[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2013. | |
[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ | |
Commission file number 001-15373 |
Large accelerated filer o | Accelerated filer R | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) |
Page | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. Financial Statements | ||
Condensed Consolidated Balance Sheets (Unaudited) | ||
Condensed Consolidated Statements of Operations (Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
Notes to Condensed Consolidated Financial Statements (Unaudited) | ||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | ||
Item 4. Controls and Procedures | ||
PART II - OTHER INFORMATION | ||
Item 1. Legal Proceedings | ||
Item 1A. Risk Factors | ||
Item 6. Exhibits | ||
Signatures | ||
(In thousands, except share and per share data) | June 30, 2013 | December 31, 2012 | |||||
Assets | |||||||
Cash and due from banks | $ | 32,019 | $ | 21,906 | |||
Federal funds sold | 41 | 51 | |||||
Interest-bearing deposits (including $2,140 and $3,270 pledged as collateral) | 66,276 | 94,413 | |||||
Total cash and cash equivalents | 98,336 | 116,370 | |||||
Interest-bearing deposits greater than 90 days | 5,300 | 1,000 | |||||
Securities available for sale | 471,017 | 640,212 | |||||
Mortgage loans held for sale | 5,583 | 11,792 | |||||
Portfolio loans not covered under FDIC loss share | 2,078,568 | 2,106,039 | |||||
Less: Allowance for loan losses | 27,619 | 34,330 | |||||
Portfolio loans not covered under FDIC loss share, net | 2,050,949 | 2,071,709 | |||||
Portfolio loans covered under FDIC loss share, net of the allowance for loan losses ($11,045 and $11,547, respectively) | 158,818 | 189,571 | |||||
Portfolio loans, net | 2,209,767 | 2,261,280 | |||||
Other real estate not covered under FDIC loss share | 8,213 | 9,327 | |||||
Other real estate covered under FDIC loss share | 17,150 | 17,173 | |||||
Other investments, at cost | 19,205 | 14,294 | |||||
Fixed assets, net | 20,544 | 21,121 | |||||
Accrued interest receivable | 9,235 | 8,497 | |||||
State tax credits, held for sale, including $19,822 and $23,020 carried at fair value, respectively | 55,493 | 61,284 | |||||
FDIC loss share receivable | 44,982 | 61,475 | |||||
Goodwill | 30,334 | 30,334 | |||||
Intangibles, net | 6,746 | 7,406 | |||||
Other assets | 92,515 | 64,221 | |||||
Total assets | $ | 3,094,420 | $ | 3,325,786 | |||
Liabilities and Shareholders' Equity | |||||||
Demand deposits | $ | 618,278 | $ | 686,805 | |||
Interest-bearing transaction accounts | 217,178 | 272,753 | |||||
Money market accounts | 885,400 | 1,036,125 | |||||
Savings | 90,693 | 83,458 | |||||
Certificates of deposit: | |||||||
$100 and over | 397,478 | 396,896 | |||||
Other | 159,207 | 182,814 | |||||
Total deposits | 2,368,234 | 2,658,851 | |||||
Subordinated debentures | 83,081 | 85,081 | |||||
Federal Home Loan Bank advances | 191,000 | 80,000 | |||||
Other borrowings | 178,212 | 233,370 | |||||
Notes payable | 11,100 | 11,700 | |||||
Accrued interest payable | 1,044 | 1,282 | |||||
Other liabilities | 14,074 | 19,757 | |||||
Total liabilities | 2,846,745 | 3,090,041 | |||||
Shareholders' equity: | |||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value; 30,000,000 shares authorized; 18,299,466 and 18,088,152 shares issued, respectively | 183 | 181 | |||||
Treasury stock, at cost; 76,000 shares | (1,743 | ) | (1,743 | ) | |||
Additional paid in capital | 176,395 | 173,299 | |||||
Retained earnings | 75,387 | 56,218 | |||||
Accumulated other comprehensive income | (2,547 | ) | 7,790 | ||||
Total shareholders' equity | 247,675 | 235,745 | |||||
Total liabilities and shareholders' equity | $ | 3,094,420 | $ | 3,325,786 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(In thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 35,585 | $ | 37,272 | $ | 74,934 | $ | 71,633 | |||||||
Interest on debt securities: | |||||||||||||||
Taxable | 2,054 | 2,366 | 4,167 | 4,812 | |||||||||||
Nontaxable | 305 | 236 | 606 | 470 | |||||||||||
Interest on interest-bearing deposits | 46 | 65 | 93 | 142 | |||||||||||
Dividends on equity securities | 71 | 90 | 171 | 187 | |||||||||||
Total interest income | 38,061 | 40,029 | 79,971 | 77,244 | |||||||||||
Interest expense: | |||||||||||||||
Interest-bearing transaction accounts | 123 | 193 | 261 | 384 | |||||||||||
Money market accounts | 752 | 1,240 | 1,634 | 2,670 | |||||||||||
Savings | 56 | 72 | 115 | 141 | |||||||||||
Certificates of deposit: | |||||||||||||||
$100 and over | 1,429 | 1,840 | 2,881 | 3,809 | |||||||||||
Other | 460 | 696 | 946 | 1,506 | |||||||||||
Subordinated debentures | 949 | 980 | 1,901 | 2,129 | |||||||||||
Federal Home Loan Bank advances | 730 | 768 | 1,464 | 1,606 | |||||||||||
Notes payable and other borrowings | 254 | 107 | 562 | 237 | |||||||||||
Total interest expense | 4,753 | 5,896 | 9,764 | 12,482 | |||||||||||
Net interest income | 33,308 | 34,133 | 70,207 | 64,762 | |||||||||||
Provision for loan losses not covered under FDIC loss share | (4,295 | ) | 75 | (2,442 | ) | 1,793 | |||||||||
Provision for loan losses covered under FDIC loss share | (2,278 | ) | 206 | (22 | ) | 2,491 | |||||||||
Net interest income after provision for loan losses | 39,881 | 33,852 | 72,671 | 60,478 | |||||||||||
Noninterest income: | |||||||||||||||
Wealth Management revenue | 1,778 | 1,991 | 3,721 | 3,700 | |||||||||||
Service charges on deposit accounts | 1,724 | 1,413 | 3,257 | 2,743 | |||||||||||
Other service charges and fee income | 661 | 578 | 1,308 | 1,172 | |||||||||||
Gain on sale of other real estate | 362 | 1,256 | 1,090 | 2,413 | |||||||||||
Gain on state tax credits, net | 39 | 587 | 906 | 924 | |||||||||||
Gain on sale of investment securities | — | 134 | 684 | 1,156 | |||||||||||
Change in FDIC loss share receivable | (6,713 | ) | (5,694 | ) | (10,798 | ) | (8,650 | ) | |||||||
Miscellaneous income | 472 | 580 | 1,069 | 1,370 | |||||||||||
Total noninterest income | (1,677 | ) | 845 | 1,237 | 4,828 | ||||||||||
Noninterest expense: | |||||||||||||||
Employee compensation and benefits | 10,766 | 11,052 | 22,229 | 21,515 | |||||||||||
Occupancy | 1,316 | 1,379 | 2,765 | 2,763 | |||||||||||
Furniture and equipment | 377 | 386 | 844 | 850 | |||||||||||
Data processing | 936 | 829 | 1,857 | 1,649 | |||||||||||
FDIC and other insurance | 833 | 843 | 1,692 | 1,796 | |||||||||||
Loan legal and other real estate expense | 2,075 | 1,955 | 2,108 | 4,029 | |||||||||||
Other | 5,076 | 4,970 | 10,401 | 10,176 | |||||||||||
Total noninterest expense | 21,379 | 21,414 | 41,896 | 42,778 | |||||||||||
Income before income tax expense | 16,825 | 13,283 | 32,012 | 22,528 | |||||||||||
Income tax expense | 5,792 | 4,517 | 10,939 | 7,577 | |||||||||||
Net income | $ | 11,033 | $ | 8,766 | $ | 21,073 | $ | 14,951 | |||||||
Net income available to common shareholders | $ | 11,033 | $ | 8,122 | $ | 21,073 | $ | 13,666 | |||||||
Earnings per common share | |||||||||||||||
Basic | $ | 0.61 | $ | 0.46 | $ | 1.17 | $ | 0.77 | |||||||
Diluted | 0.58 | 0.44 | 1.11 | 0.75 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net income | $ | 11,033 | $ | 8,766 | $ | 21,073 | $ | 14,951 | |||||||
Other comprehensive income, net of tax: | |||||||||||||||
Unrealized (loss) gain on investment securities arising during the period, net of income tax (benefit)/expense for three months of $(5,155) and $833, and for the six months of ($6,314) and $2,098, respectively | (8,098 | ) | 1,482 | (9,920 | ) | 3,278 | |||||||||
Less reclassification adjustment for realized gain on sale of securities included in net income, net of income tax expense for three months of $0 and $48, and for the six months of $267 and $416, respectively | — | (86 | ) | (417 | ) | (740 | ) | ||||||||
Total other comprehensive (loss) income | (8,098 | ) | 1,396 | (10,337 | ) | 2,538 | |||||||||
Total comprehensive income | $ | 2,935 | $ | 10,162 | $ | 10,736 | $ | 17,489 |
(in thousands, except per share data) | Preferred Stock | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income | Total shareholders' equity | |||||||||||||||||||||
Balance January 1, 2013 | $ | — | $ | 181 | $ | (1,743 | ) | $ | 173,299 | $ | 56,218 | $ | 7,790 | $ | 235,745 | |||||||||||||
Net income | — | — | — | — | 21,073 | — | 21,073 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (10,337 | ) | (10,337 | ) | |||||||||||||||||||
Cash dividends paid on common shares, $0.105 per share | — | — | — | — | (1,904 | ) | — | (1,904 | ) | |||||||||||||||||||
Repurchase of common stock warrants | — | — | — | (1,006 | ) | — | — | (1,006 | ) | |||||||||||||||||||
Issuance under equity compensation plans, 211,314 shares | — | 2 | — | 2,262 | — | — | 2,264 | |||||||||||||||||||||
Share-based compensation | — | — | — | 1,788 | — | — | 1,788 | |||||||||||||||||||||
Excess tax benefit related to equity compensation plans | — | — | — | 52 | — | — | 52 | |||||||||||||||||||||
Balance June 30, 2013 | $ | — | $ | 183 | $ | (1,743 | ) | $ | 176,395 | $ | 75,387 | $ | (2,547 | ) | $ | 247,675 |
(in thousands, except per share data) | Preferred Stock | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income | Total shareholders' equity | |||||||||||||||||||||
Balance January 1, 2012 | $ | 33,293 | $ | 178 | $ | (1,743 | ) | $ | 169,138 | $ | 35,097 | $ | 3,602 | $ | 239,565 | |||||||||||||
Net income | — | — | — | — | 14,951 | — | 14,951 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 2,538 | 2,538 | |||||||||||||||||||||
Cash dividends paid on common shares, $0.105 per share | — | — | — | — | (1,871 | ) | — | (1,871 | ) | |||||||||||||||||||
Cash dividends paid on preferred stock | — | — | — | — | (875 | ) | — | (875 | ) | |||||||||||||||||||
Preferred stock accretion of discount | 410 | — | — | — | (410 | ) | — | — | ||||||||||||||||||||
Issuance under equity compensation plans, 83,189 shares | — | 1 | — | 455 | — | — | 456 | |||||||||||||||||||||
Share-based compensation | — | — | — | 1,124 | — | — | 1,124 | |||||||||||||||||||||
Balance June 30, 2012 | $ | 33,703 | $ | 179 | $ | (1,743 | ) | $ | 170,717 | $ | 46,892 | $ | 6,140 | $ | 255,888 |
Six months ended June 30, | |||||||
(in thousands) | 2013 | 2012 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 21,073 | $ | 14,951 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 1,360 | 1,278 | |||||
Provision for loan losses | (2,464 | ) | 4,284 | ||||
Deferred income taxes | 1,267 | (1,622 | ) | ||||
Net amortization of debt securities | 3,299 | 3,999 | |||||
Amortization of intangible assets | 930 | 975 | |||||
Gain on sale of investment securities | (684 | ) | (1,156 | ) | |||
Mortgage loans originated for sale | (34,645 | ) | (47,839 | ) | |||
Proceeds from mortgage loans sold | 39,474 | 49,158 | |||||
Gain on sale of other real estate | (1,090 | ) | (2,413 | ) | |||
Gain on state tax credits, net | (906 | ) | (924 | ) | |||
Share-based compensation | 1,788 | 1,124 | |||||
Valuation adjustment on other real estate | 754 | 1,814 | |||||
Net accretion of loan discount and indemnification asset | (8,725 | ) | (5,011 | ) | |||
Changes in: | |||||||
Accrued interest receivable | (737 | ) | (472 | ) | |||
Accrued interest payable | (238 | ) | (303 | ) | |||
Prepaid FDIC insurance | 2,607 | 1,252 | |||||
Other assets | (11,002 | ) | (2,710 | ) | |||
Other liabilities | (5,683 | ) | 9,981 | ||||
Net cash provided by operating activities | 6,378 | 26,366 | |||||
Cash flows from investing activities: | |||||||
Net decrease in loans | 65,771 | 3,340 | |||||
Net cash proceeds received from FDIC loss share receivable | 7,442 | 70,014 | |||||
Proceeds from the sale of debt and equity securities, available for sale | 122,894 | 110,876 | |||||
Proceeds from the maturity of debt and equity securities, available for sale | 50,468 | 63,233 | |||||
Proceeds from the redemption of other investments | 15,689 | 4,498 | |||||
Proceeds from the sale of state tax credits held for sale | 8,126 | 4,134 | |||||
Proceeds from the sale of other real estate | 9,925 | 34,327 | |||||
Payments for the purchase/origination of: | |||||||
Available for sale debt and equity securities | (23,700 | ) | (179,285 | ) | |||
Other investments | (20,858 | ) | (4,481 | ) | |||
Bank owned life insurance | (20,000 | ) | — | ||||
State tax credits held for sale | (1,365 | ) | (18,347 | ) | |||
Fixed assets | (834 | ) | (3,904 | ) | |||
Net cash provided by investing activities | 213,558 | 84,405 | |||||
