[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2016. | |
[ ] | 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 [ ] | Accelerated filer [X] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | 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 2. Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 6. Exhibits | ||
Signatures | ||
(in thousands, except share and per share data) | September 30, 2016 | December 31, 2015 | |||||
Assets | |||||||
Cash and due from banks | $ | 56,789 | $ | 47,935 | |||
Federal funds sold | 488 | 91 | |||||
Interest-bearing deposits (including $1,870 and $1,320 pledged as collateral) | 61,222 | 46,131 | |||||
Total cash and cash equivalents | 118,499 | 94,157 | |||||
Interest-bearing deposits greater than 90 days | 1,980 | 1,000 | |||||
Securities available for sale | 479,609 | 451,770 | |||||
Securities held to maturity | 41,031 | 43,714 | |||||
Loans held for sale | 7,663 | 6,598 | |||||
Portfolio loans | 3,037,705 | 2,750,737 | |||||
Less: Allowance for loan losses | 37,498 | 33,441 | |||||
Portfolio loans, net | 3,000,207 | 2,717,296 | |||||
Purchased credit impaired loans, net of the allowance for loan losses ($6,433 and $10,175, respectively) | 41,016 | 64,583 | |||||
Total loans, net | 3,041,223 | 2,781,879 | |||||
Other real estate | 2,959 | 8,366 | |||||
Other investments, at cost | 19,789 | 17,455 | |||||
Fixed assets, net | 14,498 | 14,842 | |||||
Accrued interest receivable | 8,526 | 8,399 | |||||
State tax credits held for sale, including $4,801 and $5,941 carried at fair value, respectively | 44,180 | 45,850 | |||||
Goodwill | 30,334 | 30,334 | |||||
Intangible assets, net | 2,357 | 3,075 | |||||
Other assets | 96,996 | 101,044 | |||||
Total assets | $ | 3,909,644 | $ | 3,608,483 | |||
Liabilities and Shareholders' Equity | |||||||
Demand deposits | $ | 762,155 | $ | 717,460 | |||
Interest-bearing transaction accounts | 633,100 | 564,420 | |||||
Money market accounts | 1,131,997 | 1,053,662 | |||||
Savings | 109,728 | 92,861 | |||||
Certificates of deposit: | |||||||
Brokered | 137,592 | 39,573 | |||||
Other | 350,253 | 316,615 | |||||
Total deposits | 3,124,825 | 2,784,591 | |||||
Subordinated debentures | 56,807 | 56,807 | |||||
Federal Home Loan Bank advances | 129,000 | 110,000 | |||||
Other borrowings | 190,022 | 270,326 | |||||
Accrued interest payable | 648 | 629 | |||||
Other liabilities | 27,244 | 35,301 | |||||
Total liabilities | 3,528,546 | 3,257,654 | |||||
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; 20,249,711 and 20,093,119 shares issued, respectively | 203 | 201 | |||||
Treasury stock, at cost; 261,718 and 76,000 shares, respectively | (6,632 | ) | (1,743 | ) | |||
Additional paid in capital | 212,091 | 210,589 | |||||
Retained earnings | 170,768 | 141,564 | |||||
Accumulated other comprehensive income | 4,668 | 218 | |||||
Total shareholders' equity | 381,098 | 350,829 | |||||
Total liabilities and shareholders' equity | $ | 3,909,644 | $ | 3,608,483 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 34,442 | $ | 30,626 | $ | 101,233 | $ | 90,109 | |||||||
Interest on debt securities: | |||||||||||||||
Taxable | 2,410 | 2,176 | 7,194 | 6,434 | |||||||||||
Nontaxable | 322 | 298 | 982 | 880 | |||||||||||
Interest on interest-bearing deposits | 67 | 68 | 186 | 153 | |||||||||||
Dividends on equity securities | 52 | 12 | 191 | 107 | |||||||||||
Total interest income | 37,293 | 33,180 | 109,786 | 97,683 | |||||||||||
Interest expense: | |||||||||||||||
Interest-bearing transaction accounts | 332 | 293 | 967 | 849 | |||||||||||
Money market accounts | 1,143 | 822 | 3,162 | 2,136 | |||||||||||
Savings accounts | 68 | 58 | 191 | 162 | |||||||||||
Certificates of deposit | 1,319 | 1,543 | 3,521 | 4,728 | |||||||||||
Subordinated debentures | 369 | 314 | 1,078 | 924 | |||||||||||
Federal Home Loan Bank advances | 126 | 9 | 499 | 82 | |||||||||||
Notes payable and other borrowings | 106 | 135 | 327 | 471 | |||||||||||
Total interest expense | 3,463 | 3,174 | 9,745 | 9,352 | |||||||||||
Net interest income | 33,830 | 30,006 | 100,041 | 88,331 | |||||||||||
Provision for portfolio loan losses | 3,038 | 599 | 4,587 | 4,329 | |||||||||||
Provision reversal for purchased credit impaired loan losses | (1,194 | ) | (227 | ) | (1,603 | ) | (3,497 | ) | |||||||
Net interest income after provision for loan losses | 31,986 | 29,634 | 97,057 | 87,499 | |||||||||||
Noninterest income: | |||||||||||||||
Service charges on deposit accounts | 2,200 | 2,044 | 6,431 | 5,898 | |||||||||||
Wealth management revenue | 1,694 | 1,773 | 5,000 | 5,291 | |||||||||||
Other service charges and fee income | 1,007 | 871 | 2,827 | 2,464 | |||||||||||
Gain on state tax credits, net | 228 | 321 | 899 | 1,069 | |||||||||||
Gain (loss) on sale of other real estate | (226 | ) | 32 | 602 | 61 | ||||||||||
Gain on sale of investment securities | 86 | — | 86 | 23 | |||||||||||
Change in FDIC loss share receivable | — | (1,241 | ) | — | (4,450 | ) | |||||||||
Miscellaneous income | 1,987 | 929 | 4,185 | 3,762 | |||||||||||
Total noninterest income | 6,976 | 4,729 | 20,030 | 14,118 | |||||||||||
Noninterest expense: | |||||||||||||||
Employee compensation and benefits | 12,091 | 11,475 | 37,398 | 34,262 | |||||||||||
Occupancy | 1,705 | 1,605 | 4,997 | 4,920 | |||||||||||
Data processing | 1,150 | 1,138 | 3,441 | 3,295 | |||||||||||
FDIC and other insurance | 780 | 654 | 2,241 | 2,045 | |||||||||||
Professional fees | 757 | 800 | 2,160 | 2,626 | |||||||||||
Loan legal and other real estate expense | 416 | 530 | 1,126 | 1,356 | |||||||||||
FDIC clawback | — | 298 | — | 760 | |||||||||||
Other | 3,915 | 3,432 | 11,566 | 10,076 | |||||||||||
Total noninterest expense | 20,814 | 19,932 | 62,929 | 59,340 | |||||||||||
Income before income tax expense | 18,148 | 14,431 | 54,158 | 42,277 | |||||||||||
Income tax expense | 6,316 | 4,722 | 18,949 | 14,506 | |||||||||||
Net income | $ | 11,832 | $ | 9,709 | $ | 35,209 | $ | 27,771 | |||||||
Earnings per common share | |||||||||||||||
Basic | $ | 0.59 | $ | 0.49 | $ | 1.76 | $ | 1.39 | |||||||
Diluted | 0.59 | 0.48 | 1.74 | 1.37 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income | $ | 11,832 | $ | 9,709 | $ | 35,209 | $ | 27,771 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Unrealized gains (losses) on investment securities arising during the period, net of income tax expense (benefit) for three months of $(494) and $1,070, and for nine months of $2,795 and $793, respectively | (796 | ) | 1,724 | 4,503 | 1,306 | ||||||||||
Less: Reclassification adjustment for realized gains on sale of securities available for sale included in net income, net of income tax expense for three months of $33 and $0, and for nine months of $33 and $9, respectively | (53 | ) | — | (53 | ) | (14 | ) | ||||||||
Total other comprehensive income (loss) | (849 | ) | 1,724 | 4,450 | 1,292 | ||||||||||
Total comprehensive income | $ | 10,983 | $ | 11,433 | $ | 39,659 | $ | 29,063 |
(in thousands, except per share data) | Preferred Stock | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders' equity | ||||||||||||||||||||
Balance January 1, 2016 | $ | — | $ | 201 | $ | (1,743 | ) | $ | 210,589 | $ | 141,564 | $ | 218 | $ | 350,829 | ||||||||||||
Net income | — | — | — | — | 35,209 | — | 35,209 | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 4,450 | 4,450 | ||||||||||||||||||||
Cash dividends paid on common shares, $0.30 per share | — | — | — | — | (6,005 | ) | — | (6,005 | ) | ||||||||||||||||||
Repurchase of common shares | — | — | (4,889 | ) | — | — | — | (4,889 | ) | ||||||||||||||||||
Issuance under equity compensation plans, 156,592 shares, net | — | 2 | — | (1,652 | ) | — | — | (1,650 | ) | ||||||||||||||||||
Share-based compensation | — | — | — | 2,410 | — | — | 2,410 | ||||||||||||||||||||
Excess tax benefit related to equity compensation plans | — | — | — | 744 | — | — | 744 | ||||||||||||||||||||
Balance September 30, 2016 | $ | — | $ | 203 | $ | (6,632 | ) | $ | 212,091 | $ | 170,768 | $ | 4,668 | $ | 381,098 | ||||||||||||
(in thousands, except per share data) | Preferred Stock | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders' equity | ||||||||||||||||||||
Balance January 1, 2015 | $ | — | $ | 199 | $ | (1,743 | ) | $ | 207,731 | $ | 108,373 | $ | 1,681 | $ | 316,241 | ||||||||||||
Net income | — | — | — | — | 27,771 | — | 27,771 | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 1,292 | 1,292 | ||||||||||||||||||||
Cash dividends paid on common shares, $0.183 per share | — | — | — | — | (3,654 | ) | — | (3,654 | ) | ||||||||||||||||||
Issuance under equity compensation plans, 121,646 shares, net | — | 1 | — | (832 | ) | — | — | (831 | ) | ||||||||||||||||||
Share-based compensation | — | — | — | 2,588 | — | — | 2,588 | ||||||||||||||||||||
Excess tax benefit related to equity compensation plans | — | — | — | 156 | — | — | 156 | ||||||||||||||||||||
Balance September 30, 2015 | $ | — | $ | 200 | $ | (1,743 | ) | $ | 209,643 | $ | 132,490 | $ | 2,973 | $ | 343,563 |
Nine months ended September 30, | |||||||
(in thousands) | 2016 | 2015 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 35,209 | $ | 27,771 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 1,628 | 1,510 | |||||
Provision for loan losses | 2,984 | 832 | |||||
Deferred income taxes | 3,881 | 1,937 | |||||
Net amortization of debt securities | 2,350 | 2,473 | |||||
Amortization of intangible assets | 718 | 842 | |||||
Gain on sale of investment securities | (86 | ) | (23 | ) | |||
Mortgage loans originated for sale | (117,975 | ) | (95,744 | ) | |||
Proceeds from mortgage loans sold | 117,639 | 95,814 | |||||
Gain on sale of other real estate | (602 | ) | (61 | ) | |||
Gain on state tax credits, net | (899 | ) | (1,069 | ) | |||
Excess tax benefit of share-based compensation | (744 | ) | (156 | ) | |||
Share-based compensation | 2,410 | 2,588 | |||||
Valuation adjustment on other real estate | 1 | 82 | |||||
Net accretion of loan discount and indemnification asset | (8,165 | ) | (4,894 | ) | |||
Changes in: | |||||||
Accrued interest receivable | (127 | ) | (703 | ) | |||
Accrued interest payable | 19 | (63 | ) | ||||
Other assets | (2,101 | ) | 4,851 | ||||
Other liabilities | (8,057 | ) | 4,024 | ||||
Net cash provided by operating activities | 28,083 | 40,011 | |||||
Cash flows from investing activities: | |||||||
Net increase in loans | (256,706 | ) | (152,970 | ) | |||
Net cash proceeds received from FDIC loss share receivable | — | 1,725 | |||||
Proceeds from the sale of securities, available for sale | 2,493 | 41,069 | |||||
Proceeds from the paydown or maturity of securities, available for sale | 46,017 | 40,230 | |||||
Proceeds from the paydown or maturity of securities, held to maturity | 2,592 | 1,848 | |||||
Proceeds from the redemption of other investments | 44,968 | 29,362 | |||||
Proceeds from the sale of state tax credits held for sale | 4,918 | 5,353 | |||||
Proceeds from the sale of other real estate | 8,072 | 5,662 | |||||
Payments for the purchase/origination of: | |||||||
Available for sale debt and equity securities | (71,309 | ) | (150,934 | ) | |||
Other investments | (48,283 | ) | (23,931 | ) | |||
State tax credits held for sale | (2,349 | ) | (14,004 | ) | |||
Fixed assets | (1,284 | ) | (1,152 | ) | |||
Net cash used in investing activities | (270,871 | ) | (217,742 | ) | |||
Cash flows from financing activities: | |||||||
Net increase in noninterest-bearing deposit accounts | 44,695 | 48,828 | |||||
Net increase in interest-bearing deposit accounts | 295,539 | 273,625 | |||||
Proceeds from Federal Home Loan Bank advances | 1,309,000 | 635,900 | |||||
Repayments of Federal Home Loan Bank advances | (1,290,000 | ) | (704,900 | ) | |||
Repayments of notes payable | — | (900 | ) | ||||
Net decrease in other borrowings | (80,304 | ) | (44,299 | ) | |||
Cash dividends paid on common stock | (6,005 | ) | (3,654 | ) | |||
Excess tax benefit of share-based compensation | 744 | 156 | |||||
Payments for the repurchase of common stock | (4,889 | ) | — | ||||
Issuance of common stock, net | (1,650 | ) | (831 | ) | |||
Net cash provided by financing activities | 267,130 | 203,925 | |||||
Net increase in cash and cash equivalents | 24,342 | 26,194 | |||||
Cash and cash equivalents, beginning of period | 94,157 | 100,696 | |||||
Cash and cash equivalents, end of period | $ | 118,499 | $ | 126,890 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 9,726 | $ | 9,415 | |||
Income taxes | 19,868 | 8,763 | |||||
Noncash transactions: | |||||||
Transfer to other real estate owned in settlement of loans | $ | 2,683 | $ | 6,604 | |||
