits | $ | 2,007,821 | $ | 2,008,818 | $ | — | $ | 2,008,818 | $ | — | |||||||
Short-term borrowings | 83,251 | 83,251 | — | 83,251 | — | ||||||||||||
FHLB advances | 36,919 | 37,481 | — | 37,481 | — | ||||||||||||
Accrued interest payable | 128 | 128 | 128 | — | — | ||||||||||||
(in thousands) | Carrying | ||||||||||||||||
December 31, 2013 | Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial assets | |||||||||||||||||
Cash and short-term investments | $ | 70,770 | $ | 70,770 | $ | 70,770 | $ | — | $ | — | |||||||
Mortgage loans held for sale | 1,757 | 1,817 | — | 1,817 | — | ||||||||||||
Federal Home Loan Bank stock and other securities | 7,347 | 7,347 | — | 7,347 | — | ||||||||||||
Loans, net | 1,692,828 | 1,703,291 | — | — | 1,703,291 | ||||||||||||
Accrued interest receivable | 5,712 | 5,712 | 5,712 | — | — | ||||||||||||
Financial liabilities | |||||||||||||||||
Deposits | $ | 1,980,937 | $ | 1,983,029 | $ | — | $ | 1,983,029 | $ | — | |||||||
Short-term borrowings | 117,910 | 117,910 | — | 117,910 | — | ||||||||||||
FHLB advances | 34,329 | 35,166 | — | 35,166 | — | ||||||||||||
Accrued interest payable | 128 | 128 | 128 | — | — | ||||||||||||
Regulatory_Matters_Tables
Regulatory Matters (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Regulatory Matters | ' | ||||||||||||||||
Schedule of the risk based capital amounts and ratios | ' | ||||||||||||||||
Actual | Minimum for adequately | Minimum for well | |||||||||||||||
capitalized | capitalized | ||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
September 30, 2014 | |||||||||||||||||
Total risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 272,796 | 13.92 | % | $ | 156,779 | 8.00 | % | NA | NA | |||||||
Bank | 264,784 | 13.53 | % | 156,561 | 8.00 | % | $ | 195,701 | 10.00 | % | |||||||
Tier I risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 248,264 | 12.67 | % | $ | 78,379 | 4.00 | % | NA | NA | |||||||
Bank | 240,287 | 12.28 | % | 78,269 | 4.00 | % | $ | 117,404 | 6.00 | % | |||||||
Leverage (2) | |||||||||||||||||
Consolidated | $ | 248,264 | 10.38 | % | $ | 71,753 | 3.00 | % | NA | NA | |||||||
Bank | 240,287 | 10.07 | % | 71,585 | 3.00 | % | $ | 119,308 | 5.00 | % | |||||||
December 31, 2013 | |||||||||||||||||
Total risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 252,171 | 13.54 | % | $ | 148,993 | 8.00 | % | NA | NA | |||||||
Bank | 239,577 | 12.90 | % | 148,575 | 8.00 | % | $ | 185,719 | 10.00 | % | |||||||
Tier I risk-based capital (1) | |||||||||||||||||
Consolidated | $ | 228,827 | 12.29 | % | $ | 74,476 | 4.00 | % | NA | NA | |||||||
Bank | 219,299 | 11.65 | % | 75,296 | 4.00 | % | $ | 112,944 | 6.00 | % | |||||||
Leverage (2) | |||||||||||||||||
Consolidated | $ | 228,827 | 9.75 | % | $ | 70,408 | 3.00 | % | NA | NA | |||||||
Bank | 219,299 | 9.24 | % | 71,201 | 3.00 | % | $ | 118,668 | 5.00 | % | |||||||
-1 | Ratio is computed in relation to risk-weighted assets. | ||||||||||||||||
-2 | Ratio is computed in relation to average assets. | ||||||||||||||||
NA – Not applicable. Regulatory framework does not define well capitalized for holding companies. | |||||||||||||||||
Acquisition_Details
Acquisition (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Apr. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Apr. 30, 2013 |
Oldham | Oldham | Oldham | Oldham | ||
Core deposit | Core deposit | ||||
Acquisition | ' | ' | ' | ' | ' |
Percentage of outstanding shares acquired | ' | 100.00% | ' | ' | ' |
Purchase price: | ' | ' | ' | ' | ' |
Cash | ' | $8,297 | ' | ' | ' |
Equity instruments (531,288 common shares of Bancorp) | ' | 12,198 | ' | ' | ' |
Total purchase price | ' | 20,495 | ' | ' | ' |
Common stock converted (in shares) | ' | 531,288 | ' | ' | ' |
Identifiable assets: | ' | ' | ' | ' | ' |
Cash and federal funds sold | ' | 17,260 | ' | ' | ' |
Investment securities | ' | 81,827 | ' | ' | ' |
Loans | ' | 39,755 | ' | ' | ' |
Premises and equipment | ' | 4,008 | ' | ' | ' |
Core deposit intangible | ' | ' | ' | 1,900 | 2,543 |
Other assets | ' | 605 | ' | ' | ' |
Total identifiable assets: | ' | 145,998 | ' | ' | ' |
Identifiable liabilities: | ' | ' | ' | ' | ' |
Deposits | ' | 120,435 | ' | ' | ' |
Securities sold under agreement to repurchase | ' | 2,762 | ' | ' | ' |
Other liabilities | ' | 1,857 | ' | ' | ' |
Total identifiable liabilities | ' | 125,054 | ' | ' | ' |
Net gain resulting from acquisition | 449 | 449 | ' | ' | ' |
Acquisition costs (included in other non-interest expenses in Bancorp's income statement for the nine months ended September 30, 2013) | $1,548 | ' | $1,548 | ' | ' |
Acquisition_Details_2
Acquisition (Details 2) (Oldham, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Acquired loans | ' |
Contractually required principal and interest at acquisition | $41,048 |
Contractual cash flows not expected to be collected | -1,095 |
Expected cash flows at acquisition | 39,953 |
Interest component of expected cash flows | -198 |
Basis in acquired loans at acquisition - estimated fair value | 39,755 |
Acquired impaired loans | ' |
Acquired loans | ' |
Contractually required principal and interest at acquisition | 3,285 |
Contractual cash flows not expected to be collected | -372 |
Expected cash flows at acquisition | 2,913 |
Interest component of expected cash flows | -174 |
Basis in acquired loans at acquisition - estimated fair value | 2,739 |
Acquired non-impaired loans | ' |
Acquired loans | ' |
Contractually required principal and interest at acquisition | 37,763 |
Contractual cash flows not expected to be collected | -723 |
Expected cash flows at acquisition | 37,040 |
Interest component of expected cash flows | -24 |
Basis in acquired loans at acquisition - estimated fair value | $37,016 |
Securities_Details
Securities (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | $448,254 | ' | $493,066 |
Unrealized gains | ' | ' | 4,924 | ' | 4,487 |
Unrealized losses | ' | ' | 3,606 | ' | 7,522 |
Total securities available-for-sale, fair value | ' | ' | 449,572 | ' | 490,031 |
Securities available-for-sale sold | 7,700 | 696 | 7,732 | 701 | ' |
Loss on available-for-sale securities sold | 9 | 5 | ' | ' | ' |