Cash flows from financing activities: | |||||||
Net (decrease) increase in noninterest-bearing deposit accounts | (68,527 | ) | 38,477 | ||||
Net decrease in interest-bearing deposit accounts | (222,091 | ) | (225,558 | ) | |||
Proceeds from Federal Home Loan Bank advances | 459,000 | 91,500 | |||||
Repayments of Federal Home Loan Bank advances | (348,000 | ) | (103,000 | ) | |||
Repayments of notes payable | (600 | ) | — | ||||
Repayments of subordinated debt | (2,000 | ) | — | ||||
Net decrease in other borrowings | (55,158 | ) | (22,066 | ) | |||
Cash dividends paid on common stock | (1,904 | ) | (1,871 | ) | |||
Excess tax benefit of share-based compensation | 52 | — | |||||
Payment for the repurchase of common stock warrants | (1,006 | ) | — | ||||
Cash dividends paid on preferred stock | — | (875 | ) | ||||
Proceeds from the issuance of equity instruments | 2,264 | 456 | |||||
Net cash used by financing activities | (237,970 | ) | (222,937 | ) | |||
Net decrease in cash and cash equivalents | (18,034 | ) | (112,166 | ) | |||
Cash and cash equivalents, beginning of period | 116,370 | 188,143 | |||||
Cash and cash equivalents, end of period | $ | 98,336 | $ | 75,977 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 10,002 | $ | 12,179 | |||
Income taxes | 16,936 | 10,378 | |||||
Noncash transactions: | |||||||
Transfer to other real estate owned in settlement of loans | $ | 10,908 | $ | 13,481 | |||
Sales of other real estate financed | 2,881 | 2,673 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net income as reported | $ | 11,033 | $ | 8,766 | $ | 21,073 | $ | 14,951 | |||||||
Preferred stock dividend | — | (438 | ) | — | (875 | ) | |||||||||
Accretion of preferred stock discount | — | (206 | ) | — | (410 | ) | |||||||||
Net income available to common shareholders | $ | 11,033 | $ | 8,122 | $ | 21,073 | $ | 13,666 | |||||||
Impact of assumed conversions | |||||||||||||||
Interest on 9% convertible trust preferred securities, net of income tax | 354 | 371 | 709 | 742 | |||||||||||
Net income available to common shareholders and assumed conversions | $ | 11,387 | $ | 8,493 | $ | 21,782 | $ | 14,408 | |||||||
Weighted average common shares outstanding | 18,119 | 17,833 | 18,052 | 17,808 | |||||||||||
Incremental shares from assumed conversions of convertible trust preferred securities | 1,439 | 1,439 | 1,439 | 1,439 | |||||||||||
Additional dilutive common stock equivalents | 153 | 14 | 115 | 32 | |||||||||||
Weighted average diluted common shares outstanding | 19,711 | 19,286 | 19,606 | 19,279 | |||||||||||
Basic earnings per common share: | $ | 0.61 | $ | 0.46 | $ | 1.17 | $ | 0.77 | |||||||
Diluted earnings per common share: | $ | 0.58 | $ | 0.44 | $ | 1.11 | $ | 0.75 |
June 30, 2013 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 130,241 | $ | 998 | $ | (519 | ) | $ | 130,720 | ||||||
Obligations of states and political subdivisions | 52,245 | 904 | (2,165 | ) | 50,984 | ||||||||||
Residential mortgage-backed securities | 292,700 | 2,647 | (6,034 | ) | 289,313 | ||||||||||
$ | 475,186 | $ | 4,549 | $ | (8,718 | ) | $ | 471,017 | |||||||
December 31, 2012 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 149,039 | $ | 3,329 | $ | — | $ | 152,368 | |||||||
Obligations of states and political subdivisions | 51,202 | 2,279 | (478 | ) | 53,003 | ||||||||||
Residential mortgage-backed securities | 427,221 | 7,884 | (264 | ) | 434,841 | ||||||||||
$ | 627,462 | $ | 13,492 | $ | (742 | ) | $ | 640,212 |
(in thousands) | Amortized Cost | Estimated Fair Value | |||||
Due in one year or less | $ | 1,534 | $ | 1,547 | |||
Due after one year through five years | 142,301 | 143,018 | |||||
Due after five years through ten years | 22,412 | 22,384 | |||||
Due after ten years | 16,239 | 14,755 | |||||
Mortgage-backed securities | 292,700 | 289,313 | |||||
$ | 475,186 | $ | 471,017 |
June 30, 2013 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 51,649 | $ | 519 | $ | — | $ | — | $ | 51,649 | $ | 519 | |||||||||||
Obligations of states and political subdivisions | $ | 21,668 | $ | 1,803 | $ | 3,039 | $ | 362 | $ | 24,707 | $ | 2,165 | |||||||||||
Residential mortgage-backed securities | 161,101 | 6,034 | — | — | 161,101 | 6,034 | |||||||||||||||||
$ | 234,418 | $ | 8,356 | $ | 3,039 | $ | 362 | $ | 237,457 | $ | 8,718 | ||||||||||||
December 31, 2012 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Obligations of states and political subdivisions | 6,434 | 122 | 3,389 | 356 | 9,823 | 478 | |||||||||||||||||
Residential mortgage-backed securities | 40,471 | 143 | 11,266 | 121 | 51,737 | 264 | |||||||||||||||||
$ | 46,905 | $ | 265 | $ | 14,655 | $ | 477 | $ | 61,560 | $ | 742 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Gross gains realized | $ | — | $ | 324 | $ | 866 | $ | 1,399 | |||||||
Gross losses realized | — | (190 | ) | (182 | ) | (243 | ) | ||||||||
Proceeds from sales | — | 46,400 | 122,894 | 110,876 |
(in thousands) | June 30, 2013 | December 31, 2012 | |||||
Real Estate Loans: | |||||||
Construction and Land Development | $ | 147,888 | $ | 160,911 | |||
Commercial real estate - Investor Owned | 447,754 | 486,467 | |||||
Commercial real estate - Owner Occupied | 337,946 | 333,242 | |||||
Residential real estate | 151,098 | 145,558 | |||||
Total real estate loans | $ | 1,084,686 | $ | 1,126,178 | |||
Commercial and industrial | 962,920 | 962,884 | |||||
Consumer & other | 30,220 | 16,966 | |||||
Portfolio Loans | $ | 2,077,826 | $ | 2,106,028 | |||
Unearned loan costs, net | 742 | 11 | |||||
Portfolio loans, including unearned loan costs | $ | 2,078,568 | $ | 2,106,039 |
(in thousands) | Commercial & Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Investor Owned | Construction and Land Development | Residential Real Estate | Consumer & Other | Qualitative Adjustment | Total | |||||||||||||||||||||||
Allowance for Loan Losses: | |||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 10,064 | $ | 4,192 | $ | 10,403 | $ | 5,239 | $ | 2,026 | $ | 31 | $ | 2,375 | $ | 34,330 | |||||||||||||||
Provision charged to expense | 120 | 179 | 953 | (127 | ) | 675 | 46 | 7 | 1,853 | ||||||||||||||||||||||
Losses charged off | (206 | ) | (312 | ) | (3,052 | ) | (190 | ) | (986 | ) | (34 | ) | — | (4,780 | ) | ||||||||||||||||
Recoveries | 298 | 5 | 336 | 14 | 396 | — | — | 1,049 | |||||||||||||||||||||||
Balance at March 31, 2013 | $ | 10,276 | $ | 4,064 | $ | 8,640 | $ | 4,936 | $ | 2,111 | $ | 43 | $ | 2,382 | $ | 32,452 | |||||||||||||||
Provision charged to expense | (320 | ) | (139 | ) | (2,273 | ) | (998 | ) | (299 | ) | 1 | (267 | ) | (4,295 | ) | ||||||||||||||||
Losses charged off | (400 | ) | (32 | ) | (176 | ) | (144 | ) | — | — | — | (752 | ) | ||||||||||||||||||
Recoveries | 118 | 17 | 24 | 21 | 34 | — | — | 214 | |||||||||||||||||||||||
Balance at June 30, 2013 | $ | 9,674 | $ | 3,910 | $ | 6,215 | $ | 3,815 | $ | 1,846 | $ | 44 | $ | 2,115 | $ | 27,619 |
(in thousands) | Commercial & Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Investor Owned | Construction and Land Development | Residential Real Estate | Consumer & Other | Qualitative Adjustment | Total | |||||||||||||||||||||||
Balance June 30, 2013 | |||||||||||||||||||||||||||||||
Allowance for Loan Losses - Ending Balance: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,221 | $ | — | $ | 591 | $ | 452 | $ | 67 | $ | — | $ | — | $ | 4,331 | |||||||||||||||
Collectively evaluated for impairment | 6,453 | 3,910 | 5,624 | 3,363 | 1,779 | 44 | 2,115 | 23,288 | |||||||||||||||||||||||
Total | $ | 9,674 | $ | 3,910 | $ | 6,215 | $ | 3,815 | $ | 1,846 | $ | 44 | $ | 2,115 | $ | 27,619 | |||||||||||||||
Loans - Ending Balance: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 6,681 | $ | 761 | $ | 11,678 | $ | 4,396 | $ | 2,432 | $ | — | $ | — | $ | 25,948 | |||||||||||||||
Collectively evaluated for impairment | 956,239 | 337,185 | 436,076 | 143,492 | 148,666 | 30,962 | — | 2,052,620 | |||||||||||||||||||||||
Total | $ | 962,920 | $ | 337,946 | $ | 447,754 | $ | 147,888 | $ | 151,098 | $ | 30,962 | $ | — | $ | 2,078,568 | |||||||||||||||
Balance at December 31, 2012 | |||||||||||||||||||||||||||||||
Allowance for Loan Losses - Ending Balance: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,446 | $ | 339 | $ | 3,400 | $ | 732 | $ | 259 | $ | — | $ | — | $ | 8,176 | |||||||||||||||
Collectively evaluated for impairment | 6,618 | 3,853 | 7,003 | 4,507 | 1,767 | 31 | 2,375 | 26,154 | |||||||||||||||||||||||
Total | $ | 10,064 | $ | 4,192 | $ | 10,403 | $ | 5,239 | $ | 2,026 | $ | 31 | $ | 2,375 | $ | 34,330 | |||||||||||||||
Loans - Ending Balance: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 8,934 | $ | 5,772 | $ | 16,762 | $ | 4,695 | $ | 2,564 | $ | — | $ | — | $ | 38,727 | |||||||||||||||
Collectively evaluated for impairment | 953,950 | 327,470 | 469,705 | 156,216 | 142,994 | 16,977 | — | 2,067,312 | |||||||||||||||||||||||
Total | $ | 962,884 | $ | 333,242 | $ | 486,467 | $ | 160,911 | $ | 145,558 | $ | 16,977 | $ | — | $ | 2,106,039 |
June 30, 2013 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial & Industrial | $ | 6,841 | $ | — | $ | 6,788 | $ | 6,788 | $ | 3,221 | $ | 7,959 | |||||||||||
Real Estate: | |||||||||||||||||||||||
Commercial - Owner Occupied | 1,137 | 778 | — | 778 | — | 3,529 | |||||||||||||||||
Commercial - Investor Owned | 14,776 | 7,925 | 4,069 | 11,994 | 591 | 12,798 | |||||||||||||||||
Construction and Land Development | 5,477 | 3,380 | 1,145 | 4,525 | 452 | 5,059 | |||||||||||||||||
Residential | 3,149 | 1,918 | 596 | 2,514 | 67 | 2,567 | |||||||||||||||||
Consumer & Other | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 31,380 | $ | 14,001 | $ | 12,598 | $ | 26,599 | $ | 4,331 | $ | 31,912 |
December 31, 2012 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial & Industrial | $ | 9,005 | $ | 96 | $ | 8,838 | $ | 8,934 | $ | 3,446 | $ | 6,379 | |||||||||||
Real Estate: | |||||||||||||||||||||||
Commercial - Owner Occupied | 6,726 | 2,178 | 3,594 | 5,772 | 339 | 7,985 | |||||||||||||||||
Commercial - Investor Owned | 19,864 | 185 | 16,577 | 16,762 | 3,400 | 10,500 | |||||||||||||||||
Construction and Land Development | 6,491 | 1,560 | 3,135 | 4,695 | 732 | 10,259 | |||||||||||||||||
Residential | 3,132 | 1,626 | 938 | 2,564 | 259 | 4,368 | |||||||||||||||||
Consumer & Other | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 45,218 | $ | 5,645 | $ | 33,082 | $ | 38,727 | $ | 8,176 | $ | 39,491 |
June 30, 2013 | |||||||||||||||
(in thousands) | Non-accrual | Restructured | Loans over 90 days past due and still accruing interest | Total | |||||||||||
Commercial & Industrial | $ | 6,788 | $ | — | $ | — | $ | 6,788 | |||||||
Real Estate: | |||||||||||||||
Commercial - Investor Owned | 11,994 | — | — | 11,994 | |||||||||||
Commercial - Owner Occupied | 778 | — | — | 778 | |||||||||||
Construction and Land Development | 4,525 | — | — | 4,525 | |||||||||||
Residential | 2,514 | — | — | 2,514 | |||||||||||
Consumer & Other | — | — | — | — | |||||||||||
Total | $ | 26,599 | $ | — | $ | — | $ | 26,599 |
December 31, 2012 | |||||||||||||||
(in thousands) | Non-accrual | Restructured | Loans over 90 days past due and still accruing interest | Total | |||||||||||
Commercial & Industrial | $ | 8,929 | $ | 5 | $ | — | $ | 8,934 | |||||||
Real Estate: | |||||||||||||||
Commercial - Investor Owned | 16,762 | — | — | 16,762 | |||||||||||
Commercial - Owner Occupied | 5,772 | — | — | 5,772 | |||||||||||
Construction and Land Development | 3,260 | 1,435 | — | 4,695 | |||||||||||
Residential | 2,564 | — | — | 2,564 | |||||||||||
Consumer & Other | — | — | — | — | |||||||||||
Total | $ | 37,287 | $ | 1,440 | $ | — | $ | 38,727 |
June 30, 2013 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial & Industrial | $ | 597 | $ | 1,166 | $ | 1,763 | $ | 961,157 | $ | 962,920 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 1,016 | 761 | 1,777 | 336,169 | 337,946 | ||||||||||||||
Commercial - Investor Owned | 2,961 | 7,498 | 10,459 | 437,295 | 447,754 | ||||||||||||||
Construction and Land Development | 1,054 | 1,258 | 2,312 | 145,576 | 147,888 | ||||||||||||||
Residential | 824 | 639 | 1,463 | 149,635 | 151,098 | ||||||||||||||
Consumer & Other | — | — | — | 30,962 | 30,962 | ||||||||||||||
Total | $ | 6,452 | $ | 11,322 | $ | 17,774 | $ | 2,060,794 | $ | 2,078,568 |