Sales of other real estate financed | 140 | — |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income as reported | $ | 11,832 | $ | 9,709 | $ | 35,209 | $ | 27,771 | |||||||
Weighted average common shares outstanding | 19,997 | 19,995 | 20,002 | 19,970 | |||||||||||
Additional dilutive common stock equivalents | 227 | 266 | 229 | 266 | |||||||||||
Weighted average diluted common shares outstanding | 20,224 | 20,261 | 20,231 | 20,236 | |||||||||||
Basic earnings per common share: | $ | 0.59 | $ | 0.49 | $ | 1.76 | $ | 1.39 | |||||||
Diluted earnings per common share: | $ | 0.59 | $ | 0.48 | $ | 1.74 | $ | 1.37 |
September 30, 2016 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 97,745 | $ | 1,313 | $ | — | $ | 99,058 | |||||||
Obligations of states and political subdivisions | 37,132 | 1,511 | (307 | ) | 38,336 | ||||||||||
Agency mortgage-backed securities | 336,693 | 5,826 | (304 | ) | 342,215 | ||||||||||
Total securities available for sale | $ | 471,570 | $ | 8,650 | $ | (611 | ) | $ | 479,609 | ||||||
Held to maturity securities: | |||||||||||||||
Obligations of states and political subdivisions | $ | 14,777 | $ | 359 | $ | (2 | ) | $ | 15,134 | ||||||
Agency mortgage-backed securities | 26,254 | 830 | — | 27,084 | |||||||||||
Total securities held to maturity | $ | 41,031 | $ | 1,189 | $ | (2 | ) | $ | 42,218 |
December 31, 2015 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 98,699 | $ | 309 | $ | — | $ | 99,008 | |||||||
Obligations of states and political subdivisions | 40,700 | 1,343 | (342 | ) | 41,701 | ||||||||||
Agency mortgage-backed securities | 311,516 | 2,046 | (2,501 | ) | 311,061 | ||||||||||
Total securities available for sale | $ | 450,915 | $ | 3,698 | $ | (2,843 | ) | $ | 451,770 | ||||||
Held to maturity securities: | |||||||||||||||
Obligations of states and political subdivisions | $ | 14,831 | $ | 63 | $ | (50 | ) | $ | 14,844 | ||||||
Agency mortgage-backed securities | 28,883 | — | (286 | ) | 28,597 | ||||||||||
Total securities held to maturity | $ | 43,714 | $ | 63 | $ | (336 | ) | $ | 43,441 |
Available for sale | Held to maturity | ||||||||||||||
(in thousands) | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||
Due in one year or less | $ | 52,384 | $ | 52,637 | $ | — | $ | — | |||||||
Due after one year through five years | 70,128 | 72,153 | 8,189 | 8,356 | |||||||||||
Due after five years through ten years | 8,836 | 9,328 | 6,588 | 6,778 | |||||||||||
Due after ten years | 3,529 | 3,276 | — | — | |||||||||||
Agency mortgage-backed securities | 336,693 | 342,215 | 26,254 | 27,084 | |||||||||||
$ | 471,570 | $ | 479,609 | $ | 41,031 | $ | 42,218 |
September 30, 2016 | |||||||||||||||||||||||
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 | $ | — | $ | — | $ | 3,566 | $ | 309 | $ | 3,566 | $ | 309 | |||||||||||
Agency mortgage-backed securities | 6,654 | 11 | 13,379 | 293 | 20,033 | 304 | |||||||||||||||||
$ | 6,654 | $ | 11 | $ | 16,945 | $ | 602 | $ | 23,599 | $ | 613 | ||||||||||||
December 31, 2015 | |||||||||||||||||||||||
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 | $ | 2,199 | $ | 12 | $ | 9,395 | $ | 380 | $ | 11,594 | $ | 392 | |||||||||||
Agency mortgage-backed securities | 189,229 | 2,050 | 21,020 | 737 | 210,249 | 2,787 | |||||||||||||||||
$ | 191,428 | $ | 2,062 | $ | 30,415 | $ | 1,117 | $ | 221,843 | $ | 3,179 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Gross gains realized | $ | 86 | $ | — | $ | 86 | $ | 63 | |||||||
Gross losses realized | — | — | — | (40 | ) | ||||||||||
Proceeds from sales | 2,493 | — | 2,493 | 41,069 |
(in thousands) | September 30, 2016 | December 31, 2015 | |||||
Commercial and industrial | $ | 1,598,815 | $ | 1,484,327 | |||
Real estate: | |||||||
Commercial - investor owned | 515,055 | 428,064 | |||||
Commercial - owner occupied | 340,916 | 342,959 | |||||
Construction and land development | 188,856 | 161,061 | |||||
Residential | 233,960 | 196,498 | |||||
Total real estate loans | 1,278,787 | 1,128,582 | |||||
Consumer and other | 160,535 | 137,537 | |||||
Portfolio loans | 3,038,137 | 2,750,446 | |||||
Unearned loan fees, net | (432 | ) | 291 | ||||
Portfolio loans, including unearned loan fees | $ | 3,037,705 | $ | 2,750,737 |
(in thousands) | Commercial and industrial | CRE - investor owned | CRE - owner occupied | Construction and land development | Residential real estate | Consumer and other | Total | ||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Balance at December 31, 2015 | $ | 22,056 | $ | 3,484 | $ | 2,969 | $ | 1,704 | $ | 1,796 | $ | 1,432 | $ | 33,441 | |||||||||||||
Provision (provision reversal) for loan losses | 1,120 | (116 | ) | 80 | (65 | ) | 11 | (197 | ) | 833 | |||||||||||||||||
Losses charged off | (68 | ) | — | — | — | — | (5 | ) | (73 | ) | |||||||||||||||||
Recoveries | 53 | 7 | 68 | 6 | 34 | 4 | 172 | ||||||||||||||||||||
Balance at March 31, 2016 | $ | 23,161 | $ | 3,375 | $ | 3,117 | $ | 1,645 | $ | 1,841 | $ | 1,234 | $ | 34,373 | |||||||||||||
Provision (provision reversal) for loan losses | 302 | (27 | ) | (541 | ) | (434 | ) | (80 | ) | 1,496 | 716 | ||||||||||||||||
Losses charged off | (157 | ) | — | — | — | — | (6 | ) | (163 | ) | |||||||||||||||||
Recoveries | 502 | 8 | 15 | 8 | 36 | 3 | 572 | ||||||||||||||||||||
Balance at June 30, 2016 | $ | 23,808 | $ | 3,356 | $ | 2,591 | $ | 1,219 | $ | 1,797 | $ | 2,727 | $ | 35,498 | |||||||||||||
Provision (provision reversal) for loan losses | 3,575 | 10 | 94 | (730 | ) | 168 | (79 | ) | 3,038 | ||||||||||||||||||
Losses charged off | (2,044 | ) | — | — | — | (25 | ) | (4 | ) | (2,073 | ) | ||||||||||||||||
Recoveries | 69 | 8 | 17 | 913 | 26 | 2 | 1,035 | ||||||||||||||||||||
Balance at September 30, 2016 | $ | 25,408 | $ | 3,374 | $ | 2,702 | $ | 1,402 | $ | 1,966 | $ | 2,646 | $ | 37,498 |
(in thousands) | Commercial and industrial | CRE - investor owned | CRE - owner occupied | Construction and land development | Residential real estate | Consumer and other | Total | ||||||||||||||||||||
Balance September 30, 2016 | |||||||||||||||||||||||||||
Allowance for loan losses - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,785 | $ | — | $ | — | $ | 158 | $ | 3 | $ | 1,855 | $ | 5,801 | |||||||||||||
Collectively evaluated for impairment | 21,623 | 3,374 | 2,702 | 1,244 | 1,963 | 791 | 31,697 | ||||||||||||||||||||
Total | $ | 25,408 | $ | 3,374 | $ | 2,702 | $ | 1,402 | $ | 1,966 | $ | 2,646 | $ | 37,498 | |||||||||||||
Loans - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 13,414 | $ | 252 | $ | 1,666 | $ | 1,907 | $ | 124 | $ | 4,499 | $ | 21,862 | |||||||||||||
Collectively evaluated for impairment | 1,585,401 | 514,803 | 339,250 | 186,949 | 233,836 | 155,604 | 3,015,843 | ||||||||||||||||||||
Total | $ | 1,598,815 | $ | 515,055 | $ | 340,916 | $ | 188,856 | $ | 233,960 | $ | 160,103 | $ | 3,037,705 | |||||||||||||
Balance December 31, 2015 | |||||||||||||||||||||||||||
Allowance for loan losses - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 1,953 | $ | — | $ | 6 | $ | 369 | $ | 7 | $ | — | $ | 2,335 | |||||||||||||
Collectively evaluated for impairment | 20,103 | 3,484 | 2,963 | 1,335 | 1,789 | 1,432 | 31,106 | ||||||||||||||||||||
Total | $ | 22,056 | $ | 3,484 | $ | 2,969 | $ | 1,704 | $ | 1,796 | $ | 1,432 | $ | 33,441 | |||||||||||||
Loans - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,514 | $ | 921 | $ | 1,962 | $ | 2,800 | $ | 681 | $ | — | $ | 10,878 | |||||||||||||
Collectively evaluated for impairment | 1,479,813 | 427,143 | 340,997 | 158,261 | 195,817 | 137,828 | 2,739,859 | ||||||||||||||||||||
Total | $ | 1,484,327 | $ | 428,064 | $ | 342,959 | $ | 161,061 | $ | 196,498 | $ | 137,828 | $ | 2,750,737 |
September 30, 2016 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial and industrial | $ | 14,895 | $ | 136 | $ | 13,134 | $ | 13,270 | $ | 3,785 | $ | 15,666 | |||||||||||
Real estate loans: | |||||||||||||||||||||||
Commercial - investor owned | 252 | 253 | — | 253 | — | 250 | |||||||||||||||||
Commercial - owner occupied | — | — | — | — | — | — | |||||||||||||||||
Construction and land development | 1,907 | 1,920 | 358 | 2,278 | 158 | 2,403 | |||||||||||||||||
Residential | 149 | 65 | 64 | 129 | 3 | 652 | |||||||||||||||||
Consumer and other | 4,499 | — | 4,508 | 4,508 | 1,855 | 4,598 | |||||||||||||||||
Total | $ | 21,702 | $ | 2,374 | $ | 18,064 | $ | 20,438 | $ | 5,801 | $ | 23,569 |
December 31, 2015 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial and industrial | $ | 5,554 | $ | 509 | $ | 4,204 | $ | 4,713 | $ | 1,953 | $ | 6,970 | |||||||||||
Real estate loans: | |||||||||||||||||||||||
Commercial - investor owned | 927 | 927 | — | 927 | — | 970 | |||||||||||||||||
Commercial - owner occupied | 329 | 85 | 113 | 198 | 6 | 301 | |||||||||||||||||
Construction and land development | 4,349 | 2,914 | 530 | 3,444 | 369 | 3,001 | |||||||||||||||||
Residential | 705 | 637 | 68 | 705 | 7 | 682 | |||||||||||||||||
Consumer and other | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 11,864 | $ | 5,072 | $ | 4,915 | $ | 9,987 | $ | 2,335 | $ | 11,924 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Total interest income that would have been recognized under original terms | $ | 226 | $ | 369 | $ | 703 | $ | 913 | |||||||
Total cash received and recognized as interest income on non-accrual loans | 203 | 81 | 253 | 206 | |||||||||||
Total interest income recognized on impaired loans | 32 | 4 | 63 | 31 |
September 30, 2016 | |||||||||||||||
(in thousands) | Non-accrual | Restructured | Loans over 90 days past due and still accruing interest | Total | |||||||||||
Commercial and industrial | $ | 10,959 | $ | 2,311 | $ | — | $ | 13,270 | |||||||
Real estate: | |||||||||||||||
Commercial - investor owned | 253 | — | — | 253 | |||||||||||
Commercial - owner occupied | — | — | — | — | |||||||||||
Construction and land development | 2,258 | 20 | — | 2,278 | |||||||||||
Residential | 129 | — | — | 129 | |||||||||||
Consumer and other | 4,508 | — | — | 4,508 | |||||||||||
Total | $ | 18,107 | $ | 2,331 | $ | — | $ | 20,438 |
December 31, 2015 | |||||||||||||||
(in thousands) | Non-accrual | Restructured | Loans over 90 days past due and still accruing interest | Total | |||||||||||
Commercial and industrial | $ | 4,406 | $ | 307 | $ | — | $ | 4,713 | |||||||
Real estate: | |||||||||||||||
Commercial - investor owned | 927 | — | — | 927 | |||||||||||
Commercial - owner occupied | 198 | — | — | 198 | |||||||||||
Construction and land development | 3,444 | — | — | 3,444 | |||||||||||
Residential | 705 | — | — | 705 | |||||||||||
Consumer and other | — | — | — | — | |||||||||||
Total | $ | 9,680 | $ | 307 | $ | — | $ | 9,987 |
Three months ended September 30, 2016 | Three months ended September 30, 2015 | ||||||||||||||||||||
(in thousands, except for number of loans) | Number of Loans | Pre-Modification Outstanding Recorded Balance | Post-Modification Outstanding Recorded Balance | Number of Loans | Pre-Modification Outstanding Recorded Balance | Post-Modification Outstanding Recorded Balance | |||||||||||||||
Commercial and industrial | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||
Real estate: | |||||||||||||||||||||
Commercial - investor owned | — | — | — | — | — | — | |||||||||||||||
Commercial - owner occupied | — | — | — | — | — | — | |||||||||||||||
Construction and land development | — | — | — | — | — | — | |||||||||||||||
Residential | — | — | — | — | — | — | |||||||||||||||
Consumer and other | — | — | — | — | — | — | |||||||||||||||
Total | — | $ | — | $ | — | — | $ | — | $ | — |
Nine months ended September 30, 2016 | Nine months ended September 30, 2015 | ||||||||||||||||||||
(in thousands, except for number of loans) | Number of Loans | Pre-Modification Outstanding Recorded Balance | Post-Modification Outstanding Recorded Balance | Number of Loans | Pre-Modification Outstanding Recorded Balance | Post-Modification Outstanding Recorded Balance | |||||||||||||||
Commercial and industrial | 2 | $ | 2,341 | $ | 2,341 | — | $ | — | $ | — | |||||||||||
Real estate: | |||||||||||||||||||||
Commercial - investor owned | 1 | 248 | 248 | — | — | — | |||||||||||||||
Commercial - owner occupied | — | — | — | — | — | — | |||||||||||||||
Construction and land development | 1 | 20 | 20 | — | — | — | |||||||||||||||
Residential | — | — | — | — | — | — | |||||||||||||||
Consumer and other | — | — | — | — | — | — | |||||||||||||||
Total | 4 | $ | 2,609 | $ | 2,609 | — | $ | — | $ | — |
September 30, 2016 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | — | $ | 364 | $ | 364 | $ | 1,598,451 | $ | 1,598,815 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 136 | — | 136 | 514,919 | 515,055 | ||||||||||||||
