WISCONSIN (State or Other Jurisdiction of Incorporation or Organization) | 47-0871001 (I.R.S. Employer Identification No.) |
111 North Washington Street Green Bay, Wisconsin (Address of Principal Executive Offices) | 54301 (Zip Code) |
(920) 430-1400 (Registrant’s Telephone Number, Including Area Code) | |
N/A (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | NCBS | The NASDAQ Stock Market LLC |
Large accelerated filer ¨ | Accelerated filer x |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
Emerging Growth Company ¨ |
PAGE | |||
September 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | (Audited) | ||||||
Assets | |||||||
Cash and due from banks | $ | 88,371 | $ | 85,896 | |||
Interest-earning deposits | 55,598 | 163,630 | |||||
Cash and cash equivalents | 143,969 | 249,526 | |||||
Certificates of deposit in other banks | 5,395 | 993 | |||||
Securities available for sale (“AFS”), at fair value | 419,300 | 400,144 | |||||
Other investments | 20,697 | 17,997 | |||||
Loans held for sale | 10,564 | 1,639 | |||||
Loans | 2,242,931 | 2,166,181 | |||||
Allowance for loan losses ("ALLL") | (13,620 | ) | (13,153 | ) | |||
Loans, net | 2,229,311 | 2,153,028 | |||||
Premises and equipment, net | 47,680 | 48,173 | |||||
Bank owned life insurance (“BOLI”) | 71,796 | 66,310 | |||||
Goodwill and other intangibles, net | 121,371 | 124,307 | |||||
Accrued interest receivable and other assets | 35,588 | 34,418 | |||||
Total assets | $ | 3,105,671 | $ | 3,096,535 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities: | |||||||
Noninterest-bearing demand deposits | $ | 782,968 | $ | 753,065 | |||
Interest-bearing deposits | 1,801,479 | 1,861,073 | |||||
Total deposits | 2,584,447 | 2,614,138 | |||||
Long-term borrowings | 57,495 | 77,305 | |||||
Accrued interest payable and other liabilities | 34,987 | 17,740 | |||||
Total liabilities | 2,676,929 | 2,709,183 | |||||
Stockholders’ Equity: | |||||||
Common stock | 94 | 95 | |||||
Additional paid-in capital | 236,534 | 247,790 | |||||
Retained earnings | 186,710 | 144,364 | |||||
Accumulated other comprehensive income (loss) | 4,676 | (5,640 | ) | ||||
Total Nicolet Bankshares, Inc. stockholders’ equity | 428,014 | 386,609 | |||||
Noncontrolling interest | 728 | 743 | |||||
Total stockholders’ equity and noncontrolling interest | 428,742 | 387,352 | |||||
Total liabilities, noncontrolling interest and stockholders’ equity | $ | 3,105,671 | $ | 3,096,535 | |||
Preferred shares authorized (no par value) | 10,000,000 | 10,000,000 | |||||
Preferred shares issued and outstanding | — | — | |||||
Common shares authorized (par value $0.01 per share) | 30,000,000 | 30,000,000 | |||||
Common shares outstanding | 9,363,407 | 9,495,265 | |||||
Common shares issued | 9,387,096 | 9,524,777 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest income: | |||||||||||||||
Loans, including loan fees | $ | 31,334 | $ | 28,997 | $ | 92,511 | $ | 84,644 | |||||||
Investment securities: | |||||||||||||||
Taxable | 1,904 | 1,564 | 5,578 | 4,503 | |||||||||||
Tax-exempt | 503 | 572 | 1,574 | 1,737 | |||||||||||
Other interest income | 926 | 747 | 2,733 | 2,326 | |||||||||||
Total interest income | 34,667 | 31,880 | 102,396 | 93,210 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 4,596 | 4,055 | 14,103 | 11,012 | |||||||||||
Short-term borrowings | — | — | — | 8 | |||||||||||
Long-term borrowings | 881 | 883 | 2,684 | 2,571 | |||||||||||
Total interest expense | 5,477 | 4,938 | 16,787 | 13,591 | |||||||||||
Net interest income | 29,190 | 26,942 | 85,609 | 79,619 | |||||||||||
Provision for loan losses | 400 | 340 | 900 | 1,360 | |||||||||||
Net interest income after provision for loan losses | 28,790 | 26,602 | 84,709 | 78,259 | |||||||||||
Noninterest income: | |||||||||||||||
Trust services fee income | 1,594 | 1,638 | 4,631 | 4,915 | |||||||||||
Brokerage fee income | 2,113 | 1,732 | 5,925 | 5,074 | |||||||||||
Mortgage income, net | 3,700 | 1,902 | 6,962 | 4,510 | |||||||||||
Service charges on deposit accounts | 1,223 | 1,247 | 3,587 | 3,637 | |||||||||||
Card interchange income | 1,735 | 1,481 | 4,815 | 4,082 | |||||||||||
BOLI income | 495 | 1,019 | 1,834 | 1,929 | |||||||||||
Asset gains (losses), net | 286 | 146 | 8,030 | 1,322 | |||||||||||
Other income | 1,166 | 1,484 | 4,274 | 4,243 | |||||||||||
Total noninterest income | 12,312 | 10,649 | 40,058 | 29,712 | |||||||||||
Noninterest expense: | |||||||||||||||
Personnel | 12,914 | 12,983 | 40,809 | 38,149 | |||||||||||
Occupancy, equipment and office | 3,454 | 3,660 | 10,961 | 10,901 | |||||||||||
Business development and marketing | 1,428 | 1,334 | 4,288 | 4,139 | |||||||||||
Data processing | 2,515 | 2,375 | 7,220 | 7,094 | |||||||||||
Intangibles amortization | 914 | 1,054 | 2,936 | 3,336 | |||||||||||
Other expense | 1,662 | 1,638 | 5,159 | 4,518 | |||||||||||
Total noninterest expense | 22,887 | 23,044 | 71,373 | 68,137 | |||||||||||
Income before income tax expense | 18,215 | 14,207 | 53,394 | 39,834 | |||||||||||
Income tax expense | 4,603 | 3,268 | 10,788 | 9,431 | |||||||||||
Net income | 13,612 | 10,939 | 42,606 | 30,403 | |||||||||||
Less: Net income attributable to noncontrolling interest | 82 | 80 | 260 | 230 | |||||||||||
Net income attributable to Nicolet Bankshares, Inc. | $ | 13,530 | $ | 10,859 | $ | 42,346 | $ | 30,173 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 1.45 | $ | 1.13 | $ | 4.51 | $ | 3.12 | |||||||
Diluted | $ | 1.40 | $ | 1.09 | $ | 4.36 | $ | 3.02 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 9,346,814 | 9,633,158 | 9,393,795 | 9,678,726 | |||||||||||
Diluted | 9,696,850 | 9,949,295 | 9,706,795 | 10,004,316 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 13,612 | $ | 10,939 | $ | 42,606 | $ | 30,403 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Unrealized gains (losses) on securities AFS: | |||||||||||||||
Net unrealized holding gains (losses) | 2,053 | (1,836 | ) | 14,165 | (6,814 | ) | |||||||||
Net realized (gains) losses included in income | — | — | (32 | ) | — | ||||||||||
Income tax (expense) benefit | (555 | ) | 497 | (3,817 | ) | 1,840 | |||||||||
Total other comprehensive income (loss) | 1,498 | (1,339 | ) | 10,316 | (4,974 | ) | |||||||||
Comprehensive income | $ | 15,110 | $ | 9,600 | $ | 52,922 | $ | 25,429 |
Nicolet Bankshares, Inc. Stockholders’ Equity | |||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest | Total | ||||||||||||||||||
