Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 28, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | HERITAGE OAKS BANCORP | |
Entity Central Index Key | 921,547 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
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 | 34,356,179 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and due from banks | $ 22,469 | $ 12,548 |
Interest earning deposits in other banks | 89,801 | 23,032 |
Total cash and cash equivalents | 112,270 | 35,580 |
Investment securities available for sale, at fair value | 432,750 | 355,580 |
Loans held for sale, at lower of cost or fair value | 5,366 | 2,586 |
Gross loans held for investment | 1,206,740 | 1,193,483 |
Net deferred loan fees | (1,056) | (1,445) |
Allowance for loan and lease losses | (17,296) | (16,802) |
Net loans held for investment | 1,188,388 | 1,175,236 |
Premises and equipment, net | 37,686 | 37,820 |
Premises held for sale | 1,910 | 1,978 |
Bank-owned life insurance | 25,191 | 24,711 |
Goodwill | 24,885 | 24,885 |
Deferred tax assets, net | 21,422 | 24,920 |
Federal Home Loan Bank stock | 7,853 | 7,853 |
Other intangible assets | 4,560 | 5,347 |
Other assets | 11,644 | 13,631 |
Total assets | 1,873,925 | 1,710,127 |
Liabilities | ||
Non-interest bearing deposits | 544,782 | 461,479 |
Interest bearing deposits | 1,026,988 | 933,325 |
Total deposits | 1,571,770 | 1,394,804 |
Short term FHLB borrowing | 13,500 | 25,000 |
Long term FHLB borrowing | 65,046 | 70,558 |
Junior subordinated debentures | 10,389 | 13,233 |
Other liabilities | 7,762 | 8,592 |
Total liabilities | 1,668,467 | 1,512,187 |
Shareholders' Equity | ||
Preferred stock, 5,000,000 shares authorized: Series C preferred stock, $3.25 per share stated value; issued and outstanding: 0 shares and 348,697 shares at September 30, 2015, and December 31, 2014, respectively. | 1,056 | |
Common stock, no par value; authorized: 100,000,000 shares; issued and outstanding: 34,352,445 shares and 33,905,060 shares at September 30, 2015 and December 31, 2014, respectively. | 165,452 | 164,196 |
Additional paid in capital | 7,964 | 6,984 |
Retained earnings | 30,774 | 24,772 |
Accumulated other comprehensive income, net of tax of $920 and $677 as of September 30, 2015 and December 31, 2014, respectively. | 1,268 | 932 |
Total shareholders' equity | 205,458 | 197,940 |
Total liabilities and shareholders' equity | $ 1,873,925 | $ 1,710,127 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Preferred stock | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 34,352,445 | 33,905,060 |
Common stock, shares outstanding | 34,352,445 | 33,905,060 |
Accumulated other comprehensive loss, tax expense (in dollars) | $ 920 | $ 677 |
Series C preferred stock | ||
Preferred stock | ||
Preferred stock, per share stated value (in dollars per share) | $ 3.25 | $ 3.25 |
Preferred stock, shares issued | 0 | 348,697 |
Preferred stock, shares outstanding | 0 | 348,697 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Interest Income | ||||
Loans, including fees | $ 14,781 | $ 14,745 | $ 44,454 | $ 41,134 |
Investment securities | 1,864 | 1,946 | 5,193 | 5,355 |
Other interest-earning assets | 312 | 204 | 979 | 535 |
Total interest income | 16,957 | 16,895 | 50,626 | 47,024 |
Interest Expense | ||||
Deposits | 941 | 918 | 2,748 | 2,661 |
Other borrowings | 620 | 406 | 1,742 | 1,158 |
Total interest expense | 1,561 | 1,324 | 4,490 | 3,819 |
Net interest income before provision for loan losses | 15,396 | 15,571 | 46,136 | 43,205 |
Net interest income after provision for loan and lease losses | 15,396 | 15,571 | 46,136 | 43,205 |
Non-Interest Income | ||||
Fees and service charges | 1,219 | 1,410 | 3,639 | 3,949 |
Gain on extinguishment of debt | 552 | 552 | ||
Net gain on sale of mortgage loans | 407 | 411 | 1,277 | 967 |
Gain on sale of investment securities | 136 | 450 | 641 | 549 |
Other mortgage fee income | 92 | 64 | 348 | 223 |
Other income | 400 | 647 | 1,621 | 1,533 |
Total non-interest income | 2,806 | 2,982 | 8,078 | 7,221 |
Non-Interest Expense | ||||
Salaries and employee benefits | 5,598 | 6,164 | 17,643 | 18,121 |
Professional services | 1,688 | 1,776 | 5,023 | 4,989 |
Occupancy and equipment | 2,234 | 1,839 | 5,342 | 3,610 |
Information technology | 611 | 756 | 1,753 | 2,403 |
Regulatory assessments | 298 | 351 | 895 | 862 |
Amortization of intangible assets | 263 | 297 | 787 | 760 |
Loan department expense | 252 | 239 | 798 | 700 |
Sales and marketing | 240 | 232 | 852 | 595 |
Communication costs | 150 | 183 | 435 | 450 |
Merger, restructure and integration | (97) | 748 | (67) | 8,785 |
Other expense | 914 | 797 | 1,932 | 2,132 |
Total non-interest expense | 12,151 | 13,382 | 35,393 | 43,407 |
Income before income taxes | 6,051 | 5,171 | 18,821 | 7,019 |
Income tax expense | 2,049 | 1,742 | 6,950 | 2,406 |
Net income | 4,002 | 3,429 | 11,871 | 4,613 |
Dividends and accretion on preferred stock | 70 | |||
Net income available to common shareholders | $ 4,002 | $ 3,429 | $ 11,801 | $ 4,613 |
Earnings Per Common Share | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.10 | $ 0.35 | $ 0.14 |
Diluted (in dollars per share) | 0.12 | 0.10 | 0.34 | 0.14 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.06 | $ 0.03 | $ 0.17 | $ 0.03 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 4,002 | $ 3,429 | $ 11,871 | $ 4,613 |
Other comprehensive income, net of tax: | ||||
Unrealized holding gains on securities arising during the period | 1,963 | 983 | 1,220 | 6,206 |
Reclassification for net gains on investments included in net income | (136) | (450) | (641) | (549) |
Other comprehensive income, before income tax expense | 1,827 | 533 | 579 | 5,657 |
Income tax expense related to items of other comprehensive income | 768 | 217 | 243 | 2,326 |
Other comprehensive income | 1,059 | 316 | 336 | 3,331 |
Comprehensive income | $ 5,061 | $ 3,745 | $ 12,207 | $ 7,944 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at Dec. 31, 2013 | $ 3,604 | $ 101,511 | $ 6,020 | $ 18,717 | $ (3,425) | $ 126,427 |
Balance (in shares) at Dec. 31, 2013 | 25,397,780 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in MISN Transaction | $ 60,255 | 60,255 | ||||
Issuance of common stock in MISN Transaction (in shares) | 7,541,326 | |||||
Stock issuance costs | (381) | (381) | ||||
Dividends declared ($0.17 and $0.03 per share for period ended September 30, 2015 and 2014 respectively) | (1,027) | (1,027) | ||||
Exercise of stock options | $ 158 | 158 | ||||
Exercise of stock options (in shares) | 44,217 | |||||
Share-based compensation | 723 | 723 | ||||
Tax benefit of share-based compensation | 20 | 20 | ||||
Net issuance of restricted share awards (in shares) | 98,882 | |||||
Net income | 4,613 | 4,613 | ||||
Other comprehensive income | 3,331 | 3,331 | ||||
Balance at Sep. 30, 2014 | 3,604 | $ 161,924 | 6,382 | 22,303 | (94) | $ 194,119 |
Balance (in shares) at Sep. 30, 2014 | 33,082,205 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchases of common stock (in shares) | (55,428) | |||||
Balance at Sep. 30, 2015 | $ 165,452 | 7,964 | 30,774 | 1,268 | $ 205,458 | |
Balance (in shares) at Sep. 30, 2015 | 34,352,445 | |||||
Balance at Dec. 31, 2014 | 1,056 | $ 164,196 | 6,984 | 24,772 | 932 | 197,940 |
Balance (in shares) at Dec. 31, 2014 | 33,905,060 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Dividends declared ($0.17 and $0.03 per share for period ended September 30, 2015 and 2014 respectively) | (5,799) | (5,799) | ||||
Repurchases of common stock | $ (28) | $ (28) | ||||
Repurchases of common stock (in shares) | (3,696) | (3,696) | ||||
Exercise of stock options | $ 228 | $ 228 | ||||
Exercise of stock options (in shares) | 47,554 | |||||
Partial conversion of Series C preferred stock | $ (1,056) | $ 1,056 | 70 | (70) | ||
Partial conversion of Series C preferred stock (in shares) | 348,697 | |||||
Share-based compensation | 814 | 814 | ||||
Tax benefit of share-based compensation | 96 | 96 | ||||
Net issuance of restricted share awards (in shares) | 54,830 | |||||
Net income | 11,871 | 11,871 | ||||
Other comprehensive income | 336 | 336 | ||||
Balance at Sep. 30, 2015 | $ 165,452 | $ 7,964 | $ 30,774 | $ 1,268 | $ 205,458 | |
Balance (in shares) at Sep. 30, 2015 | 34,352,445 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Shareholders' Equity | ||||
Dividends Declared Per Common Share (in dollars per share) | $ 0.06 | $ 0.03 | $ 0.17 | $ 0.03 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Cash Flows from Operating Activities | ||
Net income | $ 11,871 | $ 4,613 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 1,538 | 1,394 |
Write-downs on premises and equipment held for sale | 68 | 988 |
Amortization of premiums / discounts | 4,999 | 3,646 |
Amortization of intangible assets | 787 | 760 |
Accretion of discount on acquired and purchased loans, net | (1,524) | (1,791) |
Share-based compensation expense | 814 | 723 |
Gain on extinguishment of debt | (552) | |
Gain on sale of available for sale securities | (641) | (549) |
Gain on sale of assets | (8) | |
Gain on sale of loans held for sale | (1,277) | (967) |
Originations of loans held for sale | (104,656) | (62,385) |
Proceeds from sale of loans held for sale | 103,153 | 59,761 |
Net increase in bank owned life insurance | (480) | (460) |
Decrease in deferred tax assets | 3,255 | 3,269 |
Tax impact of share-based compensation | (96) | (20) |
Increase in other assets and other liabilities, net | 1,487 | 1,206 |
Net cash provided by operating activities | 18,738 | 10,188 |
Cash Flows from Investing Activities | ||
Net cash and cash equivalents acquired in MISN Transaction | 28,891 | |
Purchase of securities, available for sale | (173,560) | (155,956) |
Sale of securities, available for sale | 55,184 | 98,379 |
Proceeds from principal paydowns of securities, available for sale | 37,690 | 30,799 |
Proceeds from sale of premises and equipment | 9 | 3,594 |
Purchase of FHLB stock | (941) | |
Increase in loans, net | (12,820) | (44,855) |
Recoveries on previously charged-off loans | 776 | 705 |
Proceeds from sale of foreclosed collateral | 91 | (5,122) |
Purchase of property, premises and equipment, net | (1,414) | |
Proceeds from property, premises and equipment, net | 1,628 | |
Net cash used in investing activities | (94,044) | (42,878) |
Cash Flows from Financing Activities | ||
Increase in deposits, net | 176,947 | 77,509 |
Proceeds from Federal Home Loan Bank borrowing | 36,000 | 25,000 |
Repayments of Federal Home Loan Bank borrowing | (52,898) | (44,000) |
Decrease in junior subordinated debentures | (2,550) | |
Proceeds from exercise of stock options, including tax benefits | 324 | 178 |
Stock issuance costs | (381) | |
Dividends paid | (5,799) | (1,027) |
Repurchases of common stock | (28) | |
Net cash provided by financing activities | 151,996 | 57,279 |
Net increase in cash and cash equivalents | 76,690 | 24,589 |
Cash and cash equivalents, beginning of period | 35,580 | 26,238 |
Cash and cash equivalents, end of period | 112,270 | 50,827 |
Cash Flow Information | ||
Interest paid | 4,479 | 3,631 |
Income taxes paid | 1,390 | 600 |
Non-Cash Flow Information | ||
Change in unrealized gain on available for sale securities | 1,220 | 6,206 |
Loans transferred to foreclosed assets | 416 | 1,564 |
Premises transferred to held for sale | 1,730 | |
Accretion of preferred stock | $ 70 | |
Common stock issued in MISN Transaction | $ 60,255 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Description of Business Heritage Oaks Bancorp (“Bancorp”) is a California corporation organized in 1994 to act as the holding company for Heritage Oaks Bank (the “Bank”), which opened for business in 1983. The Bank, which is the Company’s sole operating subsidiary, operates branches within San Luis Obispo and Santa Barbara Counties and has a loan production office in Ventura County. The Bank offers traditional banking products such as checking, savings, money market accounts and certificates of deposit, as well as mortgage, commercial, and consumer loans to customers who are predominately small to medium-sized businesses and to individuals. As such, the Company is subject to a concentration risk associated with its banking operations in San Luis Obispo and Santa Barbara Counties, and to a lesser degree Ventura County. No one customer accounts for more than 10% of revenue or assets in any period presented and the Company has no assets nor does it generate any revenue from outside of the United States. While the chief decision-makers of the Company monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements are not included herein. In the opinion of management, all adjustments (which consist solely of normal recurring accruals) considered necessary for a fair presentation of results for the interim periods presented have been included. These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2014 Annual Report filed on Form 10-K with the Securities and Exchange Commission on March 6, 2015; file number 000-25020 . The condensed consolidated financial statements include the accounts of Bancorp and its wholly-owned financial subsidiary, Heritage Oaks Bank. All significant inter-company balances and transactions have been eliminated. On February 28, 2014, the Company acquired 100% of the outstanding common shares of Mission Community Bancorp (“MISN”). MISN’s results of operations are included in the Company’s results of operations beginning March 1, 2014. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Investment in Non-Consolidated Subsidiaries The Company accounts for its investment in Heritage Oaks Capital Trust II, Mission Community Capital Trust I, and Santa Lucia Bancorp (CA) Capital Trust, as unconsolidated subsidiaries using the equity method of accounting, as the Company is not the primary beneficiary of the trust. Mission Community Capital Trust I and Santa Lucia Bancorp (CA) Capital Trust were acquired as part of the acquisition of Mission Community Bancorp on February 28, 2014. The sole purpose of each of these trusts is for the issuance of trust preferred securities. Reclassifications Certain items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. Use of Estimates in the Preparation of Condensed Consolidated Financial Statements The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and general practices within the banking industry require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant Accounting Policies Update The significant accounting policies that the Company applies are detailed in Note 1. Summary of Significant Accounting Policies, of the Company’s 2014 Annual Report filed on Form 10-K. Changes to accounting policies during the nine months ended September 30, 2015 are discussed below: During the third quarter of 2015, the Company made a specific enhancement to its methodology for determining the general reserve component of the allowance for loan and lease losses (“ALLL”). This enhancement related specifically to the methodology used to calculate the loss rates for loan risk grades within each loan type in the determination of the general reserve component of the ALLL. The enhanced methodology uses more granular loan level data to calculate loss rates for specific loan grades within each loan type, allowing for more detailed loan migration analysis, and the ability to determine more precise average loss rates for each loan risk grade. Although the total general reserve component of the ALLL for each loan type and portfolio segment is still based on total average historical losses for their respective loan types, management believes the allocation of the ALLL to each loan risk grade, within each loan type and the evaluation of the loss emergence period has become more precise under this methodology enhancement. The implementation of the ALLL model enhancements did not result in a required increase or decrease in the balance of the ALLL, or a material impact to the overall allocation of the ALLL. The ALLL model enhancement has allowed the Company to apply more precision in determining loss rates for specific loan grades within each loan type. The section of the accounting policy for the ALLL, which was updated for this methodology enhancement is illustrated below: Allowance for Loan and Lease Losses The Company manages credit risk not only through extensive risk analyses performed prior to a loan’s approval, but also through the ongoing monitoring of loans within the portfolio, and more specifically certain types of loans that generally involve a greater degree of risk, such as commercial real estate, commercial lines of credit, agriculture, and construction/land loans. The Company monitors loans in the portfolio through an exhaustive internal process, at least quarterly, as well as with the assistance of independent loan reviews. These reviews generally not only focus on problem loans, but also internally rated “pass” credits within certain pools of loans that may be expected to experience stress due to economic conditions. This process allows the Company to validate credit risk grade ratings, underwriting structure, and the Company’s estimated exposure in the current economic environment as well as enhance communications with borrowers where necessary in an effort to mitigate potential future losses. All significant problem loans are analyzed in detail at least quarterly, in order to properly estimate potential exposure to loss associated with these loans in a timely manner. Each segment of loans in the portfolio possesses varying degrees of risk, based on, among other things, the type of loan, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company’s loan portfolio, which are factors management regularly considers when evaluating the adequacy of the ALLL: · Real estate secured loans – consist primarily of loans secured by commercial real estate, multi-family, farmland, and 1 to 4 family residential properties. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lie primarily within that loan type. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company’s recorded investment in the loan. · Construction and land – although construction and land loans generally possess a higher inherent risk of loss than other loans, improvements in the mix, collateral and nature of loans help to mitigate risks within this segment of the portfolio. Risk arises from the necessity to complete projects within specified cost and time limits. Trends in the construction industry may also impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of future construction projects. · Commercial and industrial – consist primarily of commercial and industrial loans (business lines of credit), agriculture loans, and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which can impact a borrower’s ability to continue to make scheduled payments. The risk of repayment of agriculture loans arises largely from factors beyond the control of the Company or the related borrower, such as commodity prices, general weather conditions, and drought. · Consumer – the consumer loan portfolio is comprised primarily of a large number of small loans with scheduled amortization over a specific period. The majority of consumer loans include revolving credit plans, installment loans and credit card balances. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. ALLL Model Methodology The ALLL is maintained at a level which, in management’s judgment, is appropriate to absorb probable credit losses inherent in the loans within the loan portfolio as of the balance sheet date. The amount of the ALLL is based on management’s evaluation of the collectability of the loan portfolio, including the nature and volume of the portfolio, credit concentrations, trends in historical loss experience, the level of certain classified balances and specific impaired loans, and economic conditions and the related impact on specific borrowers and industry groups. The ALLL is increased by provisions for loan and lease losses, which are charged to earnings and reduced (or potentially increased) by charge-offs, net of recoveries. Changes in the ALLL relating to impaired loans, including troubled debt restructurings (“TDRs”), are charged or credited to the provision for loan and lease losses. Because of uncertainties inherent in the estimation process, management’s estimate of probable credit losses inherent in the loan portfolio and the related allowance may change. The process in which management determines the appropriate level of the ALLL involves the exercise of considerable judgment and the use of estimates. While management utilizes its best judgment and all available information in determining the adequacy of the ALLL, the ultimate adequacy of the ALLL is dependent upon a variety of factors beyond the Company’s control, including but not limited to, the performance of the loan portfolio, changes in current and future economic conditions and the view of regulatory agencies regarding the level of classified assets. Weakness in economic conditions and any other factor that may adversely affect credit quality and or that may result in higher levels of: past due and non-accruing loans, loan defaults, and or increased loan charge-offs, may require additional provisions for loan and lease losses in future periods and a higher balance in the Company’s ALLL. The ALLL, as more fully described below, is comprised of three components: general reserves, specific loan reserves, and a reserve for purchased credit impaired (“PCI”) loans. General Reserves – The general reserve component of the ALLL, which is not attributable to loans specifically identified as impaired, is determined through a two-step process. First a quantitative allocation is determined by pooling performing loans by collateral type and purpose. These pools of loans are then further segmented by an internal risk grading system that classifies loans as: pass, special mention, substandard and doubtful. The Company’s risk grade system allows management, among other things, to identify the risk associated with each loan, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are generally assigned based on information concerning the borrower and the strength of the collateral. Risk grades are reviewed regularly by the Company’s credit committee and are scrutinized by independent loan reviews performed semi-annually, as well as by regulatory agencies during scheduled examinations. Once credit risk grades have been assigned, estimated loss rates are then applied to each segment according to risk grade to determine the amount of the general portfolio allocation. Estimated loss rates are determined through a migration analysis of historical losses for each segment of the loan portfolio, based on the Company’s prior experience with such loans, and the use of detailed loan level data, encompassing historical losses and average balance information for each loan type and risk grade. The following provides brief definitions for credit risk grade ratings assigned to loans in the portfolio: · Pass – credits that have strong credit quality with adequate collateral or secondary source of repayment and little existing or known weaknesses. However, pass may include credits with exposure to certain potential factors that may adversely impact the