Held to maturity securities | ' | ' | 0 | ' | 0 |
U.S. Treasury and other U.S. government obligations | ' | ' | ' | ' | ' |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | ' | ' | 110,000 |
Total securities available-for-sale, fair value | ' | ' | ' | ' | 110,000 |
Government sponsored enterprise obligations | ' | ' | ' | ' | ' |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | 204,992 | ' | 138,094 |
Unrealized gains | ' | ' | 1,535 | ' | 1,623 |
Unrealized losses | ' | ' | 1,122 | ' | 1,872 |
Total securities available-for-sale, fair value | ' | ' | 205,405 | ' | 137,845 |
Mortgage-backed securities - government agencies | ' | ' | ' | ' | ' |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | 180,890 | ' | 176,524 |
Unrealized gains | ' | ' | 1,379 | ' | 1,391 |
Unrealized losses | ' | ' | 2,419 | ' | 5,222 |
Total securities available-for-sale, fair value | ' | ' | 179,850 | ' | 172,693 |
Obligations of states and political subdivisions | ' | ' | ' | ' | ' |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | 61,616 | ' | 68,448 |
Unrealized gains | ' | ' | 1,808 | ' | 1,473 |
Unrealized losses | ' | ' | 65 | ' | 428 |
Total securities available-for-sale, fair value | ' | ' | 63,359 | ' | 69,493 |
Common stock | ' | ' | ' | ' | ' |
Securities available for sale | ' | ' | ' | ' | ' |
Securities available for sale, amortized cost | ' | ' | 756 | ' | ' |
Unrealized gains | ' | ' | 202 | ' | ' |
Total securities available-for-sale, fair value | ' | ' | $958 | ' | ' |
Securities_Details_2
Securities (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Securities available for sale, Amortized cost | ' | ' |
Due within 1 year | $52,895,000 | ' |
Due after 1 but within 5 years | 131,963,000 | ' |
Due after 5 but within 10 years | 23,117,000 | ' |
Due after 10 years | 58,633,000 | ' |
Mortgage-backed securities | 180,890,000 | ' |
Corporate equity securities | 756,000 | ' |
Total securities available-for-sale | 448,254,000 | 493,066,000 |
Securities available for sale, Fair value | ' | ' |
Due within 1 year | 53,174,000 | ' |
Due after 1 but within 5 years | 133,441,000 | ' |
Due after 5 but within 10 years | 23,695,000 | ' |
Due after 10 years | 58,454,000 | ' |
Mortgage-backed securities | 179,850,000 | ' |
Corporate equity securities | 958,000 | ' |
Total securities available-for-sale, fair value | 449,572,000 | 490,031,000 |
Carrying value of securities pledged to secure accounts of commercial depositors | $209,200,000 | $243,500,000 |
Securities_Details_3
Securities (Details 3) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | item | item |
Fair value | ' | ' |
Less than 12 months | $92,097 | $211,499 |
12 months or more | 85,039 | 14,316 |
Total | 177,136 | 225,815 |
Unrealized losses | ' | ' |
Less than 12 months | 620 | 6,234 |
12 months or more | 2,986 | 1,288 |
Total | 3,606 | 7,522 |
Number of securities | 73 | 155 |
Federal Home Loan Bank stock and other securities | 6,347 | 7,347 |
Government sponsored enterprise obligations | ' | ' |
Fair value | ' | ' |
Less than 12 months | 45,050 | 76,755 |
12 months or more | 33,565 | 4,353 |
Total | 78,615 | 81,108 |
Unrealized losses | ' | ' |
Less than 12 months | 163 | 1,429 |
12 months or more | 959 | 443 |
Total | 1,122 | 1,872 |
Mortgage-backed securities - government agencies | ' | ' |
Fair value | ' | ' |
Less than 12 months | 45,123 | 112,652 |
12 months or more | 45,133 | 8,752 |
Total | 90,256 | 121,404 |
Unrealized losses | ' | ' |
Less than 12 months | 445 | 4,400 |
12 months or more | 1,974 | 822 |
Total | 2,419 | 5,222 |
Obligations of states and political subdivisions | ' | ' |
Fair value | ' | ' |
Less than 12 months | 1,924 | 22,092 |
12 months or more | 6,341 | 1,211 |
Total | 8,265 | 23,303 |
Unrealized losses | ' | ' |
Less than 12 months | 12 | 405 |
12 months or more | 53 | 23 |
Total | 65 | 428 |
CRA investments | ' | ' |
Unrealized losses | ' | ' |
Federal Home Loan Bank stock and other securities | ' | $1,000 |
Loans_Details
Loans (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Composition of loans by primary loan classification | ' | ' |
Loans | $1,785,320 | $1,721,350 |
Commercial and industrial | ' | ' |
Composition of loans by primary loan classification | ' | ' |
Loans | 550,487 | 510,739 |
Construction and development excluding undeveloped land | ' | ' |
Composition of loans by primary loan classification | ' | ' |
Loans | 93,964 | 99,719 |
Undeveloped land | ' | ' |
Composition of loans by primary loan classification | ' | ' |
Loans | 27,177 | 29,871 |
Real estate mortgage | ' | ' |
Composition of loans by primary loan classification | ' | ' |
Loans | 1,085,537 | 1,046,823 |
Consumer | ' | ' |
Composition of loans by primary loan classification | ' | ' |
Loans | $28,155 | $34,198 |
Loans_Details_2
Loans (Details 2) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | $1,785,320 | $1,721,350 |
Loans individually evaluated for impairment | 20,301 | 22,507 |
Loans collectively evaluated for impairment | 1,763,834 | 1,696,413 |
Loans acquired with deteriorated credit quality | 1,185 | 2,430 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 28,522 | 31,881 |
Provision (credit) | -400 | 6,550 |
Charge-offs | -1,822 | -11,964 |
Recoveries | 824 | 2,055 |
Balance at the end of the period | 27,124 | 28,522 |
Allowance for loans individually evaluated for impairment | 2,159 | 1,452 |
Allowance for loans collectively evaluated for impairment | 24,965 | 27,070 |
Commercial and industrial | ' | ' |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | 550,487 | 510,739 |
Loans individually evaluated for impairment | 8,778 | 7,579 |
Loans collectively evaluated for impairment | 541,626 | 502,535 |
Loans acquired with deteriorated credit quality | 83 | 625 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 7,644 | 5,949 |
Provision (credit) | 1,897 | 1,583 |
Charge-offs | -582 | -457 |
Recoveries | 211 | 569 |
Balance at the end of the period | 9,170 | 7,644 |
Allowance for loans individually evaluated for impairment | 1,559 | 762 |
Allowance for loans collectively evaluated for impairment | 7,611 | 6,882 |