Balances at June 30, 2019 | $ | 94 | $ | 234,963 | $ | 173,180 | $ | 3,178 | $ | 733 | $ | 412,148 | |||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income, three months ended September 30, 2019 | — | — | 13,530 | — | 82 | 13,612 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | 1,498 | — | 1,498 | |||||||||||||||||
Stock-based compensation expense | — | 1,144 | — | — | — | 1,144 | |||||||||||||||||
Exercise of stock options, net | — | 1,200 | — | — | — | 1,200 | |||||||||||||||||
Issuance of common stock | — | 166 | — | — | — | 166 | |||||||||||||||||
Purchase and retirement of common stock | — | (939 | ) | — | — | — | (939 | ) | |||||||||||||||
Distribution to noncontrolling interest | — | — | — | — | (87 | ) | (87 | ) | |||||||||||||||
Balances at September 30, 2019 | $ | 94 | $ | 236,534 | $ | 186,710 | $ | 4,676 | $ | 728 | $ | 428,742 | |||||||||||
Balances at June 30, 2018 | $ | 96 | $ | 254,564 | $ | 122,642 | $ | (6,718 | ) | $ | 701 | $ | 371,285 | ||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income, three months ended September 30, 2018 | — | — | 10,859 | — | 80 | 10,939 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | (1,339 | ) | — | (1,339 | ) | |||||||||||||||
Stock-based compensation expense | — | 1,299 | — | — | — | 1,299 | |||||||||||||||||
Exercise of stock options, net | 1 | 261 | — | — | — | 262 | |||||||||||||||||
Issuance of common stock | — | 59 | — | — | — | 59 | |||||||||||||||||
Purchase and retirement of common stock | (1 | ) | (4,552 | ) | — | — | — | (4,553 | ) | ||||||||||||||
Distribution to noncontrolling interest | — | — | — | — | (49 | ) | (49 | ) | |||||||||||||||
Balances at September 30, 2018 | $ | 96 | $ | 251,631 | $ | 133,501 | $ | (8,057 | ) | $ | 732 | $ | 377,903 | ||||||||||
Balances at December 31, 2018 | $ | 95 | $ | 247,790 | $ | 144,364 | $ | (5,640 | ) | $ | 743 | $ | 387,352 | ||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income, nine months ended September 30, 2019 | — | — | 42,346 | — | 260 | 42,606 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | 10,316 | — | 10,316 | |||||||||||||||||
Stock-based compensation expense | — | 3,643 | — | — | — | 3,643 | |||||||||||||||||
Exercise of stock options, net | 2 | 4,380 | — | — | — | 4,382 | |||||||||||||||||
Issuance of common stock | — | 449 | — | — | — | 449 | |||||||||||||||||
Purchase and retirement of common stock | (3 | ) | (19,728 | ) | — | — | — | (19,731 | ) | ||||||||||||||
Distribution to noncontrolling interest | — | — | — | — | (275 | ) | (275 | ) | |||||||||||||||
Balances at September 30, 2019 | $ | 94 | $ | 236,534 | $ | 186,710 | $ | 4,676 | $ | 728 | $ | 428,742 | |||||||||||
Balances at December 31, 2017 | $ | 98 | $ | 263,835 | $ | 102,391 | $ | (2,146 | ) | $ | 701 | $ | 364,879 | ||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income, nine months ended September 30, 2018 | — | — | 30,173 | — | 230 | 30,403 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | (4,974 | ) | — | (4,974 | ) | |||||||||||||||
Stock-based compensation expense | — | 3,613 | — | — | — | 3,613 | |||||||||||||||||
Exercise of stock options, net | 1 | 1,223 | — | — | — | 1,224 | |||||||||||||||||
Issuance of common stock | — | 167 | — | — | — | 167 | |||||||||||||||||
Purchase and retirement of common stock | (3 | ) | (17,207 | ) | — | — | — | (17,210 | ) | ||||||||||||||
Distribution to noncontrolling interest | — | — | — | — | (199 | ) | (199 | ) | |||||||||||||||
Adoption of new accounting pronouncement | — | — | 937 | (937 | ) | — | — | ||||||||||||||||
Balances at September 30, 2018 | $ | 96 | $ | 251,631 | $ | 133,501 | $ | (8,057 | ) | $ | 732 | $ | 377,903 |
(In thousands) | Nine Months Ended September 30, | ||||||
2019 | 2018 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 42,606 | $ | 30,403 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization, and accretion | 5,260 | 4,643 | |||||
Provision for loan losses | 900 | 1,360 | |||||
Increase in cash surrender value of life insurance | (1,432 | ) | (1,367 | ) | |||
Stock-based compensation expense | 3,643 | 3,613 | |||||
Asset (gains) losses, net | (8,030 | ) | (1,322 | ) | |||
Gain on sale of loans held for sale, net | (7,042 | ) | (4,026 | ) | |||
Proceeds from sale of loans held for sale | 255,775 | 184,314 | |||||
Origination of loans held for sale | (259,465 | ) | (178,911 | ) | |||
Net change in: | |||||||
Accrued interest receivable and other assets | (5,020 | ) | (4,952 | ) | |||
Accrued interest payable and other liabilities | 9,310 | 6,798 | |||||
Net cash provided by (used in) operating activities | 36,505 | 40,553 | |||||
Cash Flows From Investing Activities: | |||||||
Net (increase) decrease in loans | (74,131 | ) | (50,703 | ) | |||
Net (increase) decrease in certificates of deposit in other banks | (4,402 | ) | 751 | ||||
Purchases of securities AFS | (57,875 | ) | (57,891 | ) | |||
Proceeds from sales of securities AFS | 13,240 | — | |||||
Proceeds from calls and maturities of securities AFS | 38,128 | 40,302 | |||||
Purchases of other investments | (1,941 | ) | (634 | ) | |||
Proceeds from sales of other investments | 17,144 | 807 | |||||
Purchases of BOLI | (5,000 | ) | — | ||||
Proceeds from redemption of BOLI | 1,348 | 561 | |||||
Net (increase) decrease in premises and equipment | (3,529 | ) | (2,974 | ) | |||
Net (increase) decrease in other real estate and other assets | 15 | 1,486 | |||||
Net cash provided by (used in) investing activities | (77,003 | ) | (68,295 | ) | |||
Cash Flows From Financing Activities: | |||||||
Net increase (decrease) in deposits | (29,691 | ) | 51,171 | ||||
Repayments of long-term borrowings | (20,193 | ) | (1,189 | ) | |||
Purchase and retirement of common stock | (19,731 | ) | (17,210 | ) | |||
Proceeds from issuance of common stock | 449 | 167 | |||||
Proceeds from exercise of stock options | 4,382 | 1,224 | |||||
Distribution to noncontrolling interest | (275 | ) | (199 | ) | |||
Net cash provided by (used in) financing activities | (65,059 | ) | 33,964 | ||||
Net increase (decrease) in cash and cash equivalents | (105,557 | ) | 6,222 | ||||
Cash and cash equivalents: | |||||||
Beginning | 249,526 | 154,933 | |||||
Ending * | $ | 143,969 | $ | 161,155 | |||
Supplemental Disclosures of Cash Flow Information: | |||||||
Cash paid for interest | $ | 16,682 | $ | 13,294 | |||
Cash paid for taxes | 11,690 | 9,325 | |||||
Transfer of loans and bank premises to other real estate owned | 1,025 | 587 | |||||
Capitalized mortgage servicing rights | 1,807 | 696 | |||||