December 31, 2012 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial & Industrial | $ | 14 | $ | — | $ | 14 | $ | 962,870 | $ | 962,884 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 1,352 | 2,081 | 3,433 | 329,809 | 333,242 | ||||||||||||||
Commercial - Investor Owned | — | 4,045 | 4,045 | 482,422 | 486,467 | ||||||||||||||
Construction and Land Development | 1,201 | 1,559 | 2,760 | 158,151 | 160,911 | ||||||||||||||
Residential | 616 | 593 | 1,209 | 144,349 | 145,558 | ||||||||||||||
Consumer & Other | 34 | — | 34 | 16,943 | 16,977 | ||||||||||||||
Total | $ | 3,217 | $ | 8,278 | $ | 11,495 | $ | 2,094,544 | $ | 2,106,039 |
• | Grades 1, 2, and 3 - These grades include loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow and whose management team has experience and depth within their industry. |
• | Grade 4– This grade includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. |
• | Grade 5 – This grade includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. |
• | Grade 6– This grade includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the company is starting to reverse a negative trend or condition, or have recently been upgraded from a 7, 8, or 9 rating. |
• | Grade 7 – Watch credits are companies that have experienced financial setback of a nature that are not determined to be severe or influence ‘ongoing concern’ expectations. Borrowers within this category are expected to turnaround within a 12-month period of time. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support. |
• | Grade 8 – Substandard credits will include those companies that are characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted. |
• | Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. Borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual. |
June 30, 2013 | |||||||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Substandard (8) | Doubtful (9) | Total | ||||||||||||||
Commercial & Industrial | $ | 899,104 | $ | 44,072 | $ | 19,309 | $ | 435 | $ | 962,920 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 299,608 | 24,182 | 14,156 | — | 337,946 | ||||||||||||||
Commercial - Investor Owned | 373,518 | 44,407 | 29,829 | — | 447,754 | ||||||||||||||
Construction and Land Development | 111,680 | 15,048 | 20,679 | 481 | 147,888 | ||||||||||||||
Residential | 134,026 | 7,352 | 9,720 | — | 151,098 | ||||||||||||||
Consumer & Other | 30,958 | 4 | — | — | 30,962 | ||||||||||||||
Total | $ | 1,848,894 | $ | 135,065 | $ | 93,693 | $ | 916 | $ | 2,078,568 |
December 31, 2012 | |||||||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Substandard (8) | Doubtful (9) | Total | ||||||||||||||
Commercial & Industrial | $ | 912,766 | $ | 29,524 | $ | 18,546 | $ | 2,048 | $ | 962,884 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 290,850 | 26,336 | 15,898 | 158 | 333,242 | ||||||||||||||
Commercial - Investor Owned | 389,886 | 64,707 | 31,874 | — | 486,467 | ||||||||||||||
Construction and Land Development | 124,857 | 9,543 | 26,012 | 499 | 160,911 | ||||||||||||||
Residential | 130,159 | 5,921 | 9,478 | — | 145,558 | ||||||||||||||
Consumer & Other | 16,972 | 5 | — | — | 16,977 | ||||||||||||||
Total | $ | 1,865,490 | $ | 136,036 | $ | 101,808 | $ | 2,705 | $ | 2,106,039 |
June 30, 2013 | December 31, 2012 | ||||||||
(in thousands) | Weighted- Average Risk Rating | Recorded Investment Covered Loans | Weighted- Average Risk Rating | Recorded Investment Covered Loans | |||||
Real Estate Loans: | |||||||||
Construction and Land Development | 7.08 | $21,122 | 7.06 | $30,537 | |||||
Commercial real estate - Investor Owned | 6.50 | 54,087 | 6.08 | 57,602 | |||||
Commercial real estate - Owner Occupied | 6.66 | 43,686 | 6.65 | 47,140 | |||||
Residential real estate | 5.70 | 38,398 | 5.68 | 42,531 | |||||
Total real estate loans | $157,293 | $177,810 | |||||||
Commercial and industrial | 6.76 | 11,484 | 6.57 | 22,034 | |||||
Consumer & other | 4.06 | 1,086 | 4.19 | 1,274 | |||||
Portfolio Loans | $169,863 | $201,118 |
June 30, 2013 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial & Industrial | $ | 3,655 | $ | 549 | $ | 4,204 | $ | 7,280 | $ | 11,484 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 4,053 | 4,521 | 8,574 | 35,112 | 43,686 | ||||||||||||||
Commercial - Investor Owned | 189 | 3,386 | 3,575 | 50,512 | 54,087 | ||||||||||||||
Construction and Land Development | 22 | 8,470 | 8,492 | 12,630 | 21,122 | ||||||||||||||
Residential | 2,363 | 2,141 | 4,504 | 33,894 | 38,398 | ||||||||||||||
Consumer & Other | 4 | — | 4 | 1,082 | 1,086 | ||||||||||||||
Total | $ | 10,286 | $ | 19,067 | $ | 29,353 | $ | 140,510 | $ | 169,863 |
December 31, 2012 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial & Industrial | $ | 319 | $ | 3,925 | $ | 4,244 | $ | 17,790 | $ | 22,034 | |||||||||
Real Estate: | |||||||||||||||||||
Commercial - Owner Occupied | 887 | 5,144 | 6,031 | 41,109 | 47,140 | ||||||||||||||
Commercial - Investor Owned | 308 | 665 | 973 | 56,629 | 57,602 | ||||||||||||||
Construction and Land Development | 36 | 13,532 | 13,568 | 16,969 | 30,537 | ||||||||||||||
Residential | 1,232 | 2,907 | 4,139 | 38,392 | 42,531 | ||||||||||||||
Consumer & Other | 1 | 2 | 3 | 1,271 | 1,274 | ||||||||||||||
Total | $ | 2,783 | $ | 26,175 | $ | 28,958 | $ | 172,160 | $ | 201,118 |
(In thousands) | Contractual Cashflows | Less: Non-accretable Difference | Less: Accretable Yield | Carrying Amount | |||||||||||
Balance January 1, 2013 | $ | 386,966 | $ | 118,627 | $ | 78,768 | $ | 189,571 | |||||||
Principal reductions and interest payments | (23,628 | ) | — | — | (23,628 | ) | |||||||||
Accretion of loan discount | — | — | (13,735 | ) | 13,735 | ||||||||||
Changes in contractual and expected cash flows due to remeasurement | (2,595 | ) | (14,136 | ) | 5,995 | 5,546 | |||||||||
Reductions due to disposals | (56,473 | ) | (21,463 | ) | (8,604 | ) | (26,406 | ) | |||||||
Balance June 30, 2013 | $ | 304,270 | $ | 83,028 | $ | 62,424 | $ | 158,818 | |||||||
Balance January 1, 2012 | $ | 618,791 | $ | 256,481 | $ | 63,335 | $ | 298,975 | |||||||
Principal reductions and interest payments | (49,893 | ) | — | — | (49,893 | ) | |||||||||
Accretion of loan discount | — | — | (14,235 | ) | 14,235 | ||||||||||
Changes in contractual and expected cash flows due to remeasurement | 23,114 | (53,450 | ) | 69,608 | 6,956 | ||||||||||
Reductions due to disposals | (71,288 | ) | (38,080 | ) | (3,534 | ) | (29,674 | ) | |||||||
Balance June 30, 2012 | $ | 520,724 | $ | 164,951 | $ | 115,174 | $ | 240,599 |
(In thousands) | June 30, 2013 | ||
Balance at beginning of period | $ | 61,475 | |
Adjustments not reflected in income: | |||
Cash received from the FDIC for covered assets | (7,442 | ) | |
FDIC reimbursable losses, net | 1,747 | ||
Adjustments reflected in income: | |||
Amortization, net | (5,850 | ) | |
Loan impairment recapture | (37 | ) | |
Reductions for payments on covered assets in excess of expected cash flows | (4,911 | ) | |
Balance at end of period | $ | 44,982 |
(in thousands) | June 30, 2013 | December 31, 2012 | |||||
Commitments to extend credit | $ | 742,387 | $ | 722,325 | |||
Standby letters of credit | 44,636 | 42,561 |
• | Economic hedge of state tax credits. In November 2008, the Company paid $2.1 million to enter into a series of interest rate caps in order to economically hedge changes in fair value of the State tax credits held for sale. In February 2010, the Company paid $751,000 for an additional series of interest rate caps. See Note 8—Fair Value Measurements for further discussion of the fair value of the state tax credits. |
Asset Derivatives (Other Assets) | Liability Derivatives (Other Liabilities) | ||||||||||||||||||||||
Notional Amount | Fair Value | Fair Value | |||||||||||||||||||||
(in thousands) | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||
Non-designated hedging instruments | |||||||||||||||||||||||
Interest rate cap contracts | $ | 34,050 | $ | 49,050 | $ | 23 | $ | 13 | $ | — | $ | — |
Location of Gain or (Loss) Recognized in Operations on Derivative | Amount of Gain or (Loss) Recognized in Operations on Derivative | Amount of Gain or (Loss) Recognized in Operations on Derivative | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Non-designated hedging instruments | |||||||||||||||||
Interest rate cap contracts | Gain on state tax credits, net | $ | 11 | $ | (39 | ) | $ | 10 | $ | (65 | ) |
Asset Derivatives (Other Assets) | Liability Derivatives (Other Liabilities) | ||||||||||||||||||||||
Notional Amount | Fair Value | Fair Value | |||||||||||||||||||||
(in thousands) | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||
Non-designated hedging instruments | |||||||||||||||||||||||
Interest rate swap contracts | $ | 119,129 | $ | 126,962 | $ | 797 | $ | 1,741 | $ | 836 | $ | 1,979 |
Location of Gain or (Loss) Recognized in Operations on Derivative | Amount of Gain or (Loss) Recognized in Operations on Derivative | Amount of Gain or (Loss) Recognized in Operations on Derivative | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Non-designated hedging instruments | |||||||||||||||||
Interest rate swap contracts | Interest and fees on loans | $ | (68 | ) | $ | (110 | ) | $ | (173 | ) | $ | (251 | ) |
June 30, 2013 | |||||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | |||||||||||
Assets | |||||||||||||||
Securities available for sale | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | — | $ | 130,720 | $ | — | $ | 130,720 | |||||||
Obligations of states and political subdivisions | — | 47,945 | 3,039 | 50,984 | |||||||||||
Residential mortgage-backed securities | — | 289,313 | — | 289,313 | |||||||||||
Total securities available for sale | $ | — | $ | 467,978 | $ | 3,039 | $ | 471,017 | |||||||
Portfolio loans | — | 4,429 | — | 4,429 | |||||||||||
State tax credits held for sale | — | — | 19,822 | 19,822 | |||||||||||
Derivative financial instruments | — | 820 | — | 820 | |||||||||||
Total assets | $ | — | $ | 473,227 | $ | 22,861 | $ | 496,088 | |||||||
Liabilities | |||||||||||||||
Derivative financial instruments | $ | — | $ | 836 | $ | — | $ | 836 | |||||||
Total liabilities | $ | — | $ | 836 | $ | — | $ | 836 |
• | Securities available for sale. Securities classified as available for sale are reported at fair value utilizing Level 2 and Level 3 inputs. The Company obtains fair value measurements from an independent pricing service. Fair values for Level 2 securities are based upon dealer quotes, market spreads, the U.S. Treasury yield curve, trade execution data, market consensus prepayment speeds, credit information and the bond's terms and conditions at the security level. At June 30, 2013, Level 3 securities available for sale consist primarily of three Auction Rate Securities that are valued based on the securities' estimated cash flows, yields of comparable securities, and live trading levels. |
• | Portfolio Loans. Certain fixed rate portfolio loans are accounted for as trading instruments and reported at fair value. Fair value on these loans is determined using a third party valuation model with observable Level 2 market data inputs. |
• | State tax credits held for sale. At June 30, 2013, of the $55.5 million of state tax credits held for sale on the condensed consolidated balance sheet, approximately $19.8 million were carried at fair value. The remaining $35.7 million of state tax credits were accounted for at cost. |
• | Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The Company obtains counterparty quotations to value its interest rate swaps and caps. In addition, the Company validates the counterparty quotations with third party valuation sources. Derivatives with negative fair values are included in Other liabilities in the consolidated balance sheets. Derivatives with positive fair value are included in Other assets in the consolidated balance sheets. |
• | Purchases, sales, issuances and settlements, net. There were no Level 3 purchases during the quarter ended June 30, 2013 or 2012. |
• | Transfers in and/or out of Level 3. The transfer out of Level 3 during the period ended March 31, 2012 was related to a mortgage-backed security purchased in the fourth quarter of 2011 which was originally priced using Level 3 assumptions. In the first quarter of 2012, a third party pricing service, utilizing Level 2 assumptions, became available as more data was available on the new security. |