Commercial - owner occupied | 225 | — | 225 | 340,691 | 340,916 | ||||||||||||||
Construction and land development | — | 1,529 | 1,529 | 187,327 | 188,856 | ||||||||||||||
Residential | 73 | 60 | 133 | 233,827 | 233,960 | ||||||||||||||
Consumer and other | — | — | — | 160,103 | 160,103 | ||||||||||||||
Total | $ | 434 | $ | 1,953 | $ | 2,387 | $ | 3,035,318 | $ | 3,037,705 |
December 31, 2015 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | 505 | $ | 888 | $ | 1,393 | $ | 1,482,934 | $ | 1,484,327 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 464 | — | 464 | 427,600 | 428,064 | ||||||||||||||
Commercial - owner occupied | 94 | 184 | 278 | 342,681 | 342,959 | ||||||||||||||
Construction and land development | 384 | 2,273 | 2,657 | 158,404 | 161,061 | ||||||||||||||
Residential | 70 | 681 | 751 | 195,747 | 196,498 | ||||||||||||||
Consumer and other | 20 | — | 20 | 137,808 | 137,828 | ||||||||||||||
Total | $ | 1,537 | $ | 4,026 | $ | 5,563 | $ | 2,745,174 | $ | 2,750,737 |
• | Grades 1, 2, and 3 – Includes 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 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. |
• | Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. |
• | Grade 6 – 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 borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7, 8, or 9 rating. |
• | Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support. |
• | Grade 8 – Substandard credits will include those borrowers 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. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual. |
September 30, 2016 | |||||||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Substandard (8) | Doubtful (9) | Total | ||||||||||||||
Commercial and industrial | $ | 1,457,729 | $ | 63,572 | $ | 77,514 | $ | — | $ | 1,598,815 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 501,228 | 9,549 | 4,278 | — | 515,055 | ||||||||||||||
Commercial - owner occupied | 311,427 | 25,369 | 4,120 | — | 340,916 | ||||||||||||||
Construction and land development | 179,515 | 6,050 | 3,291 | — | 188,856 | ||||||||||||||
Residential | 226,287 | 4,224 | 3,449 | — | 233,960 | ||||||||||||||
Consumer and other | 153,458 | 711 | 5,934 | — | 160,103 | ||||||||||||||
Total | $ | 2,829,644 | $ | 109,475 | $ | 98,586 | $ | — | $ | 3,037,705 |
December 31, 2015 | |||||||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Substandard (8) | Doubtful (9) | Total | ||||||||||||||
Commercial and industrial | $ | 1,356,864 | $ | 90,370 | $ | 37,093 | $ | — | $ | 1,484,327 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 403,820 | 18,868 | 5,376 | — | 428,064 | ||||||||||||||
Commercial - owner occupied | 314,791 | 24,727 | 3,441 | — | 342,959 | ||||||||||||||
Construction and land development | 146,601 | 10,114 | 4,346 | — | 161,061 | ||||||||||||||
Residential | 188,269 | 5,138 | 3,091 | — | 196,498 | ||||||||||||||
Consumer and other | 131,060 | 721 | 6,047 | — | 137,828 | ||||||||||||||
Total | $ | 2,541,405 | $ | 149,938 | $ | 59,394 | $ | — | $ | 2,750,737 |
September 30, 2016 | December 31, 2015 | ||||||||
(in thousands) | Weighted- Average Risk Rating1 | Recorded Investment PCI Loans | Weighted- Average Risk Rating1 | Recorded Investment PCI Loans | |||||
Commercial and industrial | 5.84 | $ | 3,282 | 6.70 | $ | 3,863 | |||
Real estate: | |||||||||
Commercial - investor owned | 6.94 | 14,595 | 6.98 | 25,272 | |||||
Commercial - owner occupied | 6.34 | 12,417 | 6.30 | 19,414 | |||||
Construction and land development | 5.67 | 4,919 | 6.28 | 6,838 | |||||
Residential | 5.66 | 12,173 | 5.44 | 19,287 | |||||
Total real estate loans | 44,104 | 70,811 | |||||||
Consumer and other | 1.54 | 63 | 1.89 | 84 | |||||
Purchased credit impaired loans | $ | 47,449 | $ | 74,758 | |||||
1Risk ratings are based on the borrower's contractual obligation, which is not reflective of the purchase discount. |
September 30, 2016 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | 805 | $ | — | $ | 805 | $ | 2,477 | $ | 3,282 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | — | — | — | 14,595 | 14,595 | ||||||||||||||
Commercial - owner occupied | 229 | — | 229 | 12,188 | 12,417 | ||||||||||||||
Construction and land development | — | — | — | 4,919 | 4,919 | ||||||||||||||
Residential | 84 | 55 | 139 | 12,034 | 12,173 | ||||||||||||||
Consumer and other | — | — | — | 63 | 63 | ||||||||||||||
Total | $ | 1,118 | $ | 55 | $ | 1,173 | $ | 46,276 | $ | 47,449 |
December 31, 2015 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | — | $ | — | $ | — | $ | 3,863 | $ | 3,863 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 2,342 | 3,661 | 6,003 | 19,269 | 25,272 | ||||||||||||||
Commercial - owner occupied | 731 | — | 731 | 18,683 | 19,414 | ||||||||||||||
Construction and land development | — | — | — | 6,838 | 6,838 | ||||||||||||||
Residential | 1,594 | 130 | 1,724 | 17,563 | 19,287 | ||||||||||||||
Consumer and other | 4 | — | 4 | 80 | 84 | ||||||||||||||
Total | $ | 4,671 | $ | 3,791 | $ | 8,462 | $ | 66,296 | $ | 74,758 |
(in thousands) | Contractual Cashflows | Non-accretable Difference | Accretable Yield | Carrying Amount | |||||||||||
Balance January 1, 2016 | $ | 116,689 | $ | 26,765 | $ | 25,341 | $ | 64,583 | |||||||
Principal reductions and interest payments | (20,417 | ) | — | — | (20,417 | ) | |||||||||
Accretion of loan discount | — | — | (4,984 | ) | 4,984 | ||||||||||
Changes in contractual and expected cash flows due to remeasurement | 9,194 | 975 | (1,043 | ) | 9,262 | ||||||||||
Reductions due to disposals | (27,888 | ) | (6,779 | ) | (3,713 | ) | (17,396 | ) | |||||||
Balance September 30, 2016 | $ | 77,578 | $ | 20,961 | $ | 15,601 | $ | 41,016 | |||||||
Balance January 1, 2015 | $ | 178,145 | $ | 65,719 | $ | 28,733 | $ | 83,693 | |||||||
Principal reductions and interest payments | (19,315 | ) | — | — | (19,315 | ) | |||||||||
Accretion of loan discount | — | — | (8,604 | ) | 8,604 | ||||||||||
Changes in contractual and expected cash flows due to remeasurement | (5,731 | ) | (26,797 | ) | 9,233 | 11,833 | |||||||||
Reductions due to disposals | (19,734 | ) | (4,183 | ) | (3,133 | ) | (12,418 | ) | |||||||
Balance September 30, 2015 | $ | 133,365 | $ | 34,739 | $ | 26,229 | $ | 72,397 |
(in thousands) | September 30, 2016 | December 31, 2015 | |||||
Commitments to extend credit | $ | 1,086,372 | $ | 1,140,028 | |||
Standby letters of credit | 64,360 | 54,648 |
Asset Derivatives (Other Assets) | Liability Derivatives (Other Liabilities) | ||||||||||||||||||||||
Notional Amount | Fair Value | Fair Value | |||||||||||||||||||||
(in thousands) | September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | |||||||||||||||||
Non-designated hedging instruments | |||||||||||||||||||||||
Interest rate swap contracts | $ | 171,792 | $ | 153,630 | $ | 2,099 | $ | 1,155 | $ | 2,099 | $ | 1,155 |
September 30, 2016 | |||||||||||||||
(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 | $ | — | $ | 99,058 | $ | — | $ | 99,058 | |||||||
Obligations of states and political subdivisions | — | 35,242 | 3,094 | 38,336 | |||||||||||
Residential mortgage-backed securities | — | 342,215 | — | 342,215 | |||||||||||
Total securities available for sale | $ | — | $ | 476,515 | $ | 3,094 | $ | 479,609 | |||||||
State tax credits held for sale | — | — | 4,801 | 4,801 | |||||||||||
Derivative financial instruments | — | 2,099 | — | 2,099 | |||||||||||
Total assets | $ | — | $ | 478,614 | $ | 7,895 | $ | 486,509 | |||||||
Liabilities | |||||||||||||||
Derivative financial instruments | $ | — | $ | 2,099 | $ | — | $ | 2,099 | |||||||
Total liabilities | $ | — | $ | 2,099 | $ | — | $ | 2,099 |
December 31, 2015 | |||||||||||||||
(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 | $ | — | $ | 99,008 | $ | — | $ | 99,008 | |||||||
Obligations of states and political subdivisions | — | 38,624 | 3,077 | 41,701 | |||||||||||
Residential mortgage-backed securities | — | 311,061 | — | 311,061 | |||||||||||
Total securities available for sale | $ | — | $ | 448,693 | $ | 3,077 | $ | 451,770 | |||||||
State tax credits held for sale | — | — | 5,941 | 5,941 | |||||||||||
Derivative financial instruments | — | 1,155 | — | 1,155 | |||||||||||
Total assets | $ | — | $ | 449,848 | $ | 9,018 | $ | 458,866 | |||||||
Liabilities | |||||||||||||||
Derivative financial instruments | $ | — | $ | 1,155 | $ | — | $ | 1,155 | |||||||
Total liabilities | $ | — | $ | 1,155 | $ | — | $ | 1,155 |
• | Securities available for sale. Securities classified as available for sale are reported at fair value utilizing Level 2 and Level 3 inputs. 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 September 30, 2016, 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. |
• | State tax credits held for sale. At September 30, 2016, of the $44.2 million of state tax credits held for sale on the condensed consolidated balance sheet, approximately $4.8 million were carried at fair value. The remaining $39.4 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. There were no Level 3 purchases during the quarter ended September 30, 2016 or 2015. |
• | Transfers in and/or out of Level 3. There were no Level 3 transfers during the quarter ended September 30, 2016 and 2015. |
Securities available for sale, at fair value | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Beginning balance | $ | 3,093 | $ | 3,070 | $ | 3,077 | $ | 3,059 | |||||||
Total gains: | |||||||||||||||
Included in other comprehensive income | 1 | 7 | 17 | 18 | |||||||||||
Purchases, sales, issuances and settlements: | |||||||||||||||
Purchases | — | — | — | — | |||||||||||
Ending balance | $ | 3,094 | $ | 3,077 | $ | 3,094 | $ | 3,077 | |||||||
Change in unrealized gains relating to assets still held at the reporting date | $ | 1 | $ | 7 | $ | 17 | $ | 18 |
State tax credits held for sale | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Beginning balance | $ | 4,774 | $ | 9,965 | $ | 5,941 | $ | 11,689 | |||||||
Total gains: | |||||||||||||||
Included in earnings | 27 | 124 | 144 | 318 | |||||||||||
Purchases, sales, issuances and settlements: | |||||||||||||||
Sales | — | — | (1,284 | ) | (1,918 | ) | |||||||||
Ending balance | $ | 4,801 | $ | 10,089 | $ | 4,801 | $ | 10,089 | |||||||
Change in unrealized gains (losses) relating to assets still held at the reporting date | $ | 27 | $ | 124 | $ | (237 | ) | $ | (186 | ) |
(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 for the three months ended September 30, 2016 | Total losses for the nine months ended September 30, 2016 | |||||||||||||||||
Impaired loans | $ | 357 | $ | — | $ | — | $ | 357 | $ | 2,073 | $ | 2,309 | |||||||||||
Other real estate | — | — | — | — | — | 1 | |||||||||||||||||
Total | $ | 357 | $ | — | $ | — | $ | 357 | $ | 2,073 | $ | 2,310 |
September 30, 2016 | December 31, 2015 | ||||||||||||||
(in thousands) | Carrying Amount | Estimated fair value | Carrying Amount | Estimated fair value | |||||||||||
Balance sheet assets | |||||||||||||||
Cash and due from banks | $ | 56,789 | $ | 56,789 | $ | 47,935 | $ | 47,935 | |||||||
Federal funds sold | 488 | 488 | 91 | 91 | |||||||||||
Interest-bearing deposits | 63,202 | 63,202 | 47,131 | 47,131 | |||||||||||
Securities available for sale | 479,609 | 479,609 | 451,770 | 451,770 | |||||||||||
Securities held to maturity | 41,031 | 42,218 | 43,714 | 43,441 | |||||||||||
Other investments, at cost | 19,789 | 19,789 | 17,455 | 17,455 | |||||||||||
Loans held for sale | 7,663 | 7,663 | 6,598 | 6,598 | |||||||||||
Derivative financial instruments | 2,099 | 2,099 | 1,155 | 1,155 | |||||||||||
Portfolio loans, net | 3,041,223 | 3,045,230 | 2,781,879 | 2,782,704 | |||||||||||
State tax credits, held for sale | 44,180 | 48,959 | 45,850 | 49,588 | |||||||||||
Accrued interest receivable | 8,526 | 8,526 | 8,399 | 8,399 | |||||||||||
Balance sheet liabilities | |||||||||||||||
Deposits | 3,124,825 | 3,126,534 | 2,784,591 | 2,784,654 | |||||||||||
Subordinated debentures | 56,807 | 36,275 | 56,807 | 35,432 | |||||||||||
Federal Home Loan Bank advances | 129,000 | 128,996 | 110,000 | 109,994 | |||||||||||
Other borrowings | 190,022 | 189,996 | 270,326 | 270,286 | |||||||||||
Derivative financial instruments | 2,099 | 2,099 | 1,155 | 1,155 | |||||||||||
Accrued interest payable | 648 | 648 | 629 | 629 |
Estimated Fair Value Measurement at Reporting Date Using | Balance at September 30, 2016 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||
Securities held to maturity | $ | — | $ | 42,218 | $ | — | $ | 42,218 | |||||||
Portfolio loans, net | — | — | 3,045,230 | 3,045,230 | |||||||||||
State tax credits, held for sale | — | — | 44,158 | 44,158 | |||||||||||
Financial Liabilities: | |||||||||||||||