Initial recognition of operating lease right of use asset | 5,403 | — | |||||
Initial recognition of operating lease liability | 5,403 | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to Nicolet Bankshares, Inc. | $ | 13,530 | $ | 10,859 | $ | 42,346 | $ | 30,173 | |||||||
Weighted average common shares outstanding | 9,347 | 9,633 | 9,394 | 9,679 | |||||||||||
Effect of dilutive common stock awards | 350 | 316 | 313 | 325 | |||||||||||
Diluted weighted average common shares outstanding | 9,697 | 9,949 | 9,707 | 10,004 | |||||||||||
Basic earnings per common share* | $ | 1.45 | $ | 1.13 | $ | 4.51 | $ | 3.12 | |||||||
Diluted earnings per common share* | $ | 1.40 | $ | 1.09 | $ | 4.36 | $ | 3.02 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Dividend yield | — | % | — | % | |||
Expected volatility | 25 | % | 25 | % | |||
Risk-free interest rate | 2.37 | % | 2.48 | % | |||
Expected average life | 7 years | 7 years | |||||
Weighted average per share fair value of options | $ | 19.23 | $ | 17.60 |
Stock Options | Option Shares Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Life (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding - December 31, 2018 | 1,581,699 | $ | 40.77 | ||||||||||
Granted | 15,000 | 59.55 | |||||||||||
Exercise of stock options * | (185,328 | ) | 23.64 | ||||||||||
Forfeited | (3,538 | ) | 27.43 | ||||||||||
Outstanding - September 30, 2019 | 1,407,833 | $ | 43.25 | 7.0 | $ | 32,829 | |||||||
Exercisable - September 30, 2019 | 644,033 | $ | 39.28 | 6.5 | $ | 17,577 |
Restricted Stock | Weighted Average Grant Date Fair Value | Restricted Shares Outstanding | |||||
Outstanding - December 31, 2018 | $ | 39.37 | 29,512 | ||||
Granted | 61.96 | 4,257 | |||||
Vested * | 45.05 | (9,672 | ) | ||||
Forfeited | 16.50 | (408 | ) | ||||
Outstanding - September 30, 2019 | $ | 41.50 | 23,689 |
September 30, 2019 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
U.S. government agency securities | $ | 16,697 | $ | — | $ | 207 | $ | 16,490 | |||||||
State, county and municipals | 147,186 | 798 | 198 | 147,786 | |||||||||||
Mortgage-backed securities | 169,262 | 3,267 | 652 | 171,877 | |||||||||||
Corporate debt securities | 79,749 | 3,408 | 10 | 83,147 | |||||||||||
Total | $ | 412,894 | $ | 7,473 | $ | 1,067 | $ | 419,300 |
December 31, 2018 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
U.S. government agency securities | $ | 22,467 | $ | — | $ | 818 | $ | 21,649 | |||||||
State, county and municipals | 163,702 | 76 | 3,252 | 160,526 | |||||||||||
Mortgage-backed securities | 134,350 | 328 | 3,034 | 131,644 | |||||||||||
Corporate debt securities | 87,352 | 66 | 1,093 | 86,325 | |||||||||||
Total | $ | 407,871 | $ | 470 | $ | 8,197 | $ | 400,144 |
September 30, 2019 | ||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||
($ in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Number of Securities | |||||||||||||||||||
U.S. government agency securities | $ | — | $ | — | $ | 16,490 | $ | 207 | $ | 16,490 | $ | 207 | 3 | |||||||||||||
State, county and municipals | 44,012 | 138 | 8,370 | 60 | 52,382 | 198 | 139 | |||||||||||||||||||
Mortgage-backed securities | 38,515 | 127 | 40,783 | 525 | 79,298 | 652 | 150 | |||||||||||||||||||
Corporate debt securities | 2,044 | 10 | — | — | 2,044 | 10 | 1 | |||||||||||||||||||
Total | $ | 84,571 | $ | 275 | $ | 65,643 | $ | 792 | $ | 150,214 | $ | 1,067 | 293 |
December 31, 2018 | ||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||
($ in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Number of Securities | |||||||||||||||||||
U.S. government agency securities | $ | — | $ | — | $ | 21,649 | $ | 818 | $ | 21,649 | $ | 818 | 3 | |||||||||||||
State, county and municipals | 16,136 | 98 | 130,975 | 3,154 | 147,111 | 3,252 | 440 | |||||||||||||||||||
Mortgage-backed securities | 20,568 | 132 | 89,189 | 2,902 | 109,757 | 3,034 | 204 | |||||||||||||||||||
Corporate debt securities | 51,592 | 677 | 9,757 | 416 | 61,349 | 1,093 | 33 | |||||||||||||||||||
Total | $ | 88,296 | $ | 907 | $ | 251,570 | $ | 7,290 | $ | 339,866 | $ | 8,197 | 680 |
September 30, 2019 | |||||||
(in thousands) | Amortized Cost | Fair Value | |||||
Due in less than one year | $ | 18,762 | $ | 18,770 | |||
Due in one year through five years | 184,588 | 187,185 | |||||
Due after five years through ten years | 33,877 | 34,314 | |||||
Due after ten years | 6,405 | 7,154 | |||||
243,632 | 247,423 | ||||||
Mortgage-backed securities | 169,262 | 171,877 | |||||
Securities AFS | $ | 412,894 | $ | 419,300 |
Nine Months Ended September 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Gross gains | $ | 152 | $ | — | |||
Gross losses | (120 | ) | — | ||||
Gains (losses) on sales of securities AFS, net | $ | 32 | $ | — | |||
Proceeds from sales of securities AFS | $ | 13,240 | $ | — |
September 30, 2019 | December 31, 2018 | ||||||||||||
(in thousands) | Amount | % of Total | Amount | % of Total | |||||||||
Commercial & industrial | $ | 763,742 | 34 | % | $ | 684,920 | 32 | % | |||||
Owner-occupied commercial real estate (“CRE”) | 456,508 | 20 | 441,353 | 20 | |||||||||
Agricultural (“AG”) production | 36,050 | 2 | 35,625 | 2 | |||||||||
AG real estate | 58,591 | 3 | 53,444 | 2 | |||||||||
CRE investment | 336,442 | 15 | 343,652 | 16 | |||||||||
Construction & land development | 61,810 | 3 | 80,599 | 4 | |||||||||
Residential construction | 41,496 | 2 | 30,926 | 1 | |||||||||
Residential first mortgage | 343,400 | 15 | 357,841 | 17 | |||||||||
Residential junior mortgage | 116,179 | 5 | 111,328 | 5 | |||||||||
Retail & other | 28,713 | 1 | 26,493 | 1 | |||||||||
Loans | 2,242,931 | 100 | % | 2,166,181 | 100 | % | |||||||
Less allowance for loan losses (“ALLL”) | 13,620 | 13,153 | |||||||||||
Loans, net | $ | 2,229,311 | $ | 2,153,028 | |||||||||
Allowance for loan losses to loans | 0.61 | % | 0.61 | % |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||
(in thousands) | Originated Amount | % of Total | Acquired Amount | % of Total | Originated Amount | % of Total | Acquired Amount | % of Total | |||||||||||||||||||
Commercial & industrial | $ | 660,040 | 40 | % | $ | 103,702 | 18 | % | $ | 568,100 | 38 | % | $ | 116,820 | 17 | % | |||||||||||
Owner-occupied CRE | 321,323 | 19 | 135,185 | 23 | 283,531 | 19 | 157,822 | 23 | |||||||||||||||||||
AG production | 11,450 | 1 | 24,600 | 4 | 11,113 | 1 | 24,512 | 4 | |||||||||||||||||||
AG real estate | 38,616 | 2 | 19,975 | 3 | 31,374 | 2 | 22,070 | 3 | |||||||||||||||||||