Construction and development excluding undeveloped land | ' | ' |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | 93,964 | 99,719 |
Loans individually evaluated for impairment | 516 | 26 |
Loans collectively evaluated for impairment | 92,835 | 98,428 |
Loans acquired with deteriorated credit quality | 613 | 1,265 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 2,555 | 1,638 |
Provision (credit) | -1,011 | 779 |
Charge-offs | ' | -25 |
Recoveries | ' | 163 |
Balance at the end of the period | 1,544 | 2,555 |
Allowance for loans individually evaluated for impairment | 90 | ' |
Allowance for loans collectively evaluated for impairment | 1,454 | 2,555 |
Undeveloped land | ' | ' |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | 27,177 | 29,871 |
Loans individually evaluated for impairment | 6,722 | 7,340 |
Loans collectively evaluated for impairment | 20,455 | 22,531 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 5,376 | 2,898 |
Provision (credit) | -4,294 | 10,358 |
Charge-offs | -30 | -7,961 |
Recoveries | 166 | 81 |
Balance at the end of the period | 1,218 | 5,376 |
Allowance for loans collectively evaluated for impairment | 1,218 | 5,376 |
Real estate mortgage | ' | ' |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | 1,085,537 | 1,046,823 |
Loans individually evaluated for impairment | 4,207 | 7,478 |
Loans collectively evaluated for impairment | 1,080,853 | 1,038,824 |
Loans acquired with deteriorated credit quality | 477 | 521 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 12,604 | 14,288 |
Provision (credit) | 2,963 | 490 |
Charge-offs | -810 | -2,758 |
Recoveries | 98 | 584 |
Balance at the end of the period | 14,855 | 12,604 |
Allowance for loans individually evaluated for impairment | 432 | 606 |
Allowance for loans collectively evaluated for impairment | 14,423 | 11,998 |
Consumer | ' | ' |
Balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment method | ' | ' |
Loans | 28,155 | 34,198 |
Loans individually evaluated for impairment | 78 | 84 |
Loans collectively evaluated for impairment | 28,065 | 34,095 |
Loans acquired with deteriorated credit quality | 12 | 19 |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | 343 | 362 |
Provision (credit) | 45 | 86 |
Charge-offs | -400 | -763 |
Recoveries | 349 | 658 |
Balance at the end of the period | 337 | 343 |
Allowance for loans individually evaluated for impairment | 78 | 84 |
Allowance for loans collectively evaluated for impairment | 259 | 259 |
Unallocated | ' | ' |
Allowance for loan losses | ' | ' |
Balance at the beginning of the period | ' | 6,746 |
Provision (credit) | ' | ($6,746) |
Loans_Details_3
Loans (Details 3) (Acquired impaired loans, USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Changes in the interest component of the fair value adjustment for acquired impaired loans | ' | ' |
Balance at the beginning of period | $137 | ' |
Accretion | -61 | -37 |
Balance at the end of period | 76 | 137 |
Oldham | ' | ' |
Changes in the interest component of the fair value adjustment for acquired impaired loans | ' | ' |
Additions due to acquisition | ' | $174 |
Loans_Details_4
Loans (Details 4) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Recorded investment | ' | ' |
Loans with no related allowance recorded | $9,673 | $11,927 |
Loans with an allowance recorded | 10,628 | 10,580 |
Total | 20,301 | 22,507 |
Unpaid principal balance | ' | ' |
Loans with no related allowance recorded | 12,470 | 16,126 |
Loans with an allowance recorded | 11,103 | 10,898 |
Total | 23,573 | 27,024 |
Related allowance | 2,159 | 1,452 |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | 11,105 | 13,387 |
Loans with an allowance recorded | 9,379 | 14,956 |
Total | 20,484 | 28,343 |
Additional disclosure | ' | ' |
Loans past due more than 90 days or more and still accruing interest | 207 | 437 |
Recorded investment in non-accrual loans | 13,845 | 15,258 |
Commercial and industrial | ' | ' |
Recorded investment | ' | ' |
Loans with no related allowance recorded | 617 | 830 |
Loans with an allowance recorded | 8,161 | 6,749 |
Total | 8,778 | 7,579 |
Unpaid principal balance | ' | ' |
Loans with no related allowance recorded | 761 | 974 |
Loans with an allowance recorded | 8,636 | 6,749 |
Total | 9,397 | 7,723 |
Related allowance | 1,559 | 762 |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | 1,021 | 4,499 |
Loans with an allowance recorded | 6,911 | 3,806 |
Total | 7,932 | 8,305 |
Additional disclosure | ' | ' |
Loans past due more than 90 days or more and still accruing interest | 2 | 421 |
Recorded investment in non-accrual loans | 2,825 | 846 |
Construction and development excluding undeveloped land | ' | ' |
Recorded investment | ' | ' |
Loans with no related allowance recorded | 26 | 26 |
Loans with an allowance recorded | 490 | ' |
Total | 516 | 26 |
Unpaid principal balance | ' | ' |
Loans with no related allowance recorded | 151 | 151 |
Loans with an allowance recorded | 490 | ' |
Total | 641 | 151 |
Related allowance | 90 | ' |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | 26 | 54 |
Loans with an allowance recorded | 123 | 259 |
Total | 149 | 313 |
Additional disclosure | ' | ' |
Recorded investment in non-accrual loans | 516 | 26 |
Undeveloped land | ' | ' |
Recorded investment | ' | ' |
Loans with no related allowance recorded | 6,722 | 7,340 |
Total | 6,722 | 7,340 |
Unpaid principal balance | ' | ' |
Loans with no related allowance recorded | 8,785 | 9,932 |
Total | 8,785 | 9,932 |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | 7,010 | 3,272 |
Loans with an allowance recorded | ' | 7,152 |
Total | 7,010 | 10,424 |
Additional disclosure | ' | ' |
Recorded investment in non-accrual loans | 6,722 | 7,340 |
Real estate mortgage | ' | ' |
Recorded investment | ' | ' |
Loans with no related allowance recorded | 2,308 | 3,731 |
Loans with an allowance recorded | 1,899 | 3,747 |
Total | 4,207 | 7,478 |
Unpaid principal balance | ' | ' |
Loans with no related allowance recorded | 2,773 | 5,069 |
Loans with an allowance recorded | 1,899 | 4,065 |
Total | 4,672 | 9,134 |
Related allowance | 432 | 606 |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | 3,048 | 5,559 |