Securities available for sale, at fair value | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Beginning balance | $ | 3,051 | $ | 3,024 | $ | 3,049 | $ | 6,763 | |||||||
Total (losses) gains: | |||||||||||||||
Included in other comprehensive income | (12 | ) | 18 | (10 | ) | 15 | |||||||||
Purchases, sales, issuances and settlements: | |||||||||||||||
Purchases | — | — | — | — | |||||||||||
Transfer in and/or out of Level 3 | — | — | — | (3,736 | ) | ||||||||||
Ending balance | $ | 3,039 | $ | 3,042 | $ | 3,039 | $ | 3,042 | |||||||
Change in unrealized (losses) gains relating to assets still held at the reporting date | $ | (12 | ) | $ | 18 | $ | (10 | ) | $ | 15 |
State tax credits held for sale | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Beginning balance | $ | 20,053 | $ | 24,653 | $ | 23,020 | $ | 26,350 | |||||||
Total gains: | |||||||||||||||
Included in earnings | (51 | ) | 559 | 105 | 730 | ||||||||||
Purchases, sales, issuances and settlements: | |||||||||||||||
Sales | (180 | ) | (376 | ) | (3,303 | ) | (2,244 | ) | |||||||
Ending balance | $ | 19,822 | $ | 24,836 | $ | 19,822 | $ | 24,836 | |||||||
Change in unrealized gains relating to assets still held at the reporting date | $ | (99 | ) | $ | 465 | $ | (773 | ) | $ | 182 |
(1) | (1) | (1) | (1) | ||||||||||||||||||||
(in thousands) | Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total (losses) gains for the three months ended June 30, 2013 | Total (losses) gains for the six months ended June 30, 2013 | |||||||||||||||||
Impaired loans | $ | 7,471 | $ | — | $ | — | $ | 7,471 | $ | (752 | ) | $ | (5,532 | ) | |||||||||
Other real estate | 5,599 | — | — | 5,599 | (210 | ) | (754 | ) | |||||||||||||||
Total | $ | 13,070 | $ | — | $ | — | $ | 13,070 | $ | (962 | ) | $ | (6,286 | ) |
June 30, 2013 | December 31, 2012 | ||||||||||||||
(in thousands) | Carrying Amount | Estimated fair value | Carrying Amount | Estimated fair value | |||||||||||
Balance sheet assets | |||||||||||||||
Cash and due from banks | $ | 32,019 | $ | 32,019 | $ | 21,906 | $ | 21,906 | |||||||
Federal funds sold | 41 | 41 | 51 | 51 | |||||||||||
Interest-bearing deposits | 71,576 | 71,576 | 95,413 | 95,413 | |||||||||||
Securities available for sale | 471,017 | 471,017 | 640,212 | 640,212 | |||||||||||
Other investments, at cost | 19,205 | 19,205 | 14,294 | 14,294 | |||||||||||
Loans held for sale | 5,583 | 5,583 | 11,792 | 11,792 | |||||||||||
Derivative financial instruments | 820 | 820 | 1,754 | 1,754 | |||||||||||
Portfolio loans, net | 2,209,767 | 2,209,508 | 2,261,280 | 2,267,038 | |||||||||||
State tax credits, held for sale | 55,493 | 59,824 | 61,284 | 66,822 | |||||||||||
Accrued interest receivable | 9,235 | 9,235 | 8,497 | 8,497 | |||||||||||
Balance sheet liabilities | |||||||||||||||
Deposits | 2,368,234 | 2,374,537 | 2,658,851 | 2,669,113 | |||||||||||
Subordinated debentures | 83,081 | 63,867 | 85,081 | 65,840 | |||||||||||
Federal Home Loan Bank advances | 191,000 | 198,587 | 80,000 | 89,301 | |||||||||||
Other borrowings | 189,312 | 189,391 | 245,070 | 245,224 | |||||||||||
Derivative financial instruments | 836 | 836 | 1,979 | 1,979 | |||||||||||
Accrued interest payable | 1,044 | 1,044 | 1,282 | 1,282 |
Estimated Fair Value Measurement at Reporting Date Using | Balance at June 30, 2013 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||
Portfolio loans, net | $ | — | $ | — | $ | 2,209,475 | $ | 2,209,475 | |||||||
State tax credits, held for sale | $ | — | $ | — | $ | 40,002 | $ | 40,002 | |||||||
Financial Liabilities: | |||||||||||||||
Deposits | 1,811,549 | — | 562,988 | 2,374,537 | |||||||||||
Subordinated debentures | — | 63,867 | — | 63,867 | |||||||||||
Federal Home Loan Bank advances | — | 198,587 | — | 198,587 | |||||||||||
Other borrowings | — | 189,391 | — | 189,391 | |||||||||||
Estimated Fair Value Measurement at Reporting Date Using | Balance at December 31, 2012 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||
Portfolio loans, net | $ | — | $ | — | $ | 2,266,834 | $ | 2,266,834 | |||||||
State tax credits, held for sale | $ | — | $ | — | $ | 43,802 | $ | 43,802 | |||||||
Financial Liabilities: | |||||||||||||||
Deposits | 2,079,141 | — | 589,972 | 2,669,113 | |||||||||||
Subordinated debentures | — | 65,840 | — | 65,840 | |||||||||||
Federal Home Loan Bank advances | — | 89,301 | — | 89,301 | |||||||||||
Other borrowings | — | 245,224 | — | 245,224 |
(in thousands) | Banking | Wealth Management | Corporate and Intercompany | Total | |||||||||||
Three months ended June 30, | |||||||||||||||
Income Statement Information | 2013 | ||||||||||||||
Net interest income (expense) | $ | 34,404 | $ | (133 | ) | $ | (963 | ) | $ | 33,308 | |||||
Provision for loan losses | (6,573 | ) | — | — | (6,573 | ) | |||||||||
Noninterest income | (3,487 | ) | 1,811 | (1 | ) | (1,677 | ) | ||||||||
Noninterest expense | 18,471 | 1,779 | 1,129 | 21,379 | |||||||||||
Income (loss) before income tax expense (benefit) | 19,019 | (101 | ) | (2,093 | ) | 16,825 | |||||||||
2012 | |||||||||||||||
Net interest income (expense) | $ | 35,208 | $ | (186 | ) | $ | (889 | ) | $ | 34,133 | |||||
Provision for loan losses | 281 | — | — | 281 | |||||||||||
Noninterest income | (1,738 | ) | 2,577 | 6 | 845 | ||||||||||
Noninterest expense | 18,304 | 1,919 | 1,191 | 21,414 | |||||||||||
Income (loss) before income tax expense (benefit) | 14,885 | 472 | (2,074 | ) | 13,283 | ||||||||||
Six months ended June 30, | |||||||||||||||
Income Statement Information | 2013 | ||||||||||||||
Net interest income (expense) | $ | 72,261 | $ | (126 | ) | $ | (1,928 | ) | $ | 70,207 | |||||
Provision for loan losses | (2,464 | ) | — | — | (2,464 | ) | |||||||||
Noninterest income | (3,442 | ) | 4,605 | 74 | 1,237 | ||||||||||
Noninterest expense | 35,239 | 3,835 | 2,822 | 41,896 | |||||||||||
Income (loss) before income tax expense (benefit) | 36,044 | 644 | (4,676 | ) | 32,012 | ||||||||||
2012 | |||||||||||||||
Net interest income (expense) | $ | 67,018 | $ | (314 | ) | $ | (1,942 | ) | $ | 64,762 | |||||
Provision for loan losses | 4,284 | — | — | 4,284 | |||||||||||
Noninterest income | 153 | 4,630 | 45 | 4,828 | |||||||||||
Noninterest expense | 36,362 | 3,792 | 2,624 | 42,778 | |||||||||||
Income (loss) before income tax expense (benefit) | 26,525 | 524 | (4,521 | ) | 22,528 | ||||||||||
Balance Sheet Information | June 30, 2013 | December 31, 2012 | |||||||||||||
Total assets: | |||||||||||||||
Banking | $ | 2,955,561 | $ | 3,195,096 | |||||||||||
Wealth Management | 121,815 | 112,020 | |||||||||||||
Corporate and Intercompany | 17,044 | 18,670 | |||||||||||||
Total | 3,094,420 | 3,325,786 |
• | Loans - Portfolio loans totaled $2.2 billion at June 30, 2013, flat with March 31, 2013 and up $56.9 million, or 3% from June 30, 2012. The Company expects to show 3-4% loan growth over December 31, 2012 by the end of 2013. Loans covered under FDIC shared loss agreements ("Covered loans") were $169.9 million at June 30, 2013, a decrease of $13.0 million or 7% from March 31, 2013 and a decrease of $72.6 million or 30% from June 30, 2012. |
• | Deposits – Total deposits at June 30, 2013 were $2.4 billion, a decrease of $126.6 million, or 5%, and $236.0 million, or 9%, from March 31, 2013 and June 30, 2012, respectively. The decrease in deposits from the linked quarter applied primarily to our money market and interest bearing transaction deposit categories and was primarily due to seasonality. The year over year decrease in deposits was mainly due to a decline in certificates of deposits as the Company continues to force a decline through lower cost pricing. Demand deposits increased $12.7 million or 2% from March 31, 2013 and decreased $5.7 million or 1% from June 30, 2012 while interest bearing transaction accounts decreased $165.1 million or 12% from March 31, 2013 and $109.7 million or 8% from June 30, 2012. The decrease in the demand and interest bearing deposits from the prior year is mainly due to the expiration of the FDIC's Transaction Account Guarantee ("TAG") program, as well an intentional 18% reduction in higher cost certificates of deposit as the Company continues to manage down its cost of funds. |
• | Asset quality – Nonperforming loans were $25.9 million at June 30, 2013, compared to $32.2 million at March 31, 2013 and $40.6 million at June 30, 2012. Nonperforming loans represented 1.25% of total Noncovered loans at June 30, 2013 versus 1.54% at March 31, 2013 and 2.08% at June 30, 2012. Excluding non-accrual loans and Covered loans, portfolio loans that were 30-89 days delinquent at June 30, 2013 remained at very low levels, representing 0.27% of the portfolio compared to 0.12% at March 31, 2013 and 0.13% at June 30, 2012. |
• | Interest rate margin – The net interest rate margin was 4.75% for the second quarter of 2013, compared to 5.10% for the first quarter of 2013 and 4.81% in the second quarter of 2012. See Net Interest Income in this section for more information. |
• | Covered loans and other assets covered under FDIC shared loss agreements - The following table illustrates the net revenue contribution of covered assets for the most recent five quarters. |
For the Quarter ended | |||||||||||||||||||
(in thousands) | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | ||||||||||||||
Accretion income | $ | 6,623 | $ | 7,112 | $ | 7,442 | $ | 7,995 | $ | 7,155 | |||||||||
Accelerated cash flows | 4,689 | 7,209 | 9,778 | 7,446 | 5,315 | ||||||||||||||
Other | 59 | 324 | 419 | 103 | 106 | ||||||||||||||
Total interest income | 11,371 | 14,645 | 17,639 | 15,544 | 12,576 | ||||||||||||||
Provision for loan losses | 2,278 | (2,256 | ) | (653 | ) | (10,889 | ) | (206 | ) | ||||||||||
Gain on sale of other real estate | 116 | 689 | 105 | 34 | 769 | ||||||||||||||
Change in FDIC loss share receivable | (6,713 | ) | (4,085 | ) | (8,131 | ) | 1,912 | (5,694 | ) | ||||||||||
Change in FDIC clawback liability | (449 | ) | (304 | ) | (575 | ) | — | — | |||||||||||
Pre-tax net revenue | $ | 6,603 | $ | 8,689 | $ | 8,385 | $ | 6,601 | $ | 7,445 |
Three months ended June 30, | |||||
2013 | 2012 | ||||
Core net interest margin | 3.56 | % | 3.62 | % |
Six months ended June 30, | |||||
2013 | 2012 | ||||
Core net interest margin | 3.55 | % | 3.60 | % |
Three months ended June 30, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest Income/Expense | Average Yield/ Rate | Average Balance | Interest Income/Expense | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Taxable loans (1) | $ | 2,048,385 | $ | 23,688 | 4.64 | % | $ | 1,906,637 | $ | 24,328 | 5.13 | % | |||||||||
Tax-exempt loans (2) | 47,469 | 862 | 7.28 | 30,813 | 575 | 7.51 | |||||||||||||||
Covered loans (3) | 173,794 | 11,371 | 26.24 | 250,965 | 12,576 | 20.15 | |||||||||||||||
Total loans | 2,269,648 | 35,921 | 6.35 | 2,188,415 | 37,479 | 6.89 | |||||||||||||||
Taxable investments in debt and equity securities | 459,910 | 2,126 | 1.85 | 547,059 | 2,456 | 1.81 | |||||||||||||||
Non-taxable investments in debt and equity securities (2) | 44,179 | 501 | 4.55 | 31,655 | 368 | 4.68 | |||||||||||||||
Short-term investments | 84,964 | 46 | 0.22 | 114,786 | 65 | 0.23 | |||||||||||||||
Total securities and short-term investments | 589,053 | 2,673 | 1.82 | 693,500 | 2,889 | 1.68 | |||||||||||||||
Total interest-earning assets | 2,858,701 | 38,594 | 5.42 | 2,881,915 | 40,368 | 5.63 | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 17,517 | 15,370 | |||||||||||||||||||
Other assets | 266,707 | 356,794 | |||||||||||||||||||
Allowance for loan losses | (45,709 | ) | (40,066 | ) | |||||||||||||||||
Total assets | $ | 3,097,216 | $ | 3,214,013 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing transaction accounts | $ | 246,136 | $ | 123 | 0.20 | % | $ | 266,132 | $ | 193 | 0.29 | % | |||||||||
Money market accounts | 916,429 | 752 | 0.33 | 1,018,418 | 1,240 | 0.49 | |||||||||||||||
Savings | 90,927 | 56 | 0.25 | 67,998 | 72 | 0.43 | |||||||||||||||
Certificates of deposit | 552,263 | 1,889 | 1.37 | 698,284 | 2,536 | 1.46 | |||||||||||||||
Total interest-bearing deposits | 1,805,755 | 2,820 | 0.63 | 2,050,832 | 4,041 | 0.79 | |||||||||||||||
Subordinated debentures | 84,949 | 949 | 4.48 | 85,081 | 980 | 4.63 | |||||||||||||||
Borrowed funds | 331,367 | 984 | 1.19 | 206,442 | 875 | 1.70 | |||||||||||||||
Total interest-bearing liabilities | 2,222,071 | 4,753 | 0.86 | 2,342,355 | 5,896 | 1.01 | |||||||||||||||
Noninterest bearing liabilities: | |||||||||||||||||||||