CRE investment | 180,427 | 11 | 156,015 | 26 | 171,087 | 12 | 172,565 | 25 | |||||||||||||||||||
Construction & land development | 52,806 | 3 | 9,004 | 2 | 66,478 | 4 | 14,121 | 2 | |||||||||||||||||||
Residential construction | 41,246 | 3 | 250 | — | 30,926 | 2 | — | — | |||||||||||||||||||
Residential first mortgage | 228,312 | 14 | 115,088 | 19 | 220,368 | 15 | 137,473 | 20 | |||||||||||||||||||
Residential junior mortgage | 89,241 | 5 | 26,938 | 5 | 78,379 | 5 | 32,949 | 5 | |||||||||||||||||||
Retail & other | 27,232 | 2 | 1,481 | — | 23,809 | 2 | 2,684 | 1 | |||||||||||||||||||
Loans | 1,650,693 | 100 | % | 592,238 | 100 | % | 1,485,165 | 100 | % | 681,016 | 100 | % | |||||||||||||||
Less ALLL | 12,064 | 1,556 | 11,448 | 1,705 | |||||||||||||||||||||||
Loans, net | $ | 1,638,629 | $ | 590,682 | $ | 1,473,717 | $ | 679,311 | |||||||||||||||||||
ALLL to loans | 0.73 | % | 0.26 | % | 0.77 | % | 0.25 | % | |||||||||||||||||||
Loans as a percent of total loans | 74 | % | 26 | % | 69 | % | 31 | % |
Nine Months Ended | Year Ended | ||||||||||
(in thousands) | September 30, 2019 | September 30, 2018 | December 31, 2018 | ||||||||
Beginning balance | $ | 13,153 | $ | 12,653 | $ | 12,653 | |||||
Provision for loan losses | 900 | 1,360 | 1,600 | ||||||||
Charge-offs | (629 | ) | (1,110 | ) | (1,213 | ) | |||||
Recoveries | 196 | 89 | 113 | ||||||||
Net (charge-offs) recoveries | (433 | ) | (1,021 | ) | (1,100 | ) | |||||
Ending balance | $ | 13,620 | $ | 12,992 | $ | 13,153 |
TOTAL – Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,271 | $ | 2,847 | $ | 121 | $ | 301 | $ | 1,470 | $ | 510 | $ | 211 | $ | 1,646 | $ | 472 | $ | 304 | $ | 13,153 | |||||||||||||||||||||
Provision | 356 | (57 | ) | 85 | 46 | 32 | (140 | ) | 357 | (75 | ) | 71 | 225 | 900 | |||||||||||||||||||||||||||||
Charge-offs | (59 | ) | (13 | ) | — | — | — | — | (226 | ) | — | (80 | ) | (251 | ) | (629 | ) | ||||||||||||||||||||||||||
Recoveries | 90 | 2 | — | — | — | — | — | 36 | 32 | 36 | 196 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | 31 | (11 | ) | — | — | — | — | (226 | ) | 36 | (48 | ) | (215 | ) | (433 | ) | |||||||||||||||||||||||||||
Ending balance | $ | 5,658 | $ | 2,779 | $ | 206 | $ | 347 | $ | 1,502 | $ | 370 | $ | 342 | $ | 1,607 | $ | 495 | $ | 314 | $ | 13,620 | |||||||||||||||||||||
As % of ALLL | 42 | % | 20 | % | 1 | % | 3 | % | 11 | % | 3 | % | 2 | % | 12 | % | 4 | % | 2 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 308 | $ | — | $ | 119 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 427 | |||||||||||||||||||||
Collectively evaluated | 5,350 | 2,779 | 87 | 347 | 1,502 | 370 | 342 | 1,607 | 495 | 314 | 13,193 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 5,658 | $ | 2,779 | $ | 206 | $ | 347 | $ | 1,502 | $ | 370 | $ | 342 | $ | 1,607 | $ | 495 | $ | 314 | $ | 13,620 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 2,143 | $ | 2,552 | $ | 1,251 | $ | 1,089 | $ | 2,483 | $ | 427 | $ | — | $ | 2,560 | $ | 221 | $ | 12 | $ | 12,738 | |||||||||||||||||||||
Collectively evaluated | 761,599 | 453,956 | 34,799 | 57,502 | 333,959 | 61,383 | 41,496 | 340,840 | 115,958 | 28,701 | 2,230,193 | ||||||||||||||||||||||||||||||||
Total loans | $ | 763,742 | $ | 456,508 | $ | 36,050 | $ | 58,591 | $ | 336,442 | $ | 61,810 | $ | 41,496 | $ | 343,400 | $ | 116,179 | $ | 28,713 | $ | 2,242,931 | |||||||||||||||||||||
Less ALLL | 5,658 | 2,779 | 206 | 347 | 1,502 | 370 | 342 | 1,607 | 495 | 314 | 13,620 | ||||||||||||||||||||||||||||||||
Net loans | $ | 758,084 | $ | 453,729 | $ | 35,844 | $ | 58,244 | $ | 334,940 | $ | 61,440 | $ | 41,154 | $ | 341,793 | $ | 115,684 | $ | 28,399 | $ | 2,229,311 |
Originated – Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 4,683 | $ | 2,439 | $ | 110 | $ | 255 | $ | 1,230 | $ | 431 | $ | 211 | $ | 1,400 | $ | 408 | $ | 281 | $ | 11,448 | |||||||||||||||||||||
Provision | 395 | (17 | ) | 84 | 45 | 68 | (111 | ) | 323 | (42 | ) | 22 | 227 | 994 | |||||||||||||||||||||||||||||
Charge-offs | (59 | ) | (13 | ) | — | — | — | — | (226 | ) | — | (20 | ) | (251 | ) | (569 | ) | ||||||||||||||||||||||||||
Recoveries | 90 | 2 | — | — | — | — | — | 36 | 27 | 36 | 191 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | 31 | (11 | ) | — | — | — | — | (226 | ) | 36 | 7 | (215 | ) | (378 | ) | ||||||||||||||||||||||||||||
Ending balance | $ | 5,109 | $ | 2,411 | $ | 194 | $ | 300 | $ | 1,298 | $ | 320 | $ | 308 | $ | 1,394 | $ | 437 | $ | 293 | $ | 12,064 | |||||||||||||||||||||
As % of ALLL | 42 | % | 20 | % | 1 | % | 2 | % | 11 | % | 3 | % | 3 | % | 12 | % | 4 | % | 2 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 308 | $ | — | $ | 119 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 427 | |||||||||||||||||||||
Collectively evaluated | 4,801 | 2,411 | 75 | 300 | 1,298 | 320 | 308 | 1,394 | 437 | 293 | 11,637 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 5,109 | $ | 2,411 | $ | 194 | $ | 300 | $ | 1,298 | $ | 320 | $ | 308 | $ | 1,394 | $ | 437 | $ | 293 | $ | 12,064 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 722 | $ | 1,792 | $ | 1,095 | $ | 878 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 4,487 | |||||||||||||||||||||
Collectively evaluated | 659,318 | 319,531 | 10,355 | 37,738 | 180,427 | 52,806 | 41,246 | 228,312 | 89,241 | 27,232 | 1,646,206 | ||||||||||||||||||||||||||||||||
Total loans | $ | 660,040 | $ | 321,323 | $ | 11,450 | $ | 38,616 | $ | 180,427 | $ | 52,806 | $ | 41,246 | $ | 228,312 | $ | 89,241 | $ | 27,232 | $ | 1,650,693 | |||||||||||||||||||||
Less ALLL | 5,109 | 2,411 | 194 | 300 | 1,298 | 320 | 308 | 1,394 | 437 | 293 | 12,064 | ||||||||||||||||||||||||||||||||
Net loans | $ | 654,931 | $ | 318,912 | $ | 11,256 | $ | 38,316 | $ | 179,129 | $ | 52,486 | $ | 40,938 | $ | 226,918 | $ | 88,804 | $ | 26,939 | $ | 1,638,629 |
Acquired – Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 588 | $ | 408 | $ | 11 | $ | 46 | $ | 240 | $ | 79 | $ | — | $ | 246 | $ | 64 | $ | 23 | $ | 1,705 | |||||||||||||||||||||
Provision | (39 | ) | (40 | ) | 1 | 1 | (36 | ) | (29 | ) | 34 | (33 | ) | 49 | (2 | ) | (94 | ) | |||||||||||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | (60 | ) | — | (60 | ) | ||||||||||||||||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | 5 | — | 5 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | — | — | — | — | — | — | — | — | (55 | ) | — | (55 | ) | ||||||||||||||||||||||||||||||
Ending balance | $ | 549 | $ | 368 | $ | 12 | $ | 47 | $ | 204 | $ | 50 | $ | 34 | $ | 213 | $ | 58 | $ | 21 | $ | 1,556 | |||||||||||||||||||||