Loans with an allowance recorded | 2,264 | 3,705 |
Total | 5,312 | 9,264 |
Additional disclosure | ' | ' |
Loans past due more than 90 days or more and still accruing interest | 205 | 16 |
Recorded investment in non-accrual loans | 3,782 | 7,046 |
Consumer | ' | ' |
Recorded investment | ' | ' |
Loans with an allowance recorded | 78 | 84 |
Total | 78 | 84 |
Unpaid principal balance | ' | ' |
Loans with an allowance recorded | 78 | 84 |
Total | 78 | 84 |
Related allowance | 78 | 84 |
Average recorded investment | ' | ' |
Loans with no related allowance recorded | ' | 3 |
Loans with an allowance recorded | 81 | 34 |
Total | $81 | $37 |
Loans_Details_5
Loans (Details 5) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
item | |||
Recorded investment in loans modified and classified as TDRs | ' | ' | ' |
Number of contracts | 2 | ' | ' |
Loans classified as TDR | $882 | $6,500 | $7,200 |
Recorded investment in loans accounted for as TDR that were restructured and experienced a payment default | ' | ' | ' |
Number of contracts | 2 | ' | ' |
Recorded Investment | 2,426 | ' | ' |
Total related allowance allocation for TDRs individually evaluated for impairment | ' | 706 | 942 |
Outstanding commitments to lend additional funds to borrowers with loans classified as troubled debt restructurings | ' | ' | 262 |
Commercial and industrial | ' | ' | ' |
Recorded investment in loans modified and classified as TDRs | ' | ' | ' |
Number of contracts | 1 | ' | ' |
Loans classified as TDR | 796 | ' | ' |
Real estate mortgage | ' | ' | ' |
Recorded investment in loans accounted for as TDR that were restructured and experienced a payment default | ' | ' | ' |
Number of contracts | 2 | ' | ' |
Recorded Investment | 2,426 | ' | ' |
Consumer | ' | ' | ' |
Recorded investment in loans modified and classified as TDRs | ' | ' | ' |
Number of contracts | 1 | ' | ' |
Loans classified as TDR | $86 | ' | ' |
Loans_Details_6
Loans (Details 6) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | $4,388 | $5,876 |
60-89 days past due | 1,266 | 1,381 |
Greater than 90 days past due (includes non-accrual) | 14,051 | 15,696 |
Total past due | 19,705 | 22,953 |
Current | 1,765,615 | 1,698,397 |
Total loans | 1,785,320 | 1,721,350 |
Recorded investment greater than 90 days and accruing | 207 | 437 |
Commercial and industrial | ' | ' |
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | 85 | 808 |
60-89 days past due | 276 | 201 |
Greater than 90 days past due (includes non-accrual) | 2,827 | 1,268 |
Total past due | 3,188 | 2,277 |
Current | 547,299 | 508,462 |
Total loans | 550,487 | 510,739 |
Recorded investment greater than 90 days and accruing | 2 | 421 |
Construction and development excluding undeveloped land | ' | ' |
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | ' | 429 |
60-89 days past due | 242 | ' |
Greater than 90 days past due (includes non-accrual) | 516 | 26 |
Total past due | 758 | 455 |
Current | 93,206 | 99,264 |
Total loans | 93,964 | 99,719 |
Undeveloped land | ' | ' |
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | 87 | ' |
Greater than 90 days past due (includes non-accrual) | 6,722 | 7,340 |
Total past due | 6,809 | 7,340 |
Current | 20,368 | 22,531 |
Total loans | 27,177 | 29,871 |
Real estate mortgage | ' | ' |
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | 3,514 | 4,529 |
60-89 days past due | 730 | 1,180 |
Greater than 90 days past due (includes non-accrual) | 3,986 | 7,062 |
Total past due | 8,230 | 12,771 |
Current | 1,077,307 | 1,034,052 |
Total loans | 1,085,537 | 1,046,823 |
Recorded investment greater than 90 days and accruing | 205 | 16 |
Consumer | ' | ' |
Aging of the recorded investment in past due loans | ' | ' |
30-59 days past due | 702 | 110 |
60-89 days past due | 18 | ' |
Total past due | 720 | 110 |
Current | 27,435 | 34,088 |
Total loans | $28,155 | $34,198 |
Loans_Details_7
Loans (Details 7) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Credit risk profile by internally assigned grade | ' | ' |
Loans | $1,785,320 | $1,721,350 |
Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 1,721,072 | 1,644,646 |
Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 24,466 | 38,076 |
Substandard | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 19,275 | 15,684 |
Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 20,507 | 22,944 |
Commercial and industrial | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 550,487 | 510,739 |
Commercial and industrial | Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 525,362 | 486,140 |
Commercial and industrial | Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 6,039 | 12,983 |
Commercial and industrial | Substandard | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 10,306 | 3,616 |
Commercial and industrial | Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 8,780 | 8,000 |
Construction and development excluding undeveloped land | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 93,964 | 99,719 |
Construction and development excluding undeveloped land | Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 82,319 | 87,896 |
Construction and development excluding undeveloped land | Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 5,137 | 7,091 |
Construction and development excluding undeveloped land | Substandard | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 5,992 | 4,706 |
Construction and development excluding undeveloped land | Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 516 | 26 |
Undeveloped land | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 27,177 | 29,871 |
Undeveloped land | Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 19,761 | 22,366 |
Undeveloped land | Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 533 | ' |
Undeveloped land | Substandard | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 161 | 165 |
Undeveloped land | Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 6,722 | 7,340 |
Real estate mortgage | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 1,085,537 | 1,046,823 |
Real estate mortgage | Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 1,065,631 | 1,014,216 |