Demand deposits | 613,390 | 617,596 | |||||||||||||||||||
Other liabilities | 12,546 | 2,571 | |||||||||||||||||||
Total liabilities | 2,848,007 | 2,962,522 | |||||||||||||||||||
Shareholders' equity | 249,209 | 251,491 | |||||||||||||||||||
Total liabilities & shareholders' equity | $ | 3,097,216 | $ | 3,214,013 | |||||||||||||||||
Net interest income | $ | 33,841 | $ | 34,472 | |||||||||||||||||
Net interest spread | 4.56 | % | 4.62 | % | |||||||||||||||||
Net interest rate margin (4) | 4.75 | 4.81 |
(1) | Average balances include non-accrual loans. The income on such loans is included in interest but is recognized only upon receipt. Loan fees, net of amortization of deferred loan origination fees and costs, included in interest income are approximately $368,000 and $382,000 for the three months ended June 30, 2013 and 2012, respectively. |
(2) | Non-taxable income is presented on a fully tax-equivalent basis using a 39% tax rate in 2013 and 36% tax rate in 2012. The tax-equivalent adjustments were $533,000 and $339,000 for the three months ended June 30, 2013 and 2012, respectively. |
(3) | Covered loans are loans covered under FDIC shared-loss agreements. |
(4) | Net interest income divided by average total interest-earning assets. |
Six months ended June 30, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest Income/Expense | Average Yield/ Rate | Average Balance | Interest Income/Expense | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Taxable loans (1) | $ | 2,054,567 | $ | 47,870 | 4.70 | % | $ | 1,886,898 | $ | 48,412 | 5.16 | % | |||||||||
Tax-exempt loans (2) | 47,141 | 1,717 | 7.34 | 30,693 | 1,161 | 7.61 | |||||||||||||||
Covered loans (3) | 181,470 | 26,015 | 28.91 | 265,332 | 22,478 | 17.04 | |||||||||||||||
Total loans | 2,283,178 | 75,602 | 6.68 | 2,182,923 | 72,051 | 6.64 | |||||||||||||||
Taxable investments in debt and equity securities | 503,549 | 4,338 | 1.74 | 544,752 | 4,999 | 1.85 | |||||||||||||||
Non-taxable investments in debt and equity securities (2) | 43,866 | 993 | 4.56 | 31,399 | 733 | 4.69 | |||||||||||||||
Short-term investments | 86,461 | 93 | 0.22 | 120,508 | 142 | 0.24 | |||||||||||||||
Total securities and short-term investments | 633,876 | 5,424 | 1.73 | 696,659 | 5,874 | 1.70 | |||||||||||||||
Total interest-earning assets | 2,917,054 | 81,026 | 5.60 | 2,879,582 | 77,925 | 5.44 | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 17,920 | 15,331 | |||||||||||||||||||
Other assets | 268,833 | 383,776 | |||||||||||||||||||
Allowance for loan losses | (45,895 | ) | (38,255 | ) | |||||||||||||||||
Total assets | $ | 3,157,912 | $ | 3,240,434 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing transaction accounts | $ | 253,141 | $ | 261 | 0.21 | % | $ | 254,996 | $ | 384 | 0.30 | % | |||||||||
Money market accounts | 961,784 | 1,634 | 0.34 | 1,045,583 | 2,670 | 0.51 | |||||||||||||||
Savings | 89,638 | 115 | 0.26 | 62,051 | 141 | 0.46 | |||||||||||||||
Certificates of deposit | 552,754 | 3,827 | 1.40 | 732,551 | 5,315 | 1.46 | |||||||||||||||
Total interest-bearing deposits | 1,857,317 | 5,837 | 0.63 | 2,095,181 | 8,510 | 0.82 | |||||||||||||||
Subordinated debentures | 85,015 | 1,901 | 4.51 | 85,081 | 2,129 | 5.03 | |||||||||||||||
Borrowed funds | 343,970 | 2,026 | 1.19 | 213,736 | 1,843 | 1.73 | |||||||||||||||
Total interest-bearing liabilities | 2,286,302 | 9,764 | 0.86 | 2,393,998 | 12,482 | 1.05 | |||||||||||||||
Noninterest bearing liabilities: | |||||||||||||||||||||
Demand deposits | 612,743 | 592,553 | |||||||||||||||||||
Other liabilities | 13,858 | 5,665 | |||||||||||||||||||
Total liabilities | 2,912,903 | 2,992,216 | |||||||||||||||||||
Shareholders' equity | 245,009 | 248,218 | |||||||||||||||||||
Total liabilities & shareholders' equity | $ | 3,157,912 | $ | 3,240,434 | |||||||||||||||||
Net interest income | $ | 71,262 | $ | 65,443 | |||||||||||||||||
Net interest spread | 4.74 | % | 4.39 | % | |||||||||||||||||
Net interest rate margin (4) | 4.93 | 4.57 |
(1) | Average balances include non-accrual loans. The income on such loans is included in interest but is recognized only upon receipt. Loan fees, net of amortization of deferred loan origination fees and costs, included in interest income are approximately $872,000 and $700,000 for the six months ended June 30, 2013 and 2012, respectively. |
(2) | Non-taxable income is presented on a fully tax-equivalent basis using a 39% tax rate in 2013 and 36% tax rate in 2012. The tax-equivalent adjustments were $1,055,000 and $681,000 for the six months ended June 30, 2013 and 2012, respectively. |
(3) | Covered loans are loans covered under FDIC shared-loss agreements. |
(4) | Net interest income divided by average total interest-earning assets. |
2013 compared to 2012 | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
Increase (decrease) due to | Increase (decrease) due to | ||||||||||||||||||||||
(in thousands) | Volume(1) | Rate(2) | Net | Volume(1) | Rate(2) | Net | |||||||||||||||||
Interest earned on: | |||||||||||||||||||||||
Taxable loans | $ | 1,767 | $ | (2,407 | ) | $ | (640 | ) | $ | 4,032 | $ | (4,574 | ) | $ | (542 | ) | |||||||
Tax-exempt loans (3) | 304 | (17 | ) | 287 | 597 | (41 | ) | 556 | |||||||||||||||
Covered loans | (4,452 | ) | 3,247 | (1,205 | ) | (8,645 | ) | 12,182 | 3,537 | ||||||||||||||
Taxable investments in debt and equity securities | (395 | ) | 65 | (330 | ) | (372 | ) | (289 | ) | (661 | ) | ||||||||||||
Non-taxable investments in debt and equity securities (3) | 143 | (10 | ) | 133 | 281 | (21 | ) | 260 | |||||||||||||||
Short-term investments | (16 | ) | (3 | ) | (19 | ) | (38 | ) | (11 | ) | (49 | ) | |||||||||||
Total interest-earning assets | $ | (2,649 | ) | $ | 875 | $ | (1,774 | ) | $ | (4,145 | ) | $ | 7,246 | $ | 3,101 | ||||||||
Interest paid on: | |||||||||||||||||||||||
Interest-bearing transaction accounts | $ | (14 | ) | $ | (56 | ) | $ | (70 | ) | $ | (3 | ) | $ | (120 | ) | $ | (123 | ) | |||||
Money market accounts | (114 | ) | (374 | ) | (488 | ) | (201 | ) | (835 | ) | (1,036 | ) | |||||||||||
Savings | 20 | (36 | ) | (16 | ) | 49 | (75 | ) | (26 | ) | |||||||||||||
Certificates of deposit | (502 | ) | (145 | ) | (647 | ) | (1,266 | ) | (222 | ) | (1,488 | ) | |||||||||||
Subordinated debentures | (2 | ) | (29 | ) | (31 | ) | (2 | ) | (226 | ) | (228 | ) | |||||||||||
Borrowed funds | 425 | (316 | ) | 109 | 884 | (701 | ) | 183 | |||||||||||||||
Total interest-bearing liabilities | (187 | ) | (956 | ) | (1,143 | ) | (539 | ) | (2,179 | ) | (2,718 | ) | |||||||||||
Net interest income | $ | (2,462 | ) | $ | 1,831 | $ | (631 | ) | $ | (3,606 | ) | $ | 9,425 | $ | 5,819 |
(1) | Change in volume multiplied by yield/rate of prior period. |
(2) | Change in yield/rate multiplied by volume of prior period. |
(3) | Nontaxable income is presented on a fully tax-equivalent basis using the combined statutory federal and state income tax rate in effect for each year. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Allowance at beginning of period, for loans not covered under FDIC loss share | $ | 32,452 | $ | 37,596 | $ | 34,330 | $ | 37,989 | |||||||
Loans charged off: | |||||||||||||||
Commercial and industrial | (400 | ) | (406 | ) | (606 | ) | (991 | ) | |||||||
Real estate: | |||||||||||||||
Commercial | (208 | ) | (847 | ) | (3,572 | ) | (1,778 | ) | |||||||
Construction and Land Development | (144 | ) | (502 | ) | (334 | ) | (1,358 | ) | |||||||
Residential | — | (216 | ) | (986 | ) | (578 | ) | ||||||||
Consumer and other | — | — | (34 | ) | — | ||||||||||
Total loans charged off | (752 | ) | (1,971 | ) | (5,532 | ) | (4,705 | ) | |||||||
Recoveries of loans previously charged off: | |||||||||||||||
Commercial and industrial | 118 | 203 | 416 | 299 | |||||||||||
Real estate: | |||||||||||||||
Commercial | 41 | 20 | 382 | 37 | |||||||||||
Construction and Land Development | 21 | 97 | 35 | 249 | |||||||||||
Residential | 34 | 284 | 430 | 640 | |||||||||||
Consumer and other | — | — | — | 2 | |||||||||||
Total recoveries of loans | 214 | 604 | 1,263 | 1,227 | |||||||||||
Net loan chargeoffs | (538 | ) | (1,367 | ) | (4,269 | ) | (3,478 | ) | |||||||
Provision for loan losses | (4,295 | ) | 75 | (2,442 | ) | 1,793 | |||||||||
Allowance at end of period, for loans not covered under FDIC loss share | $ | 27,619 | $ | 36,304 | $ | 27,619 | $ | 36,304 | |||||||
Allowance at beginning of period, for loans covered under FDIC loss share | $ | 13,513 | $ | 3,010 | $ | 11,547 | $ | 1,635 | |||||||
Loans charged off | (79 | ) | (1,152 | ) | (257 | ) | (2,062 | ) | |||||||
Recoveries of loans | 74 | 6 | 74 | 6 | |||||||||||
Other | (185 | ) | (181 | ) | (297 | ) | (181 | ) | |||||||
Net loan chargeoffs | (190 | ) | (1,327 | ) | (480 | ) | (2,237 | ) | |||||||
Provision for loan losses | (2,278 | ) | 206 | (22 | ) | 2,491 | |||||||||
Allowance at end of period, for loans covered under FDIC loss share | $ | 11,045 | $ | 1,889 | $ | 11,045 | $ | 1,889 | |||||||
Total Allowance at end of period | $ | 38,664 | $ | 38,193 | $ | 38,664 | $ | 38,193 | |||||||
Excludes loans covered under FDIC loss share | |||||||||||||||
Average loans | $ | 2,092,162 | $ | 1,937,450 | $ | 2,097,020 | $ | 1,917,591 | |||||||
Total portfolio loans | 2,078,568 | 1,948,994 | 2,078,568 | 1,948,994 | |||||||||||
Net chargeoffs to average loans | 0.10 | % | 0.28 | % | 0.41 | % | 0.36 | % | |||||||
Allowance for loan losses to loans | 1.33 | 1.86 | 1.33 | 1.86 | |||||||||||
(in thousands) | June 30, 2013 | December 31, 2012 | June 30, 2012 | ||||||||
Non-accrual loans | $ | 25,948 | $ | 37,287 | $ | 30,143 | |||||
Loans past due 90 days or more and still accruing interest | — | — | — | ||||||||
Restructured loans | — | 1,440 | 10,412 | ||||||||
Total nonperforming loans | 25,948 | 38,727 | 40,555 | ||||||||
Foreclosed property (1) | 8,213 | 9,327 | 17,443 | ||||||||
Total nonperforming assets (1) | $ | 34,161 | $ | 48,054 | $ | 57,998 | |||||
Excludes assets covered under FDIC loss share | |||||||||||
Total assets (1) | $ | 3,094,420 | $ | 3,325,786 | $ | 3,183,134 | |||||
Total portfolio loans | 2,078,568 | 2,106,039 | 1,948,994 | ||||||||
Total loans plus foreclosed property | 2,086,781 | 2,115,366 | 1,966,437 | ||||||||
Nonperforming loans to total loans | 1.25 | % | 1.84 | % | 2.08 | % | |||||
Nonperforming assets to total loans plus foreclosed property | 1.64 | 2.27 | 2.95 | ||||||||
Nonperforming assets to total assets (1) | 1.10 | 1.44 | 1.82 | ||||||||
Allowance for loans not covered under FDIC loss share to nonperforming loans | 106 | % | 89 | % | 90 | % |
(1) | Excludes assets covered under FDIC shared-loss agreements, except for their inclusion in total assets. |
(in thousands) | June 30, 2013 | December 31, 2012 | June 30, 2012 | ||||||||
Construction and Land Development | $ | 4,396 | $ | 4,695 | $ | 11,278 | |||||
Commercial Real Estate | 12,439 | 22,534 | 20,067 | ||||||||
Residential Real Estate | 2,432 | 2,564 | 4,543 | ||||||||
Commercial & Industrial | 6,681 | 8,934 | 4,667 | ||||||||
Consumer & Other | — | — | — | ||||||||
Total | $ | 25,948 | $ | 38,727 | $ | 40,555 |
2013 | 2012 | ||||||||||||||
(in thousands) | 2nd Qtr | 1st Qtr | Year to date | Year to date | |||||||||||
Nonperforming loans beginning of period | $ | 32,222 | $ | 38,727 | $ | 38,727 | $ | 41,622 | |||||||
Additions to nonaccrual loans | 3,393 | 4,590 | 7,983 | 13,183 | |||||||||||
Additions to restructured loans | — | — | — | 4,608 | |||||||||||
Chargeoffs | (752 | ) | (4,780 | ) | (5,532 | ) | (4,705 | ) | |||||||
Other principal reductions | (2,664 | ) | (6,115 | ) | (8,779 | ) | (8,220 | ) | |||||||
Moved to Other real estate | (2,179 | ) | (225 | ) | (2,404 | ) | (4,875 | ) | |||||||
Moved to performing | (2,229 | ) | (1,818 | ) | (4,047 | ) | (303 | ) | |||||||
Loans past due 90 days or more and still accruing interest | (1,843 | ) | 1,843 | — | (755 | ) | |||||||||
Nonperforming loans end of period | $ | 25,948 | $ | 32,222 | $ | 25,948 | $ | 40,555 |
2013 | 2012 | ||||||||||||||
(in thousands) | 2nd Qtr | 1st Qtr | Year to date | Year to date | |||||||||||
Other real estate beginning of period | $ | 24,807 | $ | 26,500 | $ | 26,500 | $ | 53,688 | |||||||
Additions and expenses capitalized to prepare property for sale | 2,179 | 225 | 2,404 | 5,925 | |||||||||||
Additions from FDIC assisted transactions | 5,135 | 3,369 | 8,504 | 7,556 | |||||||||||