As % of ALLL | 35 | % | 24 | % | 1 | % | 3 | % | 13 | % | 3 | % | 2 | % | 14 | % | 4 | % | 1 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Collectively evaluated | 549 | 368 | 12 | 47 | 204 | 50 | 34 | 213 | 58 | 21 | 1,556 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 549 | $ | 368 | $ | 12 | $ | 47 | $ | 204 | $ | 50 | $ | 34 | $ | 213 | $ | 58 | $ | 21 | $ | 1,556 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 1,421 | $ | 760 | $ | 156 | $ | 211 | $ | 2,483 | $ | 427 | $ | — | $ | 2,560 | $ | 221 | $ | 12 | $ | 8,251 | |||||||||||||||||||||
Collectively evaluated | 102,281 | 134,425 | 24,444 | 19,764 | 153,532 | 8,577 | 250 | 112,528 | 26,717 | 1,469 | 583,987 | ||||||||||||||||||||||||||||||||
Total loans | $ | 103,702 | $ | 135,185 | $ | 24,600 | $ | 19,975 | $ | 156,015 | $ | 9,004 | $ | 250 | $ | 115,088 | $ | 26,938 | $ | 1,481 | $ | 592,238 | |||||||||||||||||||||
Less ALLL | 549 | 368 | 12 | 47 | 204 | 50 | 34 | 213 | 58 | 21 | 1,556 | ||||||||||||||||||||||||||||||||
Net loans | $ | 103,153 | $ | 134,817 | $ | 24,588 | $ | 19,928 | $ | 155,811 | $ | 8,954 | $ | 216 | $ | 114,875 | $ | 26,880 | $ | 1,460 | $ | 590,682 |
TOTAL – Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 4,934 | $ | 2,607 | $ | 129 | $ | 296 | $ | 1,388 | $ | 726 | $ | 251 | $ | 1,609 | $ | 488 | $ | 225 | $ | 12,653 | |||||||||||||||||||||
Provision | 1,107 | 300 | (8 | ) | 5 | 119 | (216 | ) | (40 | ) | 117 | (51 | ) | 267 | 1,600 | ||||||||||||||||||||||||||||
Charge-offs | (813 | ) | (74 | ) | — | — | (37 | ) | — | — | (85 | ) | — | (204 | ) | (1,213 | ) | ||||||||||||||||||||||||||
Recoveries | 43 | 14 | — | — | — | — | — | 5 | 35 | 16 | 113 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (770 | ) | (60 | ) | — | — | (37 | ) | — | — | (80 | ) | 35 | (188 | ) | (1,100 | ) | ||||||||||||||||||||||||||
Ending balance | $ | 5,271 | $ | 2,847 | $ | 121 | $ | 301 | $ | 1,470 | $ | 510 | $ | 211 | $ | 1,646 | $ | 472 | $ | 304 | $ | 13,153 | |||||||||||||||||||||
As % of ALLL | 40 | % | 22 | % | 1 | % | 2 | % | 11 | % | 4 | % | 2 | % | 12 | % | 4 | % | 2 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Collectively evaluated | 5,271 | 2,847 | 121 | 301 | 1,470 | 510 | 211 | 1,646 | 472 | 304 | 13,153 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 5,271 | $ | 2,847 | $ | 121 | $ | 301 | $ | 1,470 | $ | 510 | $ | 211 | $ | 1,646 | $ | 472 | $ | 304 | $ | 13,153 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 2,927 | $ | 1,506 | $ | — | $ | 222 | $ | 1,686 | $ | 603 | $ | — | $ | 2,750 | $ | 233 | $ | 12 | $ | 9,939 | |||||||||||||||||||||
Collectively evaluated | 681,993 | 439,847 | 35,625 | 53,222 | 341,966 | 79,996 | 30,926 | 355,091 | 111,095 | 26,481 | 2,156,242 | ||||||||||||||||||||||||||||||||
Total loans | $ | 684,920 | $ | 441,353 | $ | 35,625 | $ | 53,444 | $ | 343,652 | $ | 80,599 | $ | 30,926 | $ | 357,841 | $ | 111,328 | $ | 26,493 | $ | 2,166,181 | |||||||||||||||||||||
Less ALLL | 5,271 | 2,847 | 121 | 301 | 1,470 | 510 | 211 | 1,646 | 472 | 304 | 13,153 | ||||||||||||||||||||||||||||||||
Net loans | $ | 679,649 | $ | 438,506 | $ | 35,504 | $ | 53,143 | $ | 342,182 | $ | 80,089 | $ | 30,715 | $ | 356,195 | $ | 110,856 | $ | 26,189 | $ | 2,153,028 |
Originated – Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 4,192 | $ | 2,115 | $ | 112 | $ | 235 | $ | 1,154 | $ | 628 | $ | 200 | $ | 1,297 | $ | 409 | $ | 200 | $ | 10,542 | |||||||||||||||||||||
Provision | 1,262 | 385 | (2 | ) | 20 | 113 | (197 | ) | 11 | 187 | (31 | ) | 266 | 2,014 | |||||||||||||||||||||||||||||
Charge-offs | (813 | ) | (64 | ) | — | — | (37 | ) | — | — | (85 | ) | — | (201 | ) | (1,200 | ) | ||||||||||||||||||||||||||
Recoveries | 42 | 3 | — | — | — | — | — | 1 | 30 | 16 | 92 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (771 | ) | (61 | ) | — | — | (37 | ) | — | — | (84 | ) | 30 | (185 | ) | (1,108 | ) | ||||||||||||||||||||||||||
Ending balance | $ | 4,683 | $ | 2,439 | $ | 110 | $ | 255 | $ | 1,230 | $ | 431 | $ | 211 | $ | 1,400 | $ | 408 | $ | 281 | $ | 11,448 | |||||||||||||||||||||
As % of ALLL | 41 | % | 21 | % | 1 | % | 2 | % | 11 | % | 4 | % | 2 | % | 12 | % | 4 | % | 2 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Collectively evaluated | 4,683 | 2,439 | 110 | 255 | 1,230 | 431 | 211 | 1,400 | 408 | 281 | 11,448 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 4,683 | $ | 2,439 | $ | 110 | $ | 255 | $ | 1,230 | $ | 431 | $ | 211 | $ | 1,400 | $ | 408 | $ | 281 | $ | 11,448 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 227 | $ | 321 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 548 | |||||||||||||||||||||
Collectively evaluated | 567,873 | 283,210 | 11,113 | 31,374 | 171,087 | 66,478 | 30,926 | 220,368 | 78,379 | 23,809 | 1,484,617 | ||||||||||||||||||||||||||||||||
Total loans | $ | 568,100 | $ | 283,531 | $ | 11,113 | $ | 31,374 | $ | 171,087 | $ | 66,478 | $ | 30,926 | $ | 220,368 | $ | 78,379 | $ | 23,809 | $ | 1,485,165 | |||||||||||||||||||||
Less ALLL | 4,683 | 2,439 | 110 | 255 | 1,230 | 431 | 211 | 1,400 | 408 | 281 | 11,448 | ||||||||||||||||||||||||||||||||
Net loans | $ | 563,417 | $ | 281,092 | $ | 11,003 | $ | 31,119 | $ | 169,857 | $ | 66,047 | $ | 30,715 | $ | 218,968 | $ | 77,971 | $ | 23,528 | $ | 1,473,717 |
Acquired – Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Commercial & industrial | Owner- occupied CRE | AG production | AG real estate | CRE investment | Construction & land development | Residential construction | Residential first mortgage | Residential junior mortgage | Retail & other | Total | ||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 742 | $ | 492 | $ | 17 | $ | 61 | $ | 234 | $ | 98 | $ | 51 | $ | 312 | $ | 79 | $ | 25 | $ | 2,111 | |||||||||||||||||||||
Provision | (155 | ) | (85 | ) | (6 | ) | (15 | ) | 6 | (19 | ) | (51 | ) | (70 | ) | (20 | ) | 1 | (414 | ) | |||||||||||||||||||||||
Charge-offs | — | (10 | ) | — | — | — | — | — | — | — | (3 | ) | (13 | ) | |||||||||||||||||||||||||||||
Recoveries | 1 | 11 | — | — | — | — | — | 4 | 5 | — | 21 | ||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | 1 | 1 | — | — | — | — | — | 4 | 5 | (3 | ) | 8 | |||||||||||||||||||||||||||||||
Ending balance | $ | 588 | $ | 408 | $ | 11 | $ | 46 | $ | 240 | $ | 79 | $ | — | $ | 246 | $ | 64 | $ | 23 | $ | 1,705 | |||||||||||||||||||||