Real estate mortgage | Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 12,679 | 17,916 |
Real estate mortgage | Substandard | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 2,816 | 7,197 |
Real estate mortgage | Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 4,411 | 7,494 |
Consumer | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 28,155 | 34,198 |
Consumer | Pass | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 27,999 | 34,028 |
Consumer | Special mention | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | 78 | 86 |
Consumer | Substandard non-performing | ' | ' |
Credit risk profile by internally assigned grade | ' | ' |
Loans | $78 | $84 |
Federal_Home_Loan_Bank_Advance2
Federal Home Loan Bank Advances (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
item | ||
Federal Home Loan Bank Advances | ' | ' |
Federal Home Loan Bank advances | $36,919,000 | $34,329,000 |
Separate advances | 7 | ' |
Number of separate advances with principal amount due at maturity | 2 | ' |
Amount of separate advances with principal amount due at maturity | 30,000,000 | ' |
Amount of remaining advances with principal paid monthly | 6,900,000 | ' |
Advance | ' | ' |
2014 | 10,000,000 | 10,000,000 |
2015 | 20,000,000 | 20,000,000 |
2020 | 1,896,000 | 1,931,000 |
2021 | 514,000 | 564,000 |
2024 | 3,113,000 | 408,000 |
2028 | 1,396,000 | 1,426,000 |
Total | 36,919,000 | 34,329,000 |
Rate (as a percent) | ' | ' |
2014 | 0.21% | 0.21% |
2015 | 3.34% | 3.34% |
2020 | 2.23% | 2.23% |
2021 | 2.12% | 2.12% |
2024 | 2.36% | 2.40% |
2028 | 1.47% | 1.46% |
Total | 2.26% | 2.26% |
Amount of available credit from the FHLB | $422,900,000 | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (Undesignated, USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Receiving | ' | ' |
Derivative financial instruments | ' | ' |
Notional amount | $7,381 | $5,159 |
Weighted average maturity | '7 years | '6 years 4 months 24 days |
Fair value | -337 | -275 |
Paying | ' | ' |
Derivative financial instruments | ' | ' |
Notional amount | 7,381 | 5,159 |
Weighted average maturity | '7 years | '6 years 4 months 24 days |
Fair value | $337 | $275 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 2) (Designated as hedges, USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Interest rate swap | ' | ' |
Derivative financial instruments | ' | ' |
Notional amount | 10,000 | 10,000 |
Fair value of asset | 40 | 24 |
Receiving | London Interbank Offered Rate (LIBOR) [Member] | ' | ' |
Derivative financial instruments | ' | ' |
Receive (variable) index | 'US$B 3B MonthB LIBOR | 'US$B 3B MonthB LIBOR |
Paying | ' | ' |
Derivative financial instruments | ' | ' |
Pay fixed swap rate (as a percent) | 0.72% | 0.72% |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (Indiana bank, Commercial banking, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Indiana bank | Commercial banking | ' |
Goodwill and Intangible Assets | ' |
Goodwill | $682 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 9 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 30, 2013 | |
Oldham | Oldham | Oldham | ||||
Core deposit | Core deposit | |||||
Goodwill and Intangible Assets | ' | ' | ' | ' | ' | ' |
Intangible assets recorded on acquisition | ' | ' | ' | ' | $1,900,000 | $2,543,000 |
Amortization period of intangible assets | ' | ' | ' | '15 years | '10 years | ' |
Unamortized intangible | ' | ' | ' | ' | 1,900,000 | ' |
Estimated fair value of MSRs | 3,500,000 | ' | 4,000,000 | ' | ' | ' |
Total outstanding principal balances of loans serviced for others | 427,200,000 | ' | 435,300,000 | ' | ' | ' |
Changes in net carrying amount of finite-lived intangible MSRs | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | 1,832,000 | 2,088,000 | ' | ' | ' | ' |
Additions for mortgage loans sold | 197,000 | 682,000 | ' | ' | ' | ' |
Amortization | -713,000 | -755,000 | ' | ' | ' | ' |
Balance at end of period | $1,316,000 | $2,015,000 | ' | ' | ' | ' |
Defined_Benefit_Retirement_Pla1
Defined Benefit Retirement Plan (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
item | ||||
Defined Benefit Retirement Plan | ' | ' | ' | ' |
Number of officers for whom unfunded, non-qualified, defined benefit retirement plan is sponsored | ' | ' | 4 | ' |
Number of current officers for whom unfunded, non-qualified, defined benefit retirement plan is sponsored | ' | ' | 2 | ' |
Number of retired officers for whom unfunded, non-qualified, defined benefit retirement plan is sponsored | ' | ' | 2 | ' |
Benefits vesting period | ' | ' | '25 years | ' |
Net periodic benefits costs, which include interest cost and amortization of net losses | $32 | $36 | $95 | $107 |
Commitments_and_Contingent_Lia1
Commitments and Contingent Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
In Millions, unless otherwise specified | Commitments to extend credit and standby letters of credit | Commitments to extend credit and standby letters of credit | Standby letters of credit | Standby letters of credit | Standby letters of credit | Standby letters of credit | Agreements to guarantee performance of customers contracts | Agreements to guarantee performance of customers contracts | Agreements to guarantee performance of customers contracts |
Minimum | Maximum | Minimum | Maximum | ||||||
Commitments and contingent liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
The amount of commitments made by the entity | $479.40 | $464.20 | $11.70 | $15.20 | ' | ' | ' | ' | ' |
Term of the guarantee agreements | ' | ' | ' | ' | '1 year | '2 years | ' | '1 month | '22 months |
Maximum potential future payments | ' | ' | ' | ' | ' | ' | 4.4 | ' | ' |
Expected payment required in an event of default on all contracts | ' | ' | ' | ' | ' | ' | $2.90 | ' | ' |
Preferred_Stock_Details
Preferred Stock (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Preferred Stock | ' | ' |
Preferred stock, par value (in dollars per share) | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2010 | Dec. 31, 2005 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Sep. 30, 2014 | |
plan | plan | Options and SARs | Options and SARs | Restricted stock | Restricted stock | PSUs | PSUs | PSUs | Restricted stock units (RSUs) | Restricted stock units (RSUs) | |||||