credit, if they materialize, resulting in these credits being put on a watch list to monitor more closely than other pass rated credits. Such factors may be credit / relationship specific or general to an entire industry. · Special Mention – credits that have potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit at some future date. · Substandard – credits that have a defined weakness or weaknesses which may jeopardize the orderly liquidation of the loan through cash flows, making it likely that repayment may have to come from some other source, such as the liquidation of collateral. The Company is more likely to incur losses on substandard credits if the weakness or weaknesses identified in the credit are not corrected. · Doubtful – credits that possess the characteristics of a substandard credit, but because of certain existing deficiencies related to the credit, full collection is highly questionable. The probability of incurring some loss on such credits is high, but because of certain important and reasonably specific pending factors which may work to the advantage of strengthening the credit, charge-off is deferred until such time as the Company becomes reasonably certain that certain pending factors related to the credit will no longer provide some form of benefit. The second component of the general reserve allocation of the ALLL is the qualitative allocation, and is determined by estimates the Company makes in regard to certain internal and external factors that may have either a positive or negative impact on the overall losses inherent in the loan portfolio. Internal factors include trends in credit quality of the loan portfolio, the existence and the effects of concentrations, the composition and volume of the loan portfolio and the scope and frequency of the loan review process as well as any other factor determined by management to have an impact on the credit quality of the loan portfolio. External factors include local, state and national economic and business conditions, as well as the estimated impact that environmental factors may have on certain segments of the loan portfolio, such as drought. While management regularly reviews the estimated impact these internal and external factors are expected to have on the loan portfolio, there can be no assurance that an adverse change in any one or combination of these factors will not be in excess of management’s expectations. Recent Accounting Standards Updates Recent Accounting Guidance Adopted In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-14 Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure . This update addresses classification of government-guaranteed mortgage loans, including those where guarantees are offered by the Federal Housing Administration (“FHA”), the U.S. Department of Housing and Urban Development (“HUD”), and the U.S. Department of Veterans Affairs (“VA”). Although current accounting guidance stipulates proper measurement and classification in situations where a creditor obtains from a debtor, assets in satisfaction of a receivable (such as through foreclosure), current guidance does not specify how to measure and classify foreclosed mortgage loans that are government-guaranteed. Under the provisions of this update, a creditor would derecognize a mortgage loan that has been foreclosed upon, and recognize a separate receivable if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The amendments within this update are effective for interim and annual periods, beginning after December 15, 2014. The adoption of this update did not have a material impact on the Company’s consolidated financial statements. In January 2014, the FASB issued ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors . This ASU provides clarification that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for interim and annual periods, beginning after December 15, 2014. The adoption of this update did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Guidance Not Yet Effective In September, 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments (Topic 805). This ASU eliminates the requirement to restate prior period financial statements for measurement period adjustments to assets acquired and liabilities assumed in a business combination. The new guidance under this update requires the cumulative impact of measurement period adjustments be recognized in the period the adjustment is determined. This update does not change what constitutes a measurement period adjustment, nor does it change the length of the measurement period. The new standard is effective for interim annual periods beginning after December 15, 2015 and should be applied prospectively to measurement period adjustments that occur after the effective date. The Company does not expect the adoption of this update to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . This update requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The amendments within this update are effective for the quarter ending March 31, 2018. The Company is currently in the process of evaluating the impact of the adoption of this update, but does not expect a material impact on the Company’s consolidated financial statements. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination | |
Business Combination | Note 2. Business Combination On February 28, 2014, the Company acquired 100% of the outstanding common shares of Mission Community Bancorp (“MISN”) and all unexercised warrants and options to purchase MISN common stock were cancelled, in exchange for 7,541,326 shares of the Company’s common stock and $8.7 million in cash (the “MISN Transaction”). In conjunction with the merger, MISN’s wholly-owned bank subsidiary, Mission Community Bank, was merged with and into Heritage Oaks Bank. The transaction was valued at $69.0 million, based on the Company’s closing stock price of $7.99 on February 28, 2014. With the acquisition, the Company believes it has created a more valuable community banking franchise, with a low-cost core deposit base, strong capital ratios, attractive net interest margins, lower operating costs, and better overall returns for the shareholders of the combined company. The Company also believes it now has a banking platform that is well positioned for future growth, both organically and through acquisitions. The operating results for MISN are included in the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2015, and from March 1, 2014 through September 30, 2014. As of December 31, 2014, adjustments to the fair value of assets acquired and liabilities assumed in the MISN Transaction were complete. The following table presents unaudited pro forma financial information for the three and nine months ended September 30, 2014, as if the MISN Transaction were reflected in the Company’s operating results beginning on January 1, 2013. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits and borrowings acquired, and the related income tax effects. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date. Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 (dollars in thousands, except per share data) Net interest income $ $ Provision for loan and lease losses - - Non-interest income Non-interest expense Income before income taxes Income tax expense Net income $ $ Earnings Per Common Share Basic $ $ Diluted $ $ |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | Note 3. Fair Value of Assets and Liabilities Recurring Basis The following table provides a summary of the assets the Company measures at fair value on a recurring basis: Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Assets At Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (dollars in thousands) Assets Obligations of U.S. government agencies $ $ - $ $ - Mortgage backed securities: U.S government sponsored entities and agencies - - Non-agency - - State and municipal securities - - Asset backed securities - - Other investments - - Total assets measured on a recurring basis $ $ $ $ - Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Assets At Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (dollars in thousands) Assets Obligations of U.S. government agencies $ $ - $ $ - Mortgage backed securities: U.S government sponsored entities and agencies - - Non-agency - - State and municipal securities - - Asset backed securities - - Total assets measured on a recurring basis $ $ - $ $ - Non-recurring Basis The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis. These include assets and liabilities that are measured at the lower of cost or fair value, and were measured at fair value which was below cost. Certain impaired loans measured at fair value at December 31, 2014 are no longer recorded at fair value due to the borrower payments reducing the carrying value of these loans to less than fair value, and due to other impaired loans being evaluated under the discounted cash flow method versus the collateral method. The discounted cash flow method as prescribed by ASC 310 Receivables , is not a fair value measurement since the discount rate utilized is the loan’s effective interest rate, which is not a market rate. The discounted cash flow approach is used to measure impairment for certain impaired loans, because of their significant payment history and the global cash flow analysis performed on each borrower. The following tables provide a summary of assets the Company measures at fair value on a non-recurring basis: Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Year To Assets At Identical Assets Inputs Inputs Date Losses Fair Value (Level 1) (Level 2) (Level 3) (Recoveries) (dollars in thousands) Assets Impaired loans: Land $ $ - $ - $ $ Total assets measured on a non-recurring basis $ $ - $ - $ $ Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Year To Assets At Identical Assets Inputs Inputs Date Losses Fair Value (Level 1) (Level 2) (Level 3) (Recoveries) (dollars in thousands) Assets Impaired loans: Commercial real estate $ $ - $ - $ $ Land - - Total assets measured on a non-recurring basis $ $ - $ - $ $ There were no transfers into or out of Level 1 or Level 2 assets reported at fair value on either a recurring or non-recurring basis during the three or nine months ended September 30, 2015. Fair Value of Financial Instruments The following table provides a summary of the estimated fair value of financial instruments: Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Fair Value (dollars in thousands) Assets Cash and cash equivalents $ $ $ - $ - $ Investment securities available for sale - Federal Home Loan Bank stock - - - N/A Loans receivable, net of deferred fees and costs - - Loans held for sale - - Accrued interest receivable - Liabilities Non-interest bearing deposits - - Interest bearing deposits - - Federal Home Loan Bank advances - - Junior subordinated debentures - - Accrued interest payable - - Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Fair Value (dollars in thousands) Assets Cash and cash equivalents $ $ $ - $ - $ Investment securities available for sale - - Federal Home Loan Bank stock - - - N/A Loans receivable, net of deferred fees and costs - - Loans held for sale - - Accrued interest receivable - Liabilities Non-interest bearing deposits - - Interest bearing deposits - - Federal Home Loan Bank advances - - Junior subordinated debentures - - Accrued interest payable - - Information on off-balance-sheet instruments follows: September 30, 2015 December 31, 2014 Notional Cost to Cede Notional Cost to Cede Amount or Assume Amount or Assume (dollars in thousands) Off-balance sheet instruments, commitments to extend credit and standby letters of credit $ $ $ $ |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Investment Securities | Note 4. Investment Securities The following table sets forth the amortized cost and fair values of the Company’s investment securities, all of which are reported as available for sale: September 30, 2015 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Loss Value (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - Other investments - Total available for sale securities $ $ $ $ December 31, 2014 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Loss Value (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - Total available for sale securities $ $ $ $ The following table provides a summary of investment securities in an unrealized loss position: September 30, 2015 Less Than Twelve Months Twelve Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Obligations of U.S. government agencies $ $ $ - $ - $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - - Other investments - - Total $ $ $ $ $ $ December 31, 2014 Less Than Twelve Months Twelve Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - - Total $ $ $ $ $ $ A total of 78 securities were in an unrealized loss position as of September 30, 2015, and 57 securities as of December 31, 2014. As of September 30, 2015, the Company believes that unrealized losses in its investment securities portfolio are not attributable to credit quality, but rather fluctuations in market prices for these investments. In the case of the agency mortgage related securities, they have contractual cash flows guaranteed by agencies of the U.S. Government. While the Company’s investment security holdings have contractual maturity dates that range from 1 to 40 years, they have a much shorter effective duration dependent on the instrument’s priority in the overall cash flow structure and the characteristics of the loans underlying the investment security. Management does not intend to sell and it is unlikely that management will be required to sell the securities prior to their anticipated recovery in value. As of September 30, 2015, the Company does not believe unrealized losses related to any of its securities are other than temporary. Sales of Available for Sale Securities The proceeds from the sale of securities and the associated gains and losses are listed below: For Three Months Ended For Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Proceeds $ $ $ $ Gross gains Gross losses - Income tax expense on net realized gains from the sale of investment securities for the three months ended September 30, 2015 and 2014 was $57 thousand and $189 thousand. Income tax expense related to net realized gains on the sale of securities was $270 thousand and $231 thousand for the nine months ended September 30, 2015 and 2014, respectively. Maturities of Available for Sale Securities The amortized cost and fair value maturities of available for sale investment securities at September 30, 2015 are shown below. The table reflects the expected lives of mortgage backed securities, based on the Company’s historical prepayment experience, because borrowers who are party to loans underlying these securities may have the right to prepay obligations without prepayment penalties. Therefore actual maturities may differ from contractual maturities. Contractual maturities are reflected for all other security types. September 30, 2015 December 31, 2014 Amortized Amortized Cost Fair Value Cost Fair Value (dollars in thousands) Due one year or less $ $ $ $ Due after one year through five years Due after five years through ten years Due after ten years Total $ $ $ $ Securities having an amortized cost and a fair value of $141.5 million and $148.9 million, respectively, at September 30, 2015, and $67.3 million and $72.5 million, respectively, at December 31, 2014 were pledged to secure public deposits. As of September 30, 2015 and December 31, 2014, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of total securities. The following table summarizes earnings on both taxable and tax-exempt investment securities: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Taxable earnings on investment securities Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities State and municipal securities Corporate debt securities - - - Asset backed securities Non-taxable earnings on investment securities State and municipal securities Total $ $ $ $ |
Loans and Allowance for Loan an
Loans and Allowance for Loan and Lease Losses | 9 Months Ended |
Sep. 30, 2015 | |
Loans and Allowance for Loan and Lease Losses | |
Loans and Allowance for Loan and Lease Losses | Note 5. Loans and Allowance for Loan and Lease Losses The following table provides a summary of outstanding loan balances: September 30, 2015 December 31, 2014 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total (dollars in thousands) Real Estate Secured Commercial $ $ $ $ $ $ Residential 1 to 4 family Farmland - Multi-family residential - - Construction and land Home equity lines of credit - - Total real estate secured Commercial Commercial and industrial Agriculture Other - - - - Total commercial Consumer - - Total gross loans held for investment Net deferred loan fees - - Allowance for loan and lease losses - Total net loans held for investment $ $ $ $ $ $ Loans held for sale $ $ - $ $ $ - $ At September 30, 2015, and December 31, 2014, the loan portfolio includes loans purchased with evidence of deterioration in credit quality since their origination, referred to as “PCI loans.” These loans are specifically accounted for under ASC 310-30, as more fully discussed in Note 1. Summary of Significant Accounting Policies of the consolidated financial statements in the Company’s 2014 annual report filed on Form 10-K. These loans were acquired as part of the MISN Transaction. All other loans, referred to as “non-PCI loans,” consist of originated loans, as well as acquired and purchased loans which have not exhibited evidence of deteriorated credit quality since their origination. Non-PCI loans are not accounted for within the scope of ASC 310-30. Gross loans include $195.8 million and $239.7 million of loans acquired in the MISN Transaction at September 30, 2015 and December 31, 2014, respectively. These loans were recorded at fair value on the date of acquisition. Of the loans acquired in the MISN transaction, $9.4 million and $10.3 million at September 30, 2015 and December 31, 2014, respectively, are considered PCI loans. Loans held for sale are primarily single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within thirty to sixty days. Under a blanket lien to the Federal Home Loan Bank (“FHLB”), the Bank has pledged $601.4 million in loans to secure a credit facility totaling $400.1 million, of which $78.5 million is outstanding as of September 30, 2015. Of this credit facility, $11.5 million is available as a line of credit, while the remainder is available for potential future borrowings. The Bank also has a collateralized borrowing line with the Federal Reserve Bank secured by $6.9 million of loans as of September 30, 2015. Concentration of Credit Risk The Company held loans that were collateralized by various forms of real estate, including residential 1 to 4 family loans originated and held for sale, totaling $999.4 million and $978.2 million at September 30, 2015 and December 31, 2014, respectively. These loans are generally made to borrowers located in the counties of San Luis Obispo, Santa Barbara and Ventura. The Company attempts to reduce its concentration of credit risk by making loans which are diversified by product type. While management believes that the collateral presently securing this portfolio is adequate, there can be no assurances that deterioration in the California real estate market, or the impact of the current California drought on our real estate collateralized loans, would not expose the Company to significantly greater credit risk. Loans Serviced for Others Loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balance of loans serviced for others, exclusive of Small Business Administration (“SBA”) loans, was $41.8 million at September 30, 2015 and $44.8 million at December 31, 2014. From time to time, the Company also originates SBA loans for sale and retains the servicing of the guaranteed portion of the loan sold. At September 30, 2015 and December 31, 2014, the unpaid principal balance of SBA loans serviced for others totaled $9.0 million and $13.0 million, respectively. No gains were recorded on the sale of SBA loans during the three or nine months ended September 30, 2015 and 2014. Impaired Loans The following tables provide a summary of the Company’s recorded investment in non-PCI and PCI impaired loans as of September 30, 2015, and presents average balances and interest income recognized for non-PCI and PCI impaired loans for the three and nine months ended September 30, 2015. For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 September 30, 2015 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) Non-PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Construction and land - Residential 1 to 4 family - Farmland - Home equity lines of credit - - - Commercial Commercial and industrial - Agriculture - Consumer - Total - With Related Allowance Real Estate Secured Construction and land - - Commercial - - Commercial Commercial and industrial Total Total Non-PCI impaired loans $ $ $ $ $ $ $ For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 September 30, 2015 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Residential 1 to 4 family - Construction and land - Commercial Agriculture - Commercial and industrial - Total - With Related Allowance Real Estate Secured Commercial Construction and land Commercial Commercial and industrial Total Total PCI loans $ $ $ $ $ $ $ The following table provides a summary of the Company’s recorded investment in non-PCI and PCI impaired loans as of December 31, 2014, and presents average balances and interest income recognized for non-PCI and PCI impaired loans for the three and nine months ended September 30, 2014. For the Three Months Ended For the Nine Months Ended December 31, 2014 September 30, 2014 September 30, 2014 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) Non-PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Construction and land - Farmland - Residential 1 to 4 family - Home equity lines of credit - - - Commercial Commercial and industrial - Agriculture - Consumer - Total - With Related Allowance Real Estate Secured Construction and land Commercial - - Commercial Commercial and industrial Total Total Non-PCI impaired loans $ $ $ $ $ $ $ For the Three Months Ended For the Nine Months Ended December 31, 2014 September 30, 2014 September 30, 2014 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Farmland - Construction and land - Residential 1 to 4 family - Home equity lines of credit - - - Commercial Agriculture - Commercial and industrial - Total PCI loans $ $ $ - $ $ $ $ The Company did not record income from the receipt of cash payments related to non-accruing loans during the three and nine months ended September 30, 2015 and 2014. Interest income recognized on impaired loans in the tables above represents interest on accruing troubled debt restructurings, and accretion on PCI loans. Valuation allowances for impaired loans have been determined on a loan-by-loan basis. At September 30, 2015, there were no residential 1 to 4 family loans in process of foreclosure, or residential 1 to 4 family properties included in foreclosed assets. Troubled Debt Restructurings (“TDR”) The following