Writedowns in value | (977 | ) | (1,080 | ) | (2,057 | ) | (3,064 | ) | |||||||
Sales | (5,781 | ) | (4,207 | ) | (9,988 | ) | (26,830 | ) | |||||||
Other real estate end of period | $ | 25,363 | $ | 24,807 | $ | 25,363 | $ | 37,275 |
• | Wealth Management revenue – For the quarter ended June 30, 2013, Wealth Management revenue from the Trust division decreased $213,000, or 11%, compared to the same period in 2012. Year-to-date, Trust revenues increased $21,000, or 1%, over the same period in 2012. The decrease in Wealth Management revenue was primarily due non-recurring revenue in the prior year period. Assets under administration were $1.7 billion at June 30, 2013, a 9% increase from June 30, 2012. |
• | Service charges and other fee income – For the three and six months ended June 30, 2013, service charges and other fee income increased $394,000 and $650,000 compared to the same periods in 2012, primarily due to increased revenue from higher sales of treasury management services, including better pricing and improved collections. |
• | Sale of Other real estate – For the quarter ended June 30, 2013, we sold $5.8 million of Other real estate for a gain of $362,000 which included a gain of $246,000 from Other real estate not covered by loss share agreements and a gain of $116,000 from Other real estate covered by loss share agreements. Year-to-date through June 30, 2013, we have sold $10.0 million of Other real estate for a gain of $1.1 million which included a gain of $284,000 from Other real estate not covered by loss share agreements and a gain of $805,000 from Other real estate covered by loss share agreements. For the year-to-date period in 2012, we sold $26.8 million of Other real estate for a net gain of $2.4 million. |
• | State tax credit brokerage activities – For the quarter ended June 30, 2013, the Company recorded a gain of $39,000 compared to a gain of $587,000 in the second quarter of 2012. The decrease is due to mark-to-market adjustments on those tax credits held at fair value as a result of increases in the discount rate used in our internal valuation model. Year-to-date the Company recorded a gain of $906,000 compared to $924,000 in the year to date period of 2012. State tax credits can vary by period depending on client demand. For more information on the fair value treatment of the state tax credits, see Note 8 – Fair Value Measurements. |
• | Sale of investment securities – There were no sales of investment securities during the second quarter of 2013, compared to $46.4 million of proceeds on investment securities for a net gain of $134,000 in the second quarter of 2012. During the first six months of 2013, the Company realized approximately $122.9 million of proceeds on the sale of investment securities, generating a net gain of $684,000, compared to $110.9 million of proceeds on the sale of investment securities, generating a net gain of $1.2 million during the first six months of 2012. |
• | Change in FDIC loss share receivable – Income related to changes in the FDIC loss share receivable decreased $1.0 million during the second quarter of 2013 compared to the same period in 2012. The decrease in income related to the FDIC loss share receivable was primarily due to lower loss expectations on certain pools and the FDIC loss share receivable impact of the impairment reversal in the second quarter of 2013. During the second quarter of 2013 the change in FDIC loss share receivable was comprised of $1.9 million of negative accretion from accelerated cash flows, $1.8 million of reductions in the FDIC loss share receivable related to the reversal of provision for loan losses on Covered loans, and $3.0 million of negative base accretion. During the second quarter of 2012 the change in FDIC loss share receivable was comprised of $2.3 million of negative accretion |
(In thousands) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income before income tax expense | |||||||||||||||
Core Bank | $ | 12,509 | $ | 8,883 | $ | 20,227 | $ | 15,295 | |||||||
Covered assets | 4,316 | 4,400 | 11,785 | 7,233 | |||||||||||
Total | $ | 16,825 | $ | 13,283 | $ | 32,012 | $ | 22,528 |
(Dollars in thousands) | June 30, 2013 | December 31, 2012 | |||||
Tier 1 capital to risk weighted assets | 11.98 | % | 10.88 | % | |||
Total capital to risk weighted assets | 13.25 | % | 12.30 | % | |||
Tier 1 common equity to risk weighted assets | 8.71 | % | 7.70 | % | |||
Leverage ratio (Tier 1 capital to average assets) | 9.58 | % | 8.36 | % | |||
Tangible common equity to tangible assets | 6.89 | % | 6.02 | % | |||
Tier 1 capital | $ | 293,297 | $ | 268,870 | |||
Total risk-based capital | $ | 324,499 | $ | 303,951 |
(In thousands) | June 30, 2013 | December 31, 2012 | |||||
Total shareholders' equity | $ | 247,675 | $ | 235,745 | |||
Less: Goodwill | (30,334 | ) | (30,334 | ) | |||
Less: Intangible assets | (6,746 | ) | (7,406 | ) | |||
Tangible common equity | $ | 210,595 | $ | 198,005 | |||
Total assets | $ | 3,094,420 | $ | 3,325,786 | |||
Less: Goodwill | (30,334 | ) | (30,334 | ) | |||
Less: Intangible assets | (6,746 | ) | (7,406 | ) | |||
Tangible assets | $ | 3,057,340 | $ | 3,288,046 | |||
Tangible common equity to tangible assets | 6.89 | % | 6.02 | % |
(In thousands) | June 30, 2013 | December 31, 2012 | |||||
Total shareholders' equity | $ | 247,675 | $ | 235,745 | |||
Less: Goodwill | (30,334 | ) | (30,334 | ) | |||
Less: Intangible assets | (6,746 | ) | (7,406 | ) | |||
Plus (Less): Unrealized losses (gains) | 2,547 | (7,790 | ) | ||||
Plus: Qualifying trust preferred securities | 80,100 | 78,600 | |||||
Other | 55 | 55 | |||||
Tier 1 capital | $ | 293,297 | $ | 268,870 | |||
Less: Preferred stock | — | — | |||||
Less: Qualifying trust preferred securities | (80,100 | ) | (78,600 | ) | |||
Tier 1 common equity | $ | 213,197 | $ | 190,270 | |||
Total risk weighted assets determined in accordance with prescribed regulatory requirements | 2,448,161 | 2,471,668 | |||||
Tier 1 common equity to risk weighted assets | 8.71 | % | 7.70 | % |
(In thousands) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net interest income (fully tax equivalent) | $ | 33,841 | $ | 34,473 | $ | 71,263 | $ | 65,445 | |||||||
Less: Incremental accretion income | (8,491 | ) | (8,567 | ) | (19,854 | ) | (13,846 | ) | |||||||
Core net interest income | $ | 25,350 | $ | 25,906 | $ | 51,409 | $ | 51,599 | |||||||
Average earning assets | $ | 2,858,701 | $ | 2,881,915 | $ | 2,917,054 | $ | 2,879,582 | |||||||
Reported net interest margin | 4.75 | % | 4.81 | % | 4.93 | % | 4.57 | % | |||||||
Core net interest margin | 3.56 | % | 3.62 | % | 3.55 | % | 3.60 | % |
• | Gross amounts of recognized assets and liabilities |
• | Offsetting amounts that determine the net amount presented in the balance sheet |
• | Amounts subject to an enforceable master netting arrangement that were not already included in the disclosure required above, including |
◦ | Amounts related to recognized financial instruments and other derivative instruments if either (a) management makes an accounting election not to offset the amounts, or (b) the amounts do not meet the right of setoff conditions in ASC 210-30-45, Balance Sheet: Offsetting, or in ASC 815-10-45, Derivatives and Hedging |
◦ | Amounts related to financial collateral |
• | Net amounts after deducting the amounts in (4) from the amounts in (3) above |
(in thousands) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Beyond 5 years or no stated maturity | Total | ||||||||||||||||||||
Interest-Earning Assets | |||||||||||||||||||||||||||
Securities available for sale | $ | 51,594 | $ | 40,374 | $ | 36,292 | $ | 135,880 | $ | 52,947 | $ | 153,930 | $ | 471,017 | |||||||||||||
Other investments | — | — | — | — | — | 19,205 | 19,205 | ||||||||||||||||||||
Interest-bearing deposits | 71,576 | — | — | — | — | — | 71,576 | ||||||||||||||||||||
Federal funds sold | 41 | — | — | — | — | — | 41 | ||||||||||||||||||||
Portfolio loans (1) | 1,644,519 | 203,755 | 199,480 | 95,647 | 85,806 | 19,224 | 2,248,431 | ||||||||||||||||||||
Loans held for sale | 5,583 | — | — | — | — | — | 5,583 | ||||||||||||||||||||
Total interest-earning assets | $ | 1,773,313 | $ | 244,129 | $ | 235,772 | $ | 231,527 | $ | 138,753 | $ | 192,359 | $ | 2,815,853 | |||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||||||||||
Savings, NOW and Money market deposits | $ | 1,193,271 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,193,271 | |||||||||||||
Certificates of deposit | 338,987 | 63,343 | 122,109 | 30,738 | 1,410 | 98 | 556,685 | ||||||||||||||||||||
Subordinated debentures | 83,081 | — | — | — | — | — | 83,081 | ||||||||||||||||||||
Other borrowings | 285,402 | 13,810 | 11,100 | — | 70,000 | — | 380,312 | ||||||||||||||||||||
Total interest-bearing liabilities | $ | 1,900,741 | $ | 77,153 | $ | 133,209 | $ | 30,738 | $ | 71,410 | $ | 98 | $ | 2,213,349 | |||||||||||||
Interest-sensitivity GAP | |||||||||||||||||||||||||||
GAP by period | $ | (127,428 | ) | $ | 166,976 | $ | 102,563 | $ | 200,789 | $ | 67,343 | $ | 192,261 | $ | 602,504 | ||||||||||||
Cumulative GAP | $ | (127,428 | ) | $ | 39,548 | $ | 142,111 | $ | 342,900 | $ | 410,243 | $ | 602,504 | $ | 602,504 | ||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | |||||||||||||||||||||||||||
Periodic | 0.93 | 3.16 | 1.77 | 7.53 | 1.94 | 1,962.85 | 1.27 | ||||||||||||||||||||
Cumulative GAP as of June 30, 2013 | 0.93 | 1.02 | 1.07 | 1.16 | 1.19 | 1.27 | 1.27 |
(1) | Adjusted for the impact of the interest rate swaps. |
Exhibit Number | Description | |
Registrant hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of holders of each issue of long-term debt of Registrant and its consolidated subsidiaries. | ||
10.1 | Enterprise Financial Services Corp 2013 Stock Incentive Plan effective May 8, 2013 (incorporated herein by reference to Appendix A to Registrant's Proxy Statement on Schedule 14A filed on March 26, 2013). | |
*12.1 | Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends | |
*31.1 | Chief Executive Officer’s Certification required by Rule 13(a)-14(a). | |
*31.2 | Chief Financial Officer’s Certification required by Rule 13(a)-14(a). | |
**32.1 | Chief Executive Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to section § 906 of the Sarbanes-Oxley Act of 2002. | |
**32.2 | Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to section § 906 of the Sarbanes-Oxley Act of 2002. | |
***101 | Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, is formatted in XBRL interactive data files: (i) Consolidated Balance Sheet at June 30, 2013 and December 31, 2012; (ii) Consolidated Statement of Income for the three and six months ended June 30, 2013 and 2012; (iii) Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2013 and 2012; (iv) Consolidated Statement of Changes in Equity for the six months ended June 30, 2013 and 2012; (v) Consolidated Statement of Cash Flows for the six months ended June 30, 2013 and 2012; and (vi) Notes to Financial Statements. |
ENTERPRISE FINANCIAL SERVICES CORP | |||
By: | /s/ Peter F. Benoist | ||
Peter F. Benoist | |||
Chief Executive Officer | |||
By: | /s/ Frank H. Sanfilippo | ||
Frank H. Sanfilippo | |||
Chief Financial Officer (Principal Financial Officer) |
Six Months Ended June 30, | Years ended December 31, | ||||||||||||||||||
($ in thousands) | 2013 | 2012 | 2011 | 2010 | 2009 (2) | 2008 | |||||||||||||
Earnings (1): | |||||||||||||||||||
Income (loss) before income taxes | $ | 32,012 | $ | 41,914 | $ | 37,372 | $ | 6,396 | $ | (49,321 | ) | $ | 11,738 | ||||||
Add: Fixed charges from below | 9,764 | 27,899 | 33,866 | 35,242 | 51,396 | 60,454 | |||||||||||||
Earnings including interest expense on deposits (a) | $ | 41,776 | $ | 69,813 | $ | 71,238 | $ | 41,638 | $ | 2,075 | $ | 72,192 | |||||||
Less: interest expense on deposits | (5,837 | ) | (15,406 | ) | (21,658 | ) | (22,867 | ) | (30,203 | ) | (39,920 | ) | |||||||
Earnings excluding interest expense on deposits (b) | $ | 35,939 | $ | 54,407 | $ | 49,580 | $ | 18,771 | $ | (28,128 | ) | $ | 32,272 | ||||||
Fixed charges (1): | |||||||||||||||||||
Interest on deposits | $ | 5,837 | $ | 15,406 | $ | 21,658 | $ | 22,867 | $ | 30,203 | $ | 39,920 | |||||||
Interest on borrowings | 3,927 | 7,761 | 8,497 | 9,544 | 18,642 | 20,418 | |||||||||||||
TARP preferred stock dividends (pre-tax) | — | 4,732 | 3,711 | 2,831 | 2,551 | 116 | |||||||||||||