Executive Officer | Executive Officer | Executive Officer | Directors | Directors | |||||||||||
Stock-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock-based compensation plans | 1 | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares reserved under the plan | ' | ' | ' | ' | ' | 735,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of additional shares authorized under the plan | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares available for future awards | 449,428 | ' | 449,428 | ' | ' | ' | ' | ' | ' | ' | 16,675 | 36,792 | 28,079 | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Award vesting limit per year (as a percent) | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Period after grant date after which the award expires | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options granted since 2007 | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | '3 years | '3 years | '3 years | ' | '1 year |
Performance period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Shares awarded (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 39,730 | 55,275 | ' | ' | ' | 3,920 | ' |
Stock-based compensation expense before income taxes | 691,000 | 488,000 | 1,459,000 | 1,473,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less: deferred tax benefit | -242,000 | -171,000 | -510,000 | -516,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction of net income | 449,000 | 317,000 | 949,000 | 957,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional expected stock-based compensation expense | ' | ' | 499,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized stock-based compensation expense | 3,700,000 | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of recognition of stock-based compensation expense | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount received from exercise of options | ' | ' | $1,400,000 | $1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions used in SAR/Option valuations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | ' | ' | ' | 2.94% | 2.80% | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | ' | ' | ' | 23.66% | 22.54% | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 2.22% | 1.26% | ' | ' | ' | ' | ' | ' | ' |
Expected life of awards | ' | ' | ' | ' | ' | ' | '7 years | '6 years 7 months 6 days | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Vested and exercisable | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $20.90 | $20.25 |
Vested and exercisable | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $26.83 | $26.83 |
Unvested | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $21.03 | $21.03 |
Unvested | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $29.16 | $24.87 |
Outstanding | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $20.90 | $20.25 |
Outstanding | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $29.16 | $26.83 |
Granted | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $29.05 | ' |
Granted | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $29.16 | ' |
Exercised | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $20.25 | ' |
Exercised | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $26.83 | ' |
Forfeited | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $21.03 | ' |
Forfeited | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $23.76 | ' |
Vested year-to-date | Minimum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $21.03 | ' |
Vested year-to-date | Maximum | ' | ' |
Exercise price per share | ' | ' |
Exercise price per share (in dollars per share) | $24.87 | ' |
Options and SARs | ' | ' |
Options and SARs | ' | ' |
Vested and exercisable at the beginning of the period (in shares) | 579 | ' |
Unvested at the beginning of the period (in shares) | 218 | ' |
Total outstanding at the beginning of the period (in shares) | 797 | ' |
Granted (in shares) | 62 | ' |
Exercised (in shares) | -89 | ' |
Forfeited (in shares) | -6 | ' |
Vested and exercisable at the end of the period (in shares) | 570 | 579 |
Unvested at the end of the period (in shares) | 194 | 218 |
Total outstanding at the end of the period (in shares) | 764 | 797 |
Vested year-to-date (in shares) | 80 | ' |
Weighted average exercise price | ' | ' |
Vested and exercisable at the beginning of the period (in dollars per share) | $23.83 | ' |
Unvested at the beginning of the period (in dollars per share) | $22.70 | ' |
Total outstanding at the beginning of the period (in dollars per share) | $23.52 | ' |
Granted (in dollars per share) | $29.05 | ' |
Exercised (in dollars per share) | $22.94 | ' |
Forfeited (in dollars per share) | $22.78 | ' |
Vested and exercisable at the end of the period (in dollars per share) | $23.79 | $23.83 |
Unvested at the end of the period (in dollars per share) | $24.83 | $22.70 |
Total outstanding at the end of the period (in dollars per share) | $24.05 | $23.52 |
Vested during year (in dollars per share) | $22.49 | ' |
Aggregate intrinsic value | ' | ' |
Vested and exercisable at the beginning of the period (in dollars) | $4,685 | ' |
Unvested at the beginning of the period (in dollars) | 2,011 | ' |
Total outstanding at the beginning of the period (in dollars) | 6,696 | ' |
Granted (in dollars) | 65 | ' |
Exercised (in dollars) | 656 | ' |
Forfeited (in dollars) | 46 | ' |
Vested and exercisable at the end of the period (in dollars) | 3,601 | 4,685 |
Unvested at the end of the period (in dollars) | 1,022 | 2,011 |
Total outstanding at the end of the period (in dollars) | 4,623 | 6,696 |
Vested during year (in dollars) | $611 | ' |
Weighted average fair value | ' | ' |
Vested and exercisable at the beginning of the period (in dollars per share) | $5.43 | ' |
Unvested at the beginning of the period (in dollars per share) | $4.36 | ' |
Total outstanding at the beginning of the period (in dollars per share) | $5.14 | ' |
Granted (in dollars per share) | $5.37 | ' |
Exercised (in dollars per share) | $5.23 | ' |
Forfeited (in dollars per share) | $4.43 | ' |
Vested and exercisable at the end of the period (in dollars per share) | $5.35 | $5.43 |