table provides a summary of loans that were classified as TDRs as of the dates indicated below: September 30, 2015 December 31, 2014 Accrual Non-accrual Total Accrual Non-accrual Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ $ $ Construction and land Residential 1 to 4 family Farmland - - Commercial Commercial and industrial Agriculture - - Consumer - Total non-PCI loans PCI Loans Real Estate Secured Commercial - Construction and land - - - - Commercial Commercial and industrial Total PCI loans Total TDRs $ $ $ $ $ $ The majority of the Company’s TDRs resulted from granting concessions with respect to interest rates, payment structure and/or maturity. Modifications for the three and nine months ended September 30, 2015, and 2014 relate substantially to extensions of the maturity date at the loan’s original interest rate, which was lower than the current market rate for new debt with similar risk. The maturity date extensions granted were for periods ranging from 6 months to 10 years. As of September 30, 2015, the Company was not committed to lend any additional funds to borrowers whose obligations to the Company were restructured. During the three and nine months ended September 30, 2015, an ALLL of approximately $0.1 million was established for one loan at the time the loan was modified as a TDR. The financial effects of modifications for the three and nine months ended September 30, 2014 were not material. The following tables summarize loan modifications which resulted in TDRs during the periods presented below: For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded of TDRs Investment Investment of TDRs Investment Investment (dollars in thousands) Non-PCI Loans Real Estate Secured Residential 1 to 4 family $ $ $ $ Farmland Commercial - - - Construction and land - - - Commercial Commercial and industrial Agriculture Consumer PCI Loans Real Estate Secured Commercial Construction and land - - - Commercial Commercial and industrial Total $ $ $ $ For the Three Months Ended For the Nine Months Ended September 30, 2014 September 30, 2014 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded of TDRs Investment Investment of TDRs Investment Investment (dollars in thousands) Non-PCI Loans Real Estate Secured Construction and land $ $ $ $ Commercial - - - Commercial Commercial and industrial Agriculture - - - Consumer - - - PCI Loans Real Estate Secured Commercial - - - Commercial Commercial and industrial - - - Total $ $ $ $ The following tables summarizes loans that were modified as troubled debt restructurings within the twelve months prior to the balance sheet date, and for which there was a payment default during the periods presented below: For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 Number of TDRs Recorded Investment Number of TDRs Recorded Investment Non-PCI Loans (dollars in thousands) Commercial Commercial and industrial - $ - $ Total - $ - $ For the Three Months Ended For the Nine Months Ended September 30, 2014 September 30, 2014 Number of TDRs Recorded Investment Number of TDRs Recorded Investment Non-PCI Loans (dollars in thousands) Commercial Commercial and industrial - $ - $ Total - $ - $ Credit Quality The following tables stratify loans held for investment by the Company’s internal risk grading system: September 30, 2015 Credit Risk Grades Special Pass Mention Substandard Doubtful Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ - $ Residential 1 to 4 family - - Farmland - Multi-family residential - - Construction and land - Home equity lines of credit - - Commercial Commercial and industrial - Agriculture - Other - - - - - Consumer - - Total non-PCI loans - PCI Loans Real Estate Secured Commercial - - Construction and land - Residential 1 to 4 family - - Commercial Agriculture - - - Commercial and industrial - Total PCI loans - Total loans held for investment $ $ $ $ - $ December 31, 2014 Credit Risk Grades Special Pass Mention Substandard Doubtful Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ - $ Residential 1 to 4 family - Farmland - Multi-family residential - - Home equity lines of credit - - Construction and land - - Commercial Commercial and industrial Agriculture - Other - - - Consumer - - Total non-PCI loans PCI Loans Real Estate Secured Commercial - Farmland - - - Construction and land - - Residential 1 to 4 family - - - Commercial Agriculture - - - Commercial and industrial Total PCI loans Total loans held for investment $ $ $ $ $ Aging of Loans Held for Investment The following tables summarize the aging of loans held for investment as of the dates indicated below: September 30, 2015 Days Past Due 90+ and Still Non- Current 30-59 60-89 Accruing Accruing Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ - $ - $ $ Residential 1 to 4 family - - - Farmland - - - Multi-family residential - - - - Construction and land - - - Home equity lines of credit - - - Commercial - Commercial and industrial - - Agriculture - - - - Other - - - - - - Consumer - - - Total non-PCI loans - - PCI Loans Real Estate Secured Commercial - - - Land - - - - Residential 1 to 4 family - - - - Commercial Agriculture - - - - Commercial and industrial - - - Total PCI loans - - - Total loans held for investment $ $ $ - $ - $ $ December 31, 2014 Days Past Due 90+ and Still Non- Current 30-59 60-89 Accruing Accruing Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ - $ - $ - $ $ Residential 1 to 4 family - - - Farmland - - - - Multi-family residential - - - - Construction and land - - - Home equity lines of credit - - - Commercial Commercial and industrial - - Agriculture - - - Other - - - - Consumer - Total non-PCI loans - PCI Loans Real Estate Secured Commercial - - - - Farmland - - - - Construction and land - - - - Residential 1 to 4 family - - - - Commercial Agriculture - - - - Commercial and industrial - - - Total PCI loans - - - Total loans held for investment $ $ $ $ - $ $ Purchased Credit Impaired Loans As part of the MISN Transaction , disclosed in Note 2. Business Combination, the Company acquired certain loans which have exhibited evidence of credit deterioration since their origination. The carrying amount and unpaid principal balance of these loans are as follows: September 30, 2015 December 31, 2014 Unpaid Principal Balance Carrying Amount Unpaid Principal Balance Carrying Amount (dollars in thousands) Real Estate Secured Commercial $ $ $ $ Construction and land Residential 1 to 4 family Farmland - - Total real estate secured Commercial Commercial and industrial Agriculture Total commercial Total PCI loans $ $ $ $ The following table summarizes the accretable yield, or income expected to be collected for PCI loans: For the Nine Months Ended September 30, 2015 (dollars in thousands) Balance, December 31, 2014 $ Accretion of income Reclassifications from nonaccretable difference (1) Balance, September 30, 2015 $ (1) Reclassification from nonaccretable difference is attributable to positive changes in expected future cash flows on certain PCI loans. Allowance for Loan and Lease Losses The following table summarizes the activity in the allowance for loan and lease losses by portfolio segment for the periods presented below: For the Three Months Ended September 30, 2015 Balance June 30, 2015 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2015 (dollars in thousands) Other real estate secured $ $ - $ $ $ Commercial Construction and land - Consumer Unallocated - Total $ $ $ $ - $ For the Nine Months Ended September 30, 2015 Balance December 31, 2014 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2015 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial Construction and land Consumer Unallocated - Total $ $ $ $ - $ For the Three Months Ended September 30, 2014 Balance June 30, 2014 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2014 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial - Construction and land - Consumer Unallocated Total $ $ $ $ - $ For the Nine Months Ended September 30, 2014 Balance December 31, 2013 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2014 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial Construction and land - Consumer Unallocated Total $ $ $ $ - $ The following tables disaggregate the allowance for loan and lease losses and the recorded investment in loans by impairment methodology as of the dates presented below: September 30, 2015 Allowance for Loan and Lease Losses Recorded Investment in Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality (dollars in thousands) Other real estate secured $ $ $ $ $ $ Commercial Construction and land Consumer - - - Unallocated - - - Total $ $ $ $ $ $ December 31, 2014 Allowance for Loan and Lease Losses Recorded Investment in Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality (dollars in thousands) Other real estate secured $ $ $ - $ $ $ Commercial - Construction and land - Consumer - - - Unallocated - - Total $ $ $ - $ $ $ At September 30, 2015, total gross loans of $1.2 billion in the table above include $195.8 million of loans acquired through the MISN Transaction. These loans were initially recorded at fair value, and had no related ALLL on the acquisition date. The ALLL for acquired non-PCI loans at September 30, 2015 and December 31, 2014 was $0.4 million, and $1.0 million, respectively, and is the result of determining, through the Company’s ALLL methodology, that the existing discount for acquired non-PCI loans was no longer deemed sufficient to cover probable losses incurred in particular segments of the loan portfolio, specifically commercial and industrial, other real estate secured, and consumer loans. The incremental ALLL allocation for acquired non-PCI loans was not driven by deterioration in credit quality; rather due to the acceleration of accretion of purchase discounts related to loan pay-downs and payoffs of loans within these segments of the acquired loan portfolio. The ALLL allocated to acquired non-PCI loans is included in the ALLL attributable to loans collectively evaluated for impairment in the tables above. The ALLL for PCI loans was $82 thousand at September 30, 2015, and resulted from unfavorable changes in expected future cash flows on certain PCI loans. There was no ALLL for PCI loans at December 31, 2014. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | Note 6. Income Taxes Deferred tax assets relate to amounts that are expected to be realized through subsequent reversals of existing temporary differences over the period they are expected to reverse. The ultimate realization of the Company’s deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are expected to reverse. U.S. GAAP requires that companies assess whether a valuation allowance should be established against deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence, both positive and negative, that can be objectively verified. At September 30, 2015 and December 31, 2014 there was no valuation allowance for the Company’s deferred tax assets. The Company’s deferred tax assets totaled $21.4 million at September 30, 2015, and $24.9 million at December 31, 2014. The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2014, 2013, 2012, 2011, and 2010 are open to audit by federal and state taxing authorities. The Company does not have any uncertain income tax positions and has not accrued for any interest or penalties as of September 30, 2015 and December 31, 2014. Management assessed the impact of the MISN Transaction for limitations under I.R.C. Section 382 and determined that, given the assumption that the Company generates sufficient future taxable income to utilize NOLs, no loss of NOL utilization would result from the estimated annual I.R.C. Section 382 base limitation resulting from the transaction. Furthermore, due to the fact that MISN was in a net unrealized built-in gain position (“NUBIG”) the Company’s annual I.R.C. Section 382 limitation will likely increase over the next five years for realized built-in gains (“RBIG”). |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 7. Goodwill and Other Intangible Assets At September 30, 2015 and December 31, 2014 the balance of goodwill was $24.9 million. Other intangible assets consist of core deposit intangibles (“CDI”), which are attributable to the acquisition of core deposit balances, including those acquired in the MISN Transaction. CDI assets are subject to amortization. At September 30, 2015 and December 31, 2014 the balance of CDI was $4.6 million, and $5.3 million, respectively. Amortization of CDI for the nine months ended September 30, 2015 and 2014 was approximately $0.8 million during both periods. The following table summarizes the gross carrying amount, accumulated amortization and net carrying amount of CDI as of September 30, 2015, and provides an estimate for future amortization for 2015 and the next five years: September 30, 2015 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (dollars in thousands) Core deposit intangibles $ $ $ September 30, 2015 Beginning Balance Estimated Remaining Amortization Projected Ending Balance (dollars in thousands) Period Year 2015 $ $ $ Year 2016 Year 2017 Year 2018 Year 2019 Year 2020 |
Share-based Compensation Plans
Share-based Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
Share-based Compensation Plans | |
Share-based Compensation Plans | Note 8. Share-Based Compensation Plans As of September 30, 2015, the Company had one active share-based employee compensation plan, which was approved by the Company’s shareholders in May 2015. This plan, referred to as the “2015 Equity Incentive Plan,” authorizes the Company to grant various types of share-based compensation awards to the Company’s employees and Board of Directors such as stock options, and restricted stock awards. Under the 2015 Equity Incentive Plan a maximum of 2,500,000 shares of the Company’s common stock may be issued. Shares issued under this plan, other than stock options and stock appreciation rights, are counted against the plan on a two shares for every one share actually issued basis. Awards that are cancelled, expired, forfeited, fail to vest, or otherwise result in issued shares not being delivered to the grantee, are again made available for the issuance of future share-based compensation awards. Additionally, under this plan, no one individual may be granted shares in aggregate that exceed more than 250,000 shares during any calendar year. The Company’s Board of Directors may terminate the 2015 Equity Incentive Plan at any time, and for any reason before the plan expires on December 3, 2024. The Company also has two non-active share-based compensation plans, which are more fully described in Note 12. Share-Based Compensation Plans, of the condensed consolidated financial statements in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. These plans include the “1997 Stock Option Plan” and the “2005 Equity Based Compensation Plan.” As of September 30, 2015 no further grants can be made from either of these plans. The following table provides a summary of the expenses the Company has recognized related to share-based compensation for the periods indicated below: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Share-based compensation expense: Stock options $ $ $ $ Restricted stock Total expense $ $ $ $ Unrecognized compensation expense: Stock options $ $ Restricted stock Total unrecognized expense $ $ At September 30, 2015 unrecognized compensation expense related to non-vested stock options and restricted stock awards is expected to be recognized over weighted average periods of 2.8 years and 1.9 years, respectively. Restricted Stock Awards The Company grants restricted stock periodically for the benefit of employees. Restricted stock issued typically vests ratably over a period of three to five years depending on the specific terms of the grant. Restricted stock grants may be subject to the achievement of certain performance goals. Compensation costs related to restricted stock awards are charged to earnings, included in salaries and employee benefits, over the vesting period of those awards. The fair value of performance-based grants is initially based on the assumption that performance goals will be achieved. If such performance conditions are not met, no compensation cost is recognized and previously-recognized compensation cost is reversed. The following table provides a summary of activity related to restricted stock granted, vested and forfeited: Number of Average Grant Shares Date Fair Value Balance December 31, 2014 $ Granted Vested Forfeited Balance September 30, 2015 $ Included in the table above are performance-based grants of restricted stock totaling 23,408 shares as of September 30, 2015. Stock Options Stock options are granted periodically for the benefit of employees. The fair value of each stock option award is determined on the date of grant using the Black-Scholes option valuation model, which uses assumptions outlined in the table above. Expectations for volatility are based on the historical volatility of the Company’s common stock. The Company estimates forfeiture rates based on historical employee option exercise and termination experience. The Company recognizes share-based compensation costs on a straight line basis over the vesting period of the award, which is typically a period of three to five years. The following table presents the assumptions used in the calculation of the weighted average fair value of options granted during the periods presented: For the Nine Months Ended September 30, 2015 2014 Expected volatility Expected term (years) Dividend yield Risk free rate Weighted-average grant date fair value $ $ The following table provides a summary of activity related to options granted, exercised, and forfeited during the nine months ended September 30, 2015: Options Outstanding Options Number Weighted Average Available for of Shares Exercise Price Grant (1) Balance, December 31, 2014 $ Granted Forfeited Exercised Expired Balance, September 30, 2015 $ (1) Shares available for grant as of December 31, 2014 were from the 2005 Equity Based Compensation Plan, which expired in March 2015. As of September 30, 2015, no further grants can be made from that plan. Shares available for grant as of September 30, 2015 are from the 2015 Equity Incentive Plan, which was approved by the Company’s shareholders in May 2015. The following table provides a summary of the aggregate intrinsic value of options vested and expected to vest and exercisable as of September 30, 2015: September 30, 2015 Weighted Average Weighted Remaining Aggregate Average Contractual Life Intrinsic Shares Exercise Price (Years) Value Vested or expected to vest $ $ Exercisable $ $ The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, which is subject to change based on the fair market value of the Company’s stock. The aggregate intrinsic value of options exercised was $153 thousand for the nine months ended September 30, 2015. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Shareholders' Equity | |
Shareholders' Equity | Note 9. Shareholders’ Equity Regulatory Capital In 2013, the Board of Governors of the Federal Reserve System (“FRB”), the FDIC, and the Office of the Comptroller of the Currency (“OCC”) issued final rules under Basel III (the “Basel III Capital Rules”), establishing a new comprehensive framework for regulatory capital for U.S. banking organizations. These rules implement the Basel Committee’s December 2010 proposed framework, certain provisions of the Dodd-Frank Act, and revise the risk-based capital requirements applicable to bank-holding companies, and depository institutions, including the Company. These rules became effective for the Company on January 1, 2015, and are subject to phase-in periods for certain of their components. The significant changes outlined under the Basel III Capital Rules that are applicable to the Company and the Bank include: · A new Common Equity Tier I (“CET I”) capital measure, with a minimum ratio requirement of 4.5% CET I to risk-weighted assets, and for Prompt Corrective Action purposes 6.5% or greater to generally be considered “well-capitalized.” · A capital conservation buffer in addition to CET I of: 0.625% for 2016; 1.25% for 2017; 1.875% for 2018; and 2.5% for 2019. The capital conservation buffer does not begin phasing-in until January 1, 2016. · Changes to the calculation of risk-weighted assets from the current four categories (0%, 20%, 50% and 100%) to a much broader and risk-sensitive number of categories. · The inclusion of certain changes in accumulated other comprehensive income (“AOCI”) in the determination of regulatory capital measures; however, “non-advanced approaches banking organizations,” including the Company and the Bank may make a one-time permanent election, as of January 1, 2015, to exclude these changes in AOCI from the determination of regulatory capital. The Company, including the Bank, has made this election. · An exclusion from CET I of certain items on a phased-in basis, such as deferred tax assets, and intangible assets. When Basel III Capital Rules are fully phased-in on January 1, 2019, the Company and the Bank will also be required to maintain a 2.5% “capital conservation buffer,” which is designed to absorb losses during periods of economic stress. This capital conservation buffer will be comprised entirely of CET I, and will be in addition to minimum risk-weighted asset ratios outlined under the Basel III Capital Rules. If a banking organization fails to hold capital above minimum capital ratios, including the capital conservation buffer, it will be subject to certain restrictions on capital distributions and discretionary bonus payments. The following table sets forth the Company’s and the Bank’s regulatory capital ratios, including those applicable following the implementation of Basel III as of January 1, 2015: Basel III Pre-Basel III Regulatory Regulatory Standard to be Standard to be Well September 30, 2015 Well December 31, 2014 September 30, 2014 Capitalized (1) Company Bank Capitalized (1) Company Bank Company Bank Ratio Common Equity Tier I capital 6.50% N/A N/A N/A N/A N/A Leverage ratio 5.00% 5.00% Tier I capital 8.00% 6.00% Total risk-based capital 10.00% 10.00% (1) Reflects minimum threshold to be considered “well capitalized” under the Prompt Corrective Action framework, specific to depository institutions. Preferred Stock Under its Amended Articles of Incorporation, the Company is authorized to issue up to 5,000,000 shares of preferred stock, in one or more series, having such voting powers, designations, preferences, rights, qualifications, limitations and restrictions as determined by the Board of Directors. On June 4, 2015, the holder of the Company’s Series C Convertible Perpetual Preferred Stock (“Series C Preferred Stock”) completed the exchange of its remaining 348,697 shares of Series C Preferred Stock for shares of the Company’s common stock on a one-for-one exchange ratio basis. As of September 30, 2015, there were no shares of the Company’s Series C Preferred Stock issued and outstanding. The fair market value of the Company’s common stock was higher than the conversion price of $3.25 per share of the Series C Preferred Stock on the date the Company made a firm commitment to issue the Series C Preferred Stock. As a result, the Series C Preferred Stock was issued with a beneficial conversion feature associated with it. In connection with the exchange of all remaining outstanding shares of the Series C Preferred Stock on June 4, 2015, the Company recorded the remaining beneficial conversion feature of $70 thousand during the second quarter of 2015 through a charge to retained earnings. Cash Dividends On March 2, 2015, the Company paid a cash dividend of $0.05 per share to holders of the Company’s common stock and Series C Preferred Stock as of February 16, 2015. On June 1, 2015, the Company paid a cash dividend of $0.06 per share to holders of the Company’s common stock and Series C Preferred Stock as of May 15, 2015. On August 31, 2015, the Company paid a cash dividend of $0.06 per share to holders of the Company’s common stock as of August 17, 2015. As discussed in Note 13. Subsequent Events, of these condensed consolidated financial statements, on October 28, 2015, the Company’s Board of Directors declared a cash dividend of $0.06 per share, payable on November 30, 2015, to shareholders of the Company’s common stock as of November 16, 2015. During the three and nine months ended September 30, 2014, the Company paid a cash dividend of $0.03 per share to holders of the Company’s common stock and Series C Preferred Stock. Stock Repurchase Program In June 2015, the Company announced it had amended its previously announced plan for the repurchase of up to $5.0 million of its outstanding common stock pursuant to a written plan compliant with Rule 10b5-1 and Rule 10b-18. Repurchase program activity pursuant to the amended plan commenced on July 1, 2015 and will continue in effect until January 31, 2016 or expire earlier upon completion of the repurchase of $5.0 million of the Company’s common stock, as well as under certain other circumstances set forth in the repurchase plan agreement. The Company has no obligation to repurchase any shares under this program, and may suspend or discontinue it at any time. All shares repurchased as part of the repurchase program will be cancelled, and therefore no longer available for reissuance. As of September 30, 2015, the Company had repurchased 55,428 shares of its common stock under this plan at an average price of $7.47 per share. Repurchases of common stock during the first nine months of 2015 totaled 3,696 shares, and were purchased at an average price of $7.52 per share. There were no repurchases of common stock during the third quarter of 2015. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Earnings Per Share | Note 10. Earnings Per Share Basic earnings per common share are computed by dividing net income by the weighted-average number of common and participating preferred shares outstanding for the reporting period, including the Series C Preferred Stock. Diluted earnings per common share are computed by dividing net income by the weighted-average number of common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares are calculated using the treasury stock method and include incremental shares issuable upon exercise of outstanding stock options, and other share-based compensation. The computation of diluted earnings per common share excludes the impact of the assumed exercise or issuance of securities that would have an anti-dilutive effect. The following tables set forth number of shares used in the calculation of both basic and diluted earnings per common share: For the Three Months Ended September 30, 2015 2014 Net Net Income Shares Income Shares (dollars in thousands, except per share data) Net income $ $ Accretion on preferred stock - - Net income available to common shareholders $ $ Weighted average shares outstanding Basic earnings per common share $ $ Dilutive effect of share-based compensation awards Weighted average diluted shares outstanding Diluted earnings per common share $ $ For the Nine Months Ended September 30, 2015 2014 Net Net Income Shares Income Shares (dollars in thousands, except per share data) Net income $ $ Accretion on preferred stock - Net income available to common shareholders $ $ Weighted average shares outstanding Basic earnings per common share $ $ Dilutive effect of share-based compensation awards Weighted average diluted shares outstanding Diluted earnings per common share $ $ For the three and nine months ended September 30, 2015 and 2014, common stock equivalents totaling approximately 126,000 shares and 160,000 shares and 35,000 shares and 114,000 shares respectively, were excluded from the calculation of diluted earnings per share, as their impact would be anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 11. Commitments and Contingencies In the normal course of business, various claims and lawsuits are brought by and against the Company. At September 30, 2015, the Company does not believe the disposition of all pending or threatened proceedings will have a material effect on the Company’s condensed consolidated financial statements. Commitments to Extend Credit In the normal course of business, the Bank enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk not recognized in the Company’s condensed consolidated financial statements. 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. Standby letters of credit are conditional commitments to guarantee the performance of a Bank customer to a third party. Since many of the commitments and standby letters of credit are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The Bank’s management evaluates each customer’s credit worthiness on a case-by-case basis, and determines the amount of collateral deemed adequate to secure the loan, if collateral security is determined to be necessary for the particular loan. The Bank’s exposure to loan loss in the event of nonperformance on commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments as it does for loans reflected in the Company’s condensed consolidated financial statements. As of September 30, 2015, and December 31, 2014, the Company had the following outstanding financial commitments: September 30, December 31, 2015 2014 (dollars in thousands) Commitme nts to extend credit $ $ Standby letters of credit (1) Total commitments and standby letters of credit $ $ (1) Includes a standby letter of credit to one customer in the amount of $10.4 million at September 30, 2015 and December 31, 2014. Commitments to extend credit and standby letters of credit are made at both fixed and variable rates of interest. At September 30, 2015 and December 31, 2014, the Company had $26.3 million and $35.7 million in fixed rate commitments, and $256.7 million and $217.5 million in variable rate commitments. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2015 | |
Regulatory Matters | |
Regulatory Matters | Note 12. Regulatory Matters BSA Consent Order On November 5, 2014, the Bank entered into a Stipulation to the Issuance of a Consent Order with the Federal Deposit Insurance Corporation (“FDIC”) and the California Department of Business Oversight (“DBO”), consenting to the issuance of a consent order (“the BSA Consent Order”) relating to identified deficiencies in the Bank’s centralized Bank Secrecy Act and anti-money laundering compliance program, which is designed to comply with the requirements of the Bank Secrecy Act, the USA Patriot Act of 2001 and related anti-money laundering regulations (collectively, the “BSA/AML Requirements”). Per the BSA Consent Order, the Bank must review, update and implement an enhanced Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) risk assessment process based on the 2010 Federal Financial Institutions Examination Council BSA/AML Examination Manual. Some of the areas highlighted in the BSA Consent Order include the requirements to: i) enhance customer due-diligence procedures; ii) improve the enhanced due diligence analysis for high-risk customers; iii) ensure the proper identification and reporting of suspicious activity; iv) address and correct the noted violations of law; v) ensure that there is sufficient and qualified staff; and vi) ensure that all staff are properly trained to carry out the BSA/AML programs. Certain activities, including expansionary activities, that otherwise require regulatory approval will likely be impeded while the BSA Consent Order remains outstanding. The Company continues to make progress in addressing the issues identified in the BSA Consent Order that was entered into with its regulators in November of 2014. However, the Company still has additional work to do in order to fully remediate the issues identified in the BSA Consent Order. Compliance and resolution of the BSA Consent Order will ultimately be determined by the FDIC and DBO. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | |
Subsequent Events | Note 13. Subsequent Events Dividend Declaration On October 28, 2015, the Company’s Board of Directors declared a cash dividend of $0.06 per share, payable on November 30, 2015, to shareholders of the Company’s common stock as of November 16, 2015. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Investment in Non-Consolidated Subsidiaries | Investment in Non-Consolidated Subsidiaries The Company accounts for its investment in Heritage Oaks Capital Trust II, Mission Community Capital Trust I, and Santa Lucia Bancorp (CA) Capital Trust, as unconsolidated subsidiaries using the equity method of accounting, as the Company is not the primary beneficiary of the trust. Mission Community Capital Trust I and Santa Lucia Bancorp (CA) Capital Trust were acquired as part of the acquisition of Mission Community Bancorp on February 28, 2014. The sole purpose of each of these trusts is for the issuance of trust preferred securities. |
Reclassifications | Reclassifications Certain items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. |
Use of Estimates in the Preparation of Condensed Consolidated Financial Statements | Use of Estimates in the Preparation of Condensed Consolidated Financial Statements The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and general practices within the banking industry require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Allowance for Loan and Lease Losses | Significant Accounting Policies Update The significant accounting policies that the Company applies are detailed in Note 1. Summary of Significant Accounting Policies, of the Company’s 2014 Annual Report filed on Form 10-K. Changes to accounting policies during the nine months ended September 30, 2015 are discussed below: During the third quarter of 2015, the Company made a specific enhancement to its methodology for determining the general reserve component of the allowance for loan and lease losses (“ALLL”). This enhancement related specifically to the methodology used to calculate the loss rates for loan risk grades within each loan type in the determination of the general reserve component of the ALLL. The enhanced methodology uses more granular loan level data to calculate loss rates for specific loan grades within each loan type, allowing for more detailed loan migration analysis, and the ability to determine more precise average loss rates for each loan risk grade. Although the total general reserve component of the ALLL for each loan type and portfolio segment is still based on total average historical losses for their respective loan types, management believes the allocation of the ALLL to each loan risk grade, within each loan type and the evaluation of the loss emergence period has become more precise under this methodology enhancement. The implementation of the ALLL model enhancements did not result in a required increase or decrease in the balance of the ALLL, or a material impact to the overall allocation of the ALLL. The ALLL model enhancement has allowed the Company to apply more precision in determining loss rates for specific loan grades within each loan type. The section of the accounting policy for the ALLL, which was updated for this methodology enhancement is illustrated below: Allowance for Loan and Lease Losses The Company manages credit risk not only through extensive risk analyses performed prior to a loan’s approval, but also through the ongoing monitoring of loans within the portfolio, and more specifically certain types of loans that generally involve a greater degree of risk, such as commercial real estate, commercial lines of credit, agriculture, and construction/land loans. The Company monitors loans in the portfolio through an exhaustive internal process, at least quarterly, as well as with the assistance of independent loan reviews. These reviews generally not only focus on problem loans, but also internally rated “pass” credits within certain pools of loans that may be expected to experience stress due to economic conditions. This process allows the Company to validate credit risk grade ratings, underwriting structure, and the Company’s estimated exposure in the current economic environment as well as enhance communications with borrowers where necessary in an effort to mitigate potential future losses. All significant problem loans are analyzed in detail at least quarterly, in order to properly estimate potential exposure to loss associated with these loans in a timely manner. Each segment of loans in the portfolio possesses varying degrees of risk, based on, among other things, the type of loan, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company’s loan portfolio, which are factors management regularly considers when evaluating the adequacy of the ALLL: " Real estate secured loans – consist primarily of loans secured by commercial real estate, multi-family, farmland, and 1 to 4 family residential properties. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lie primarily within that loan type. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company’s recorded investment in the loan. " Construction and land – although construction and land loans generally possess a higher inherent risk of loss than other loans, improvements in the mix, collateral and nature of loans help to mitigate risks within this segment of the portfolio. Risk arises from the necessity to complete projects within specified cost and time limits. Trends in the construction industry may also impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of future construction projects. " Commercial and industrial – consist primarily of commercial and industrial loans (business lines of credit), agriculture loans, and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which can impact a borrower’s ability to continue to make scheduled payments. The risk of repayment of agriculture loans arises largely from factors beyond the control of the Company or the related borrower, such as commodity prices, general weather conditions, and drought. " Consumer – the consumer loan portfolio is comprised primarily of a large number of small loans with scheduled amortization over a specific period. The majority of consumer loans include revolving credit plans, installment loans and credit card balances. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. ALLL Model Methodology The ALLL is maintained at a level which, in management’s judgment, is appropriate to absorb probable credit losses inherent in the loans within the loan portfolio as of the balance sheet date. The amount of the ALLL is based on management’s evaluation of the collectability of the loan portfolio, including the nature and volume of the portfolio, credit concentrations, trends in historical loss experience, the level of certain classified balances and specific impaired loans, and economic conditions and the related impact on specific borrowers and industry groups. The ALLL is increased by provisions for loan and lease losses, which are charged to earnings and reduced (or potentially increased) by charge-offs, net of recoveries. Changes in the ALLL relating to impaired loans, including troubled debt restructurings (“TDRs”), are charged or credited to the provision for loan and lease losses. Because of uncertainties inherent in the estimation process, management’s estimate of probable credit losses inherent in the loan portfolio and the related allowance may change. The process in which management determines the appropriate level of the ALLL involves the exercise of considerable judgment and the use of estimates. While management utilizes its best judgment and all available information in determining the adequacy of the ALLL, the ultimate adequacy of the ALLL is dependent upon a variety of factors beyond the Company’s control, including but not limited to, the performance of the loan portfolio, changes in current and future economic conditions and the view of regulatory agencies regarding the level of classified assets. Weakness in economic conditions and any other factor that may adversely affect credit quality and or that may result in higher levels of: past due and non-accruing loans, loan defaults, and or increased loan charge-offs, may require additional provisions for loan and lease losses in future periods and a higher balance in the Company’s ALLL. The ALLL, as more fully described below, is comprised of three components: general reserves, specific loan reserves, and a reserve for purchased credit impaired (“PCI”) loans. General Reserves – The general reserve component of the ALLL, which is not attributable to loans specifically identified as impaired, is determined through a two-step process. First a quantitative allocation is determined by pooling performing loans by collateral type and purpose. These pools of loans are then further segmented by an internal risk grading system that classifies loans as: pass, special mention, substandard and doubtful. The Company’s risk grade system allows management, among other things, to identify the risk associated with each loan, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are generally assigned based on information concerning the borrower and the strength of the collateral. Risk grades are reviewed regularly by the Company’s credit committee and are scrutinized by independent loan reviews performed semi-annually, as well as by regulatory agencies during scheduled examinations. Once credit risk grades have been assigned, estimated loss rates are then applied to each segment according to risk grade to determine the amount of the general portfolio allocation. Estimated loss rates are determined through a migration analysis of historical losses for each segment of the loan portfolio, based on the Company’s prior experience with such loans, and the use of detailed loan level data, encompassing historical losses and average balance information for each loan type and risk grade. The following provides brief definitions for credit risk grade ratings assigned to loans in the portfolio: " Pass – credits that have strong credit quality with adequate collateral or secondary source of repayment and little existing or known weaknesses. However, pass may include credits with exposure to certain potential factors that may adversely impact the credit, if they materialize, resulting in these credits being put on a watch list to monitor more closely than other pass rated credits. Such factors may be credit / relationship specific or general to an entire industry. " Special Mention – credits that have potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit at some future date. " Substandard – credits that have a defined weakness or weaknesses which may jeopardize the orderly liquidation of the loan through cash flows, making it likely that repayment may have to come from some other source, such as the liquidation of collateral. The Company is more likely to incur losses on substandard credits if the weakness or weaknesses identified in the credit are not corrected. " Doubtful – credits that possess the characteristics of a substandard credit, but because of certain existing deficiencies related to the credit, full collection is highly questionable. The probability of incurring some loss on such credits is high, but because of certain important and reasonably specific pending factors which may work to the advantage of strengthening the credit, charge-off is deferred until such time as the Company becomes reasonably certain that certain pending factors related to the credit will no longer provide some form of benefit. The second component of the general reserve allocation of the ALLL is the qualitative allocation, and is determined by estimates the Company makes in regard to certain internal and external factors that may have either a positive or negative impact on the overall losses inherent in the loan portfolio. Internal factors include trends in credit quality of the loan portfolio, the existence and the effects of concentrations, the composition and volume of the loan portfolio and the scope and frequency of the loan review process as well as any other factor determined by management to have an impact on the credit quality of the loan portfolio. External factors include local, state and national economic and business conditions, as well as the estimated impact that environmental factors may have on certain segments of the loan portfolio, such as drought. While management regularly reviews the estimated impact these internal and external factors are expected to have on the loan portfolio, there can be no assurance that an adverse change in any one or combination of these factors will not be in excess of management’s expectations. |
Recent Accounting Guidance Adopted | Recent Accounting Guidance Adopted In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-14 Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure . This update addresses classification of government-guaranteed mortgage loans, including those where guarantees are offered by the Federal Housing Administration (“FHA”), the U.S. Department of Housing and Urban Development (“HUD”), and the U.S. Department of Veterans Affairs (“VA”). Although current accounting guidance stipulates proper measurement and classification in situations where a creditor obtains from a debtor, assets in satisfaction of a receivable (such as through foreclosure), current guidance does not specify how to measure and classify foreclosed mortgage loans that are government-guaranteed. Under the provisions of this update, a creditor would derecognize a mortgage loan that has been foreclosed upon, and recognize a separate receivable if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The amendments within this update are effective for interim and annual periods, beginning after December 15, 2014. The adoption of this update did not have a material impact on the Company’s consolidated financial statements. In January 2014, the FASB issued ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors . This ASU provides clarification that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for interim and annual periods, beginning after December 15, 2014. The adoption of this update did not have a material impact on the Company’s consolidated financial statements. |