Deposits | 2,636,980 | — | 489,554 | 3,126,534 | |||||||||||
Subordinated debentures | — | 36,275 | — | 36,275 | |||||||||||
Federal Home Loan Bank advances | — | 128,996 | — | 128,996 | |||||||||||
Other borrowings | — | 189,996 | — | 189,996 | |||||||||||
Estimated Fair Value Measurement at Reporting Date Using | Balance at December 31, 2015 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||
Securities held to maturity | $ | — | $ | 43,441 | $ | — | $ | 43,441 | |||||||
Portfolio loans, net | — | — | 2,782,704 | 2,782,704 | |||||||||||
State tax credits, held for sale | — | — | 43,647 | 43,647 | |||||||||||
Financial Liabilities: | |||||||||||||||
Deposits | 2,428,403 | — | 356,251 | 2,784,654 | |||||||||||
Subordinated debentures | — | 35,432 | — | 35,432 | |||||||||||
Federal Home Loan Bank advances | — | 109,994 | — | 109,994 | |||||||||||
Other borrowings | — | 270,286 | — | 270,286 |
(in thousands, except per share data) | For the Three Months ended and At | For the Nine Months ended | |||||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||||
EARNINGS | |||||||||||||||||||
Total interest income | $ | 37,293 | $ | 37,033 | $ | 33,180 | $ | 109,786 | $ | 97,683 | |||||||||
Total interest expense | 3,463 | 3,250 | 3,174 | 9,745 | 9,352 | ||||||||||||||
Net interest income | 33,830 | 33,783 | 30,006 | 100,041 | 88,331 | ||||||||||||||
Provision for portfolio loans | 3,038 | 716 | 599 | 4,587 | 4,329 | ||||||||||||||
Provision reversal for PCI loans | (1,194 | ) | (336 | ) | (227 | ) | (1,603 | ) | (3,497 | ) | |||||||||
Net interest income after provision for loan losses | 31,986 | 33,403 | 29,634 | 97,057 | 87,499 | ||||||||||||||
Total noninterest income | 6,976 | 7,049 | 4,729 | 20,030 | 14,118 | ||||||||||||||
Total noninterest expense | 20,814 | 21,353 | 19,932 | 62,929 | 59,340 | ||||||||||||||
Income before income tax expense | 18,148 | 19,099 | 14,431 | 54,158 | 42,277 | ||||||||||||||
Income tax expense | 6,316 | 6,747 | 4,722 | 18,949 | 14,506 | ||||||||||||||
Net income | $ | 11,832 | $ | 12,352 | $ | 9,709 | $ | 35,209 | $ | 27,771 | |||||||||
Basic earnings per share | $ | 0.59 | $ | 0.62 | $ | 0.49 | $ | 1.76 | $ | 1.39 | |||||||||
Diluted earnings per share | 0.59 | 0.61 | 0.48 | 1.74 | 1.37 | ||||||||||||||
Return on average assets | 1.23 | % | 1.33 | % | 1.13 | % | 1.26 | % | 1.11 | % | |||||||||
Return on average common equity | 12.46 | % | 13.57 | % | 11.38 | % | 12.83 | % | 11.24 | % | |||||||||
Return on average tangible common equity | 13.64 | % | 14.91 | % | 12.65 | % | 14.10 | % | 12.53 | % | |||||||||
Net interest margin (fully tax equivalent) | 3.80 | % | 3.93 | % | 3.77 | % | 3.87 | % | 3.84 | % | |||||||||
Efficiency ratio | 51.01 | % | 52.29 | % | 57.38 | % | 52.41 | % | 57.92 | % | |||||||||
ASSET QUALITY (1) | |||||||||||||||||||
Net charge-offs (recoveries) | $ | 1,038 | $ | (409 | ) | $ | 113 | $ | 530 | $ | 2,263 | ||||||||
Nonperforming loans | 19,942 | 12,813 | 9,123 | ||||||||||||||||
Classified assets | 101,545 | 87,532 | 62,679 | ||||||||||||||||
Nonperforming loans to portfolio loans | 0.66 | % | 0.44 | % | 0.35 | % | |||||||||||||
Nonperforming assets to total assets (1)(2) | 0.59 | % | 0.47 | % | 0.30 | % | |||||||||||||
Allowance for loan losses to portfolio loans | 1.23 | % | 1.23 | % | 1.24 | % | |||||||||||||
Net charge-offs (recoveries) to average loans (annualized) | 0.14 | % | (0.06 | )% | 0.02 | % | 0.02 | % | 0.12 | % | |||||||||
(1) Excludes PCI loans and related assets, except for their inclusion in total assets. | |||||||||||||||||||
(2) Other real estate from PCI loans included in Nonperforming assets beginning with the period ended December 31, 2015 due to termination of FDIC loss share agreements. |
For the Three Months ended | For the Nine Months ended | ||||||||||||||||||
(in thousands) | September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||
CORE PERFORMANCE MEASURES (1) | |||||||||||||||||||
Net interest income | $ | 31,534 | $ | 30,212 | $ | 27,087 | $ | 91,340 | $ | 78,951 | |||||||||
Provision for portfolio loans | 3,038 | 716 | 599 | 4,587 | 4,329 | ||||||||||||||
Noninterest income | 6,828 | 6,105 | 5,939 | 18,938 | 18,519 | ||||||||||||||
Noninterest expense | 20,242 | 20,446 | 19,347 | 61,123 | 57,445 | ||||||||||||||
Income before income tax expense | 15,082 | 15,155 | 13,080 | 44,568 | 35,696 | ||||||||||||||
Income tax expense | 5,142 | 5,237 | 4,204 | 15,276 | 11,985 | ||||||||||||||
Net income | $ | 9,940 | $ | 9,918 | $ | 8,876 | $ | 29,292 | $ | 23,711 | |||||||||
Earnings per share | $ | 0.49 | $ | 0.49 | $ | 0.44 | $ | 1.45 | $ | 1.17 | |||||||||
Return on average assets | 1.04 | % | 1.07 | % | 1.03 | % | 1.05 | % | 0.95 | % | |||||||||
Return on average common equity | 10.47 | % | 10.89 | % | 10.41 | % | 10.67 | % | 9.59 | % | |||||||||
Return on average tangible common equity | 11.46 | % | 11.98 | % | 11.56 | % | 11.73 | % | 10.70 | % | |||||||||
Net interest margin (fully tax equivalent) | 3.54 | % | 3.52 | % | 3.41 | % | 3.53 | % | 3.44 | % | |||||||||
Efficiency ratio | 52.77 | % | 56.30 | % | 58.58 | % | 55.43 | % | 58.94 | % | |||||||||
(1) A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption "Use of Non-GAAP Financial Measures." |
• | The Company reported net income of $35.2 million, or $1.74 per share, for the nine months ended September 30, 2016, compared to $27.8 million, or $1.37 per share, for the same period in 2015. The 27% increase in net income was primarily due to an increase in core net income from growing net interest income and an increase in noninterest income, as well as a more substantial contribution from PCI assets due to the termination of FDIC loss share. |
• | On a core basis1, net income was $29.3 million, or $1.45 per share, for the nine months ended September 30, 2016, compared to $23.7 million, or $1.17 per share, in the prior year period. The increase from the prior year was primarily due to increases in earning asset balances, driving growth in core net interest income. |
• | Net interest income for the first nine months of 2016 increased $11.7 million or 13%, from the prior year period due to strong portfolio loan growth. |
• | Net interest margin for the first nine months of 2016 expanded three basis points to 3.87% when compared to the prior year period. Core net interest margin1, for the first nine months of 2016, defined as Net interest margin (fully tax equivalent), including contractual interest on PCI loans, but excluding the incremental accretion on these loans, increased nine basis points from the prior year period primarily due to managed reductions in funding costs combined with an improved earning asset mix, and an increase in the yield on portfolio loans. |
• | Noninterest income for the first nine months of 2016 increased $5.9 million, or 42%, compared to the prior year period largely due to a decrease in the Change in FDIC receivable from termination of the Company's loss share agreements in the fourth quarter of 2015. Core noninterest income1 increased $0.4 million, or 2%, from the prior year period primarily due to higher fee income from service charges on deposits and card products, and an increase in the gain on sale of mortgages. |
• | Noninterest expense increased $3.6 million, or 6%, from the prior year period, due to an increase in Employee compensation and benefits, while the Company's efficiency ratio improved to 52.4% for the nine months ended September 30, 2016, from 57.9% in the prior year. Core noninterest expense1 also increased 6% when compared to the prior year. However, the Core efficiency ratio1 also improved to 55.4% from 58.9% when compared to the prior year period due to revenue growth resulting from investments in customer facing associates driving continued revenue growth. |
• | On October 10, 2016, the Company entered into a definitive merger agreement to acquire Jefferson County Bancshares, Inc. ("JCB") headquartered in Jefferson County, Missouri. JCB is the parent holding company of Eagle Bank and Trust Company of Missouri. The transaction is anticipated to close in early 2017, and is subject to normal and customary closing conditions, including but not limited to, regulatory approval and approval by JCB shareholders. The merger with JCB is expected to accelerate the Company's St. Louis market expansion and add valuable scale and operating leverage to this market. The Company believes that JCB's commercial and retail customer bases are complementary to EFSC's existing product sets. |
• | The Company repurchased 6,700 shares at $26.50 per share pursuant to its publicly announced program during the quarter ended September 30, 2016, 18,918 shares at $26.46 per share during the quarter ended June 30, 2016, and 160,100 shares at $26.30 per share during the quarter ended March 31, 2016. The Company's Board authorized the repurchase plan in May of 2015, which allows the Company to repurchase up to two million common shares, representing approximately 10% of the Company’s currently outstanding shares. Shares may be bought back in open market or privately negotiated transactions over an indeterminate time period based on market and business conditions. |
• | Loans – Loans totaled $3.1 billion at September 30, 2016, including $47.4 million of PCI loans. Portfolio loans increased $287.0 million, or 10%, from December 31, 2015. Commercial and industrial loans increased $114.5 million, or 8%, Consumer and other loans increased $22.3 million, or 16%, Construction loans and Residential real estate loans increased $65.3 million, or 18%, and Commercial real estate increased $84.9 million, or 11%. See Item 1, Note 4 – Portfolio Loans for more information. |
• | Deposits – Total deposits at September 30, 2016 were $3.1 billion, an increase of $340.2 million, or 12%, from December 31, 2015. Deposits increased from both core deposit gathering efforts and brokered sources to supplement and fund loan growth. |
• | Asset quality – Nonperforming loans were $19.9 million at September 30, 2016, compared to $9.1 million at December 31, 2015. Nonperforming loans represented 0.66% of portfolio loans at September 30, 2016 versus 0.33% at December 31, 2015. There were no portfolio loans that were over 90 days delinquent and still accruing at September 30, 2016 or December 31, 2015. |
Three months ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest Income/Expense | Average Yield/ Rate | Average Balance | Interest Income/Expense | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Taxable portfolio loans (1) | $ | 2,916,678 | $ | 30,980 | 4.23 | % | $ | 2,505,985 | $ | 26,061 | 4.13 | % | |||||||||
Tax-exempt portfolio loans (2) | 41,495 | 611 | 5.86 | 39,218 | 644 | 6.51 | |||||||||||||||
Purchased credit impaired loans | 53,198 | 3,085 | 23.07 | 85,155 | 4,167 | 19.41 | |||||||||||||||
Total loans | 3,011,371 | 34,676 | 4.58 | 2,630,358 | 30,872 | 4.66 | |||||||||||||||
Taxable investments in debt and equity securities | 479,755 | 2,462 | 2.04 | 431,313 | 2,188 | 2.01 | |||||||||||||||
Non-taxable investments in debt and equity securities (2) | 47,761 | 521 | 4.34 | 43,867 | 483 | 4.37 | |||||||||||||||
Short-term investments | 50,193 | 67 | 0.53 | 95,642 | 68 | 0.28 | |||||||||||||||
Total securities and short-term investments | 577,709 | 3,050 | 2.10 | 570,822 | 2,739 | 1.90 | |||||||||||||||
Total interest-earning assets | 3,589,080 | 37,726 | 4.18 | 3,201,180 | 33,611 | 4.17 | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 58,178 | 49,057 | |||||||||||||||||||
Other assets | 213,352 | 210,109 | |||||||||||||||||||
Allowance for loan losses | (45,692 | ) | (43,630 | ) | |||||||||||||||||
Total assets | $ | 3,814,918 | $ | 3,416,716 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing transaction accounts | $ | 600,707 | $ | 332 | 0.22 | % | $ | 518,260 | $ | 293 | 0.22 | % | |||||||||
Money market accounts | 1,075,747 | 1,143 | 0.42 | 1,023,062 | 822 | 0.32 | |||||||||||||||
Savings | 108,075 | 68 | 0.25 | 92,596 | 58 | 0.25 | |||||||||||||||
Certificates of deposit | 516,159 | 1,319 | 1.02 | 500,877 | 1,543 | 1.22 | |||||||||||||||
Total interest-bearing deposits | 2,300,688 | 2,862 | 0.49 | 2,134,795 | 2,716 | 0.50 | |||||||||||||||
Subordinated debentures | 56,807 | 369 | 2.59 | 56,807 | 314 | 2.19 | |||||||||||||||
Other borrowed funds | 286,896 | 232 | 0.32 | 203,133 | 144 | 0.28 | |||||||||||||||
Total interest-bearing liabilities | 2,644,391 | 3,463 | 0.52 | 2,394,735 | 3,174 | 0.53 | |||||||||||||||
Noninterest bearing liabilities: | |||||||||||||||||||||
Demand deposits | 768,468 | 653,450 | |||||||||||||||||||
Other liabilities | 24,198 | 30,163 | |||||||||||||||||||