Unvested at the end of the period (in dollars per share) | $4.57 | $4.36 |
Total outstanding at the end of the period (in dollars per share) | $5.15 | $5.14 |
Vested during year (in dollars per share) | $4.63 | ' |
Weighted average remaining contractual life | ' | ' |
Vested and exercisable | '3 years 6 months | '3 years 4 months 24 days |
Unvested | '8 years | '7 years 8 months 12 days |
Total outstanding | '4 years 7 months 6 days | '4 years 7 months 6 days |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (Restricted stock, USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Restricted stock | ' | ' |
Number | ' | ' |
Unvested at the beginning of the period (in shares) | 124,556 | 113,910 |
Shares awarded (in shares) | 39,730 | 55,275 |
Restrictions lapsed and shares released to employees/directors (in shares) | -44,724 | -39,909 |
Shares forfeited (in shares) | -3,164 | -4,720 |
Unvested at the end of the period (in shares) | 116,398 | 124,556 |
Grant date weighted-average cost | ' | ' |
Unvested at the beginning of the period (in dollars per share) | $22.77 | $22.55 |
Shares awarded (in dollars per share) | $29.12 | $22.93 |
Restrictions lapsed and shares released to employees/directors (in dollars per share) | $22.69 | $22.29 |
Shares forfeited (in dollars per share) | $23.29 | $23.45 |
Unvested at the end of the period (in dollars per share) | $24.95 | $22.77 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock-based compensation | ' | ' | ' |
Expected shares to be awarded | 449,428 | ' | ' |
PSUs | Executive Officer | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Performance period | '3 years | ' | ' |
Vesting period | '3 years | '3 years | '3 years |
Fair value at grant date (in dollars per share) | $26.42 | $20.38 | $20.57 |
Expected shares to be awarded | 16,675 | 36,792 | 28,079 |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net Income Per Share | ' | ' | ' | ' |
Net income | $9,889 | $7,682 | $26,100 | $20,857 |
Average shares outstanding | 14,574 | 14,408 | 14,542 | 14,144 |
Dilutive securities (in shares) | 174 | 148 | 190 | 84 |
Average shares outstanding including dilutive securities | 14,748 | 14,556 | 14,732 | 14,228 |
Net income per share, basic (in dollars per share) | $0.68 | $0.53 | $1.79 | $1.47 |
Net income per share, diluted (in dollars per share) | $0.67 | $0.53 | $1.77 | $1.47 |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Selected financial information by business segment | ' | ' | ' | ' |
Net interest income | $21,363 | $20,017 | $62,246 | $57,455 |
(Credit) provision for loan losses | -2,100 | 1,325 | -400 | 4,975 |
Investment management and trust services | 4,502 | 4,017 | 13,825 | 12,032 |
All other non-interest income | 5,348 | 5,635 | 15,557 | 17,159 |
Non-interest expense | 18,709 | 17,571 | 53,954 | 51,972 |
Income before income taxes | 14,604 | 10,773 | 38,074 | 29,699 |
Tax expense | 4,715 | 3,091 | 11,974 | 8,842 |
Net income | 9,889 | 7,682 | 26,100 | 20,857 |
Commercial banking | ' | ' | ' | ' |
Selected financial information by business segment | ' | ' | ' | ' |
Net interest income | 21,317 | 19,978 | 62,110 | 57,347 |
(Credit) provision for loan losses | -2,100 | 1,325 | -400 | 4,975 |
All other non-interest income | 5,348 | 5,621 | 15,527 | 17,114 |
Non-interest expense | 15,971 | 15,215 | 46,036 | 45,176 |
Income before income taxes | 12,794 | 9,059 | 32,001 | 24,310 |
Tax expense | 4,071 | 2,485 | 9,814 | 6,938 |
Net income | 8,723 | 6,574 | 22,187 | 17,372 |
Investment management and trust | ' | ' | ' | ' |
Selected financial information by business segment | ' | ' | ' | ' |
Net interest income | 46 | 39 | 136 | 108 |
Investment management and trust services | 4,502 | 4,017 | 13,825 | 12,032 |
All other non-interest income | ' | 14 | 30 | 45 |
Non-interest expense | 2,738 | 2,356 | 7,918 | 6,796 |
Income before income taxes | 1,810 | 1,714 | 6,073 | 5,389 |
Tax expense | 644 | 606 | 2,160 | 1,904 |
Net income | $1,166 | $1,108 | $3,913 | $3,485 |
Income_Taxes_Details
Income Taxes (Details) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Analysis of the difference between the statutory and effective tax rates from operations | ' | ' |
U.S. federal statutory tax rate (as a percent) | 35.00% | 35.00% |
Tax exempt interest income (as a percent) | -1.50% | -2.00% |
Tax credits (as a percent) | -1.50% | -2.20% |
Cash surrender value of life insurance (as a percent) | -1.30% | -1.80% |
State income taxes (as a percent) | 0.90% | 0.70% |
Other, net (as a percent) | -0.20% | 0.10% |
Effective tax rate (as a percent) | 31.40% | 29.80% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Taxes | ' | ' |
Gross amount of unrecognized tax benefits | $37 | $41 |
Amount accrued for the potential payment of interest and penalties | $2 | $2 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
U.S. Treasury and other U.S. government obligations | Government sponsored enterprise obligations | Government sponsored enterprise obligations | Mortgage-backed securities - government agencies | Mortgage-backed securities - government agencies | Obligations of states and political subdivisions | Obligations of states and political subdivisions | Common stock | Mortgage Servicing Rights (MSR) | Mortgage Servicing Rights (MSR) | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Non-recurring basis | Non-recurring basis | Non-recurring basis | Non-recurring basis | Non-recurring basis | Non-recurring basis | |||
Fair value | Fair value | Level 1 | Level 2 | Level 2 | U.S. Treasury and other U.S. government obligations | U.S. Treasury and other U.S. government obligations | Government sponsored enterprise obligations | Government sponsored enterprise obligations | Government sponsored enterprise obligations | Government sponsored enterprise obligations | Mortgage-backed securities - government agencies | Mortgage-backed securities - government agencies | Mortgage-backed securities - government agencies | Mortgage-backed securities - government agencies | Obligations of states and political subdivisions | Obligations of states and political subdivisions | Obligations of states and political subdivisions | Obligations of states and political subdivisions | Common stock | Common stock | Fair value | Fair value | Level 3 | Level 3 | |||||||||||||||