Recent Accounting Guidance Not Yet Effective | Recent Accounting Guidance Not Yet Effective In September, 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments (Topic 805). This ASU eliminates the requirement to restate prior period financial statements for measurement period adjustments to assets acquired and liabilities assumed in a business combination. The new guidance under this update requires the cumulative impact of measurement period adjustments be recognized in the period the adjustment is determined. This update does not change what constitutes a measurement period adjustment, nor does it change the length of the measurement period. The new standard is effective for interim annual periods beginning after December 15, 2015 and should be applied prospectively to measurement period adjustments that occur after the effective date. The Company does not expect the adoption of this update to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . This update requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The amendments within this update are effective for the quarter ending March 31, 2018. The Company is currently in the process of evaluating the impact of the adoption of this update, but does not expect a material impact on the Company’s consolidated financial statements. |
Business Combination (Table)
Business Combination (Table) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination | |
Schedule of unaudited pro forma financial information | Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 (dollars in thousands, except per share data) Net interest income $ $ Provision for loan and lease losses - - Non-interest income Non-interest expense Income before income taxes Income tax expense Net income $ $ Earnings Per Common Share Basic $ $ Diluted $ $ |
Fair Value of Assets and Liab24
Fair Value of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Assets and Liabilities | |
Summary of the assets the Company measures at fair value on a recurring basis | Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Assets At Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (dollars in thousands) Assets Obligations of U.S. government agencies $ $ - $ $ - Mortgage backed securities: U.S government sponsored entities and agencies - - Non-agency - - State and municipal securities - - Asset backed securities - - Other investments - - Total assets measured on a recurring basis $ $ $ $ - Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Assets At Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (dollars in thousands) Assets Obligations of U.S. government agencies $ $ - $ $ - Mortgage backed securities: U.S government sponsored entities and agencies - - Non-agency - - State and municipal securities - - Asset backed securities - - Total assets measured on a recurring basis $ $ - $ $ - |
Summary of assets the Company measures at fair value on a non-recurring basis | Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Year To Assets At Identical Assets Inputs Inputs Date Losses Fair Value (Level 1) (Level 2) (Level 3) (Recoveries) (dollars in thousands) Assets Impaired loans: Land $ $ - $ - $ $ Total assets measured on a non-recurring basis $ $ - $ - $ $ Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Year To Assets At Identical Assets Inputs Inputs Date Losses Fair Value (Level 1) (Level 2) (Level 3) (Recoveries) (dollars in thousands) Assets Impaired loans: Commercial real estate $ $ - $ - $ $ Land - - Total assets measured on a non-recurring basis $ $ - $ - $ $ |
Summary of the estimated fair value of financial instruments | Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant September 30, 2015 Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Fair Value (dollars in thousands) Assets Cash and cash equivalents $ $ $ - $ - $ Investment securities available for sale - Federal Home Loan Bank stock - - - N/A Loans receivable, net of deferred fees and costs - - Loans held for sale - - Accrued interest receivable - Liabilities Non-interest bearing deposits - - Interest bearing deposits - - Federal Home Loan Bank advances - - Junior subordinated debentures - - Accrued interest payable - - Fair Value Measurements at the End of the Reporting Period Using As of Quoted Prices in Significant Other Significant December 31, 2014 Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Fair Value (dollars in thousands) Assets Cash and cash equivalents $ $ $ - $ - $ Investment securities available for sale - - Federal Home Loan Bank stock - - - N/A Loans receivable, net of deferred fees and costs - - Loans held for sale - - Accrued interest receivable - Liabilities Non-interest bearing deposits - - Interest bearing deposits - - Federal Home Loan Bank advances - - Junior subordinated debentures - - Accrued interest payable - - |
Summary of off-balance sheet instruments | September 30, 2015 December 31, 2014 Notional Cost to Cede Notional Cost to Cede Amount or Assume Amount or Assume (dollars in thousands) Off-balance sheet instruments, commitments to extend credit and standby letters of credit $ $ $ $ |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Schedule of amortized cost and fair values of the Company's investment securities, all of which are reported as available for sale | September 30, 2015 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Loss Value (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - Other investments - Total available for sale securities $ $ $ $ December 31, 2014 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Loss Value (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - Total available for sale securities $ $ $ $ |
Summary of investment securities in an unrealized loss position | September 30, 2015 Less Than Twelve Months Twelve Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Obligations of U.S. government agencies $ $ $ - $ - $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - - Other investments - - Total $ $ $ $ $ $ December 31, 2014 Less Than Twelve Months Twelve Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Obligations of U.S. government agencies $ $ $ $ $ $ Mortgage backed securities U.S. government sponsored entities and agencies Non-agency State and municipal securities Asset backed securities - - Total $ $ $ $ $ $ |
Schedule of proceeds from the sales and calls of securities and the associated gains and losses | For Three Months Ended For Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Proceeds $ $ $ $ Gross gains Gross losses - |
Schedule of amortized cost and fair values maturities of available for sale investment securities | September 30, 2015 December 31, 2014 Amortized Amortized Cost Fair Value Cost Fair Value (dollars in thousands) Due one year or less $ $ $ $ Due after one year through five years Due after five years through ten years Due after ten years Total $ $ $ $ |
Summary of earnings on both taxable and tax-exempt investment securities | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Taxable earnings on investment securities Obligations of U.S. government agencies $ $ $ $ Mortgage backed securities State and municipal securities Corporate debt securities - - - Asset backed securities Non-taxable earnings on investment securities State and municipal securities Total $ $ $ $ |
Loans and Allowance for Loan 26
Loans and Allowance for Loan and Lease Losses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Loans and Allowance for Loan and Lease Losses | |
Summary of outstanding loan balances | September 30, 2015 December 31, 2014 Non-PCI PCI Non-PCI PCI Loans Loans Total Loans Loans Total (dollars in thousands) Real Estate Secured Commercial $ $ $ $ $ $ Residential 1 to 4 family Farmland - Multi-family residential - - Construction and land Home equity lines of credit - - Total real estate secured Commercial Commercial and industrial Agriculture Other - - - - Total commercial Consumer - - Total gross loans held for investment Net deferred loan fees - - Allowance for loan and lease losses - Total net loans held for investment $ $ $ $ $ $ Loans held for sale $ $ - $ $ $ - $ |
Summary of the recorded investment in non-PCI and PCI impaired loans | For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 September 30, 2015 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) Non-PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Construction and land - Residential 1 to 4 family - Farmland - Home equity lines of credit - - - Commercial Commercial and industrial - Agriculture - Consumer - Total - With Related Allowance Real Estate Secured Construction and land - - Commercial - - Commercial Commercial and industrial Total Total Non-PCI impaired loans $ $ $ $ $ $ $ For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 September 30, 2015 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Residential 1 to 4 family - Construction and land - Commercial Agriculture - Commercial and industrial - Total - With Related Allowance Real Estate Secured Commercial Construction and land Commercial Commercial and industrial Total Total PCI loans $ $ $ $ $ $ $ For the Three Months Ended For the Nine Months Ended December 31, 2014 September 30, 2014 September 30, 2014 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) Non-PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Construction and land - Farmland - Residential 1 to 4 family - Home equity lines of credit - - - Commercial Commercial and industrial - Agriculture - Consumer - Total - With Related Allowance Real Estate Secured Construction and land Commercial - - Commercial Commercial and industrial Total Total Non-PCI impaired loans $ $ $ $ $ $ $ For the Three Months Ended For the Nine Months Ended December 31, 2014 September 30, 2014 September 30, 2014 Unpaid Specific Average Interest Average Interest Recorded Principal Allowance for Recorded Income Recorded Income Investment Balance Impaired Loans Investment Recognized Investment Recognized (dollars in thousands) PCI Loans Without Related Allowance Real Estate Secured Commercial $ $ $ - $ $ $ $ Farmland - Construction and land - Residential 1 to 4 family - Home equity lines of credit - - - Commercial Agriculture - Commercial and industrial - Total PCI loans $ $ $ - $ $ $ $ |
Summary of loans classified as TDRs | September 30, 2015 December 31, 2014 Accrual Non-accrual Total Accrual Non-accrual Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ $ $ Construction and land Residential 1 to 4 family Farmland - - Commercial Commercial and industrial Agriculture - - Consumer - Total non-PCI loans PCI Loans Real Estate Secured Commercial - Construction and land - - - - Commercial Commercial and industrial Total PCI loans Total TDRs $ $ $ $ $ $ |
Schedule of loan modifications resulted in TDRs for non-PCI and PCI loans | For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded of TDRs Investment Investment of TDRs Investment Investment (dollars in thousands) Non-PCI Loans Real Estate Secured Residential 1 to 4 family $ $ $ $ Farmland Commercial - - - Construction and land - - - Commercial Commercial and industrial Agriculture Consumer PCI Loans Real Estate Secured Commercial Construction and land - - - Commercial Commercial and industrial Total $ $ $ $ For the Three Months Ended For the Nine Months Ended September 30, 2014 September 30, 2014 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded of TDRs Investment Investment of TDRs Investment Investment (dollars in thousands) Non-PCI Loans Real Estate Secured Construction and land $ $ $ $ Commercial - - - Commercial Commercial and industrial Agriculture - - - Consumer - - - PCI Loans Real Estate Secured Commercial - - - Commercial Commercial and industrial - - - Total $ $ $ $ |
Schedule of loans that were modified as troubled debt restructurings within the twelve months prior to the balance sheet date indicated for which there was a payment default | For the Three Months Ended For the Nine Months Ended September 30, 2015 September 30, 2015 Number of TDRs Recorded Investment Number of TDRs Recorded Investment Non-PCI Loans (dollars in thousands) Commercial Commercial and industrial - $ - $ Total - $ - $ For the Three Months Ended For the Nine Months Ended September 30, 2014 September 30, 2014 Number of TDRs Recorded Investment Number of TDRs Recorded Investment Non-PCI Loans (dollars in thousands) Commercial Commercial and industrial - $ - $ Total - $ - $ |
Schedule of loan portfolio by the Company's internal risk grading system | September 30, 2015 Credit Risk Grades Special Pass Mention Substandard Doubtful Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ - $ Residential 1 to 4 family - - Farmland - Multi-family residential - - Construction and land - Home equity lines of credit - - Commercial Commercial and industrial - Agriculture - Other - - - - - Consumer - - Total non-PCI loans - PCI Loans Real Estate Secured Commercial - - Construction and land - Residential 1 to 4 family - - Commercial Agriculture - - - Commercial and industrial - Total PCI loans - Total loans held for investment $ $ $ $ - $ December 31, 2014 Credit Risk Grades Special Pass Mention Substandard Doubtful Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ $ - $ Residential 1 to 4 family - Farmland - Multi-family residential - - Home equity lines of credit - - Construction and land - - Commercial Commercial and industrial Agriculture - Other - - - Consumer - - Total non-PCI loans PCI Loans Real Estate Secured Commercial - Farmland - - - Construction and land - - Residential 1 to 4 family - - - Commercial Agriculture - - - Commercial and industrial Total PCI loans Total loans held for investment $ $ $ $ $ |
Summary of the aging of loans held for investment | September 30, 2015 Days Past Due 90+ and Still Non- Current 30-59 60-89 Accruing Accruing Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ $ - $ - $ $ Residential 1 to 4 family - - - Farmland - - - Multi-family residential - - - - Construction and land - - - Home equity lines of credit - - - Commercial - Commercial and industrial - - Agriculture - - - - Other - - - - - - Consumer - - - Total non-PCI loans - - PCI Loans Real Estate Secured Commercial - - - Land - - - - Residential 1 to 4 family - - - - Commercial Agriculture - - - - Commercial and industrial - - - Total PCI loans - - - Total loans held for investment $ $ $ - $ - $ $ December 31, 2014 Days Past Due 90+ and Still Non- Current 30-59 60-89 Accruing Accruing Total (dollars in thousands) Non-PCI Loans Real Estate Secured Commercial $ $ - $ - $ - $ $ Residential 1 to 4 family - - - Farmland - - - - Multi-family residential - - - - Construction and land - - - Home equity lines of credit - - - Commercial Commercial and industrial - - Agriculture - - - Other - - - - Consumer - Total non-PCI loans - PCI Loans Real Estate Secured Commercial - - - - Farmland - - - - Construction and land - - - - Residential 1 to 4 family - - - - Commercial Agriculture - - - - Commercial and industrial - - - Total PCI loans - - - Total loans held for investment $ $ $ $ - $ $ |
Schedule of carrying amount and unpaid principal balance of purchased credit impaired loans | September 30, 2015 December 31, 2014 Unpaid Principal Balance Carrying Amount Unpaid Principal Balance Carrying Amount (dollars in thousands) Real Estate Secured Commercial $ $ $ $ Construction and land Residential 1 to 4 family Farmland - - Total real estate secured Commercial Commercial and industrial Agriculture Total commercial Total PCI loans $ $ $ $ |
Schedule of accretable yield, or income expected to be collected | For the Nine Months Ended September 30, 2015 (dollars in thousands) Balance, December 31, 2014 $ Accretion of income Reclassifications from nonaccretable difference (1) Balance, September 30, 2015 $ (1) Reclassification from nonaccretable difference is attributable to positive changes in expected future cash flows on certain PCI loans. |
Summary of the activity in the allowance for loan and lease losses by portfolio segment | For the Three Months Ended September 30, 2015 Balance June 30, 2015 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2015 (dollars in thousands) Other real estate secured $ $ - $ $ $ Commercial Construction and land - Consumer Unallocated - Total $ $ $ $ - $ For the Nine Months Ended September 30, 2015 Balance December 31, 2014 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2015 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial Construction and land Consumer Unallocated - Total $ $ $ $ - $ For the Three Months Ended September 30, 2014 Balance June 30, 2014 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2014 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial - Construction and land - Consumer Unallocated Total $ $ $ $ - $ For the Nine Months Ended September 30, 2014 Balance December 31, 2013 Charge-offs Recoveries Provision for Loan and Lease Losses Balance September 30, 2014 (dollars in thousands) Other real estate secured $ $ $ $ $ Commercial Construction and land - Consumer Unallocated Total $ $ $ $ - $ |
Schedule of allowance for loan and lease losses and the recorded investment in loans by impairment methodology | September 30, 2015 Allowance for Loan and Lease Losses Recorded Investment in Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality (dollars in thousands) Other real estate secured $ $ $ $ $ $ Commercial Construction and land Consumer - - - Unallocated - - - Total $ $ $ $ $ $ December 31, 2014 Allowance for Loan and Lease Losses Recorded Investment in Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality Individually Evaluated for Impairment Collectively Evaluated for Impairment Loans Acquired with Deteriorated Credit Quality (dollars in thousands) Other real estate secured $ $ $ - $ $ $ Commercial - Construction and land - Consumer - - - Unallocated - - Total $ $ $ - $ $ $ |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Summary of the gross carrying amount, accumulated amortization and net carrying amount of CDI | September 30, 2015 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (dollars in thousands) Core deposit intangibles $ $ $ |
Summary of an estimate for future amortization expense | September 30, 2015 Beginning Balance Estimated Remaining Amortization Projected Ending Balance (dollars in thousands) Period Year 2015 $ $ $ Year 2016 Year 2017 Year 2018 Year 2019 Year 2020 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-based Compensation Plans | |
Summary of recognized and unrecognized share based compensation expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in thousands) Share-based compensation expense: Stock options $ $ $ $ Restricted stock Total expense $ $ $ $ Unrecognized compensation expense: Stock options $ $ Restricted stock Total unrecognized expense $ $ |
Summary of activity related to restricted stock granted, vested and forfeited | Number of Average Grant Shares Date Fair Value Balance December 31, 2014 $ Granted Vested Forfeited Balance September 30, 2015 $ |
Schedule of assumptions used in the calculation of weighted average fair value of options granted | For the Nine Months Ended September 30, 2015 2014 Expected volatility Expected term (years) Dividend yield Risk free rate Weighted-average grant date fair value $ $ |
Summary of activity related to options granted, exercised, and forfeited | Options Outstanding Options Number Weighted Average Available for of Shares Exercise Price Grant (1) Balance, December 31, 2014 $ Granted Forfeited Exercised Expired Balance, September 30, 2015 $ (1) Shares available for grant as of December 31, 2014 were from the 2005 Equity Based Compensation Plan, which expired in March 2015. As of September 30, 2015, no further grants can be made from that plan. Shares available for grant as of September 30, 2015 are from the 2015 Equity Incentive Plan, which was approved by the Company’s shareholders in May 2015. |
Summary of the aggregate intrinsic value of options vested and expected to vest and exercisable | September 30, 2015 Weighted Average Weighted Remaining Aggregate Average Contractual Life Intrinsic Shares Exercise Price (Years) Value Vested or expected to vest $ $ Exercisable $ $ |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Shareholders' Equity | |
Schedule of the Company's and the Bank's actual regulatory capital ratios | Basel III Pre-Basel III Regulatory Regulatory Standard to be Standard to be Well September 30, 2015 Well December 31, 2014 September 30, 2014 Capitalized (1) Company Bank Capitalized (1) Company Bank Company Bank Ratio Common Equity Tier I capital 6.50% N/A N/A N/A N/A N/A Leverage ratio 5.00% 5.00% Tier I capital 8.00% 6.00% Total risk-based capital 10.00% 10.00% (1) Reflects minimum threshold to be considered “well capitalized” under the Prompt Corrective Action framework, specific to depository institutions. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Schedule of calculation of both basic and diluted earnings per common share | For the Three Months Ended September 30, 2015 2014 Net Net Income Shares Income Shares (dollars in thousands, except per share data) Net income $ $ Accretion on preferred stock - - Net income available to common shareholders $ $ Weighted average shares outstanding Basic earnings per common share $ $ Dilutive effect of share-based compensation awards Weighted average diluted shares outstanding Diluted earnings per common share $ $ For the Nine Months Ended September 30, 2015 2014 Net Net Income Shares Income Shares (dollars in thousands, except per share data) Net income $ $ Accretion on preferred stock - Net income available to common shareholders $ $ Weighted average shares outstanding Basic earnings per common share $ $ Dilutive effect of share-based compensation awards Weighted average diluted shares outstanding Diluted earnings per common share $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies. | |
Schedule of outstanding financial commitments | September 30, December 31, 2015 2014 (dollars in thousands) Commitments to extend credit $ $ Standby letters of credit (1) Total commitments and standby letters of credit $ $ (1) Includes a standby letter of credit to one customer in the amount of $10.4 million at September 30, 2015 and December 31, 2014. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015USD ($)segment | Dec. 31, 2014USD ($) | Feb. 28, 2014 | |
Assets the Company measures at fair value on a recurring basis | |||
Total assets | $ 1,873,925 | $ 1,710,127 | |
Nature of Operations | |||
Number of business segments | segment | 1 | ||
MISN | |||
Assets the Company measures at fair value on a recurring basis | |||
Percentage acquired of outstanding common shares | 100.00% | ||
All Non-United States countries | |||
Assets the Company measures at fair value on a recurring basis | |||
Total assets | $ 0 | ||
Revenue | $ 0 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Pro Forma Financial Information | |||
Net interest Income | $ 15,395 | $ 45,761 | |
Non-interest income | 2,982 | 7,835 | |
Non-interest expense | 13,384 | 46,844 | |
Income before income tax expense | 4,993 | 6,752 | |
Income tax expense | 1,682 | 2,315 | |
Net income | $ 3,311 | $ 4,437 | |
Loss Per Common Share | |||
Basic (in dollars per share) | $ 0.10 | $ 0.13 | |
Diluted (in dollars per share) | $ 0.10 | $ 0.13 | |
MISN | |||
Business combination | |||
Percentage acquired of outstanding common shares | 100.00% | ||
Common stock issued (in shares) | 7,541,326 | ||
Aggregate cash consideration | $ 8,700 | ||