Total liabilities | 3,437,057 | 3,078,348 | |||||||||||||||||||
Shareholders' equity | 377,861 | 338,368 | |||||||||||||||||||
Total liabilities & shareholders' equity | $ | 3,814,918 | $ | 3,416,716 | |||||||||||||||||
Net interest income | $ | 34,263 | $ | 30,437 | |||||||||||||||||
Net interest spread | 3.66 | % | 3.64 | % | |||||||||||||||||
Net interest margin | 3.80 | % | 3.77 | % |
(1) | Average balances include non-accrual loans. Loan fees, net of amortization of deferred loan origination fees and costs, included in interest income are approximately $0.8 million and $0.6 million for the three months ended September 30, 2016 and 2015 respectively. |
(2) | Non-taxable income is presented on a fully tax-equivalent basis using a 38.3% tax rate in 2016 and 2015. The tax-equivalent adjustments were $0.4 million and $0.4 million for the three months ended September 30, 2016 and 2015. |
Nine months ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest Income/Expense | Average Yield/ Rate | Average Balance | Interest Income/Expense | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Taxable portfolio loans (1) | $ | 2,830,365 | $ | 88,667 | 4.18 | % | $ | 2,449,606 | $ | 75,560 | 4.12 | % | |||||||||
Tax-exempt portfolio loans (2) | 41,526 | 1,899 | 6.11 | 38,691 | 1,896 | 6.55 | |||||||||||||||
Purchased credit impaired loans | 60,420 | 11,394 | 25.19 | 91,464 | 13,376 | 19.55 | |||||||||||||||
Total loans | 2,932,311 | 101,960 | 4.64 | 2,579,761 | 90,832 | 4.71 | |||||||||||||||
Taxable investments in debt and equity securities | 474,981 | 7,385 | 2.08 | 424,058 | 6,541 | 2.06 | |||||||||||||||
Non-taxable investments in debt and equity securities (2) | 48,475 | 1,591 | 4.38 | 42,913 | 1,421 | 4.43 | |||||||||||||||
Short-term investments | 47,771 | 186 | 0.52 | 68,926 | 153 | 0.30 | |||||||||||||||
Total securities and short-term investments | 571,227 | 9,162 | 2.14 | 535,897 | 8,115 | 2.02 | |||||||||||||||
Total interest-earning assets | 3,503,538 | 111,122 | 4.24 | 3,115,658 | 98,947 | 4.25 | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 56,618 | 48,633 | |||||||||||||||||||
Other assets | 214,860 | 212,419 | |||||||||||||||||||
Allowance for loan losses | (44,567 | ) | (44,280 | ) | |||||||||||||||||
Total assets | $ | 3,730,449 | $ | 3,332,430 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing transaction accounts | $ | 578,373 | $ | 967 | 0.22 | % | $ | 503,142 | $ | 849 | 0.23 | % | |||||||||
Money market accounts | 1,056,565 | 3,162 | 0.40 | 915,989 | 2,136 | 0.31 | |||||||||||||||
Savings | 102,589 | 191 | 0.25 | 86,996 | 162 | 0.25 | |||||||||||||||
Certificates of deposit | 460,667 | 3,521 | 1.02 | 522,157 | 4,728 | 1.21 | |||||||||||||||
Total interest-bearing deposits | 2,198,194 | 7,841 | 0.48 | 2,028,284 | 7,875 | 0.52 | |||||||||||||||
Subordinated debentures | 56,807 | 1,078 | 2.53 | 56,807 | 924 | 2.18 | |||||||||||||||
Other borrowed funds | 339,849 | 826 | 0.32 | 235,622 | 553 | 0.31 | |||||||||||||||
Total interest-bearing liabilities | 2,594,850 | 9,745 | 0.50 | 2,320,713 | 9,352 | 0.54 | |||||||||||||||
Noninterest bearing liabilities: | |||||||||||||||||||||
Demand deposits | 739,705 | 654,721 | |||||||||||||||||||
Other liabilities | 29,196 | 26,556 | |||||||||||||||||||
Total liabilities | 3,363,751 | 3,001,990 | |||||||||||||||||||
Shareholders' equity | 366,698 | 330,440 | |||||||||||||||||||
Total liabilities & shareholders' equity | $ | 3,730,449 | $ | 3,332,430 | |||||||||||||||||
Net interest income | $ | 101,377 | $ | 89,595 | |||||||||||||||||
Net interest spread | 3.74 | % | 3.71 | % | |||||||||||||||||
Net interest margin | 3.87 | % | 3.84 | % |
(1) | Average balances include non-accrual loans. Loan fees, net of amortization of deferred loan origination fees and costs, included in interest income are approximately $1.6 million and $1.5 million for the nine months ended September 30, 2016 and 2015 respectively. |
(2) | Non-taxable income is presented on a fully tax-equivalent basis using a 38.3% tax rate in 2016 and 2015. The tax-equivalent adjustments were $1.3 million and $1.3 million for the nine months ended September 30, 2016 and 2015. |
2016 compared to 2015 | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 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 portfolio loans | $ | 4,287 | $ | 632 | $ | 4,919 | $ | 11,977 | $ | 1,130 | $ | 13,107 | |||||||||||
Tax-exempt portfolio loans (3) | 35 | (68 | ) | (33 | ) | 135 | (132 | ) | 3 | ||||||||||||||
Purchased credit impaired loans | (1,763 | ) | 681 | (1,082 | ) | (5,246 | ) | 3,264 | (1,982 | ) | |||||||||||||
Taxable investments in debt and equity securities | 243 | 31 | 274 | 797 | 47 | 844 | |||||||||||||||||
Non-taxable investments in debt and equity securities (3) | 41 | (3 | ) | 38 | 184 | (14 | ) | 170 | |||||||||||||||
Short-term investments | (42 | ) | 41 | (1 | ) | (57 | ) | 90 | 33 | ||||||||||||||
Total interest-earning assets | $ | 2,801 | $ | 1,314 | $ | 4,115 | $ | 7,790 | $ | 4,385 | $ | 12,175 | |||||||||||
Interest paid on: | |||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 45 | $ | (6 | ) | $ | 39 | $ | 127 | $ | (9 | ) | $ | 118 | |||||||||
Money market accounts | 44 | 277 | 321 | 361 | 665 | 1,026 | |||||||||||||||||
Savings | 10 | — | 10 | 29 | — | 29 | |||||||||||||||||
Certificates of deposit | 45 | (269 | ) | (224 | ) | (518 | ) | (689 | ) | (1,207 | ) | ||||||||||||
Subordinated debentures | — | 55 | 55 | — | 154 | 154 | |||||||||||||||||
Borrowed funds | 65 | 23 | 88 | 253 | 20 | 273 | |||||||||||||||||
Total interest-bearing liabilities | 209 | 80 | 289 | 252 | 141 | 393 | |||||||||||||||||
Net interest income | $ | 2,592 | $ | 1,234 | $ | 3,826 | $ | 7,538 | $ | 4,244 | $ | 11,782 | |||||||||||
(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 tax year. | |||||||||||||||||||||||
NOTE: The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each. |
For the Three Months ended | For the Nine Months ended | ||||||||||||||
(in thousands) | September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||
Accelerated cash flows and other incremental accretion | $ | 2,296 | $ | 2,919 | $ | 8,701 | $ | 9,380 | |||||||
Provision reversal for PCI loan losses | 1,194 | 227 | 1,603 | 3,497 | |||||||||||
Gain (loss) on sale of other real estate | (225 | ) | 31 | 480 | 26 | ||||||||||
Other income from other real estate | 287 | — | 526 | — | |||||||||||
Change in FDIC loss share receivable | — | (1,241 | ) | — | (4,450 | ) | |||||||||
Change in FDIC clawback liability | — | (298 | ) | — | (760 | ) | |||||||||
Other expenses | (270 | ) | (287 | ) | (922 | ) | (1,136 | ) | |||||||
PCI assets income before income tax expense | $ | 3,282 | $ | 1,351 | $ | 10,388 | $ | 6,557 |
Three months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | Increase (decrease) | |||||||||||
Service charges on deposit accounts | $ | 2,200 | $ | 2,044 | $ | 156 | 8 | % | ||||||
Wealth management revenue | 1,694 | 1,773 | (79 | ) | (4 | )% | ||||||||
Other service charges and fee income | 1,007 | 871 | 136 | 16 | % | |||||||||
Gain on state tax credits, net | 228 | 321 | (93 | ) | (29 | )% | ||||||||
Gain on sale of other real estate - core | — | 1 | (1 | ) | (100 | )% | ||||||||
Miscellaneous income - core | 1,699 | 929 | 770 | 83 | % | |||||||||
Core noninterest income (1) | 6,828 | 5,939 | 889 | 15 | % | |||||||||
Change in FDIC loss share receivable | — | (1,241 | ) | 1,241 | (100 | )% | ||||||||
Gain (loss) on sale of other real estate from PCI loans | (225 | ) | 31 | (256 | ) | (826 | )% | |||||||
Gain on sale of investment securities | 86 | — | 86 | — | % | |||||||||
Other income from PCI assets | 287 | — | 287 | — | % | |||||||||
Total noninterest income | $ | 6,976 | $ | 4,729 | $ | 2,247 | 48 | % | ||||||
(1) A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption "Use of Non-GAAP Financial Measures." |
Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | Increase (decrease) | |||||||||||
Service charges on deposit accounts | $ | 6,431 | $ | 5,898 | $ | 533 | 9 | % | ||||||
Wealth management revenue | 5,000 | 5,291 | (291 | ) | (5 | )% | ||||||||
Other service charges and fee income | 2,827 | 2,464 | 363 | 15 | % | |||||||||
Gain on state tax credits, net | 899 | 1,069 | (170 | ) | (16 | )% | ||||||||
Gain on sale of other real estate - core | 122 | 35 | 87 | 249 | % | |||||||||
Miscellaneous income - core | 3,659 | 3,762 | (103 | ) | (3 | )% | ||||||||
Core noninterest income (1) | 18,938 | 18,519 | 419 | 2 | % | |||||||||
Change in FDIC loss share receivable | — | (4,450 | ) | 4,450 | (100 | )% | ||||||||
Gain on sale of other real estate from PCI loans | 480 | 26 | 454 | 1,746 | % | |||||||||
Gain on sale of investment securities | 86 | 23 | 63 | 274 | % | |||||||||
Other income from PCI assets | 526 | — | 526 | — | % | |||||||||
Total noninterest income | $ | 20,030 | $ | 14,118 | $ | 5,912 | 42 | % | ||||||
(1) A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption "Use of Non-GAAP Financial Measures." |
Three months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | Increase (decrease) | |||||||||||
Core expenses (1): | ||||||||||||||
Employee compensation and benefits - core | $ | 11,910 | $ | 11,237 | $ | 673 | 6 | % | ||||||
Occupancy - core | 1,679 | 1,580 | 99 | 6 | % | |||||||||
Data processing - core | 1,135 | 1,107 | 28 | 3 | % | |||||||||
FDIC and other insurance | 780 | 654 | 126 | 19 | % | |||||||||
Professional fees - core | 540 | 772 | (232 | ) | (30 | )% | ||||||||
Loan, legal and other real estate expense - core | 310 | 567 | (257 | ) | (45 | )% | ||||||||
Other - core | 3,888 | 3,430 | 458 | 13 | % | |||||||||
Core noninterest expense (1) | 20,242 | 19,347 | 895 | 5 | % | |||||||||
FDIC clawback | — | 298 | (298 | ) | (100 | )% | ||||||||
Merger related expenses | 302 | — | 302 | — | % | |||||||||
Other expenses related to PCI loans | 270 | 287 | (17 | ) | (6 | )% | ||||||||
Total noninterest expense | $ | 20,814 | $ | 19,932 | $ | 882 | 4 | % | ||||||
(1) A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption "Use of Non-GAAP Financial Measures." |
Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | Increase (decrease) | |||||||||||
Core expenses (1): | ||||||||||||||
Employee compensation and benefits - core | $ | 36,560 | $ | 33,517 | $ | 3,043 | 9 | % | ||||||
Occupancy - core | 4,920 | 4,845 | 75 | 2 | % | |||||||||
Data processing - core | 3,396 | 3,205 | 191 | 6 | % | |||||||||
FDIC and other insurance | 2,241 | 2,045 | 196 | 10 | % | |||||||||
Professional fees - core | 1,942 | 2,582 | (640 | ) | (25 | )% | ||||||||
Loan, legal and other real estate expense - core | 782 | 1,188 | (406 | ) | (34 | )% | ||||||||
Other - core | 11,282 | 10,063 | 1,219 | 12 | % | |||||||||
Core noninterest expense (1) | 61,123 | 57,445 | 3,678 | 6 | % | |||||||||
FDIC clawback | — | 760 | (760 | ) | (100 | )% | ||||||||
Executive severance | 332 | — | 332 | — | % | |||||||||
Merger related expenses | 302 | — | 302 | — | % | |||||||||
Other non-core expenses | 250 | — | 250 | — | % | |||||||||
Other expenses related to PCI loans | 922 | 1,135 | (213 | ) | (19 | )% | ||||||||
Total noninterest expense | $ | 62,929 | $ | 59,340 | $ | 3,589 | 6 | % | ||||||
(1) A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption "Use of Non-GAAP Financial Measures." |
(in thousands) | September 30, 2016 | December 31, 2015 | Increase (decrease) | |||||||||
Total cash and cash equivalents | $ | 118,499 | $ | 94,157 | 24,342 | 25.9 | % | |||||
Securities | 520,640 | 495,484 | 25,156 | 5.1 | % | |||||||
Portfolio loans | 3,037,705 | 2,750,737 | 286,968 | 10.4 | % | |||||||
Purchased credit impaired loans | 47,449 | 74,758 | (27,309 | ) | (36.5 | )% | ||||||
Total assets | 3,909,644 | 3,608,483 | 301,161 | 8.3 | % | |||||||
Deposits | 3,124,825 | 2,784,591 | 340,234 | 12.2 | % | |||||||
Total liabilities | 3,528,546 | 3,257,654 | 270,892 | 8.3 | % | |||||||
Total shareholders' equity | 381,098 | 350,829 | 30,269 | 8.6 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | Increase (decrease) | ||||||||||
Commercial and industrial | $ | 1,598,815 | $ | 1,484,327 | $ | 114,488 | 7.7 | % | |||||
Commercial real estate - investor owned | 515,055 | 428,064 | 86,991 | 20.3 | % | ||||||||
Commercial real estate - owner occupied | 340,916 | 342,959 | (2,043 | ) | (0.6 | )% | |||||||
Construction and land development | 188,856 | 161,061 | 27,795 | 17.3 | % | ||||||||
Residential real estate | 233,960 | 196,498 | 37,462 | 19.1 | % | ||||||||
Consumer and other | 160,103 | 137,828 | 22,275 | 16.2 | % | ||||||||
Portfolio loans | 3,037,705 | 2,750,737 | 286,968 | 10.4 | % | ||||||||
Purchased credit impaired loans | 47,449 | 74,758 | (27,309 | ) | (36.5 | )% | |||||||