As % of ALLL | 34 | % | 24 | % | 1 | % | 3 | % | 14 | % | 5 | % | — | % | 14 | % | 4 | % | 1 | % | 100 | % | |||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Collectively evaluated | 588 | 408 | 11 | 46 | 240 | 79 | — | 246 | 64 | 23 | 1,705 | ||||||||||||||||||||||||||||||||
Ending balance | $ | 588 | $ | 408 | $ | 11 | $ | 46 | $ | 240 | $ | 79 | $ | — | $ | 246 | $ | 64 | $ | 23 | $ | 1,705 | |||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||
Individually evaluated | $ | 2,700 | $ | 1,185 | $ | — | $ | 222 | $ | 1,686 | $ | 603 | $ | — | $ | 2,750 | $ | 233 | $ | 12 | $ | 9,391 | |||||||||||||||||||||
Collectively evaluated | 114,120 | 156,637 | 24,512 | 21,848 | 170,879 | 13,518 | — | 134,723 | 32,716 | 2,672 | 671,625 | ||||||||||||||||||||||||||||||||
Total loans | $ | 116,820 | $ | 157,822 | $ | 24,512 | $ | 22,070 | $ | 172,565 | $ | 14,121 | $ | — | $ | 137,473 | $ | 32,949 | $ | 2,684 | $ | 681,016 | |||||||||||||||||||||
Less ALLL | 588 | 408 | 11 | 46 | 240 | 79 | — | 246 | 64 | 23 | 1,705 | ||||||||||||||||||||||||||||||||
Net loans | $ | 116,232 | $ | 157,414 | $ | 24,501 | $ | 22,024 | $ | 172,325 | $ | 14,042 | $ | — | $ | 137,227 | $ | 32,885 | $ | 2,661 | $ | 679,311 |
Total Nonaccrual Loans | |||||||||||||
(in thousands) | September 30, 2019 | % of Total | December 31, 2018 | % of Total | |||||||||
Commercial & industrial | $ | 2,279 | 25 | % | $ | 2,816 | 52 | % | |||||
Owner-occupied CRE | 2,302 | 25 | 673 | 12 | |||||||||
AG production | 1,251 | 14 | — | — | |||||||||
AG real estate | 846 | 9 | 164 | 3 | |||||||||
CRE investment | 1,111 | 12 | 210 | 4 | |||||||||
Construction & land development | — | — | 80 | 1 | |||||||||
Residential construction | — | — | 1 | — | |||||||||
Residential first mortgage | 865 | 9 | 1,265 | 23 | |||||||||
Residential junior mortgage | 576 | 6 | 262 | 5 | |||||||||
Retail & other | 8 | — | — | — | |||||||||
Nonaccrual loans | $ | 9,238 | 100 | % | $ | 5,471 | 100 | % | |||||
Percent of total loans | 0.4 | % | 0.2 | % |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||
(in thousands) | Originated Amount | % of Total | Acquired Amount | % of Total | Originated Amount | % of Total | Acquired Amount | % of Total | |||||||||||||||||||
Commercial & industrial | $ | 833 | 16 | % | $ | 1,446 | 35 | % | $ | 352 | 25 | % | $ | 2,464 | 61 | % | |||||||||||
Owner-occupied CRE | 1,792 | 35 | 510 | 12 | 362 | 26 | 311 | 8 | |||||||||||||||||||
AG production | 1,095 | 22 | 156 | 4 | — | — | — | — | |||||||||||||||||||
AG real estate | 635 | 13 | 211 | 5 | — | — | 164 | 4 | |||||||||||||||||||
CRE investment | — | — | 1,111 | 27 | — | — | 210 | 5 | |||||||||||||||||||
Construction & land development | — | — | — | — | — | — | 80 | 2 | |||||||||||||||||||
Residential construction | — | — | — | — | 1 | — | — | — | |||||||||||||||||||
Residential first mortgage | 458 | 9 | 407 | 10 | 629 | 45 | 636 | 15 | |||||||||||||||||||
Residential junior mortgage | 263 | 5 | 313 | 7 | 65 | 4 | 197 | 5 | |||||||||||||||||||
Retail & other | — | — | 8 | — | — | — | — | — | |||||||||||||||||||
Nonaccrual loans | $ | 5,076 | 100 | % | $ | 4,162 | 100 | % | $ | 1,409 | 100 | % | $ | 4,062 | 100 | % | |||||||||||
Percent of nonaccrual loans | 55 | % | 45 | % | 26 | % | 74 | % |
September 30, 2019 | |||||||||||||||
(in thousands) | 30-89 Days Past Due (accruing) | 90 Days & Over or nonaccrual | Current | Total | |||||||||||
Commercial & industrial | $ | 215 | $ | 2,279 | $ | 761,248 | $ | 763,742 | |||||||
Owner-occupied CRE | — | 2,302 | 454,206 | 456,508 | |||||||||||
AG production | — | 1,251 | 34,799 | 36,050 | |||||||||||
AG real estate | — | 846 | 57,745 | 58,591 | |||||||||||
CRE investment | — | 1,111 | 335,331 | 336,442 | |||||||||||
Construction & land development | — | — | 61,810 | 61,810 | |||||||||||
Residential construction | — | — | 41,496 | 41,496 | |||||||||||
Residential first mortgage | 319 | 865 | 342,216 | 343,400 | |||||||||||
Residential junior mortgage | 283 | 576 | 115,320 | 116,179 | |||||||||||
Retail & other | 124 | 8 | 28,581 | 28,713 | |||||||||||
Total loans | $ | 941 | $ | 9,238 | $ | 2,232,752 | $ | 2,242,931 | |||||||
Percent of total loans | — | % | 0.4 | % | 99.6 | % | 100.0 | % |
December 31, 2018 | |||||||||||||||
(in thousands) | 30-89 Days Past Due (accruing) | 90 Days & Over or nonaccrual | Current | Total | |||||||||||
Commercial & industrial | $ | — | $ | 2,816 | $ | 682,104 | $ | 684,920 | |||||||
Owner-occupied CRE | 557 | 673 | 440,123 | 441,353 | |||||||||||
AG production | 19 | — | 35,606 | 35,625 | |||||||||||
AG real estate | 35 | 164 | 53,245 | 53,444 | |||||||||||
CRE investment | 180 | 210 | 343,262 | 343,652 | |||||||||||
Construction & land development | — | 80 | 80,519 | 80,599 | |||||||||||
Residential construction | — | 1 | 30,925 | 30,926 | |||||||||||
Residential first mortgage | 758 | 1,265 | 355,818 | 357,841 | |||||||||||
Residential junior mortgage | 12 | 262 | 111,054 | 111,328 | |||||||||||
Retail & other | 10 | — | 26,483 | 26,493 | |||||||||||
Total loans | $ | 1,571 | $ | 5,471 | $ | 2,159,139 | $ | 2,166,181 | |||||||
Percent of total loans | 0.1 | % | 0.2 | % | 99.7 | % | 100.0 | % |
September 30, 2019 | |||||||||||||||||||||||||||
(in thousands) | Grades 1- 4 | Grade 5 | Grade 6 | Grade 7 | Grade 8 | Grade 9 | Total | ||||||||||||||||||||
Commercial & industrial | $ | 725,484 | $ | 22,299 | $ | 2,076 | $ | 13,883 | $ | — | $ | — | $ | 763,742 | |||||||||||||
Owner-occupied CRE | 428,332 | 15,110 | 963 | 12,103 | — | — | 456,508 | ||||||||||||||||||||
AG production | 27,350 | 4,044 | 1,669 | 2,987 | — | — | 36,050 | ||||||||||||||||||||
AG real estate | 48,740 | 4,077 | 2,344 | 3,430 | — | — | 58,591 | ||||||||||||||||||||
CRE investment | 332,078 | 2,345 | 908 | 1,111 | — | — | 336,442 | ||||||||||||||||||||
Construction & land development | 61,794 | — | 16 | — | — | — | 61,810 | ||||||||||||||||||||
Residential construction | 41,496 | — | — | — | — | — | 41,496 | ||||||||||||||||||||
Residential first mortgage | 338,627 | 1,664 | 1,193 | 1,916 | — | — | 343,400 | ||||||||||||||||||||
Residential junior mortgage | 115,595 | — | — | 584 | — | — | 116,179 | ||||||||||||||||||||
Retail & other | 28,705 | — | — | 8 | — | — | 28,713 | ||||||||||||||||||||
Total loans | $ | 2,148,201 | $ | 49,539 | $ | 9,169 | $ | 36,022 | $ | — | $ | — | $ | 2,242,931 | |||||||||||||
Percent of total | 95.8 | % | 2.2 | % | 0.4 | % | 1.6 | % | — | — | 100.0 | % |
December 31, 2018 | |||||||||||||||||||||||||||
(in thousands) | Grades 1- 4 | Grade 5 | Grade 6 | Grade 7 | Grade 8 | Grade 9 | Total | ||||||||||||||||||||