Transaction value | $ 69,000 | ||
Closing price (in dollars per share) | $ 7.99 |
Fair Value of Assets and Liab34
Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | $ 432,750 | $ 355,580 |
Obligations of U.S. government agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 49,264 | 19,664 |
Mortgage-backed securities - U.S. government sponsored entities and agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 232,499 | 215,398 |
Mortgage-backed securities - Non-agency | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 32,176 | 11,901 |
State and municipal securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 102,694 | 82,592 |
Asset backed securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 16,082 | 26,025 |
Other investments | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 35 | |
Assets At Fair Value | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 432,750 | 355,580 |
Assets At Fair Value | Significant Other Observable Inputs (Level 2) | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 432,715 | 355,580 |
Assets At Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 35 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 432,715 | 355,580 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Obligations of U.S. government agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 49,264 | 19,664 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - U.S. government sponsored entities and agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 232,499 | 215,398 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - Non-agency | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 32,176 | 11,901 |
Recurring basis | Significant Other Observable Inputs (Level 2) | State and municipal securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 102,694 | 82,592 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset backed securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 16,082 | 26,025 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 35 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other investments | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 35 | |
Recurring basis | Assets At Fair Value | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 432,750 | 355,580 |
Recurring basis | Assets At Fair Value | Obligations of U.S. government agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 49,264 | 19,664 |
Recurring basis | Assets At Fair Value | Mortgage-backed securities - U.S. government sponsored entities and agencies | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 232,499 | 215,398 |
Recurring basis | Assets At Fair Value | Mortgage-backed securities - Non-agency | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 32,176 | 11,901 |
Recurring basis | Assets At Fair Value | State and municipal securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 102,694 | 82,592 |
Recurring basis | Assets At Fair Value | Asset backed securities | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | 16,082 | $ 26,025 |
Recurring basis | Assets At Fair Value | Other investments | ||
Assets the Company measures at fair value on a recurring basis | ||
Total assets measured on a recurring basis | $ 35 |
Fair Value of Assets and Liab35
Fair Value of Assets and Liabilities (Details 2) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Land | ||
Total Losses for assets measured at fair value on a non-recurring basis | ||
Year to Date Losses/(Recoveries) on impaired loans | $ (178) | |
Recurring basis | ||
Transfers between level 1 and level 2 | ||
Assets transfer from Level 1 to level 2 | 0 | |
Assets transfer from Level 2 to level 1 | 0 | |
Non-recurring basis | ||
Total Losses for assets measured at fair value on a non-recurring basis | ||
Year to Date Losses/(Recoveries) | (178) | $ 80 |
Transfers between level 1 and level 2 | ||
Assets transfer from Level 1 to level 2 | 0 | |
Assets transfer from Level 2 to level 1 | 0 | |
Non-recurring basis | Commercial real estate | ||
Total Losses for assets measured at fair value on a non-recurring basis | ||
Year to Date Losses/(Recoveries) | 1,026 | |
Non-recurring basis | Land | ||
Total Losses for assets measured at fair value on a non-recurring basis | ||
Year to Date Losses/(Recoveries) on impaired loans | (946) | |
Non-recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Total assets measured on a non-recurring basis | 3,211 | 4,586 |
Non-recurring basis | Significant Unobservable Inputs (Level 3) | Commercial real estate | ||
Assets | ||
Impaired loans | 1,325 | |
Non-recurring basis | Significant Unobservable Inputs (Level 3) | Land | ||
Assets | ||
Impaired loans | 3,211 | 3,261 |
Non-recurring basis | Assets At Fair Value | ||
Assets | ||
Total assets measured on a non-recurring basis | 3,211 | 4,586 |
Non-recurring basis | Assets At Fair Value | Commercial real estate | ||
Assets | ||
Impaired loans | 1,325 | |
Non-recurring basis | Assets At Fair Value | Land | ||
Assets | ||
Impaired loans | $ 3,211 | $ 3,261 |
Fair Value of Assets and Liab36
Fair Value of Assets and Liabilities (Details 3) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Summary of the estimated fair value of financial instruments | ||
Off-balance sheet instruments, commitments to extend credit and standby letters of credit, Notional Amount | $ 282,984 | $ 253,275 |
Off-balance sheet instruments, commitments to extend credit and standby letters of credit, Cost to Cede or Assume | 2,830 | 2,533 |
Assets | ||
Investment securities available for sale, at fair value | 432,750 | 355,580 |
Liabilities | ||
Non-interest bearing deposits | 544,782 | 461,479 |
Junior subordinated debentures | 10,389 | 13,233 |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents | 112,270 | 35,580 |
Investment securities available for sale, at fair value | 432,750 | 355,580 |
Federal Home Loan Bank stock | 7,853 | 7,853 |
Loans receivable, net of deferred fees and costs | 1,205,684 | 1,192,038 |
Loans held for sale | 5,366 | 2,586 |
Accrued interest receivable | 5,911 | 5,659 |
Liabilities | ||
Non-interest bearing deposits | 544,782 | 461,479 |
Interest bearing deposits | 1,026,988 | 933,325 |
Federal Home Loan Bank advances | 78,546 | 95,558 |
Junior subordinated debentures | 10,389 | 13,233 |
Accrued interest payable | 412 | 401 |
Assets At Fair Value | ||
Assets | ||
Cash and cash equivalents | 112,270 | 35,580 |
Investment securities available for sale, at fair value | 432,750 | 355,580 |
Loans receivable, net of deferred fees and costs | 1,232,158 | 1,196,997 |
Loans held for sale | 5,366 | 2,586 |
Accrued interest receivable | 5,911 | 5,659 |
Liabilities | ||
Non-interest bearing deposits | 544,782 | 461,479 |
Interest bearing deposits | 1,028,358 | 936,151 |
Federal Home Loan Bank advances | 79,986 | 96,679 |
Junior subordinated debentures | 8,522 | 9,297 |
Accrued interest payable | 412 | 401 |
Assets At Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 112,270 | 35,580 |
Investment securities available for sale, at fair value | 35 | |
Liabilities | ||
Non-interest bearing deposits | 544,782 | 461,479 |
Assets At Fair Value | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Investment securities available for sale, at fair value | 432,715 | 355,580 |
Loans held for sale | 5,366 | 2,586 |
Accrued interest receivable | 2,242 | 2,038 |
Liabilities | ||
Interest bearing deposits | 1,028,358 | 936,151 |
Federal Home Loan Bank advances | 79,986 | 96,679 |
Accrued interest payable | 412 | 401 |
Assets At Fair Value | Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Loans receivable, net of deferred fees and costs | 1,232,158 | 1,196,997 |
Accrued interest receivable | 3,669 | 3,621 |
Liabilities | ||
Junior subordinated debentures | $ 8,522 | $ 9,297 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | $ 430,562 | $ 353,971 |
Gross Unrealized Gains | 4,340 | 4,147 |
Gross Unrealized Losses | (2,152) | (2,538) |
Fair Value | 432,750 | 355,580 |
Obligations of U.S. government agencies | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 49,238 | 19,562 |
Gross Unrealized Gains | 346 | 191 |
Gross Unrealized Losses | (320) | (89) |
Fair Value | 49,264 | 19,664 |
Mortgage-backed securities - U.S. government sponsored entities and agencies | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 231,779 | 216,492 |
Gross Unrealized Gains | 1,633 | 1,092 |
Gross Unrealized Losses | (913) | (2,186) |
Fair Value | 232,499 | 215,398 |
Mortgage-backed securities - Non-agency | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 32,283 | 11,891 |
Gross Unrealized Gains | 40 | 21 |
Gross Unrealized Losses | (147) | (11) |
Fair Value | 32,176 | 11,901 |
State and municipal securities | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 100,704 | 79,810 |
Gross Unrealized Gains | 2,321 | 2,843 |
Gross Unrealized Losses | (331) | (61) |
Fair Value | 102,694 | 82,592 |
Asset backed securities | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 16,458 | 26,216 |
Gross Unrealized Losses | (376) | (191) |
Fair Value | 16,082 | $ 26,025 |
Other investments | ||
Reconciliation of amortized cost to fair value of investment securities reported as available for sale | ||
Total | 100 | |
Gross Unrealized Losses | (65) | |
Fair Value | $ 35 |
Investment Securities (Details
Investment Securities (Details 2) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)security | Dec. 31, 2014USD ($)security | |
Investment securities | ||
Less Than Twelve Months, Fair Value | $ 120,284 | $ 62,277 |
Less Than Twelve Months, Unrealized Loss | (1,229) | (741) |
Twelve Months or More, Fair Value | 50,991 | 81,265 |
Twelve Months or More, Unrealized Loss | (923) | (1,797) |
Total, Fair Value | 171,275 | 143,542 |
Total, Unrealized Loss | $ (2,152) | $ (2,538) |
Securities were in an unrealized loss position | security | 78 | 57 |
Investment security holdings | Minimum | ||
Securities in an unrealized loss position | ||
Maturity period of available-for-sale securities | 1 year | |
Investment security holdings | Maximum | ||
Securities in an unrealized loss position | ||
Maturity period of available-for-sale securities | 40 years | |
Obligations of U.S. government agencies | ||
Investment securities | ||
Less Than Twelve Months, Fair Value | $ 32,115 | $ 2,795 |
Less Than Twelve Months, Unrealized Loss | (320) | (17) |
Twelve Months or More, Fair Value | 2,607 | |
Twelve Months or More, Unrealized Loss | (72) | |
Total, Fair Value | 32,115 | 5,402 |
Total, Unrealized Loss | (320) | (89) |
Mortgage-backed securities - U.S. government sponsored entities and agencies | ||
Investment securities | ||
Less Than Twelve Months, Fair Value | 45,582 | 50,583 |
Less Than Twelve Months, Unrealized Loss | (376) | (670) |
Twelve Months or More, Fair Value | 32,365 | 58,753 |
Twelve Months or More, Unrealized Loss | (537) | (1,516) |
Total, Fair Value | 77,947 | 109,336 |
Total, Unrealized Loss | (913) | (2,186) |
Mortgage-backed securities - Non-agency | ||
Investment securities | ||
Less Than Twelve Months, Fair Value | 17,219 | 3,000 |
Less Than Twelve Months, Unrealized Loss | (142) | (7) |
Twelve Months or More, Fair Value | 1,581 | 507 |
Twelve Months or More, Unrealized Loss | (5) | (4) |
Total, Fair Value | 18,800 | 3,507 |
Total, Unrealized Loss | (147) | (11) |
State and municipal securities | ||
Investment securities | ||
Less Than Twelve Months, Fair Value | 25,333 | 5,899 |
Less Than Twelve Months, Unrealized Loss | (326) | (47) |
Twelve Months or More, Fair Value | 963 | 2,245 |
Twelve Months or More, Unrealized Loss | (5) | (14) |
Total, Fair Value | 26,296 | 8,144 |
Total, Unrealized Loss | (331) | (61) |
Asset backed securities | ||
Investment securities | ||
Twelve Months or More, Fair Value | 16,082 | 17,153 |
Twelve Months or More, Unrealized Loss | (376) | (191) |
Total, Fair Value | 16,082 | 17,153 |
Total, Unrealized Loss | (376) | $ (191) |
Other investments | ||
Investment securities | ||
Less Than Twelve Months, Fair Value | 35 | |
Less Than Twelve Months, Unrealized Loss | (65) | |
Total, Fair Value | 35 | |
Total, Unrealized Loss | $ (65) |
Investment Securities (Detail39
Investment Securities (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Proceeds from the sales and calls of securities and the associated gains and losses | ||||
Proceeds | $ 8,656 | $ 19,991 | $ 55,184 | $ 98,379 |
Gross gains | 136 | 457 | 815 | 814 |
Gross losses | (7) | (174) | (265) | |
Income tax expense (benefit) related to net realized gains (losses) on sale of securities | $ 57 | $ 189 | $ 270 | $ 231 |
Investment Securities (Detail40
Investment Securities (Details 4) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Available for sale securities, Amortized cost | ||
Due one year or less | $ 46,219 | $ 38,674 |
Due after one year through five years | 145,177 | 113,081 |
Due after five years through ten years | 173,928 | 137,909 |
Due after ten years | 65,238 | 64,307 |
Total | 430,562 | 353,971 |
Available for sale securities, Fair Value | ||
Due one year or less | 46,291 | 38,587 |
Due after one year through five years | 145,642 | 112,926 |
Due after five years through ten years | 175,581 | 140,115 |
Due after ten years | 65,236 | 63,952 |
Total | 432,750 | 355,580 |
Securities pledged to secure public deposits | ||
Available for sale securities, Amortized cost | ||
Total | 141,500 | 67,300 |
Available for sale securities, Fair Value | ||
Total | $ 148,900 | $ 72,500 |
Investment Securities (Detail41
Investment Securities (Details 5) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings on both taxable and tax-exempt investment securities | ||||
Total | $ 1,864 | $ 1,946 | $ 5,193 | $ 5,355 |
Obligations of U.S. government agencies | ||||
Earnings on both taxable and tax-exempt investment securities | ||||
Taxable earnings on investment securities | 161 | 112 | 487 | 226 |
Mortgage backed securities | ||||
Earnings on both taxable and tax-exempt investment securities | ||||
Taxable earnings on investment securities | 938 | 1,152 | 2,529 | 3,370 |
State and municipal securities | ||||
Earnings on both taxable and tax-exempt investment securities | ||||
Taxable earnings on investment securities | 151 | 38 | 339 | 40 |
Non-taxable earnings on investment securities | 581 | 545 | 1,725 | 1,452 |
Corporate debt securities | ||||
Earnings on both taxable and tax-exempt investment securities | ||||
Taxable earnings on investment securities | 6 | |||
Asset backed securities | ||||
Earnings on both taxable and tax-exempt investment securities | ||||
Taxable earnings on investment securities | $ 33 | $ 99 | $ 113 | $ 261 |
Loans and Allowance for Loan 42
Loans and Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Outstanding loan balances | ||||||||
Total gross loans held for investment | $ 1,206,740 | $ 1,206,740 | $ 1,193,483 | |||||
Net deferred loan fees | (1,056) | (1,056) | (1,445) | |||||
Allowance for loan and lease losses | (17,296) | $ (16,787) | (17,296) | $ (16,787) | $ (16,982) | (16,802) | $ (16,635) | $ (17,859) |
Net loans held for investment | 1,188,388 | 1,188,388 | 1,175,236 | |||||
Loans held for sale | 5,366 | 5,366 | 2,586 | |||||
Concentration of Credit Risk | ||||||||
Loan portfolio collateralized by various forms of real estate | 999,400 | 999,400 | 978,200 | |||||
Loans Serviced for Others | ||||||||
Unpaid principal balance of loans serviced for others, exclusive of SBA loans | 41,800 | 41,800 | 44,800 | |||||
Unpaid principal balance of SBA loans serviced for others | 9,000 | 9,000 | 13,000 | |||||
Recognized gains from the sale of SBA loans | 0 | 0 | 0 | 0 | ||||
Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 1,197,307 | 1,197,307 | 1,183,183 | |||||
Net deferred loan fees | (1,056) | (1,056) | (1,445) | |||||
Allowance for loan and lease losses | (17,214) | (17,214) | (16,802) | |||||
Net loans held for investment | 1,179,037 | 1,179,037 | 1,164,936 | |||||
Loans held for sale | 5,366 | 5,366 | 2,586 | |||||
PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 9,433 | 9,433 | 10,300 | |||||
Allowance for loan and lease losses | (82) | (82) | ||||||
Net loans held for investment | 9,351 | 9,351 | 10,300 | |||||
Federal Reserve Bank | ||||||||
Outstanding loan balances | ||||||||
Loans pledged as collateral | 601,400 | 601,400 | ||||||
FHLB secured credit facility | 400,100 | 400,100 | ||||||
FHLB secured borrowings | 78,500 | 78,500 | ||||||
FHLB secured line of credit | 11,500 | 11,500 | ||||||
Reserve maintained for the exercise of repurchase option by buyer | 6,900 | 6,900 | ||||||
MISN | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 195,800 | 195,800 | 239,700 | |||||
MISN | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 9,400 | $ 9,400 | 10,300 | |||||
Minimum | ||||||||
Outstanding loan balances | ||||||||
Period for sale of loans categorized as held for sale | 30 days | |||||||
Maximum | ||||||||
Outstanding loan balances | ||||||||
Period for sale of loans categorized as held for sale | 60 days | |||||||
Real Estate Secured | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 993,992 | $ 993,992 | 975,603 | |||||
Real Estate Secured | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 986,911 | 986,911 | 968,110 | |||||
Real Estate Secured | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 7,081 | 7,081 | 7,493 | |||||
Real Estate Secured | Commercial real estate | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 581,767 | 581,767 | 588,472 | |||||
Real Estate Secured | Commercial real estate | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 576,053 | 576,053 | 584,056 | |||||
Real Estate Secured | Commercial real estate | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 5,714 | 5,714 | 4,416 | |||||
Real Estate Secured | Residential 1 to 4 family | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 154,895 | 154,895 | 127,201 | |||||
Real Estate Secured | Residential 1 to 4 family | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 154,327 | 154,327 | 126,640 | |||||
Real Estate Secured | Residential 1 to 4 family | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 568 | 568 | 561 | |||||
Real Estate Secured | Farmland | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 107,376 | 107,376 | 98,373 | |||||
Real Estate Secured | Farmland | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 107,376 | 107,376 | 96,708 | |||||
Real Estate Secured | Farmland | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 1,665 | |||||||
Real Estate Secured | Multi-family residential | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 75,774 | 75,774 | 78,645 | |||||
Real Estate Secured | Multi-family residential | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 75,774 | 75,774 | 78,645 | |||||
Real Estate Secured | Construction and land | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 42,571 | 42,571 | 44,660 | |||||
Real Estate Secured | Construction and land | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 41,772 | 41,772 | 43,809 | |||||
Real Estate Secured | Construction and land | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 799 | 799 | 851 | |||||
Real Estate Secured | Home equity lines of credit | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 31,609 | 31,609 | 38,252 | |||||
Real Estate Secured | Home equity lines of credit | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 31,609 | 31,609 | 38,252 | |||||
Commercial | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 206,256 | 206,256 | 209,902 | |||||
Allowance for loan and lease losses | (5,485) | (4,314) | (5,485) | (4,314) | (4,993) | (5,125) | (4,436) | (4,781) |
Commercial | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 203,904 | 203,904 | 207,095 | |||||
Commercial | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 2,352 | 2,352 | 2,807 | |||||
Commercial | Commercial and industrial | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 159,012 | 159,012 | 154,787 | |||||
Commercial | Commercial and industrial | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 158,106 | 158,106 | 153,403 | |||||
Commercial | Commercial and industrial | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 906 | 906 | 1,384 | |||||
Commercial | Agriculture | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 47,244 | 47,244 | 55,101 | |||||
Commercial | Agriculture | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 45,798 | 45,798 | 53,678 | |||||
Commercial | Agriculture | PCI loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 1,446 | 1,446 | 1,423 | |||||
Commercial | Other | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 14 | |||||||
Commercial | Other | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 14 | |||||||
Consumer | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | 6,492 | 6,492 | 7,978 | |||||
Allowance for loan and lease losses | (191) | $ (109) | (191) | $ (109) | $ (171) | (202) | $ (100) | $ (131) |
Consumer | Non-PCI Loans | ||||||||
Outstanding loan balances | ||||||||
Total gross loans held for investment | $ 6,492 | $ 6,492 | $ 7,978 |
Loans and Allowance for Loan 43
Loans and Allowance for Loan and Lease Losses (Details 2) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | $ 10,788 | $ 10,788 | $ 9,978 | ||
Recorded investment with related allowance | 6,184 | 6,184 | 6,417 | ||
Unpaid principal balance without related allowance | 16,240 | 16,240 | 14,543 | ||
Unpaid principal balance with related allowance | 7,559 | 7,559 | 10,241 | ||
Specific Allowance for Impaired Loans | 1,114 | 1,114 | 1,771 | ||
Average recorded investment without related allowance | 11,087 | $ 8,192 | 11,596 | $ 8,804 | |
Average recorded investment with related allowance | 5,989 | 8,627 | 5,762 | 8,946 | |
Interest income recognized without related allowance | 94 | 75 | 275 | 200 | |
Interest income recognized with related allowance | 22 | 57 | 50 | 148 | |
Recorded Investment | 16,972 | 16,972 | 16,395 | ||
Unpaid Principal Balance | 23,799 | 23,799 | 24,784 | ||
Average Recorded Investment | 17,076 | 16,819 | 17,358 | 17,750 | |
Interest Income Recognized | 116 | 132 | 325 | 348 | |
PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 8,170 | 8,170 | 10,341 | ||
Recorded investment with related allowance | 1,263 | 1,263 | |||
Unpaid principal balance without related allowance | 10,552 | 10,552 | 13,390 | ||
Unpaid principal balance with related allowance | 1,278 | 1,278 | |||
Specific Allowance for Impaired Loans | 82 | 82 | |||
Average recorded investment without related allowance | 8,290 | 11,643 | 8,535 | 12,002 | |
Average recorded investment with related allowance | 1,281 | 1,308 | |||
Interest income recognized without related allowance | 233 | 405 | 1,104 | 796 | |
Interest income recognized with related allowance | 25 | 86 | |||
Recorded Investment | 9,433 | 9,433 | |||
Unpaid Principal Balance | 11,830 | 11,830 | |||
Average Recorded Investment | 9,571 | 9,843 | |||
Interest Income Recognized | $ 258 | $ 1,190 | |||
Residential 1 to 4 family | |||||
Foreclosures | |||||
Number of foreclosures | loan | 0 | 0 | |||
Foreclosed assets | $ 0 | $ 0 | |||
Real Estate Secured | Commercial real estate | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 4,212 | 4,212 | 4,000 | ||
Recorded investment with related allowance | 453 | 453 | 498 | ||
Unpaid principal balance without related allowance | 5,676 | 5,676 | 6,255 | ||