Total loans | $ | 3,085,154 | $ | 2,825,495 | $ | 259,659 | 9.2 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | Increase (decrease) | ||||||||||
Enterprise value lending | $ | 394,923 | $ | 350,266 | $ | 44,657 | 12.7 | % | |||||
C&I - general | 755,829 | 732,186 | 23,643 | 3.2 | % | ||||||||
Life insurance premium financing | 298,845 | 265,184 | 33,661 | 12.7 | % | ||||||||
Tax credits | 149,218 | 136,691 | 12,527 | 9.2 | % | ||||||||
CRE, Construction, and land development | 1,044,827 | 932,084 | 112,743 | 12.1 | % | ||||||||
Residential | 233,960 | 196,498 | 37,462 | 19.1 | % | ||||||||
Other | 160,103 | 137,828 | 22,275 | 16.2 | % | ||||||||
Portfolio loans | $ | 3,037,705 | $ | 2,750,737 | $ | 286,968 | 10.4 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Allowance at beginning of period, for portfolio loans | $ | 35,498 | $ | 31,765 | $ | 33,441 | $ | 30,185 | |||||||
Loans charged off: | |||||||||||||||
Commercial and industrial | (2,044 | ) | (572 | ) | (2,269 | ) | (3,634 | ) | |||||||
Real estate: | |||||||||||||||
Commercial | — | — | — | (664 | ) | ||||||||||
Construction and land development | — | — | — | (350 | ) | ||||||||||
Residential | (25 | ) | (240 | ) | (25 | ) | (1,313 | ) | |||||||
Consumer and other | (4 | ) | (9 | ) | (15 | ) | (24 | ) | |||||||
Total loans charged off | (2,073 | ) | (821 | ) | (2,309 | ) | (5,985 | ) | |||||||
Recoveries of loans previously charged off: | |||||||||||||||
Commercial and industrial | 69 | 389 | 624 | 1,578 | |||||||||||
Real estate: | |||||||||||||||
Commercial | 25 | 84 | 123 | 1,540 | |||||||||||
Construction and land development | 913 | 125 | 927 | 300 | |||||||||||
Residential | 26 | 108 | 96 | 221 | |||||||||||
Consumer and other | 2 | 2 | 9 | 83 | |||||||||||
Total recoveries of loans | 1,035 | 708 | 1,779 | 3,722 | |||||||||||
Net loan charge-offs | (1,038 | ) | (113 | ) | (530 | ) | (2,263 | ) | |||||||
Provision for portfolio loan losses | 3,038 | 599 | 4,587 | 4,329 | |||||||||||
Allowance at end of period, for portfolio loans | $ | 37,498 | $ | 32,251 | $ | 37,498 | $ | 32,251 | |||||||
Allowance at beginning of period, for purchased credit impaired loans | $ | 8,551 | $ | 11,594 | $ | 10,175 | $ | 15,410 | |||||||
Loans charged off | (312 | ) | (10 | ) | (1,295 | ) | (12 | ) | |||||||
Other | (612 | ) | (18 | ) | (844 | ) | (562 | ) | |||||||
Net loan charge-offs | (924 | ) | (28 | ) | (2,139 | ) | (574 | ) | |||||||
Provision reversal for PCI loan losses | (1,194 | ) | (227 | ) | (1,603 | ) | (3,497 | ) | |||||||
Allowance at end of period, for purchased credit impaired loans | $ | 6,433 | $ | 11,339 | $ | 6,433 | $ | 11,339 | |||||||
Total allowance at end of period | $ | 43,931 | $ | 43,590 | $ | 43,931 | $ | 43,590 | |||||||
Portfolio loans, average | $ | 2,947,949 | $ | 2,540,948 | $ | 2,864,916 | $ | 2,483,488 | |||||||
Portfolio loans, ending | 3,037,705 | 2,602,156 | 3,037,705 | 2,602,156 | |||||||||||
Net charge-offs to average portfolio loans | 0.14 | % | 0.02 | % | 0.02 | % | 0.12 | % | |||||||
Allowance for portfolio loan losses to loans | 1.23 | % | 1.24 | % | 1.23 | % | 1.24 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | September 30, 2015 | ||||||||
Non-accrual loans | $ | 17,622 | $ | 8,797 | $ | 9,123 | |||||
Restructured loans | 2,320 | 303 | — | ||||||||
Total nonperforming loans (1) | 19,942 | 9,100 | 9,123 | ||||||||
Other real estate from originated loans | 2,719 | 3,218 | 1,575 | ||||||||
Other real estate from acquired loans | 240 | 5,148 | — | ||||||||
Total nonperforming assets (1) (2) | $ | 22,901 | $ | 17,466 | $ | 10,698 | |||||
Total assets | $ | 3,909,644 | $ | 3,608,483 | $ | 3,516,541 | |||||
Portfolio loans | 3,037,705 | 2,750,737 | 2,602,156 | ||||||||
Portfolio loans plus other real estate | 3,040,664 | 2,759,103 | 2,603,731 | ||||||||
Nonperforming loans to portfolio loans (1) | 0.66 | % | 0.33 | % | 0.35 | % | |||||
Nonperforming assets to total loans plus other real estate (1) (2) | 0.75 | 0.63 | 0.41 | ||||||||
Nonperforming assets to total assets (1) (2) | 0.59 | 0.48 | 0.30 | ||||||||
Allowance for portfolio loans to nonperforming loans (1) | 188 | % | 367 | % | 354 | % | |||||
(1) Excludes PCI loans, except for their inclusion in total assets. | |||||||||||
(2) Other real estate from PCI loans included in Nonperforming assets beginning with the year ended December 31, 2015 due to termination of all existing FDIC loss share agreements. |
(in thousands) | September 30, 2016 | December 31, 2015 | September 30, 2015 | ||||||||
Commercial and industrial | $ | 13,160 | $ | 4,514 | $ | 2,975 | |||||
Commercial real estate | 252 | 1,105 | 2,611 | ||||||||
Construction and land development | 1,907 | 2,800 | 2,823 | ||||||||
Residential real estate | 124 | 681 | 714 | ||||||||
Consumer and other | 4,499 | — | — | ||||||||
Total | $ | 19,942 | $ | 9,100 | $ | 9,123 |
Nine months ended September 30, | |||||||
(in thousands) | 2016 | 2015 | |||||
Nonperforming loans beginning of period | $ | 9,100 | $ | 22,244 | |||
Additions to nonaccrual loans | 18,354 | 18,854 | |||||
Additions to restructured loans | 2,320 | — | |||||
Charge-offs | (2,104 | ) | (6,109 | ) | |||
Other principal reductions | (6,058 | ) | (24,840 | ) | |||
Moved to other real estate | (283 | ) | (450 | ) | |||
Moved to performing | (1,387 | ) | (576 | ) | |||
Loans past due 90 days or more and still accruing interest | — | — | |||||
Nonperforming loans end of period | $ | 19,942 | $ | 9,123 |
Nine months ended September 30, | |||||||
(in thousands) | 2016 | 2015 | |||||
Other real estate beginning of period | $ | 8,366 | $ | 7,840 | |||
Additions and expenses capitalized to prepare property for sale | 2,203 | 6,604 | |||||
Writedowns in value | — | (299 | ) | ||||
Sales | (7,610 | ) | (5,775 | ) | |||
Other real estate end of period | $ | 2,959 | $ | 8,370 |
(in thousands) | September 30, 2016 | December 31, 2015 | Increase (decrease) | ||||||||||
Demand deposits | $ | 762,155 | $ | 717,460 | 44,695 | 6.2 | % | ||||||
Interest-bearing transaction accounts | 633,100 | 564,420 | 68,680 | 12.2 | % | ||||||||
Money market accounts | 1,131,997 | 1,053,662 | 78,335 | 7.4 | % | ||||||||
Savings | 109,728 | 92,861 | 16,867 | 18.2 | % | ||||||||
Certificates of deposit: | |||||||||||||
Brokered | 137,592 | 39,573 | 98,019 | 247.7 | % | ||||||||
Other | 350,253 | 316,615 | 33,638 | 10.6 | % | ||||||||
Total deposits | $ | 3,124,825 | $ | 2,784,591 | 340,234 | 12.2 | % | ||||||
Non-time deposits / total deposits | 84 | % | 87 | % | |||||||||
Demand deposits / total deposits | 24 | % | 26 | % |
• | Net income of $35.2 million, |
• | Other comprehensive income of $4.5 million from the change in unrealized gains on investment securities, |
• | Repurchase of 185,718 common shares for $4.9 million, |
• | Dividends paid on common shares of $6.0 million. |
(in thousands) | September 30, 2016 | December 31, 2015 | Well Capitalized Minimum % | ||||||
Total capital to risk-weighted assets | 12.01 | % | 11.85 | % | 10.00 | % | |||
Tier 1 capital to risk-weighted assets | 10.82 | % | 10.61 | % | 8.00 | % | |||
Common equity tier 1 capital to risk-weighted assets | 9.33 | % | 9.05 | % | 6.50 | % | |||
Leverage ratio (Tier 1 capital to average assets) | 10.58 | % | 10.71 | % | 5.00 | % | |||
Tangible common equity to tangible assets1 | 8.99 | % | 8.88 | % | N/A | ||||
Tier 1 capital | $ | 400,382 | $ | 374,676 | |||||
Total risk-based capital | 444,388 | 418,367 | |||||||
1 Not a required regulatory capital ratio |
For the Three Months ended | For the Nine Months ended | ||||||||||||||||||
(in thousands) | September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||
Net interest income | $ | 33,830 | $ | 33,783 | $ | 30,006 | $ | 100,041 | $ | 88,331 | |||||||||
Less: Incremental accretion income | 2,296 | 3,571 | 2,919 | 8,701 | 9,380 | ||||||||||||||
Core net interest income | 31,534 | 30,212 | 27,087 | 91,340 | 78,951 | ||||||||||||||
Total noninterest income | 6,976 | 7,049 | 4,729 | 20,030 | 14,118 | ||||||||||||||
Less: Change in FDIC loss share receivable | — | — | (1,241 | ) | — | (4,450 | ) | ||||||||||||
Less: Gain (loss) on sale of other real estate from PCI loans | (225 | ) | 705 | 31 | 480 | 26 | |||||||||||||
Less: Gain on sale of investment securities | 86 | — | — | 86 | 23 | ||||||||||||||
Less: Other income from PCI assets | 287 | 239 | — | 526 | — | ||||||||||||||
Core noninterest income | 6,828 | 6,105 | 5,939 | 18,938 | 18,519 | ||||||||||||||
Total core revenue | 38,362 | 36,317 | 33,026 | 110,278 | 97,470 | ||||||||||||||
Provision for portfolio loans | 3,038 | 716 | 599 | 4,587 | 4,329 | ||||||||||||||
Total noninterest expense | 20,814 | 21,353 | 19,932 | 62,929 | 59,340 | ||||||||||||||
Less: FDIC clawback | — | — | 298 | — | 760 | ||||||||||||||
Less: Other expenses related to PCI loans | 270 | 325 | 287 | 922 | 1,135 | ||||||||||||||
Less: Executive severance | — | 332 | — | 332 | — | ||||||||||||||
Less: Merger related expenses | 302 | — | — | 302 | — | ||||||||||||||
Less: Other non-core expenses | — | 250 | — | 250 | — | ||||||||||||||
Core noninterest expense | 20,242 | 20,446 | 19,347 | 61,123 | 57,445 | ||||||||||||||
Core income before income tax expense | 15,082 | 15,155 | 13,080 | 44,568 | 35,696 | ||||||||||||||
Total income tax expense | 6,316 | 6,747 | 4,722 | 18,949 | 14,506 | ||||||||||||||
Less: Non-core income tax expense1 | 1,174 | 1,510 | 518 | 3,673 | 2,521 | ||||||||||||||
Core income tax expense | 5,142 | 5,237 | 4,204 | 15,276 | 11,985 | ||||||||||||||
Core net income | $ | 9,940 | $ | 9,918 | $ | 8,876 | $ | 29,292 | $ | 23,711 | |||||||||
Core diluted earnings per share | $ | 0.49 | $ | 0.49 | $ | 0.44 | $ | 1.45 | $ | 1.17 | |||||||||
Core return on average assets | 1.04 | % | 1.07 | % | 1.03 | % | 1.05 | % | 0.95 | % | |||||||||
Core return on average common equity | 10.47 | % | 10.89 | % | 10.41 | % | 10.67 | % | 9.59 | % | |||||||||
Core return on average tangible common equity | 11.46 | % | 11.98 | % | 11.56 | % | 11.73 | % | 10.70 | % | |||||||||
Core efficiency ratio | 52.77 | % | 56.30 | % | 58.58 | % | 55.43 | % | 58.94 | % | |||||||||
1Non-core income tax expense calculated at 38.3% of non-core pretax income. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net interest income | $ | 34,263 | $ | 30,437 | $ | 101,377 | $ | 89,595 | |||||||
Less: Incremental accretion income | 2,296 | 2,919 | 8,701 | 9,380 | |||||||||||
Core net interest income | $ | 31,967 | $ | 27,518 | $ | 92,676 | $ | 80,215 | |||||||
Average earning assets | $ | 3,589,080 | $ | 3,201,181 | $ | 3,503,538 | $ | 3,115,658 | |||||||
Reported net interest margin | 3.80 | % | 3.77 | % | 3.87 | % | 3.84 | % | |||||||
Core net interest margin | 3.54 | % | 3.41 | % | 3.53 | % | 3.44 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | |||||
Total shareholders' equity | $ | 381,098 | $ | 350,829 | |||
Less: Goodwill | 30,334 | 30,334 | |||||
Less: Intangible assets | 2,357 | 3,075 | |||||
Tangible common equity | $ | 348,407 | $ | 317,420 | |||
Total assets | $ | 3,909,644 | $ | 3,608,483 | |||
Less: Goodwill | 30,334 | 30,334 | |||||
Less: Intangible assets | 2,357 | 3,075 | |||||
Tangible assets | $ | 3,876,953 | $ | 3,575,074 | |||
Tangible common equity to tangible assets | 8.99 | % | 8.88 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | |||||
Total shareholders' equity | $ | 381,098 | $ | 350,829 | |||
Less: Goodwill | 30,334 | 30,334 | |||||
Less: Intangible assets, net of deferred tax liabilities | 873 | 759 | |||||
Less: Unrealized gains | 4,668 | 218 | |||||
Plus: Other | 24 | 35 | |||||
Common equity tier 1 capital | 345,247 | 319,553 | |||||
Plus: Qualifying trust preferred securities | 55,100 | 55,100 | |||||
Plus: Other | 35 | 23 | |||||
Tier 1 capital | 400,382 | 374,676 | |||||
Plus: Tier 2 capital | 44,006 | 43,691 | |||||
Total risk-based capital | 444,388 | 418,367 | |||||
Total risk-weighted assets determined in accordance with prescribed regulatory requirements | $ | 3,699,757 | $ | 3,530,521 | |||
Common equity tier 1 to risk-weighted assets | 9.33 | % | 9.05 | % | |||
Tier 1 capital to risk-weighted assets | 10.82 | % | 10.61 | % | |||
Total risk-based capital to risk-weighted assets | 12.01 | % | 11.85 | % |
Rate Shock | Annual % change in net interest income |
+ 300 bp | 7.8% |
+ 200 bp | 5.5% |
+ 100 bp | 3.0% |
- 100 bp | -5.0% |
Period | Total number of shares purchased (a) | Weighted-average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | |||||||||
July 1, 2016 through July 31, 2016 | 6,700 | $ | 26.50 | 6,700 | 1,814,282 | ||||||||
August 1, 2016 through August 31, 2016 | — | — | — | 1,814,282 | |||||||||