Commercial & industrial | $ | 649,475 | $ | 16,145 | $ | 6,178 | $ | 13,122 | $ | — | $ | — | $ | 684,920 | |||||||||||||
Owner-occupied CRE | 405,198 | 22,776 | 6,569 | 6,810 | — | — | 441,353 | ||||||||||||||||||||
AG production | 29,363 | 3,302 | 2,351 | 609 | — | — | 35,625 | ||||||||||||||||||||
AG real estate | 46,248 | 3,246 | 2,983 | 967 | — | — | 53,444 | ||||||||||||||||||||
CRE investment | 334,080 | 6,792 | — | 2,780 | — | — | 343,652 | ||||||||||||||||||||
Construction & land development | 75,365 | 5,138 | 16 | 80 | — | — | 80,599 | ||||||||||||||||||||
Residential construction | 30,926 | — | — | — | — | — | 30,926 | ||||||||||||||||||||
Residential first mortgage | 353,239 | 1,406 | 510 | 2,686 | — | — | 357,841 | ||||||||||||||||||||
Residential junior mortgage | 111,037 | 17 | — | 274 | — | — | 111,328 | ||||||||||||||||||||
Retail & other | 26,493 | — | — | — | — | — | 26,493 | ||||||||||||||||||||
Total loans | $ | 2,061,424 | $ | 58,822 | $ | 18,607 | $ | 27,328 | $ | — | $ | — | $ | 2,166,181 | |||||||||||||
Percent of total | 95.1 | % | 2.7 | % | 0.9 | % | 1.3 | % | — | — | 100.0 | % |
Total Impaired Loans – September 30, 2019 | |||||||||||||||||||
(in thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||
Commercial & industrial | $ | 2,143 | $ | 4,271 | $ | 308 | $ | 2,807 | $ | 739 | |||||||||
Owner-occupied CRE | 2,552 | 2,930 | — | 2,742 | 170 | ||||||||||||||
AG production | 1,251 | 1,263 | 119 | 1,295 | 12 | ||||||||||||||
AG real estate | 1,089 | 1,091 | — | 1,098 | 2 | ||||||||||||||
CRE investment | 2,483 | 2,490 | — | 2,524 | 8 | ||||||||||||||
Construction & land development | 427 | 427 | — | 480 | — | ||||||||||||||
Residential construction | — | — | — | — | — | ||||||||||||||
Residential first mortgage | 2,560 | 2,785 | — | 2,611 | 97 | ||||||||||||||
Residential junior mortgage | 221 | 231 | — | 225 | 2 | ||||||||||||||
Retail & other | 12 | 15 | — | 12 | 3 | ||||||||||||||
Total | $ | 12,738 | $ | 15,503 | $ | 427 | $ | 13,794 | $ | 1,033 | |||||||||
Originated impaired loans | $ | 4,487 | $ | 4,707 | $ | 427 | $ | 4,649 | $ | 176 | |||||||||
Acquired impaired loans | 8,251 | 10,796 | — | 9,145 | 857 | ||||||||||||||
Total | $ | 12,738 | $ | 15,503 | $ | 427 | $ | 13,794 | $ | 1,033 |
Total Impaired Loans – December 31, 2018 | |||||||||||||||||||
(in thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||
Commercial & industrial | $ | 2,927 | $ | 6,736 | $ | — | $ | 4,041 | $ | 660 | |||||||||
Owner-occupied CRE | 1,506 | 1,833 | — | 1,659 | 137 | ||||||||||||||
AG production | — | — | — | — | — | ||||||||||||||
AG real estate | 222 | 281 | — | 238 | 26 | ||||||||||||||
CRE investment | 1,686 | 2,484 | — | 1,606 | 163 | ||||||||||||||
Construction & land development | 603 | 1,506 | — | 603 | 21 | ||||||||||||||
Residential construction | — | — | — | — | — | ||||||||||||||
Residential first mortgage | 2,750 | 2,907 | — | 2,478 | 176 | ||||||||||||||
Residential junior mortgage | 233 | 262 | — | 62 | 15 | ||||||||||||||
Retail & other | 12 | 12 | — | 12 | 1 | ||||||||||||||
Total | $ | 9,939 | $ | 16,021 | $ | — | $ | 10,699 | $ | 1,199 | |||||||||
Originated impaired loans | $ | 548 | $ | 548 | $ | — | $ | 899 | $ | 154 | |||||||||
Acquired impaired loans | 9,391 | 15,473 | — | 9,800 | 1,045 | ||||||||||||||
Total | $ | 9,939 | $ | 16,021 | $ | — | $ | 10,699 | $ | 1,199 |
Nonaccretable discount on purchased credit impaired loans: | Nine Months Ended | Year Ended | |||||||||
(in thousands) | September 30, 2019 | September 30, 2018 | December 31, 2018 | ||||||||
Balance at beginning of period | $ | 6,408 | $ | 9,471 | $ | 9,471 | |||||
Accretion to loan interest income | (3,293 | ) | (1,872 | ) | (1,976 | ) | |||||
Transferred to accretable | — | (513 | ) | (990 | ) | ||||||
Disposals of loans | (660 | ) | (97 | ) | (97 | ) | |||||
Balance at end of period | $ | 2,455 | $ | 6,989 | $ | 6,408 |
Nine Months Ended | Year Ended | ||||||
(in thousands) | September 30, 2019 | December 31, 2018 | |||||
Goodwill | $ | 107,366 | $ | 107,366 | |||
Core deposit intangibles | 10,006 | 12,562 | |||||
Customer list intangibles | 3,999 | 4,379 | |||||
Other intangibles | 14,005 | 16,941 | |||||
Goodwill and other intangibles, net | $ | 121,371 | $ | 124,307 |
Nine Months Ended | Year Ended | ||||||
(in thousands) | September 30, 2019 | December 31, 2018 | |||||
Core deposit intangibles: | |||||||
Gross carrying amount | $ | 29,015 | $ | 29,015 | |||
Accumulated amortization | (19,009 | ) | (16,453 | ) | |||
Net book value | $ | 10,006 | $ | 12,562 | |||
Additions during the period | $ | — | $ | — | |||
Amortization during the period | $ | 2,556 | $ | 3,915 | |||
Customer list intangibles: | |||||||
Gross carrying amount | $ | 5,523 | $ | 5,523 | |||
Accumulated amortization | (1,524 | ) | (1,144 | ) | |||
Net book value | $ | 3,999 | $ | 4,379 | |||
Additions during the period | $ | — | $ | 290 | |||
Amortization during the period | $ | 380 | $ | 474 |
Nine Months Ended | Year Ended | ||||||
(in thousands) | September 30, 2019 | December 31, 2018 | |||||
Mortgage servicing rights ("MSR") asset: | |||||||
MSR asset at beginning of year | $ | 3,749 | $ | 3,187 | |||
Capitalized MSR | 1,807 | 1,203 | |||||
Amortization during the period | (611 | ) | (641 | ) | |||
MSR asset at end of period | $ | 4,945 | $ | 3,749 | |||
Fair value of MSR asset at end of period | $ | 6,960 | $ | 6,347 | |||
Residential mortgage loans serviced for others | $ | 721,569 | $ | 603,446 | |||
Net book value of MSR asset to loans serviced for others | 0.69 | % | 0.62 | % |
(in thousands) | Core deposit intangibles | Customer list intangibles | MSR asset | ||||||||
Year ending December 31, | |||||||||||
2019 (remaining three months) | $ | 781 | $ | 127 | $ | 224 | |||||
2020 | 2,657 | 507 | 879 | ||||||||
2021 | 2,167 | 507 | 730 | ||||||||
2022 | 1,735 | 507 | 730 | ||||||||
2023 | 1,273 | 483 | 658 | ||||||||
2024 | 841 | 449 | 400 | ||||||||
Thereafter | 552 | 1,419 | 1,324 | ||||||||
Total | $ | 10,006 | $ | 3,999 | $ | 4,945 |
(in thousands) | September 30, 2019 | December 31, 2018 | |||||
FHLB advances | $ | 15,056 | $ | 35,252 | |||
Junior subordinated debentures | 30,455 | 30,096 | |||||
Subordinated notes | 11,984 | 11,957 | |||||
Total long-term borrowings | $ | 57,495 | $ | 77,305 | |||
Percent of fixed rate long-term borrowings | 58 | % | 69 | % | |||
Percent of floating rate long-term borrowings | 42 | % | 31 | % |
Junior Subordinated Debentures | ||||||||||||||||||