Unpaid principal balance with related allowance | 671 | 671 | 688 | ||
Specific Allowance for Impaired Loans | 94 | 94 | 148 | ||
Average recorded investment without related allowance | 4,247 | 2,269 | 4,158 | 1,862 | |
Average recorded investment with related allowance | 461 | 331 | 476 | 331 | |
Interest income recognized without related allowance | 36 | 6 | 110 | 19 | |
Real Estate Secured | Commercial real estate | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 5,178 | 5,178 | 4,432 | ||
Recorded investment with related allowance | 536 | 536 | |||
Unpaid principal balance without related allowance | 6,663 | 6,663 | 6,109 | ||
Unpaid principal balance with related allowance | 547 | 547 | |||
Specific Allowance for Impaired Loans | 41 | 41 | |||
Average recorded investment without related allowance | 5,189 | 4,993 | 5,297 | 5,160 | |
Average recorded investment with related allowance | 537 | 536 | |||
Interest income recognized without related allowance | 122 | 130 | 807 | 327 | |
Interest income recognized with related allowance | 10 | 38 | |||
Real Estate Secured | Construction and land | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 1,263 | 1,263 | 1,470 | ||
Recorded investment with related allowance | 4,000 | 4,000 | 4,876 | ||
Unpaid principal balance without related allowance | 4,517 | 4,517 | 2,355 | ||
Unpaid principal balance with related allowance | 5,152 | 5,152 | 8,499 | ||
Specific Allowance for Impaired Loans | 789 | 789 | 1,472 | ||
Average recorded investment without related allowance | 1,556 | 1,315 | 1,798 | 1,550 | |
Average recorded investment with related allowance | 4,084 | 6,380 | 4,147 | 6,602 | |
Interest income recognized without related allowance | 24 | 7 | 71 | 37 | |
Interest income recognized with related allowance | 16 | 58 | |||
Real Estate Secured | Construction and land | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 554 | 554 | 853 | ||
Recorded investment with related allowance | 245 | 245 | |||
Unpaid principal balance without related allowance | 666 | 666 | 993 | ||
Unpaid principal balance with related allowance | 248 | 248 | |||
Specific Allowance for Impaired Loans | 6 | 6 | |||
Average recorded investment without related allowance | 553 | 923 | 556 | 943 | |
Average recorded investment with related allowance | 254 | 272 | |||
Interest income recognized without related allowance | 19 | 21 | 58 | 47 | |
Interest income recognized with related allowance | 5 | 15 | |||
Real Estate Secured | Residential 1 to 4 family | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 788 | 788 | 260 | ||
Unpaid principal balance without related allowance | 964 | 964 | 383 | ||
Average recorded investment without related allowance | 748 | 222 | 602 | 496 | |
Interest income recognized without related allowance | 10 | 6 | 12 | 16 | |
Real Estate Secured | Residential 1 to 4 family | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 568 | 568 | 564 | ||
Unpaid principal balance without related allowance | 878 | 878 | 886 | ||
Average recorded investment without related allowance | 566 | 565 | 565 | 585 | |
Interest income recognized without related allowance | 18 | 13 | 48 | 29 | |
Real Estate Secured | Farmland | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 498 | 498 | 283 | ||
Unpaid principal balance without related allowance | 498 | 498 | 282 | ||
Average recorded investment without related allowance | 385 | 292 | 558 | 294 | |
Interest income recognized without related allowance | 7 | 2 | 26 | 12 | |
Real Estate Secured | Farmland | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 1,673 | ||||
Unpaid principal balance without related allowance | 2,027 | ||||
Average recorded investment without related allowance | 1,699 | 1,706 | |||
Interest income recognized without related allowance | 20 | 64 | |||
Real Estate Secured | Home equity lines of credit | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 85 | 85 | 258 | ||
Unpaid principal balance without related allowance | 86 | 86 | 340 | ||
Average recorded investment without related allowance | 85 | 100 | 119 | 100 | |
Real Estate Secured | Home equity lines of credit | PCI loans | |||||
Investment in impaired loans | |||||
Average recorded investment without related allowance | 81 | 81 | |||
Interest income recognized without related allowance | 2 | 4 | |||
Commercial | Commercial and industrial | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 3,126 | 3,126 | 2,875 | ||
Recorded investment with related allowance | 1,731 | 1,731 | 1,043 | ||
Unpaid principal balance without related allowance | 3,528 | 3,528 | 3,967 | ||
Unpaid principal balance with related allowance | 1,736 | 1,736 | 1,054 | ||
Specific Allowance for Impaired Loans | 231 | 231 | 151 | ||
Average recorded investment without related allowance | 3,252 | 3,152 | 3,541 | 3,616 | |
Average recorded investment with related allowance | 1,444 | 1,916 | 1,139 | 2,013 | |
Interest income recognized without related allowance | 10 | 51 | 45 | 111 | |
Interest income recognized with related allowance | 22 | 41 | 50 | 90 | |
Commercial | Commercial and industrial | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 424 | 424 | 1,388 | ||
Recorded investment with related allowance | 482 | 482 | |||
Unpaid principal balance without related allowance | 845 | 845 | 1,883 | ||
Unpaid principal balance with related allowance | 483 | 483 | |||
Specific Allowance for Impaired Loans | 35 | 35 | |||
Average recorded investment without related allowance | 542 | 2,081 | 680 | 2,236 | |
Average recorded investment with related allowance | 490 | 500 | |||
Interest income recognized without related allowance | 44 | 185 | 104 | 263 | |
Interest income recognized with related allowance | 10 | 33 | |||
Commercial | Agriculture | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 653 | 653 | 720 | ||
Unpaid principal balance without related allowance | 744 | 744 | 760 | ||
Average recorded investment without related allowance | 654 | 724 | 671 | 741 | |
Interest income recognized without related allowance | 6 | 2 | 7 | 2 | |
Commercial | Agriculture | PCI loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 1,446 | 1,446 | 1,431 | ||
Unpaid principal balance without related allowance | 1,500 | 1,500 | 1,492 | ||
Average recorded investment without related allowance | 1,440 | 1,301 | 1,437 | 1,291 | |
Interest income recognized without related allowance | 30 | 34 | 87 | 62 | |
Consumer | Non-PCI Loans | |||||
Investment in impaired loans | |||||
Recorded investment without related allowance | 163 | 163 | 112 | ||
Unpaid principal balance without related allowance | 227 | 227 | $ 201 | ||
Average recorded investment without related allowance | 160 | 118 | 149 | 145 | |
Interest income recognized without related allowance | $ 1 | $ 1 | $ 4 | $ 3 |
Loans and Allowance for Loan 44
Loans and Allowance for Loan and Lease Losses (Details 3) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($)item | Sep. 30, 2015USD ($)itemloan | Sep. 30, 2014USD ($)itemloan | Dec. 31, 2014USD ($) | |
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | $ 8,622 | $ 8,622 | $ 6,511 | ||
Non-Accruing loans that were classified as TDRs | 7,305 | 7,305 | 7,057 | ||
Total loans classified as TDRs | 15,927 | 15,927 | 13,568 | ||
Loans modified as a TDRs | $ 100 | $ 100 | |||
Number of loans modified as a TDRs | loan | 1 | 1 | |||
Number of TDRs | 12 | 6 | 37 | 24 | |
Pre-Modification Outstanding Recorded Investment | $ 2,254 | $ 912 | $ 7,906 | $ 3,684 | |
Post-Modification Outstanding Recorded Investment | 2,254 | $ 912 | $ 7,906 | $ 3,684 | |
Minimum | |||||
Troubled debt restructurings | |||||
Period of maturity date extensions granted | 6 years | ||||
Maximum | |||||
Troubled debt restructurings | |||||
Period of maturity date extensions granted | 10 years | ||||
Non-PCI Loans | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 7,127 | $ 7,127 | 6,251 | ||
Non-Accruing loans that were classified as TDRs | 7,176 | 7,176 | 6,950 | ||
Total loans classified as TDRs | 14,303 | $ 14,303 | 13,201 | ||
Troubled Debt Restructurings That Subsequently Defaulted | |||||
Number of TDRs | item | 1 | 1 | |||
Recorded Investment | $ 18 | $ 30 | |||
Non-PCI Loans | Real Estate Secured | Commercial real estate | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 2,601 | 2,601 | 2,449 | ||
Non-Accruing loans that were classified as TDRs | 209 | 209 | 78 | ||
Total loans classified as TDRs | 2,810 | $ 2,810 | 2,527 | ||
Number of TDRs | loan | 4 | 1 | |||
Pre-Modification Outstanding Recorded Investment | $ 670 | $ 166 | |||
Post-Modification Outstanding Recorded Investment | 670 | $ 166 | |||
Non-PCI Loans | Real Estate Secured | Construction and land | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 1,217 | 1,217 | 1,109 | ||
Non-Accruing loans that were classified as TDRs | 4,046 | 4,046 | 5,149 | ||
Total loans classified as TDRs | 5,263 | $ 5,263 | 6,258 | ||
Number of TDRs | 2 | 1 | 4 | ||
Pre-Modification Outstanding Recorded Investment | $ 535 | $ 97 | $ 811 | ||
Post-Modification Outstanding Recorded Investment | $ 535 | 97 | $ 811 | ||
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 617 | 617 | 130 | ||
Non-Accruing loans that were classified as TDRs | 171 | 171 | 130 | ||
Total loans classified as TDRs | $ 788 | $ 788 | 260 | ||
Number of TDRs | loan | 1 | 4 | |||
Pre-Modification Outstanding Recorded Investment | $ 129 | $ 753 | |||
Post-Modification Outstanding Recorded Investment | 129 | 753 | |||
Non-PCI Loans | Real Estate Secured | Farmland | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 498 | 498 | 283 | ||
Total loans classified as TDRs | $ 498 | $ 498 | 283 | ||
Number of TDRs | loan | 1 | 2 | |||
Pre-Modification Outstanding Recorded Investment | $ 232 | $ 730 | |||
Post-Modification Outstanding Recorded Investment | 232 | 730 | |||
Non-PCI Loans | Commercial | Commercial and industrial | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 1,425 | 1,425 | 2,177 | ||
Non-Accruing loans that were classified as TDRs | 2,740 | 2,740 | 1,593 | ||
Total loans classified as TDRs | $ 4,165 | $ 4,165 | 3,770 | ||
Number of TDRs | 4 | 4 | 13 | 14 | |
Pre-Modification Outstanding Recorded Investment | $ 323 | $ 377 | $ 2,436 | $ 1,604 | |
Post-Modification Outstanding Recorded Investment | 323 | $ 377 | $ 2,436 | $ 1,604 | |
Troubled Debt Restructurings That Subsequently Defaulted | |||||
Number of TDRs | item | 1 | 1 | |||
Recorded Investment | $ 18 | $ 30 | |||
Non-PCI Loans | Commercial | Agriculture | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 653 | 653 | 34 | ||
Total loans classified as TDRs | $ 653 | $ 653 | 34 | ||
Number of TDRs | loan | 3 | 4 | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 714 | $ 1,612 | $ 662 | ||
Post-Modification Outstanding Recorded Investment | 714 | 1,612 | $ 662 | ||
Non-PCI Loans | Consumer | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 116 | 116 | 69 | ||
Non-Accruing loans that were classified as TDRs | 10 | 10 | |||
Total loans classified as TDRs | $ 126 | $ 126 | 69 | ||
Number of TDRs | loan | 1 | 2 | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 11 | $ 68 | $ 73 | ||
Post-Modification Outstanding Recorded Investment | 11 | 68 | $ 73 | ||
PCI loans | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 1,495 | 1,495 | 260 | ||
Non-Accruing loans that were classified as TDRs | 129 | 129 | 107 | ||
Total loans classified as TDRs | 1,624 | 1,624 | 367 | ||
PCI loans | Real Estate Secured | Commercial real estate | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 928 | 928 | 223 | ||
Non-Accruing loans that were classified as TDRs | 53 | 53 | |||
Total loans classified as TDRs | $ 981 | $ 981 | 223 | ||
Number of TDRs | loan | 1 | 5 | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 348 | $ 993 | $ 230 | ||
Post-Modification Outstanding Recorded Investment | 348 | 993 | $ 230 | ||
PCI loans | Real Estate Secured | Construction and land | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 51 | 51 | |||
Total loans classified as TDRs | $ 51 | $ 51 | |||
Number of TDRs | loan | 1 | ||||
Pre-Modification Outstanding Recorded Investment | $ 50 | ||||
Post-Modification Outstanding Recorded Investment | $ 50 | ||||
PCI loans | Real Estate Secured | Commercial and industrial | |||||
Troubled debt restructurings | |||||
Number of TDRs | loan | 1 | 1 | 2 | ||
Pre-Modification Outstanding Recorded Investment | $ 497 | $ 497 | $ 138 | ||
Post-Modification Outstanding Recorded Investment | 497 | 497 | $ 138 | ||
PCI loans | Commercial | Commercial and industrial | |||||
Troubled debt restructurings | |||||
Accruing loans that were classified as TDRs | 516 | 516 | 37 | ||
Non-Accruing loans that were classified as TDRs | 76 | 76 | 107 | ||
Total loans classified as TDRs | $ 592 | $ 592 | $ 144 |
Loans and Allowance for Loan 45
Loans and Allowance for Loan and Lease Losses (Details 4) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | $ 1,206,740 | $ 1,193,483 |
Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,138,834 | 1,130,984 |
Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 24,188 | 9,874 |
Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 43,718 | 52,395 |
Credit Risk Grades, Doubtful | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 230 | |
Real Estate Secured | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 993,992 | 975,603 |
Real Estate Secured | Commercial real estate | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 581,767 | 588,472 |
Real Estate Secured | Residential 1 to 4 family | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 154,895 | 127,201 |
Real Estate Secured | Farmland | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 107,376 | 98,373 |
Real Estate Secured | Multi-family residential | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 75,774 | 78,645 |
Real Estate Secured | Construction and land | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 42,571 | 44,660 |
Real Estate Secured | Home equity lines of credit | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 31,609 | 38,252 |
Commercial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 206,256 | 209,902 |
Commercial | Commercial and industrial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 159,012 | 154,787 |
Commercial | Agriculture | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 47,244 | 55,101 |
Commercial | Other | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 14 | |
Consumer | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,492 | 7,978 |
Non-PCI Loans | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,197,307 | 1,183,183 |
Non-PCI Loans | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,138,104 | 1,130,528 |
Non-PCI Loans | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 22,206 | 9,097 |
Non-PCI Loans | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 36,997 | 43,404 |
Non-PCI Loans | Credit Risk Grades, Doubtful | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 154 | |
Non-PCI Loans | Real Estate Secured | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 986,911 | 968,110 |
Non-PCI Loans | Real Estate Secured | Commercial real estate | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 576,053 | 584,056 |
Non-PCI Loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 547,307 | 560,478 |
Non-PCI Loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,594 | 3,010 |
Non-PCI Loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 22,152 | 20,568 |
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 154,327 | 126,640 |
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 153,200 | 125,733 |
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 199 | |
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,127 | 708 |
Non-PCI Loans | Real Estate Secured | Farmland | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 107,376 | 96,708 |
Non-PCI Loans | Real Estate Secured | Farmland | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 105,540 | 92,481 |
Non-PCI Loans | Real Estate Secured | Farmland | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 232 | 2,665 |
Non-PCI Loans | Real Estate Secured | Farmland | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,604 | 1,562 |
Non-PCI Loans | Real Estate Secured | Multi-family residential | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 75,774 | 78,645 |
Non-PCI Loans | Real Estate Secured | Multi-family residential | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 67,147 | 78,023 |
Non-PCI Loans | Real Estate Secured | Multi-family residential | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 8,627 | |
Non-PCI Loans | Real Estate Secured | Multi-family residential | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 622 | |
Non-PCI Loans | Real Estate Secured | Construction and land | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 41,772 | 43,809 |
Non-PCI Loans | Real Estate Secured | Construction and land | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 36,477 | 37,422 |
Non-PCI Loans | Real Estate Secured | Construction and land | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 969 | |
Non-PCI Loans | Real Estate Secured | Construction and land | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 4,326 | 6,387 |
Non-PCI Loans | Real Estate Secured | Home equity lines of credit | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 31,609 | 38,252 |
Non-PCI Loans | Real Estate Secured | Home equity lines of credit | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 31,088 | 37,638 |
Non-PCI Loans | Real Estate Secured | Home equity lines of credit | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 521 | 614 |
Non-PCI Loans | Commercial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 203,904 | 207,095 |
Non-PCI Loans | Commercial | Commercial and industrial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 158,106 | 153,403 |
Non-PCI Loans | Commercial | Commercial and industrial | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 146,176 | 138,202 |
Non-PCI Loans | Commercial | Commercial and industrial | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 5,664 | 2,943 |
Non-PCI Loans | Commercial | Commercial and industrial | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,266 | 12,104 |
Non-PCI Loans | Commercial | Commercial and industrial | Credit Risk Grades, Doubtful | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 154 | |
Non-PCI Loans | Commercial | Agriculture | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 45,798 | 53,678 |
Non-PCI Loans | Commercial | Agriculture | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 44,778 | 52,678 |
Non-PCI Loans | Commercial | Agriculture | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 120 | 280 |
Non-PCI Loans | Commercial | Agriculture | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 900 | 720 |
Non-PCI Loans | Commercial | Other | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 14 | |
Non-PCI Loans | Commercial | Other | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 14 | |
Non-PCI Loans | Consumer | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,492 | 7,978 |
Non-PCI Loans | Consumer | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,391 | 7,873 |
Non-PCI Loans | Consumer | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 101 | 105 |
PCI loans | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 9,433 | 10,300 |
PCI loans | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 730 | 456 |
PCI loans | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,982 | 777 |
PCI loans | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 6,721 | 8,991 |
PCI loans | Credit Risk Grades, Doubtful | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 76 | |
PCI loans | Real Estate Secured | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 7,081 | 7,493 |
PCI loans | Real Estate Secured | Commercial real estate | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 5,714 | 4,416 |
PCI loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 126 | |
PCI loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,760 | 680 |
PCI loans | Real Estate Secured | Commercial real estate | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 3,954 | 3,610 |
PCI loans | Real Estate Secured | Residential 1 to 4 family | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 568 | 561 |
PCI loans | Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 451 | |
PCI loans | Real Estate Secured | Residential 1 to 4 family | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 117 | 561 |
PCI loans | Real Estate Secured | Farmland | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,665 | |
PCI loans | Real Estate Secured | Farmland | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,665 | |
PCI loans | Real Estate Secured | Construction and land | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 799 | 851 |
PCI loans | Real Estate Secured | Construction and land | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 245 | 294 |
PCI loans | Real Estate Secured | Construction and land | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 51 | |
PCI loans | Real Estate Secured | Construction and land | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 503 | 557 |
PCI loans | Commercial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 2,352 | 2,807 |
PCI loans | Commercial | Commercial and industrial | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 906 | 1,384 |
PCI loans | Commercial | Commercial and industrial | Credit Risk Grades, Pass | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 34 | 36 |
PCI loans | Commercial | Commercial and industrial | Credit Risk Grades, Special Mention | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 171 | 97 |
PCI loans | Commercial | Commercial and industrial | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 701 | 1,175 |
PCI loans | Commercial | Commercial and industrial | Credit Risk Grades, Doubtful | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 76 | |
PCI loans | Commercial | Agriculture | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | 1,446 | 1,423 |
PCI loans | Commercial | Agriculture | Credit Risk Grades, Substandard | ||
Non-PCI loans by the internal risk grading system | ||
Total Gross loans | $ 1,446 | $ 1,423 |
Loans and Allowance for Loan 46
Loans and Allowance for Loan and Lease Losses (Details 5) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Aging of loans held for investment | ||
Current | $ 1,195,930 | $ 1,182,868 |
30-59 | 794 | 56 |
60-89 | 24 | |
Non-Accruing | 10,016 | 10,535 |
Total | 1,206,740 | 1,193,483 |
Accretable yield, or income expected to be collected | ||
Balance at the beginning of the period | 4,374 | |
Accretion of income | (1,190) | |
Reclassifications from nonaccretable difference | 861 | |
Balance at the end of the period | 4,045 | 4,374 |
Non-PCI Loans | ||
Aging of loans held for investment | ||
Current | 1,186,668 | 1,172,944 |
30-59 | 794 | 56 |
60-89 | 24 | |
Non-Accruing | 9,845 | 10,159 |
Total | 1,197,307 | 1,183,183 |
Contractually required payments receivable of loans purchased during the period | ||
Allowance for loan losses | 400 | 1,000 |
Non-PCI Loans | Real Estate Secured | Commercial real estate | ||