September 1, 2016 through September 30, 2016 | — | — | — | 1,814,282 | |||||||||
Total | 6,700 | $ | 26.50 | 6,700 |
Exhibit No. | Description |
*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 September 30, 2016, is formatted in XBRL interactive data files: (i) Consolidated Balance Sheet at September 30, 2016 and December 31, 2015; (ii) Consolidated Statement of Income for the three and nine months ended September 30, 2016 and 2015; (iii) Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015; (iv) Consolidated Statement of Changes in Equity for the nine months ended September 30, 2016 and 2015; (v) Consolidated Statement of Cash Flows for the nine months ended September 30, 2016 and 2015; and (vi) Notes to Financial Statements. |
ENTERPRISE FINANCIAL SERVICES CORP | |||
By: | /s/ Peter F. Benoist | ||
Peter F. Benoist | |||
Chief Executive Officer | |||
By: | /s/ Keene S. Turner | ||
Keene S. Turner | |||
Chief Financial Officer |
Nine Months Ended September 30, | Years ended December 31, | ||||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||
Earnings (1): | |||||||||||||||||||
Income before income tax expense | $ | 54,158 | $ | 58,401 | $ | 41,044 | $ | 50,080 | $ | 42,830 | $ | 38,225 | |||||||
Add: Fixed charges from below | 9,745 | 12,369 | 14,386 | 18,137 | 28,002 | 33,950 | |||||||||||||
Earnings including interest expense on deposits (a) | $ | 63,903 | $ | 70,770 | $ | 55,430 | $ | 68,217 | $ | 70,832 | $ | 72,175 | |||||||
Less: interest expense on deposits | (7,841 | ) | (10,412 | ) | (10,487 | ) | (11,142 | ) | (15,406 | ) | (21,658 | ) | |||||||
Earnings excluding interest expense on deposits (b) | $ | 56,062 | $ | 60,358 | $ | 44,943 | $ | 57,075 | $ | 55,426 | $ | 50,517 | |||||||
Fixed charges (1): | |||||||||||||||||||
Interest on deposits | $ | 7,841 | $ | 10,412 | $ | 10,487 | $ | 11,142 | $ | 15,406 | $ | 21,658 | |||||||
Interest on borrowings | 1,904 | 1,957 | 3,899 | 6,995 | 7,761 | 8,497 | |||||||||||||
TARP preferred stock dividends (pre-tax) | — | — | — | — | 4,835 | 3,795 | |||||||||||||
Fixed charges including interest on deposits (c) | $ | 9,745 | $ | 12,369 | $ | 14,386 | $ | 18,137 | $ | 28,002 | $ | 33,950 | |||||||
Less: interest expense on deposits | (7,841 | ) | (10,412 | ) | (10,487 | ) | (11,142 | ) | (15,406 | ) | (21,658 | ) | |||||||
Fixed charges excluding interest expense on deposits (d) | $ | 1,904 | $ | 1,957 | $ | 3,899 | $ | 6,995 | $ | 12,596 | $ | 12,292 | |||||||
Ratio of earnings to combined fixed charges | |||||||||||||||||||
Excluding interest on deposits (b/d) (2) | 29.44x | 30.85x | 11.53x | 8.16x | 4.40x | 4.11x | |||||||||||||
Including interest on deposits (a/c) | 6.56x | 5.72x | 3.85x | 3.76x | 2.53x | 2.13x | |||||||||||||
Ratio of earnings to combined fixed charges and preferred dividends: | |||||||||||||||||||
Excluding interest on deposits (b/d) (2) | 29.44x | 30.85x | 11.53x | 8.16x | 6.52x | 5.50x | |||||||||||||
Including interest on deposits (a/c) | 6.56x | 5.72x | 3.85x | 3.76x | 2.85x | 2.27x |
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: | October 25, 2016 |
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/ Keene S. Turner | Date: | October 25, 2016 |
Keene S. Turner | |||
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2016 |
Oct. 19, 2016 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | ENTERPRISE FINANCIAL SERVICES CORP | |
Entity Central Index Key | 0001025835 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 20,011,401 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Assets | ||
Collateral pledged | $ 1,870 | $ 1,320 |
Allowance for loan losses on Portfolio loans, covered under FDIC loss share | 6,433 | 10,175 |
State tax credits, held for sale, carried at fair value | $ 4,801 | $ 5,941 |
Shareholders' equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 20,249,711 | 20,093,119 |
Treasury stock, shares | 261,718 | 76,000 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 11,832 | $ 9,709 | $ 35,209 | $ 27,771 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gains (losses) on investment securities arising during the period, net of income tax expense (benefit) for three months of $986 and $(1,322), and for six months of $3,290 and $(277), respectively | (796) | 1,724 | 4,503 | 1,306 |
Less: Reclassification adjustment for realized gains on sale of securities available for sale included in net income, net of income tax expense for three months of $0 and $0, and for six months of $0 and $9, respectively | (53) | 0 | (53) | (14) |
Total other comprehensive income (loss) | (849) | 1,724 | 4,450 | 1,292 |
Total comprehensive income | $ 10,983 | $ 11,433 | $ 39,659 | $ 29,063 |
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Other comprehensive income, tax: | ||||
Unrealized (loss)/gain on investment securities available for sale arising during the period, tax | $ (494) | $ 1,070 | $ 2,795 | $ 793 |
Reclassification adjustment for realized gains on sale of securities available for sale included in net income, tax | $ 33 | $ 0 | $ 33 | $ 9 |
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Preferred Stock |
Common Stock |
Treasury Stock |
Additional paid in capital |
Retained earnings |
Accumulated other comprehensive income (loss) |
---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2014 | $ 316,241 | $ 0 | $ 199 | $ (1,743) | $ 207,731 | $ 108,373 | $ 1,681 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 27,771 | 0 | 0 | 0 | 0 | 27,771 | 0 |
Other comprehensive income | 1,292 | 0 | 0 | 0 | 0 | 0 | 1,292 |
Cash dividends paid on common shares | (3,654) | 0 | 0 | 0 | 0 | 3,654 | 0 |
Issuance under equity compensation plans, net | (831) | 0 | (1) | 0 | 832 | 0 | 0 |
Share-based Compensation | 2,588 | 0 | 0 | 0 | 2,588 | 0 | 0 |
Excess tax benefit related to equity compensation plans | 156 | 0 | 0 | 0 | 156 | 0 | 0 |
Balance at Sep. 30, 2015 | 343,563 | 0 | 200 | (1,743) | 209,643 | 132,490 | 2,973 |
Balance at Dec. 31, 2015 | 350,829 | 0 | 201 | (1,743) | 210,589 | 141,564 | 218 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 35,209 | 0 | 0 | 0 | 0 | 35,209 | 0 |
Other comprehensive income | 4,450 | 0 | 0 | 0 | 0 | 0 | 4,450 |
Cash dividends paid on common shares | (6,005) | 0 | 0 | 0 | 0 | 6,005 | 0 |
Adjustments To Additional Paid In Capital, Repurchase Of Common Stock Warrants | (4,889) | 0 | 0 | (4,889) | 0 | 0 | 0 |
Issuance under equity compensation plans, net | (1,650) | 0 | (2) | 0 | 1,652 | 0 | 0 |
Share-based Compensation | 2,410 | 0 | 0 | 0 | 2,410 | 0 | 0 |
Excess tax benefit related to equity compensation plans | 744 | 0 | 0 | 0 | 744 | 0 | 0 |
Balance at Sep. 30, 2016 | $ 381,098 | $ 0 | $ 203 | $ (6,632) | $ 212,091 | $ 170,768 | $ 4,668 |
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Cash dividends paid on common shares, per share | $ 0.30 | $ 0.183 |
Issuance under equity compensation plans, shares | 156,592 | 121,646 |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0 | 0 |
Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2016 | |
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 nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2016. 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, 2015. Basis of Financial Statement Presentation The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the 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. 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 2016, the Company changed its presentation of certificates of deposit on the Condensed Consolidated Balance Sheets to separate brokered deposit sources from other sources. The corresponding prior period balances were reclassified to conform to the current year presentation. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. |
Earnings Per Share |
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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 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. The following table presents a summary of per common share data and amounts for the periods indicated.
For the three and nine months ended September 30, 2016 and 2015, the amount of common stock equivalents excluded from the earnings per share calculations because their effect was anti-dilutive was zero, and 0.1 million common stock equivalents, respectively. |
Investments |
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Investments | INVESTMENTS The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available for sale and held to maturity:
At September 30, 2016, and December 31, 2015, there were no holdings of securities of any one issuer in an amount greater than 10% of shareholders’ equity, other than U.S. Government agencies and sponsored enterprises. The agency mortgage-backed securities are all issued by U.S. Government-sponsored enterprises. Available for sale securities having a fair value of $321.5 million and $334.4 million at September 30, 2016, and December 31, 2015, respectively, were pledged as collateral to secure deposits of public institutions and for other purposes as required by law or contract provisions. The amortized cost and estimated fair value of debt securities at September 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted average life of the mortgage-backed securities is approximately 4 years.
The following table represents a summary of investment securities that had an unrealized loss:
The unrealized losses at both September 30, 2016, and December 31, 2015, were primarily attributable to changes in market interest rates since the securities were purchased. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include among other considerations (1) the present value of the cash flows expected to be collected compared to the amortized cost of the security, (2) duration and magnitude of the decline in value, (3) the financial condition of the issuer or issuers, (4) structure of the security, and (5) the intent to sell the security or whether it is more likely than not the Company would be required to sell the security before its anticipated recovery in market value. At September 30, 2016, management performed its quarterly analysis of all securities with an unrealized loss and concluded no individual securities were other-than-temporarily impaired. The gross gains and gross losses realized from sales of available for sale investment securities were as follows:
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Portfolio Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at September 30, 2016 and December 31, 2015:
A summary of the activity in the allowance for loan losses and the recorded investment in Portfolio loans by class and category based on impairment method through September 30, 2016, and at December 31, 2015, is as follows:
A summary of Portfolio loans individually evaluated for impairment by category at September 30, 2016 and December 31, 2015, is as follows:
The following table presents details for past due and impaired loans:
There were no loans over 90 days past due and still accruing interest at September 30, 2016 or December 31, 2015. The recorded investment in impaired Portfolio loans by category at September 30, 2016 and December 31, 2015, is as follows:
The recorded investment by category for the Portfolio loans that have been restructured during the three and nine months ended September 30, 2016 and 2015, is as follows:
The restructured loans resulted from deferral of principal and extending the term to maturity. As of September 30, 2016, the Company had $1.2 million specific reserves allocated to loans that have been restructured. There were no Portfolio loans restructured that subsequently defaulted during the three and nine months ended September 30, 2016 or 2015. The aging of the recorded investment in past due Portfolio loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below.
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
The recorded investment by risk category of the Portfolio loans by portfolio class and category at September 30, 2016, which is based upon the most recent analysis performed, and December 31, 2015 is as follows:
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Purchased Credit Impaired ("PCI") Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Credit Impaired (PCI) Loans | PURCHASED CREDIT IMPAIRED ("PCI") LOANS Below is a summary of PCI loans by category at September 30, 2016 and December 31, 2015:
The aging of the recorded investment in past due PCI loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below:
The following table is a rollforward of PCI loans, net of the allowance for loan losses, for the nine months ended September 30, 2016 and 2015.