Fixed charges including interest on deposits (c) | $ | 9,764 | $ | 27,899 | $ | 33,866 | $ | 35,242 | $ | 51,396 | $ | 60,454 | |||||||
Less: interest expense on deposits | (5,837 | ) | (15,406 | ) | (21,658 | ) | (22,867 | ) | (30,203 | ) | (39,920 | ) | |||||||
Fixed charges excluding interest expense on deposits (d) | $ | 3,927 | $ | 12,493 | $ | 12,208 | $ | 12,375 | $ | 21,193 | $ | 20,534 | |||||||
Ratio of earnings to combined fixed charges | |||||||||||||||||||
Excluding interest on deposits (b/d) (3) | 9.15x | 4.35x | 4.06x | 1.52x | -1.33x | 1.57x | |||||||||||||
Including interest on deposits (a/c) | 4.28x | 2.50x | 2.10x | 1.18x | 0.04x | 1.19x | |||||||||||||
Ratio of earnings to combined fixed charges and preferred dividends: | |||||||||||||||||||
Excluding interest on deposits (b/d) (3) | 9.15x | 6.40x | 5.40x | 1.67x | -1.65x | 1.57x | |||||||||||||
Including interest on deposits (a/c) | 4.28x | 2.81x | 2.24x | 1.20x | -0.01x | 1.19x |
1. | I have reviewed this quarterly report on Form 10-Q of Enterprise Financial Services Corp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Peter F. Benoist | Date: | August 2, 2013 |
Peter F. Benoist | |||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Enterprise Financial Services Corp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Frank H. Sanfilippo | Date: | August 2, 2013 |
Frank H. Sanfilippo | |||
Chief Financial Officer |
Fair Value Measurements
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Below is a description of certain assets and liabilities measured at fair value. The following table summarizes financial instruments measured at fair value on a recurring basis as of June 30, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.
The Company is not aware of an active market that exists for the 10-year streams of state tax credit financial instruments. However, the Company’s principal market for these tax credits consists of Missouri state residents who buy these credits and from local and regional accounting firms who broker them. As such, the Company employed a discounted cash flow analysis (income approach) to determine the fair value. The fair value measurement is calculated using an internal valuation model with observable market data including discounted cash flows based upon the terms and conditions of the tax credits. If the underlying project remains in compliance with the various federal and state rules governing the tax credit program, each project will generate about 10 years of tax credits. The inputs to the discounted cash flow calculation include: the amount of tax credits generated each year, the anticipated sale price of the tax credit, the timing of the sale and a discount rate. The discount rate is estimated using the LIBOR swap curve at a point equal to the remaining life in years of credits plus a 205 basis point spread. With the exception of the discount rate, the other inputs to the fair value calculation are observable and readily available. The discount rate is considered a Level 3 input because it is an “unobservable input” and is based on the Company’s assumptions. An increase in the discount rate utilized would generally result in a lower estimated fair value of the tax credits. Alternatively, a decrease in the discount rate utilized would generally result in a higher estimated fair value of the tax credits. Given the significance of this input to the fair value calculation, the state tax credit assets are reported as Level 3 assets.
Level 3 financial instruments The following table presents the changes in Level 3 financial instruments measured at fair value on a recurring basis for the periods ended June 30, 2013 and 2012, respectively.
From time to time, the Company measures certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or fair value that were recognized at fair value below cost at the end of the period. The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of June 30, 2013:
(1) The amounts represent only balances measured at fair value during the period and still held as of the reporting date. Impaired loans are reported at the fair value of the underlying collateral or by determining the net present value of future cash flows. Fair values for collateral dependent impaired loans are obtained from current appraisals by qualified licensed appraisers or independent valuation specialists. Fair values of impaired loans that are not collateral dependent are determined by using a discounted cash flow model to determine the net present value of future cash flows. Other real estate owned is adjusted to fair value upon foreclosure of the loan collateral. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value less costs to sell. Fair value of other real estate is based upon the current appraised values of the properties as determined by qualified licensed appraisers and the Company’s judgment of other relevant market conditions. Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at June 30, 2013, and December 31, 2012.
For information regarding the methods and assumptions used to estimate the fair value of each class of financial instruments for which it is practical to estimate such value, refer to Note 20–Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The following table presents the level in the fair value hierarchy for the estimated fair values of only the Company’s financial instruments that are not already on the condensed consolidated balance sheets at fair value at June 30, 2013, and December 31, 2012:
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Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used by Enterprise Financial Services Corp (the “Company” or “Enterprise”) in the preparation of the condensed consolidated financial statements are summarized below: Business and Consolidation Enterprise is a financial holding company that provides a full range of banking and wealth management services to individuals and corporate customers located in the St. Louis, Kansas City and Phoenix metropolitan markets through its banking subsidiary, Enterprise Bank & Trust (the “Bank”). Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Basis of Financial Statement Presentation The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and footnotes required by U.S. GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain 2012 amounts in the consolidated financial statements have been reclassified to conform to the 2013 presentation. These reclassifications have no effect on Net income or Shareholders' equity as previously reported. |
Commitments and Contingencies (Tables)
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Commitments | The contractual amounts of off-balance-sheet financial instruments as of June 30, 2013, and December 31, 2012, are as follows:
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Segment Reporting
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | SEGMENT REPORTING The Company has two primary operating segments, Banking and Wealth Management, which are delineated by the products and services that each segment offers. The segments are evaluated separately on their individual performance, as well as their contribution to the Company as a whole. The Banking operating segment consists of a full-service commercial bank, with locations in St. Louis, Kansas City, and Phoenix. The majority of the Company’s assets and income result from the Banking segment. All banking locations have the same product and service offerings, have similar types and classes of customers and utilize similar service delivery methods. Pricing guidelines and operating policies for products and services are the same across all regions. The Banking operating segment also includes activities surrounding the assets acquired under FDIC loss share agreements. The Wealth Management segment includes the Trust division of the Bank and the state tax credit brokerage activities. The Trust division provides estate planning, investment management, and retirement planning as well as strategic planning and management succession issues. State tax credits are part of a fee initiative designed to augment the Company’s wealth management segment and banking lines of business. The Company's Corporate and Intercompany activities represent the elimination of items between segments as well as Corporate related items that management feels are not allocable to either of the two respective segments. The financial information for each business segment reflects that information which is specifically identifiable or which is allocated based on an internal allocation method. There were no material intersegment revenues among the two segments. Management periodically makes changes to methods of assigning costs and income to its business segments to better reflect operating results. When appropriate, these changes are reflected in prior year information presented below. Following are the financial results for the Company’s operating segments.
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Portfolio Loans Not Covered by Loss Share ("Non-covered") - Summary of Aging of Recorded Investment in Past Due Non-covered Loans by Portfolio Class and Category (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | $ 2,078,568 | $ 2,106,039 |
Non-Covered Loans
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 6,452 | 3,217 |
90 or More Days Past Due | 11,322 | 8,278 |
Total Past Due | 17,774 | 11,495 |
Current | 2,060,794 | 2,094,544 |
Total | 2,077,826 | 2,106,028 |
Total | 2,078,568 | 2,106,039 |
Non-Covered Loans | Commercial & Industrial
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 597 | 14 |
90 or More Days Past Due | 1,166 | 0 |
Total Past Due | 1,763 | 14 |
Current | 961,157 | 962,870 |
Total | 962,920 | 962,884 |
Non-Covered Loans | Real Estate
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 1,084,686 | 1,126,178 |
Non-Covered Loans | Real Estate | Commercial - Owner Occupied
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 1,016 | 1,352 |
90 or More Days Past Due | 761 | 2,081 |
Total Past Due | 1,777 | 3,433 |
Current | 336,169 | 329,809 |
Total | 337,946 | 333,242 |
Non-Covered Loans | Real Estate | Commercial - Investor Owned
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 2,961 | 0 |
90 or More Days Past Due | 7,498 | 4,045 |
Total Past Due | 10,459 | 4,045 |
Current | 437,295 | 482,422 |
Total | 447,754 | 486,467 |
Non-Covered Loans | Real Estate | Construction and Land Development
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 1,054 | 1,201 |
90 or More Days Past Due | 1,258 | 1,559 |
Total Past Due | 2,312 | 2,760 |
Current | 145,576 | 158,151 |
Total | 147,888 | 160,911 |
Non-Covered Loans | Real Estate | Residential
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 824 | 616 |
90 or More Days Past Due | 639 | 593 |
Total Past Due | 1,463 | 1,209 |
Current | 149,635 | 144,349 |
Total | 151,098 | 145,558 |
Non-Covered Loans | Consumer & Other
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Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 0 | 34 |
90 or More Days Past Due | 0 | 0 |
Total Past Due | 0 | 34 |
Current | 30,962 | 16,943 |
Total | 30,220 | 16,966 |
Total | $ 30,962 | $ 16,977 |
Segment Reporting (Tables)
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Following are the financial results for the Company’s operating segments.
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Fair Value Measurements (Tables)
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Measured at Fair Value on a Recurring Basis | The following table summarizes financial instruments measured at fair value on a recurring basis as of June 30, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.
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Fair Value, Financial Instruments, Unobservable Input Reconciliation |
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Fair Value Measurements, Nonrecurring | The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of June 30, 2013:
(1) The amounts represent only balances measured at fair value during the period and still held as of the reporting date. |
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Summary of Carrying Amount and Fair Values of Financial Instruments Reported on the Balance Sheets | Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at June 30, 2013, and December 31, 2012.