Aging of loans held for investment | ||
Current | 573,330 | 581,971 |
30-59 | 659 | |
Non-Accruing | 2,064 | 2,085 |
Total | 576,053 | 584,056 |
Non-PCI Loans | Real Estate Secured | Residential 1 to 4 family | ||
Aging of loans held for investment | ||
Current | 154,156 | 126,516 |
Non-Accruing | 171 | 124 |
Total | 154,327 | 126,640 |
Non-PCI Loans | Real Estate Secured | Farmland | ||
Aging of loans held for investment | ||
Current | 107,291 | 96,708 |
30-59 | 85 | |
Total | 107,376 | 96,708 |
Non-PCI Loans | Real Estate Secured | Multi-family residential | ||
Aging of loans held for investment | ||
Current | 75,774 | 78,645 |
Total | 75,774 | 78,645 |
Non-PCI Loans | Real Estate Secured | Construction and land | ||
Aging of loans held for investment | ||
Current | 37,726 | 38,572 |
Non-Accruing | 4,046 | 5,237 |
Total | 41,772 | 43,809 |
Non-PCI Loans | Real Estate Secured | Home equity lines of credit | ||
Aging of loans held for investment | ||
Current | 31,524 | 37,994 |
Non-Accruing | 85 | 258 |
Total | 31,609 | 38,252 |
Non-PCI Loans | Commercial | Commercial and industrial | ||
Aging of loans held for investment | ||
Current | 154,625 | 151,656 |
30-59 | 50 | |
60-89 | 21 | |
Non-Accruing | 3,431 | 1,726 |
Total | 158,106 | 153,403 |
Non-PCI Loans | Commercial | Agriculture | ||
Aging of loans held for investment | ||
Current | 45,798 | 52,992 |
Non-Accruing | 686 | |
Total | 45,798 | 53,678 |
Non-PCI Loans | Commercial | Other | ||
Aging of loans held for investment | ||
Current | 14 | |
Total | 14 | |
Non-PCI Loans | Consumer | ||
Aging of loans held for investment | ||
Current | 6,444 | 7,876 |
30-59 | 56 | |
60-89 | 3 | |
Non-Accruing | 48 | 43 |
Total | 6,492 | 7,978 |
PCI loans | ||
Aging of loans held for investment | ||
Current | 9,262 | 9,924 |
Non-Accruing | 171 | 376 |
Total | 9,433 | 10,300 |
Unpaid Principal Balance | 11,830 | 13,390 |
Carrying Amount | 9,433 | 10,300 |
Contractually required payments receivable of loans purchased during the period | ||
Allowance for loan losses | 82 | 0 |
PCI loans | Real Estate Secured | ||
Aging of loans held for investment | ||
Unpaid Principal Balance | 9,002 | 10,015 |
Carrying Amount | 7,081 | 7,493 |
PCI loans | Real Estate Secured | Commercial real estate | ||
Aging of loans held for investment | ||
Current | 5,661 | 4,416 |
Non-Accruing | 53 | |
Total | 5,714 | 4,416 |
Unpaid Principal Balance | 7,210 | 6,109 |
Carrying Amount | 5,714 | 4,416 |
PCI loans | Real Estate Secured | Residential 1 to 4 family | ||
Aging of loans held for investment | ||
Current | 568 | 561 |
Total | 568 | 561 |
Unpaid Principal Balance | 878 | 886 |
Carrying Amount | 568 | 561 |
PCI loans | Real Estate Secured | Land | ||
Aging of loans held for investment | ||
Current | 799 | |
Total | 799 | |
PCI loans | Real Estate Secured | Farmland | ||
Aging of loans held for investment | ||
Current | 1,665 | |
Total | 1,665 | |
Unpaid Principal Balance | 2,027 | |
Carrying Amount | 1,665 | |
PCI loans | Real Estate Secured | Construction and land | ||
Aging of loans held for investment | ||
Current | 851 | |
Total | 851 | |
Unpaid Principal Balance | 914 | 993 |
Carrying Amount | 799 | 851 |
PCI loans | Commercial | ||
Aging of loans held for investment | ||
Unpaid Principal Balance | 2,828 | 3,375 |
Carrying Amount | 2,352 | 2,807 |
PCI loans | Commercial | Commercial and industrial | ||
Aging of loans held for investment | ||
Current | 788 | 1,008 |
Non-Accruing | 118 | 376 |
Total | 906 | 1,384 |
Unpaid Principal Balance | 1,328 | 1,883 |
Carrying Amount | 906 | 1,384 |
PCI loans | Commercial | Agriculture | ||
Aging of loans held for investment | ||
Current | 1,446 | 1,423 |
Total | 1,446 | 1,423 |
Unpaid Principal Balance | 1,500 | 1,492 |
Carrying Amount | $ 1,446 | $ 1,423 |
Loans and Allowance for Loan 47
Loans and Allowance for Loan and Lease Losses (Details 6) - USD ($) $ in Thousands | Feb. 28, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | $ 16,982 | $ 16,635 | $ 16,802 | $ 17,859 | $ 17,859 | |
Charge-offs | (45) | (12) | (282) | (1,777) | ||
Recoveries | 359 | 164 | 776 | 705 | ||
Balance, at the end of the period | 17,296 | 16,787 | 17,296 | 16,787 | 16,802 | |
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses individually evaluated for impairment | 1,114 | 1,114 | 1,771 | |||
Allowance for loan and lease losses collectively evaluated for impairment | 16,100 | 16,100 | 15,031 | |||
Allowance for Loans acquired with deteriorated credit quality | 82 | 82 | ||||
Recorded investment in loan individually evaluated for impairment | 16,972 | 16,972 | 16,390 | |||
Recorded investment in loan collectively evaluated for impairment | 1,180,335 | 1,180,335 | 1,166,752 | |||
Recorded investment in loans acquired with deteriorated credit quality | 9,433 | 9,433 | 10,341 | |||
Total gross loans held for investment | 1,206,740 | 1,206,740 | 1,193,483 | |||
Non-PCI Loans | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 16,802 | |||||
Balance, at the end of the period | 17,214 | 17,214 | 16,802 | |||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 1,197,307 | 1,197,307 | 1,183,183 | |||
Allowance for loan and lease losses | 400 | 1,000 | ||||
PCI loans | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the end of the period | 82 | 82 | ||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 9,433 | 9,433 | 10,300 | |||
Allowance for loan and lease losses | 82 | 0 | ||||
MISN | ||||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 195,800 | 195,800 | 239,700 | |||
Allowance for loan and lease losses | $ 0 | |||||
MISN | PCI loans | ||||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 9,400 | 9,400 | 10,300 | |||
Commercial | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 4,993 | 4,436 | 5,125 | 4,781 | 4,781 | |
Charge-offs | (44) | (187) | (650) | |||
Recoveries | 327 | 174 | 636 | 628 | ||
Provision for loan and lease losses | 209 | (296) | (89) | (445) | ||
Balance, at the end of the period | 5,485 | 4,314 | 5,485 | 4,314 | 5,125 | |
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses individually evaluated for impairment | 231 | 231 | 151 | |||
Allowance for loan and lease losses collectively evaluated for impairment | 5,219 | 5,219 | 4,974 | |||
Allowance for Loans acquired with deteriorated credit quality | 35 | 35 | ||||
Recorded investment in loan individually evaluated for impairment | 5,510 | 5,510 | 4,633 | |||
Recorded investment in loan collectively evaluated for impairment | 198,394 | 198,394 | 202,450 | |||
Recorded investment in loans acquired with deteriorated credit quality | 2,352 | 2,352 | 2,819 | |||
Total gross loans held for investment | 206,256 | 206,256 | 209,902 | |||
Commercial | Non-PCI Loans | ||||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 203,904 | 203,904 | 207,095 | |||
Commercial | PCI loans | ||||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 2,352 | 2,352 | 2,807 | |||
Construction and land | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 1,940 | 3,054 | 2,000 | 3,660 | 3,660 | |
Charge-offs | (34) | |||||
Recoveries | 24 | 9 | 48 | 32 | ||
Provision for loan and lease losses | (599) | (721) | (649) | (1,350) | ||
Balance, at the end of the period | 1,365 | 2,342 | 1,365 | 2,342 | 2,000 | |
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses individually evaluated for impairment | 1,472 | |||||
Allowance for loan and lease losses collectively evaluated for impairment | 528 | |||||
Recorded investment in loan individually evaluated for impairment | 6,346 | |||||
Recorded investment in loan collectively evaluated for impairment | 37,461 | |||||
Recorded investment in loans acquired with deteriorated credit quality | 853 | |||||
Consumer | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 171 | 100 | 202 | 131 | 131 | |
Charge-offs | (1) | (2) | (6) | (8) | ||
Recoveries | 3 | 1 | 11 | 10 | ||
Provision for loan and lease losses | 18 | 10 | (16) | (24) | ||
Balance, at the end of the period | 191 | 109 | 191 | 109 | 202 | |
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses collectively evaluated for impairment | 191 | 191 | 202 | |||
Recorded investment in loan individually evaluated for impairment | 163 | 163 | 112 | |||
Recorded investment in loan collectively evaluated for impairment | 6,329 | 6,329 | 7,866 | |||
Total gross loans held for investment | 6,492 | 6,492 | 7,978 | |||
Consumer | Non-PCI Loans | ||||||
Amount of allowance attributed to: | ||||||
Total gross loans held for investment | 6,492 | 6,492 | 7,978 | |||
Unallocated | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 243 | 298 | 346 | 262 | 262 | |
Provision for loan and lease losses | (243) | 205 | (346) | 241 | ||
Balance, at the end of the period | 503 | 503 | 346 | |||
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses collectively evaluated for impairment | 346 | |||||
Other real estate secured | ||||||
Allocation of the allowance to various segments in the loan portfolio | ||||||
Balance, at the beginning of the period | 9,635 | 8,747 | 9,129 | 9,025 | 9,025 | |
Charge-offs | (10) | (55) | (1,119) | |||
Recoveries | 5 | 81 | 35 | |||
Adjustments | (20) | |||||
Provision for loan and lease losses | 615 | 802 | 1,100 | 1,578 | ||
Balance, at the end of the period | 10,255 | 9,519 | 10,255 | $ 9,519 | 9,129 | |
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses individually evaluated for impairment | 94 | 94 | 148 | |||
Allowance for loan and lease losses collectively evaluated for impairment | 10,120 | 10,120 | 8,981 | |||
Allowance for Loans acquired with deteriorated credit quality | 41 | 41 | ||||
Recorded investment in loan individually evaluated for impairment | 6,036 | 6,036 | 5,299 | |||
Recorded investment in loan collectively evaluated for impairment | 939,103 | 939,103 | 918,975 | |||
Recorded investment in loans acquired with deteriorated credit quality | 6,282 | 6,282 | $ 6,669 | |||
Provision for loan losses, transfer from C&I to Land related to the re-characterization of a loan as part of a TDR | $ (20) | |||||
Land | Construction and land | ||||||
Amount of allowance attributed to: | ||||||
Allowance for loan and lease losses individually evaluated for impairment | 789 | 789 | ||||
Allowance for loan and lease losses collectively evaluated for impairment | 570 | 570 | ||||
Allowance for Loans acquired with deteriorated credit quality | 6 | 6 | ||||
Recorded investment in loan individually evaluated for impairment | 5,263 | 5,263 | ||||
Recorded investment in loan collectively evaluated for impairment | 36,509 | 36,509 | ||||
Recorded investment in loans acquired with deteriorated credit quality | $ 799 | $ 799 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Income Taxes | ||
Deferred tax valuation allowance | $ 0 | $ 0 |
Deferred tax assets | 21,422 | $ 24,920 |
Loss of NOL utilization | $ 0 |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Core deposit intangible | |||||
Gross Carrying Amount | $ 9,261 | $ 9,261 | |||
Accumulated Amortization | (4,701) | (4,701) | |||
Net Carrying Amount | 4,560 | 4,560 | |||
Estimated Amortization | |||||
Year 2,015 | (262) | (262) | |||
Year 2,016 | (944) | (944) | |||
Year 2,017 | (588) | (588) | |||
Year 2,018 | (549) | (549) | |||
Year 2,019 | (522) | (522) | |||
Year 2,020 | (441) | (441) | |||
Goodwill | 24,885 | 24,885 | $ 24,885 | ||
Other Intangible Assets, Net | 4,560 | 4,560 | 5,347 | ||
Amortization of Intangible Assets | 263 | $ 297 | 787 | $ 760 | |
Year 2,015 | |||||
Core deposit intangible | |||||
Net Carrying Amount | 4,298 | 4,298 | 4,560 | ||
Year 2,016 | |||||
Core deposit intangible | |||||
Net Carrying Amount | 3,354 | 3,354 | 4,298 | ||
Year 2,017 | |||||
Core deposit intangible | |||||
Net Carrying Amount | 2,766 | 2,766 | 3,354 | ||
Year 2,018 | |||||
Core deposit intangible | |||||
Net Carrying Amount | 2,217 | 2,217 | 2,766 | ||
Year 2,019 | |||||
Core deposit intangible | |||||
Net Carrying Amount | 1,695 | 1,695 | 2,217 | ||
Year 2,020 | |||||
Core deposit intangible | |||||
Net Carrying Amount | $ 1,254 | $ 1,254 | $ 1,695 |
Share-based Compensation Plan50
Share-based Compensation Plans (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)plan$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)plan$ / sharesshares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014planshares | |
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Aggregate number of shares that may be granted during any calendar year per individual | 250,000 | ||||
Share-based compensation expense | $ | $ 279 | $ 257 | $ 814 | $ 723 | |
Unrecognized compensation expense | $ | $ 2,115 | 2,223 | $ 2,115 | 2,223 | |
Number of shares | |||||
Expired (in shares) | (11,812) | ||||
Weighted Average Exercise Price | |||||
Expired (in dollars per share) | $ / shares | $ 13.18 | ||||
2015 Equity Incentive Plan | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Number of share-based employee compensation plans | plan | 1 | 1 | |||
1997 Stock Option Plan and 2005 Equity Based Compensation Plan | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Number of share-based employee compensation plans | plan | 2 | ||||
Number of Shares | |||||
Granted (in shares) | 0 | ||||
Maximum | 2015 Equity Incentive Plan | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Maximum number of shares that may be issued | 2,500,000 | 2,500,000 | |||
Stock options | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Share-based compensation expense | $ | $ 126 | 109 | $ 374 | 370 | |
Unrecognized compensation expense | $ | $ 1,133 | 1,156 | $ 1,133 | $ 1,156 | |
Weighted-average period over which expense is expected to be recognized | 2 years 9 months 18 days | ||||
Assumptions used in the calculation of the weighted average fair value of options granted | |||||
Expected volatility (as a percent) | 36.38% | 49.83% | |||
Expected term | 5 years | 5 years 7 months 28 days | |||
Dividend yield (as a percent) | 2.82% | 0.59% | |||
Risk free rate (as a percent) | 1.54% | 1.76% | |||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 1.97 | $ 3.39 | |||
Number of shares | |||||
Options Available for Grant (in shares) | 2,235,402 | 2,235,402 | 2,003,176 | ||
Options outstanding, at the beginning of the period (in shares) | 742,557 | ||||
Granted (in shares) | 375,429 | ||||
Forfeited (in shares) | (98,352) | ||||
Exercised (in shares) | (47,554) | ||||
Options outstanding, at the end of the period (in shares) | 960,268 | 960,268 | |||
Weighted Average Exercise Price | |||||
Options outstanding, at the beginning of the period (in dollars per share) | $ / shares | $ 6.83 | ||||
Granted (in dollars per share) | $ / shares | 7.70 | ||||
Forfeited (in dollars per share) | $ / shares | 6.94 | ||||
Exercised (in dollars per share) | $ / shares | 4.90 | ||||
Options outstanding, at the end of the period (in dollars per share) | $ / shares | $ 7.18 | $ 7.18 | |||
Options vested or expected to vest | |||||
Shares | 908,273 | 908,273 | |||
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 7.16 | $ 7.16 | |||
Weighted Average Remaining Contractual Life | 7 years 11 months 1 day | ||||
Aggregate Intrinsic Value | $ | $ 1,028,678 | $ 1,028,678 | |||
Options exercisable | |||||
Shares | 350,160 | 350,160 | |||
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 6.81 | $ 6.81 | |||
Weighted Average Remaining Contractual Life | 6 years 1 month 2 days | ||||
Aggregate Intrinsic Value | $ | $ 705,664 | $ 705,664 | |||
Aggregate intrinsic value of options exercised | |||||
Aggregate intrinsic value of options exercised | $ | $ 153 | ||||
Stock options | Minimum | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Vesting period | 3 years | ||||
Stock options | Maximum | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Vesting period | 5 years | ||||
Restricted stock | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Share-based compensation expense | $ | 153 | 148 | $ 440 | $ 353 | |
Unrecognized compensation expense | $ | $ 982 | $ 1,067 | $ 982 | $ 1,067 | |
Weighted-average period over which expense is expected to be recognized | 1 year 10 months 24 days | ||||
Number of Shares | |||||
Balance at the beginning of the period (in shares) | 206,443 | ||||
Granted (in shares) | 84,951 | ||||
Vested (in shares) | (88,534) | ||||
Forfeited (in shares) | (30,121) | ||||
Balance at the end of the period (in shares) | 172,739 | 172,739 | |||
Average Grant Date fair Value | |||||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 6.65 | ||||
Granted (in dollars per share) | $ / shares | 7.87 | ||||
Vested (in dollars per share) | $ / shares | 6.49 | ||||
Forfeited (in dollars per share) | $ / shares | 7.10 | ||||
Balance at the end of the period (in dollars per share) | $ / shares | $ 7.26 | $ 7.26 | |||
Restricted stock | Minimum | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Vesting period | 3 years | ||||
Restricted stock | Maximum | |||||
Summary of the expenses the Company has recognized related to share-based compensation | |||||
Vesting period | 5 years | ||||
Performance-based | |||||
Average Grant Date fair Value | |||||
Performance based grant (in shares) | 23,408 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Shareholders' Equity | |||
Capital conservation buffer (as a percent) | 2.50% | ||
Capital conservation buffer for 2016 (as a percent) | 0.625% | ||
Capital conservation buffer for 2017 (as a percent) | 1.25% | ||
Capital conservation buffer for 2018 (as a percent) | 1.875% | ||
Capital conservation buffer for 2019 (as a percent) | 2.50% | ||
Common equity Tier I Capital | |||
Regulatory Standard, Common equity Tier I Capital Well Capitalized Ratio (as a percent) | 6.50% | ||
Leverage ratio | |||
Regulatory Standard, Leverage ratio Well Capitalized Ratio (as a percent) | 5.00% | 5.00% | |
Tier I capital to risk weighted assets | |||
Regulatory Standard, Well Capitalized Ratio (as a percent) | 8.00% | 6.00% | |
Total risk based capital to risk weighted assets | |||
Regulatory Standard, Total risk based capital Well Capitalized Ratio (as a percent) | 10.00% | 10.00% | |
Minimum | |||
Shareholders' Equity | |||
CET I to risk-weighted assets | 4.50% | ||
Total risk based capital to risk weighted assets | |||
Regulatory Standard, Total risk based capital Well Capitalized Ratio (as a percent) | 6.50% | ||
Calculation of Risk-Weighted Assets Category One | |||
Shareholders' Equity | |||
Ratio risk-weighted assets (as a percent) | 0.00% | ||
Calculation of Risk-Weighted Assets Category Two | |||
Shareholders' Equity | |||
Ratio risk-weighted assets (as a percent) | 20.00% | ||
Calculation of Risk-Weighted Assets Category Three | |||
Shareholders' Equity | |||
Ratio risk-weighted assets (as a percent) | 50.00% | ||
Calculation of Risk-Weighted Assets Category Four | |||
Shareholders' Equity | |||
Ratio risk-weighted assets (as a percent) | 100.00% | ||
Heritage Oaks Bancorp | |||
Common equity Tier I Capital | |||
Actual regulatory, Common equity Tier I Capital Ratio (as a percent | 12.81% | ||
Leverage ratio | |||
Actual regulatory, Leverage ratio (as a percent) | 9.96% | 10.22% | 10.00% |
Tier I capital to risk weighted assets | |||
Actual regulatory, Tier I capital (as a percent) | 13.20% | 13.13% | 12.87% |
Total risk based capital to risk weighted assets | |||
Actual regulatory, Total risk based capital (as a percent) | 14.46% | 14.38% | 14.12% |
Heritage Oaks Bank | |||
Common equity Tier I Capital | |||
Actual regulatory, Common equity Tier I Capital Ratio (as a percent | 12.52% | ||
Leverage ratio | |||
Actual regulatory, Leverage ratio (as a percent) | 9.44% | 9.83% | 9.77% |
Tier I capital to risk weighted assets | |||
Actual regulatory, Tier I capital (as a percent) | 12.52% | 12.63% | 12.58% |
Total risk based capital to risk weighted assets | |||
Actual regulatory, Total risk based capital (as a percent) | 13.77% | 13.88% | 13.83% |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - USD ($) $ / shares in Units, $ in Thousands | Oct. 28, 2015 | Aug. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Jun. 01, 2015 | Mar. 02, 2015 | Dec. 31, 2014 |
Preferred Stock | |||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||
Cash dividend paid on common and preferred stock (in dollars per share) | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.06 | $ 0.05 | ||||||
Cash dividend paid on common stock (in dollars per share) | $ 0.06 | ||||||||||
Cash dividend declared (in dollars per share) | $ 0.06 | $ 0.03 | $ 0.17 | $ 0.03 | |||||||
Shares repurchased | 0 | 3,696 | 55,428 | ||||||||
Average price per share stock repurchase | $ 7.52 | $ 7.47 | |||||||||
Maximum | |||||||||||
Preferred Stock | |||||||||||
Repurchase of shares amount authorized | $ 5,000 | ||||||||||
Subsequent Event | |||||||||||
Preferred Stock | |||||||||||
Cash dividend declared (in dollars per share) | $ 0.06 | ||||||||||
Series C preferred stock | |||||||||||
Preferred Stock | |||||||||||
Issuance of stock (in shares) | 348,697 | ||||||||||
Conversion price (in dollars per share) | $ 3.25 | ||||||||||
Remaining beneficial conversion feature | $ 70 | ||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 348,697 | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 348,697 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Calculation of both basic and diluted earnings (loss) per common share | ||||
Net income | $ 4,002 | $ 3,429 | $ 11,871 | $ 4,613 |
Accretion on preferred stock | 70 | |||
Net income available to common shareholders | $ 4,002 | $ 3,429 | $ 11,801 | $ 4,613 |
Weighted average shares outstanding | 34,158,081 | 33,992,465 | 34,111,079 | 32,322,194 |
Basic earnings per common share (in dollars per share) | $ 0.12 | $ 0.10 | $ 0.35 | $ 0.14 |
Dilutive effect of share-based compensation awards (in shares) | 124,286 | 153,735 | 147,285 | 197,324 |
Weighted average diluted shares outstanding | 34,282,367 | 34,146,200 | 34,258,364 | 32,519,518 |
Diluted earnings per common share (in dollars per share) | $ 0.12 | $ 0.10 | $ 0.34 | $ 0.14 |
Stock options | ||||
Shares excluded from the calculation of diluted earnings per share | ||||
Shares excluded from the calculation of diluted earnings per share | 126,000 | 160,000 | 35,000 | 114,000 |
Commitments and Contingencies54
Commitments and Contingencies (Details) - Heritage Oaks Bank - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | ||
Total commitments and standby letters of credit | $ 282,984 | $ 253,275 |
Outstanding financial fixed rate commitments | 26,300 | 35,700 |
Outstanding financial variable rate commitments | 256,700 | 217,500 |
Commitments to extend credit | ||
Commitments and Contingencies | ||
Total commitments and standby letters of credit | 270,024 | 237,733 |
Standby letters of credit | ||
Commitments and Contingencies | ||
Total commitments and standby letters of credit | 12,960 | 15,542 |
Standby letters of credit | One customer | ||
Commitments and Contingencies | ||
Total commitments and standby letters of credit | $ 10,400 | $ 10,400 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Oct. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Subsequent events | |||||
Cash dividend declared (in dollars per share) | $ 0.06 | $ 0.03 | $ 0.17 | $ 0.03 | |
Subsequent Event | |||||
Subsequent events | |||||
Cash dividend declared (in dollars per share) | $ 0.06 |