The accretable yield is recognized in interest income over the estimated life of the acquired loans using the effective yield method. Outstanding customer balances on PCI loans were $64.6 million and $98.6 million as of September 30, 2016, and December 31, 2015, respectively. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS The Company is a party to various derivative financial instruments that are used in the normal course of business to meet the needs of its clients and as part of its risk management activities. These instruments include interest rate swaps and option contracts and foreign exchange forward contracts. The Company does not enter into derivative financial instruments for trading purposes. Risk Management Instruments. The Company enters into interest rate caps in order to economically hedge changes in fair value of State tax credits held for sale. See Note 8 – Fair Value Measurements for further discussion on the fair value of state tax credits. The notional amount of the derivative instruments used to manage risk was $3.5 million at September 30, 2016 and December 31, 2015, and the fair value was zero in both periods. Client-Related Derivative Instruments. The Company enters into interest rate swaps to allow customers to hedge changes in fair value of certain loans while maintaining a variable rate loan on its own books. The Company also enters into foreign exchange forward contracts with clients, and enters into offsetting foreign exchange forward contracts with established financial institution counterparties. The table below summarizes the notional amounts and fair values of the client-related derivative instruments:
Changes in the fair value of client-related derivative instruments are recognized currently in operations. For the three and nine months ended September 30, 2016 and 2015, the gains and losses offset each other due to the Company's hedging of the client swaps with other bank counterparties. |
Commitments |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments | COMMITMENTS AND CONTINGENCIES The Company issues financial instruments with off balance sheet risk in the normal course of the business of meeting the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments may involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company’s extent of involvement and maximum potential exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for financial instruments included on its consolidated balance sheets. At September 30, 2016, there were $0.5 million unadvanced commitments on impaired loans. The contractual amounts of off-balance-sheet financial instruments as of September 30, 2016, and December 31, 2015, are as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments usually have fixed expiration dates or other termination clauses, may have significant usage restrictions, and may require payment of a fee. Of the total commitments to extend credit at September 30, 2016, and December 31, 2015, approximately $108 million and $94 million, respectively, represent fixed rate loan commitments. Since certain of the commitments may expire without being drawn upon or may be revoked, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, inventory, premises and equipment, and real estate. Other liabilities include $0.3 million for estimated losses attributable to the unadvanced commitments at September 30, 2016 and December 31, 2015. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance or payment of a customer to a third party. These standby letters of credit are issued to support contractual obligations of the Company’s customers. The credit risk involved in issuing letters of credit is essentially the same as the risk involved in extending loans to customers. The approximate remaining term of standby letters of credit range from 1 month to 5 years at September 30, 2016. Contingencies The Company and its subsidiaries are, from time to time, parties to various legal proceedings arising out of their businesses. Management believes there are no such proceedings pending or threatened against the Company or its subsidiaries which, if determined adversely, would have a material adverse effect on the business, consolidated financial condition, results of operations or cash flows of the Company or any of its subsidiaries. |
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 September 30, 2016 and December 31, 2015, 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 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 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 as of September 30, 2016 and 2015.
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 September 30, 2016.
(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 for collateral dependent loans. Fair values for impaired loans are obtained from current appraisals by qualified licensed appraisers or independent valuation specialists. Other real estate owned is adjusted to fair value upon foreclosure of the underlying loan. 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. Certain state tax credits are reported at cost. Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at September 30, 2016 and December 31, 2015.
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 19 – Fair Value Measurements in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. 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 presented on the condensed consolidated balance sheets at fair value at September 30, 2016, and December 31, 2015.
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New Authoritative Accounting Guidance |
9 Months Ended |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Authoritative Accounting Guidance | NEW AUTHORITATIVE ACCOUNTING GUIDANCE FASB ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230)" which addresses changes to reduce the presentation diversity of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The guidance becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The new standard will be applied retrospectively, but may be applied prospectively if retrospective application would be impracticable. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated statement of cash flows. FASB ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" In June 2016, the FASB issued ASU 2016-13, "Financial Instruments (Topic 326)" which changes the methodology for evaluating impairment of most financial instruments. The ASU replaces the currently used incurred loss model with a forward-looking expected loss model, which will generally result in a more timely recognition of losses. The guidance becomes effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2016-09 "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718)" which impacts accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 requires all excess tax benefits and tax deficiencies to be recognized in the income statement as income tax expense (or benefit.) The tax effects of exercised or vested awards must be treated as discrete items in the reporting period in which they occur, regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits will be classified with other income tax cash flows as an operating activity, and cash paid by an employer when withholding shares for tax liabilities should be classified as a financing activity. The guidance becomes effective for annual periods beginning after December 15, 2017, and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2016-02 "Leases (Topic 842)" In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" which requires organizations that lease assets ("lessees") to recognize the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee remains dependent on its classification as a finance or operating lease. The criteria for determining whether a lease is a finance or operating lease has not been significantly changed by this ASU. The ASU also requires additional disclosure of the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance becomes effective for periods beginning after December 15, 2018. Early adoption will be permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated balance sheets. FASB ASU 2016-01 "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 requires equity investments to be measured at fair value through earnings, and eliminates the available-for-sale classification for equity securities with readily determinable fair values. For financial liabilities where the fair value option has been elected, changes in fair value due to instrument-specific credit risk must be recognized in other comprehensive income. When measuring the fair value of financial instruments at amortized cost, the exit price must be used for disclosure purposes. The ASU also requires that financial assets and liabilities be presented separately in the notes to the financial statements. This ASU becomes effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2014-09, "Revenue from Contracts with Customers" In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The new guidance was originally effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements, nor decided upon the method of adoption. Entities have the option of using either a full retrospective or modified approach of adoption. |
Subsequent Events (Notes) |
9 Months Ended |
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Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS On October 10, 2016, the Company entered into a definitive merger agreement to acquire Jefferson County Bancshares, Inc. (“JCB”). JCB and its wholly-owned subsidiary, Eagle Bank and Trust Company of Missouri, have approximately $935 million in assets, $670 million in loans, and $763 million in deposits as of June 30, 2016. JCB operates 13 full service retail and commercial banking offices in metropolitan St. Louis and Perry County, Missouri. JCB shareholders will receive, based on their election, cash consideration in an amount of $85.39 per share of JCB common stock or 2.75 shares of EFSC common stock per share of JCB common stock. Aggregate consideration at the closing will be 3.3 million shares of EFSC common stock and approximately $26.6 million in cash, subject to adjustment for any JCB stock option exercises. Based on EFSC’s 15-day volume weighted average closing stock price of $31.52 as of October 10, 2016, the overall transaction has an estimated value of $130.6 million, including JCB’s common stock and stock options. The transaction is anticipated to close in early 2017, and is subject to normal and customary closing conditions, including but not limited to, regulatory approval and approval by JCB shareholders. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Business and Consolidation | Basis of Financial Statement Presentation The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the 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. 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 2016, the Company changed its presentation of certificates of deposit on the Condensed Consolidated Balance Sheets to separate brokered deposit sources from other sources. The corresponding prior period balances were reclassified to conform to the current year presentation. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. |
Available-for-sale Securities | Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include among other considerations (1) the present value of the cash flows expected to be collected compared to the amortized cost of the security, (2) duration and magnitude of the decline in value, (3) the financial condition of the issuer or issuers, (4) structure of the security, and (5) the intent to sell the security or whether it is more likely than not the Company would be required to sell the security before its anticipated recovery in market value. At September 30, 2016, management performed its quarterly analysis of all securities with an unrealized loss and concluded no individual securities were other-than-temporarily impaired. |
New Authoritative Accounting Guidance | FASB ASU 2016-15 "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230)" which addresses changes to reduce the presentation diversity of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The guidance becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The new standard will be applied retrospectively, but may be applied prospectively if retrospective application would be impracticable. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated statement of cash flows. FASB ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" In June 2016, the FASB issued ASU 2016-13, "Financial Instruments (Topic 326)" which changes the methodology for evaluating impairment of most financial instruments. The ASU replaces the currently used incurred loss model with a forward-looking expected loss model, which will generally result in a more timely recognition of losses. The guidance becomes effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2016-09 "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718)" which impacts accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 requires all excess tax benefits and tax deficiencies to be recognized in the income statement as income tax expense (or benefit.) The tax effects of exercised or vested awards must be treated as discrete items in the reporting period in which they occur, regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits will be classified with other income tax cash flows as an operating activity, and cash paid by an employer when withholding shares for tax liabilities should be classified as a financing activity. The guidance becomes effective for annual periods beginning after December 15, 2017, and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2016-02 "Leases (Topic 842)" In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" which requires organizations that lease assets ("lessees") to recognize the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee remains dependent on its classification as a finance or operating lease. The criteria for determining whether a lease is a finance or operating lease has not been significantly changed by this ASU. The ASU also requires additional disclosure of the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance becomes effective for periods beginning after December 15, 2018. Early adoption will be permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated balance sheets. FASB ASU 2016-01 "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 requires equity investments to be measured at fair value through earnings, and eliminates the available-for-sale classification for equity securities with readily determinable fair values. For financial liabilities where the fair value option has been elected, changes in fair value due to instrument-specific credit risk must be recognized in other comprehensive income. When measuring the fair value of financial instruments at amortized cost, the exit price must be used for disclosure purposes. The ASU also requires that financial assets and liabilities be presented separately in the notes to the financial statements. This ASU becomes effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. FASB ASU 2014-09, "Revenue from Contracts with Customers" In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The new guidance was originally effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this guidance to annual reporting periods beginning after December 15, 2017 for public companies, and permits early adoption on a limited basis. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements, nor decided upon the method of adoption. Entities have the option of using either a full retrospective or modified approach of adoption. |
Earnings Per Share (Tables) |
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Summary of Per Common Share Data and Amounts | The following table presents a summary of per common share data and amounts for the periods indicated.
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Investments (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale and Held-to-Maturity Securities Reconciliation | The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available for sale and held to maturity:
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Schedule of Available-for-sale and Held-to-Maturity Securities Reconciliation | The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available for sale and held to maturity:
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Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of debt securities at September 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted average life of the mortgage-backed securities is approximately 4 years.
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Schedule of Unrealized Loss on Investments | The following table represents a summary of investment securities that had an unrealized loss:
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Schedule of Realized Gain (Loss) | The gross gains and gross losses realized from sales of available for sale investment securities were as follows:
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Portfolio Loans (Tables) - Portfolio loans, net |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-covered Loans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Portfolio Loans by Category | Below is a summary of Portfolio loans by category at September 30, 2016 and December 31, 2015:
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Summary of Allowance for Loan Losses and the Recorded Investment in Portfolio Loans by Class and Category Based on Impairment Method |
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Summary of Portfolio Loans Individually Evaluated for Impairment and Recorded Investment in Impaired Non-Covered Loans by Category |
The following table presents details for past due and impaired loans:
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Summary of Recorded Investment by for Portfolio Loans Restructured | The recorded investment by category for the Portfolio loans that have been restructured during the three and nine months ended September 30, 2016 and 2015, is as follows:
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Summary of Recorded Investment by Category for Portfolio Loans Restructured and Subsequently Defaulted | The restructured loans resulted from deferral of principal and extending the term to maturity. As of September 30, 2016, the Company had $1.2 million specific reserves allocated to loans that have been restructured. There were no Portfolio loans restructured that subsequently defaulted during the three and nine months ended September 30, 2016 or 2015. |
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Summary of Aging of Recorded Investment in Past Due Portfolio Loans by Portfolio Class and Category | The aging of the recorded investment in past due Portfolio loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below.
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Summary of Recorded Investment by Risk Category of Portfolio Loans by Portfolio Class and Category | The recorded investment by risk category of the Portfolio loans by portfolio class and category at September 30, 2016, which is based upon the most recent analysis performed, and December 31, 2015 is as follows:
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Purchased Credit Impaired ("PCI") Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Covered Loans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of PCI Loans, Net of Allowance for Loan Losses | The following table is a rollforward of PCI loans, net of the allowance for loan losses, for the nine months ended September 30, 2016 and 2015.
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Covered Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Covered Loans [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of PCI Loans by Category | Below is a summary of PCI loans by category at September 30, 2016 and December 31, 2015:
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Summary of Aging of Recorded Investment in Past Due PCI Loans by Portfolio Class and Category | The aging of the recorded investment in past due PCI loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below:
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Summary of FDIC Loss Share Receivable | . |
Derivative Financial Instruments (Tables) - Client-Related |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts and Fair Values of Derivative Instruments and Client-Related Derivative Instruments | The table below summarizes the notional amounts and fair values of the client-related derivative instruments:
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | For the three and nine months ended September 30, 2016 and 2015, the gains and losses offset each other due to the Company's hedging of the client swaps with other bank counterparties. |
Commitments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Commitments | The contractual amounts of off-balance-sheet financial instruments as of September 30, 2016, and December 31, 2015, are as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of 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 September 30, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
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Schedule of Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis | The following table presents the changes in Level 3 financial instruments measured at fair value on a recurring basis as of September 30, 2016 and 2015.
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Summary of Financial Instruments and Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis | The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of September 30, 2016.
(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 September 30, 2016 and December 31, 2015.
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Schedule of Estimated Fair Values 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 presented on the condensed consolidated balance sheets at fair value at September 30, 2016, and December 31, 2015.
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Investments - Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Gross gains realized | $ 86 | $ 0 | $ 86 | $ 63 |
Gross losses realized | 0 | 0 | 0 | (40) |
Proceeds from sales | $ 2,493 | $ 0 | $ 2,493 | $ 41,069 |
Investments - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | ||
Other investments, at cost | $ 19,789 | $ 17,455 |
Maximum percentage of shareholders' equity security holdings held of one issuer | 10.00% | 10.00% |
Available-for-sale securities pledged as collateral, fair value | $ 321,500 | $ 334,400 |
Mortgage-backed securities, weighted average life | 4 years |
Portfolio Loans - Summary of Past Due and Impaired Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Receivables [Abstract] | ||||
Total interest income that would have been recognized under original terms | $ 226 | $ 369 | $ 703 | $ 913 |
Total cash received and recognized as interest income on non-accrual loans | 203 | 81 | 253 | 206 |
Total interest income recognized on impaired loans | $ 32 | $ 4 | $ 63 | $ 31 |
Purchased Credit Impaired ("PCI") Loans - Summary of FDIC Loss Share Receivable (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
FDIC Indemnification Asset [Roll Forward] | ||
Cash received from the FDIC for covered assets | $ 0 | $ (1,725) |
Purchased Credit Impaired ("PCI") Loans - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
PCI loans outstanding | $ 64.6 | $ 98.6 |
Derivative Financial Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Risk Management [Member] | ||
Summary of Derivative Instruments [Abstract] | ||
Notional Amount | $ 3,500 | $ 3,500 |
Derivative, Fair Value, Net | 0 | 0 |
Non-designated hedging instruments | Client-Related | Interest rate swap contracts | ||
Summary of Derivative Instruments [Abstract] | ||
Notional Amount | 171,792 | 153,630 |
Non-designated hedging instruments | Client-Related | Other Assets | Interest rate swap contracts | ||
Summary of Derivative Instruments [Abstract] | ||
Asset derivatives (other assets), fair value | 2,099 | 1,155 |
Non-designated hedging instruments | Client-Related | Other Liabilities | Interest rate swap contracts | ||
Summary of Derivative Instruments [Abstract] | ||
Liability derivatives (other liabilities), fair value | $ 2,099 | $ 1,155 |
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