Fair value | Level 2 | Fair value | Fair value | Level 2 | Level 2 | Fair value | Fair value | Level 2 | Level 2 | Fair value | Fair value | Level 2 | Level 2 | Fair value | Level 1 | ||||||||||||||||||||||||
Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment securities available for sale | $449,572,000 | $490,031,000 | $110,000,000 | $205,405,000 | $137,845,000 | $179,850,000 | $172,693,000 | $63,359,000 | $69,493,000 | $958,000 | ' | ' | $449,572,000 | $490,031,000 | $958,000 | $448,614,000 | $490,031,000 | $110,000,000 | $110,000,000 | $205,405,000 | $137,845,000 | $205,405,000 | $137,845,000 | $179,850,000 | $172,693,000 | $179,850,000 | $172,693,000 | $63,359,000 | $69,493,000 | $63,359,000 | $69,493,000 | $958,000 | $958,000 | ' | ' | ' | ' | ' | ' |
Interest rate swaps | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 377,000 | 299,000 | ' | 377,000 | 299,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 449,949,000 | 490,330,000 | 958,000 | 448,991,000 | 490,330,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate swaps | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 337,000 | 275,000 | ' | 337,000 | 275,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other real estate owned | 2,800,000 | 5,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impaired loans with a valuation allowance | 10,628,000 | 10,580,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of valuation allowance | 2,159,000 | 1,452,000 | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impaired loans | 8,500,000 | 9,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,470,000 | 9,128,000 | 8,470,000 | 9,128,000 |
Losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,148,000 | -1,181,000 | ' | ' | ' | ' |
Level 1 to Level 2 transfer, assets | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Level 2 to Level 1 transfer, assets | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Level 1 to Level 2 transfer, liabilities | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Level 2 to Level 1 transfer, liabilities | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfers into/out of Level 3, assets | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfers into/out of Level 3, liabilities | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets | ' | ' |
Accrued interest receivable | $5,629 | $5,712 |
Financial liabilities | ' | ' |
Accrued interest payable | 128 | 128 |
Level 1 | ' | ' |
Financial assets | ' | ' |
Cash and short-term investments | 69,567 | 70,770 |
Accrued interest receivable | 5,629 | 5,712 |
Financial liabilities | ' | ' |
Accrued interest payable | 128 | 128 |
Level 2 | ' | ' |
Financial assets | ' | ' |
Mortgage loans held for sale | 4,239 | 1,817 |
Federal Home Loan Bank stock and other securities | 6,347 | 7,347 |
Financial liabilities | ' | ' |
Deposits | 2,008,818 | 1,983,029 |
Short-term borrowings | 83,251 | 117,910 |
FHLB advances | 37,481 | 35,166 |
Level 3 | ' | ' |
Financial assets | ' | ' |
Loans, net | 1,767,171 | 1,703,291 |
Carrying amount | ' | ' |
Financial assets | ' | ' |
Cash and short-term investments | 69,567 | 70,770 |
Mortgage loans held for sale | 4,069 | 1,757 |
Federal Home Loan Bank stock and other securities | 6,347 | 7,347 |
Loans, net | 1,758,196 | 1,692,828 |
Accrued interest receivable | 5,629 | 5,712 |
Financial liabilities | ' | ' |
Deposits | 2,007,821 | 1,980,937 |
Short-term borrowings | 83,251 | 117,910 |
FHLB advances | 36,919 | 34,329 |
Accrued interest payable | 128 | 128 |
Fair value | ' | ' |
Financial assets | ' | ' |
Cash and short-term investments | 69,567 | 70,770 |
Mortgage loans held for sale | 4,239 | 1,817 |
Federal Home Loan Bank stock and other securities | 6,347 | 7,347 |
Loans, net | 1,767,171 | 1,703,291 |
Accrued interest receivable | 5,629 | 5,712 |
Financial liabilities | ' | ' |
Deposits | 2,008,818 | 1,983,029 |
Short-term borrowings | 83,251 | 117,910 |
FHLB advances | 37,481 | 35,166 |
Accrued interest payable | $128 | $128 |
Regulatory_Matters_Details
Regulatory Matters (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total risk-based capital | ' | ' |
Actual Amount | $272,796 | $252,171 |
Actual Ratio (as a percent) | 13.92% | 13.54% |
Minimum for adequately capitalized Amount | 156,779 | 148,993 |
Minimum for adequately capitalized Ratio (as a percent) | 8.00% | 8.00% |
Tier I risk-based capital | ' | ' |
Actual Amount | 248,264 | 228,827 |
Actual Ratio (as a percent) | 12.67% | 12.29% |
Minimum for adequately capitalized Amount | 78,379 | 74,476 |
Minimum for adequately capitalized Ratio (as a percent) | 4.00% | 4.00% |
Leverage | ' | ' |
Actual Amount | 248,264 | 228,827 |
Actual Ratio (as a percent) | 10.38% | 9.75% |
Minimum for adequately capitalized Amount | 71,753 | 70,408 |
Minimum for adequately capitalized Ratio (as a percent) | 3.00% | 3.00% |
Bank | ' | ' |
Total risk-based capital | ' | ' |
Actual Amount | 264,784 | 239,577 |
Actual Ratio (as a percent) | 13.53% | 12.90% |
Minimum for adequately capitalized Amount | 156,561 | 148,575 |
Minimum for adequately capitalized Ratio (as a percent) | 8.00% | 8.00% |
Minimum for well capitalized Amount | 195,701 | 185,719 |
Minimum for well capitalized Ratio (as a percent) | 10.00% | 10.00% |
Tier I risk-based capital | ' | ' |
Actual Amount | 240,287 | 219,299 |
Actual Ratio (as a percent) | 12.28% | 11.65% |
Minimum for adequately capitalized Amount | 78,269 | 75,296 |
Minimum for adequately capitalized Ratio (as a percent) | 4.00% | 4.00% |
Minimum for well capitalized Amount | 117,404 | 112,944 |
Minimum for well capitalized Ratio (as a percent) | 6.00% | 6.00% |
Leverage | ' | ' |
Actual Amount | 240,287 | 219,299 |
Actual Ratio (as a percent) | 10.07% | 9.24% |
Minimum for adequately capitalized Amount | 71,585 | 71,201 |
Minimum for adequately capitalized Ratio (as a percent) | 3.00% | 3.00% |
Minimum for well capitalized Amount | $119,308 | $118,668 |
Minimum for well capitalized Ratio (as a percent) | 5.00% | 5.00% |