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Estimate of the Fair Value of Financial Instruments Not Recorded at Fair Value on Balance Sheet | The following table presents the level in the fair value hierarchy for the estimated fair values of only the Company’s financial instruments that are not already on the condensed consolidated balance sheets at fair value at June 30, 2013, and December 31, 2012:
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Fair Value Measurements - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Assets | ||
Securities available for sale | $ 471,017 | $ 640,212 |
State tax credits held for sale | 19,822 | 23,020 |
Liabilities | ||
State tax credits, held for sale | 55,493 | 61,284 |
Tax credit stream, term | 10 years | |
Years of tax credits generated | 10 years | |
Obligations of U.S. Government sponsored enterprises
|
||
Assets | ||
Securities available for sale | 130,720 | 152,368 |
Obligations of states and political subdivisions
|
||
Assets | ||
Securities available for sale | 50,984 | 53,003 |
Residential mortgage-backed securities
|
||
Assets | ||
Securities available for sale | 289,313 | 434,841 |
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
||
Assets | ||
State tax credits held for sale | 0 | 0 |
Significant Other Observable Inputs (Level 2)
|
||
Assets | ||
State tax credits held for sale | 0 | 0 |
Significant Unobservable Inputs (Level 3)
|
||
Assets | ||
State tax credits held for sale | 40,002 | 43,802 |
Significant Unobservable Inputs (Level 3) | Auction Rate Securities
|
||
Liabilities | ||
Number of securities | 3 | |
Total Fair Value
|
||
Assets | ||
State tax credits held for sale | 40,002 | 43,802 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
|
||
Assets | ||
Securities available for sale | 0 | |
Portfolio loans | 0 | |
State tax credits held for sale | 0 | |
Derivative financial instruments | 0 | |
Total assets | 0 | |
Liabilities | ||
Derivative financial instruments | 0 | |
Total liabilities | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of U.S. Government sponsored enterprises
|
||
Assets | ||
Securities available for sale | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of states and political subdivisions
|
||
Assets | ||
Securities available for sale | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential mortgage-backed securities
|
||
Assets | ||
Securities available for sale | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2)
|
||
Assets | ||
Securities available for sale | 467,978 | |
Portfolio loans | 4,429 | |
State tax credits held for sale | 0 | |
Derivative financial instruments | 820 | |
Total assets | 473,227 | |
Liabilities | ||
Derivative financial instruments | 836 | |
Total liabilities | 836 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Obligations of U.S. Government sponsored enterprises
|
||
Assets | ||
Securities available for sale | 130,720 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions
|
||
Assets | ||
Securities available for sale | 47,945 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities
|
||
Assets | ||
Securities available for sale | 289,313 | |
Recurring basis | Significant Unobservable Inputs (Level 3)
|
||
Assets | ||
Securities available for sale | 3,039 | |
Portfolio loans | 0 | |
State tax credits held for sale | 19,822 | |
Derivative financial instruments | 0 | |
Total assets | 22,861 | |
Liabilities | ||
Derivative financial instruments | 0 | |
Total liabilities | 0 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Obligations of U.S. Government sponsored enterprises
|
||
Assets | ||
Securities available for sale | 0 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Obligations of states and political subdivisions
|
||
Assets | ||
Securities available for sale | 3,039 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Residential mortgage-backed securities
|
||
Assets | ||
Securities available for sale | 0 | |
Recurring basis | Total Fair Value
|
||
Assets | ||
Securities available for sale | 471,017 | |
Portfolio loans | 4,429 | |
State tax credits held for sale | 19,822 | |
Derivative financial instruments | 820 | |
Total assets | 496,088 | |
Liabilities | ||
Derivative financial instruments | 836 | |
Total liabilities | 836 | |
Recurring basis | Total Fair Value | Obligations of U.S. Government sponsored enterprises
|
||
Assets | ||
Securities available for sale | 130,720 | |
Recurring basis | Total Fair Value | Obligations of states and political subdivisions
|
||
Assets | ||
Securities available for sale | 50,984 | |
Recurring basis | Total Fair Value | Residential mortgage-backed securities
|
||
Assets | ||
Securities available for sale | 289,313 | |
Portion at Fair Value, Fair Value Disclosure | Recurring basis | Total Fair Value
|
||
Assets | ||
State tax credits held for sale | 19,800 | |
Portion at Other than Fair Value, Fair Value Disclosure
|
||
Assets | ||
State tax credits held for sale | $ 35,700 | |
LIBOR Swap Curve
|
||
Liabilities | ||
Discount rate, remaining life in years of credits plus | 20500.00% |
Portfolio Loans Not Covered by Loss Share ("Non-covered") - Summary of Allowance for Loan Losses for Non-covered Loans by Portfolio Class and Category (Details) (Non-Covered Loans, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Mar. 31, 2013
|
|
Allowance for Loan Losses [Roll Forward] | ||
Balance | $ 32,452 | $ 34,330 |
Provision charged to expense | (4,295) | 1,853 |
Losses charged off | (752) | (4,780) |
Recoveries | 214 | 1,049 |
Balance | 27,619 | 32,452 |
Commercial & Industrial
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 10,276 | 10,064 |
Provision charged to expense | (320) | 120 |
Losses charged off | (400) | (206) |
Recoveries | 118 | 298 |
Balance | 9,674 | 10,276 |
Real Estate | Commercial Real Estate Owner Occupied
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 4,064 | 4,192 |
Provision charged to expense | (139) | 179 |
Losses charged off | (32) | (312) |
Recoveries | 17 | 5 |
Balance | 3,910 | 4,064 |
Real Estate | Commercial Real Estate Investor Owned
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 8,640 | 10,403 |
Provision charged to expense | (2,273) | 953 |
Losses charged off | (176) | (3,052) |
Recoveries | 24 | 336 |
Balance | 6,215 | 8,640 |
Real Estate | Construction and Land Development
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 4,936 | 5,239 |
Provision charged to expense | (998) | (127) |
Losses charged off | (144) | (190) |
Recoveries | 21 | 14 |
Balance | 3,815 | 4,936 |
Real Estate | Residential Real Estate
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 2,111 | 2,026 |
Provision charged to expense | (299) | 675 |
Losses charged off | 0 | (986) |
Recoveries | 34 | 396 |
Balance | 1,846 | 2,111 |
Consumer & Other
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 43 | 31 |
Provision charged to expense | 1 | 46 |
Losses charged off | 0 | (34) |
Recoveries | 0 | 0 |
Balance | 44 | 43 |
Qualitative Adjustment
|
||
Allowance for Loan Losses [Roll Forward] | ||
Balance | 2,382 | 2,375 |
Provision charged to expense | (267) | 7 |
Losses charged off | 0 | 0 |
Recoveries | 0 | 0 |
Balance | $ 2,115 | $ 2,382 |
Portfolio Loans Covered by Loss Share (Covered loans) - Summary of Covered Loans by Category (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
Covered Loans
|
Dec. 31, 2012
Covered Loans
|
Jun. 30, 2013
Covered Loans
Real Estate Loans
|
Dec. 31, 2012
Covered Loans
Real Estate Loans
|
Jun. 30, 2013
Covered Loans
Real Estate Loans
Construction and Land Development
rating
|
Dec. 31, 2012
Covered Loans
Real Estate Loans
Construction and Land Development
rating
|
Jun. 30, 2013
Covered Loans
Real Estate Loans
Commercial Real Estate Investor Owned
rating
|
Dec. 31, 2012
Covered Loans
Real Estate Loans
Commercial Real Estate Investor Owned
rating
|
Jun. 30, 2013
Covered Loans
Real Estate Loans
Commercial Real Estate Owner Occupied
rating
|
Dec. 31, 2012
Covered Loans
Real Estate Loans
Commercial Real Estate Owner Occupied
rating
|
Jun. 30, 2013
Covered Loans
Real Estate Loans
Residential Real Estate
rating
|
Dec. 31, 2012
Covered Loans
Real Estate Loans
Residential Real Estate
rating
|
Jun. 30, 2013
Covered Loans
Commercial and industrial
rating
|
Dec. 31, 2012
Covered Loans
Commercial and industrial
rating
|
Jun. 30, 2013
Covered Loans
Consumer & other
rating
|
Dec. 31, 2012
Covered Loans
Consumer & other
rating
|
|
Covered Loans [Line Items] | ||||||||||||||||||
Net cash proceeds received from FDIC loss share receivable | $ 7,442 | $ 70,014 | ||||||||||||||||
Weighted-Average Risk Rating | 7.08 | 7.06 | 6.50 | 6.08 | 6.66 | 6.65 | 5.70 | 5.68 | 6.76 | 6.57 | 4.06 | 4.19 | ||||||
Recorded Investment Covered Loans | $ 169,863 | $ 201,118 | $ 157,293 | $ 177,810 | $ 21,122 | $ 30,537 | $ 54,087 | $ 57,602 | $ 43,686 | $ 47,140 | $ 38,398 | $ 42,531 | $ 11,484 | $ 22,034 | $ 1,086 | $ 1,274 |
Portfolio Loans Covered by Loss Share (Covered loans) - Summary of Activity in the FDIC Loss Share Receivable (Details) (USD $)
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amount of Estimated Clawback Liability | $ 1,300,000 |
Adjustment in FDIC clawback liability | $ 449,000 |
Derivative Financial Instruments (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivatives Not Designated as Hedging Instruments, Notional Amount And Statements of Financial Position, Location | The table below summarizes the notional amounts and fair values of the client-related derivative instruments.
The table below summarizes the notional amounts and fair values of the derivative instruments used to manage risk.
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table shows the location and amount of gains and losses recorded in the condensed consolidated statements of operations for the three and six months ended June 30, 2013 and 2012.
The following table shows the location and amount of gains and losses related to derivatives used for risk management purposes that were recorded in the condensed consolidated statements of operations for the three and six months ended June 30, 2013 and 2012.
|
Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statement of Comprehensive Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ (5,155) | $ 833 | $ (6,314) | $ 2,098 |
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax | $ 0 | $ 48 | $ 267 | $ 416 |
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Cash dividends paid on common shares, per share | $ 0.105 | $ 0.105 |
Issuance under equity compensation plans, shares | 211,314 | 83,189 |
Earnings Per Share
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE Basic earnings per common share data is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Common shares outstanding include common stock and restricted stock awards where recipients have satisfied the vesting terms. Diluted earnings per common share gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and the if-converted method for convertible trust preferred securities. The following table presents a summary of per common share data and amounts for the periods indicated.
For the three months ended June 30, 2013 and 2012, the amount of common stock equivalents that were excluded from the earnings per share calculations because their effect was anti-dilutive was 551,667, and 1.1 million common stock equivalents (including 324,074 common stock warrants), respectively. For the six months ended June 30, 2013 and 2012, the amount of common stock equivalents that were excluded from the earnings per share calculations because their effect was anti-dilutive was 547,356 (including 14,324 average common stock warrants), and 1.0 million common stock equivalents (including 324,074 common stock warrants), respectively. |
Investments - Schedule of Realized Gain (Loss) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Investments [Abstract] | ||||
Gross gains realized | $ 0 | $ 324 | $ 866 | $ 1,399 |
Gross losses realized | 0 | (190) | (182) | (243) |
Proceeds from sales | $ 0 | $ 46,400 | $ 122,894 | $ 110,876 |
Portfolio Loans Not Covered by Loss Share ("Non-covered") - Summary of Recorded Investment in Impaired Non-covered Loans by Category (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
loan
|
Jun. 30, 2013
loan
|
Jun. 30, 2013
Non-Covered Loans
|
Dec. 31, 2012
Non-Covered Loans
|
Jun. 30, 2013
Non-Covered Loans
Commercial & Industrial
|
Dec. 31, 2012
Non-Covered Loans
Commercial & Industrial
|
Jun. 30, 2013
Non-Covered Loans
Real Estate
Commercial - Investor Owned
|
Dec. 31, 2012
Non-Covered Loans
Real Estate
Commercial - Investor Owned
|
Jun. 30, 2013
Non-Covered Loans
Real Estate
Commercial - Owner Occupied
|
Dec. 31, 2012
Non-Covered Loans
Real Estate
Commercial - Owner Occupied
|
Jun. 30, 2013
Non-Covered Loans
Real Estate
Construction and Land Development
|
Dec. 31, 2012
Non-Covered Loans
Real Estate
Construction and Land Development
|
Jun. 30, 2013
Non-Covered Loans
Real Estate
Residential
|
Dec. 31, 2012
Non-Covered Loans
Real Estate
Residential
|
Jun. 30, 2013
Non-Covered Loans
Consumer & Other
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Dec. 31, 2012
Non-Covered Loans
Consumer & Other
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Jun. 30, 2013
Unadvanced Commitment on Impaired Loan
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Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||||||||||||
Number of loans over 90 days past due and still accruing | 0 | 0 | |||||||||||||||
Interest lost on impaired loans | $ 279,000 | $ 1,000,000 | |||||||||||||||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 9,000 | 24,000 | |||||||||||||||
Impaired Financing Receivable, Interest Income, Accrual Method | 0 | ||||||||||||||||
Loans and Leases Receivable, Impaired Loans, Commitment to Lend | 1,728,000 | ||||||||||||||||
Estimated losses attributable to unadvanced commitments on impaired loans | 259,000 | ||||||||||||||||
Non-accrual | 26,599,000 | 37,287,000 | 6,788,000 | 8,929,000 | 11,994,000 | 16,762,000 | 778,000 | 5,772,000 | 4,525,000 | 3,260,000 | 2,514,000 | 2,564,000 | 0 | 0 | |||
Restructured | 0 | 1,440,000 | 0 | 5,000 | 0 | 0 | 0 | 0 | 0 | 1,435,000 | 0 | 0 | 0 | 0 | |||
Loans over 90 days past due and still accruing interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
Total Recorded Investment | $ 26,599,000 | $ 38,727,000 | $ 6,788,000 | $ 8,934,000 | $ 11,994,000 | $ 16,762,000 | $ 778,000 | $ 5,772,000 | $ 4,525,000 | $ 4,695,000 | $ 2,514,000 | $ 2,564,000 | $ 0 | $ 0 |