9/30/2019 | 9/30/2019 | 12/31/18 | ||||||||||||||||
(in thousands) | Maturity Date | Par | Unamortized Discount | Carrying Value | Carrying Value | |||||||||||||
2004 Nicolet Bankshares Statutory Trust (1) | 7/15/2034 | $ | 6,186 | $ | — | $ | 6,186 | $ | 6,186 | |||||||||
2005 Mid-Wisconsin Financial Services, Inc. (2) | 12/15/2035 | 10,310 | (3,222 | ) | 7,088 | 6,939 | ||||||||||||
2006 Baylake Corp. (3) | 9/30/2036 | 16,598 | (3,942 | ) | 12,656 | 12,478 | ||||||||||||
2004 First Menasha Bancshares, Inc. (4) | 3/17/2034 | 5,155 | (630 | ) | 4,525 | 4,493 | ||||||||||||
Total | $ | 38,249 | $ | (7,794 | ) | $ | 30,455 | $ | 30,096 |
(1) | The interest rate is 8.00% fixed. |
(2) | The debentures, assumed in April 2013 as the result of an acquisition, have a floating rate of the three-month LIBOR plus 1.43%, adjusted quarterly. The interest rates were 3.55% and 4.22% as of September 30, 2019 and December 31, 2018, respectively. |
(3) | The debentures, assumed in April 2016 as a result of an acquisition, have a floating rate of the three-month LIBOR plus 1.35%, adjusted quarterly. The interest rates were 3.45% and 4.15% as of September 30, 2019 and December 31, 2018, respectively. |
(4) | The debentures, assumed in April 2017 as the result of an acquisition, have a floating rate of the three-month LIBOR plus 2.79%, adjusted quarterly. The interest rates were 4.93% and 5.58% as of September 30, 2019 and December 31, 2018, respectively. |
• | Level 1 – quoted market prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date |
• | Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly |
• | Level 3 – significant unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity |
(in thousands) | Fair Value Measurements Using | |||||||||||||||
Measured at Fair Value on a Recurring Basis: | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
September 30, 2019 | ||||||||||||||||
U.S. government agency securities | $ | 16,490 | $ | — | $ | 16,490 | $ | — | ||||||||
State, county and municipals | 147,786 | — | 147,786 | — | ||||||||||||
Mortgage-backed securities | 171,877 | — | 171,877 | — | ||||||||||||
Corporate debt securities | 83,147 | — | 80,317 | 2,830 | ||||||||||||
Securities AFS | $ | 419,300 | $ | — | $ | 416,470 | $ | 2,830 | ||||||||
Other investments (equity securities) | $ | 4,080 | $ | 4,080 | $ | — | $ | — | ||||||||
December 31, 2018 | ||||||||||||||||
U.S. government agency securities | $ | 21,649 | $ | — | $ | 21,649 | $ | — | ||||||||
State, county and municipals | 160,526 | — | 160,460 | 66 | ||||||||||||
Mortgage-backed securities | 131,644 | — | 131,644 | — | ||||||||||||
Corporate debt securities | 86,325 | — | 77,901 | 8,424 | ||||||||||||
Securities AFS | $ | 400,144 | $ | — | $ | 391,654 | $ | 8,490 | ||||||||
Other investments (equity securities) | $ | 2,650 | $ | 2,650 | $ | — | $ | — |
(in thousands) | Nine Months Ended | Year Ended | ||||||
Level 3 Fair Value Measurements: | September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of year | $ | 8,490 | $ | 9,151 | ||||
Paydowns/Sales/Settlements | (5,660 | ) | (661 | ) | ||||
Balance at end of period | $ | 2,830 | $ | 8,490 |
(in thousands) | Fair Value Measurements Using | |||||||||||||||
Measured at Fair Value on a Nonrecurring Basis: | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
September 30, 2019 | ||||||||||||||||
Impaired loans | $ | 12,311 | $ | — | $ | — | $ | 12,311 | ||||||||
Other real estate owned (“OREO”) | 1,325 | — | — | 1,325 | ||||||||||||
MSR asset | 6,960 | — | — | 6,960 | ||||||||||||
December 31, 2018 | ||||||||||||||||
Impaired loans | $ | 9,939 | $ | — | $ | — | $ | 9,939 | ||||||||
OREO | 420 | — | — | 420 | ||||||||||||
MSR asset | 6,347 | — | — | 6,347 |
September 30, 2019 | ||||||||||||||||||||
(in thousands) | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 143,969 | $ | 143,969 | $ | 143,969 | $ | — | $ | — | ||||||||||
Certificates of deposit in other banks | 5,395 | 5,390 | — | 5,390 | — | |||||||||||||||
Securities AFS | 419,300 | 419,300 | — | 416,470 | 2,830 | |||||||||||||||
Other investments, including equity securities | 20,697 | 20,697 | 4,080 | 13,259 | 3,358 | |||||||||||||||
Loans held for sale | 10,564 | 10,710 | — | 10,710 | — | |||||||||||||||
Loans, net | 2,229,311 | 2,244,410 | — | — | 2,244,410 | |||||||||||||||
BOLI | 71,796 | 71,796 | 71,796 | — | — | |||||||||||||||
MSR asset | 4,945 | 6,960 | — | — | 6,960 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 2,584,447 | $ | 2,584,662 | $ | — | $ | — | $ | 2,584,662 | ||||||||||
Long-term borrowings | 57,495 | 56,679 | — | 15,135 | 41,544 |
December 31, 2018 | ||||||||||||||||||||
(in thousands) | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 249,526 | $ | 249,526 | $ | 249,526 | $ | — | $ | — | ||||||||||
Certificates of deposit in other banks | 993 | 993 | — | 993 | — | |||||||||||||||
Securities AFS | 400,144 | 400,144 | — | 391,654 | 8,490 | |||||||||||||||
Other investments, including equity securities | 17,997 | 17,997 | 2,650 | 13,189 | 2,158 | |||||||||||||||
Loans held for sale | 1,639 | 1,662 | — | 1,662 | — | |||||||||||||||
Loans, net | 2,153,028 | 2,139,322 | — | — | 2,139,322 | |||||||||||||||
BOLI | 66,310 | 66,310 | 66,310 | — | — | |||||||||||||||
MSR asset | 3,749 | 6,347 | — | — | 6,347 | |||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits | $ | 2,614,138 | $ | 2,614,995 | $ | — | $ | — | $ | 2,614,995 | ||||||||||
Long-term borrowings | 77,305 | 75,923 | — | 34,907 | 41,016 |
Nine Months Ended | |||
($ in thousands) | September 30, 2019 | ||
Net lease cost: | |||
Operating lease cost | $ | 737 | |
Variable lease cost | 179 | ||
Net lease cost | $ | 916 | |
Selected other operating lease information: | |||
Weighted average remaining lease term (years) | 5 | ||
Weighted average discount rate | 2.5 | % |
(in thousands) | |||
Year ending December 31, | |||
2019 (remaining three months) | $ | 951 | |
2020 | 1,037 | ||
2021 | 911 | ||
2022 | 851 | ||
2023 | 607 | ||
2024 | 499 | ||
Thereafter | 16 | ||
Total future minimum lease payments | 4,872 | ||
Less: amount representing interest | (122 | ) | |
Present value of net future minimum lease payments | $ | 4,750 |
• | operating, legal and regulatory risks, including the effects of legislative or regulatory developments affecting the financial industry generally or Nicolet specifically; |
• | economic, market, political and competitive forces affecting Nicolet’s banking and wealth management businesses; |
• | changes in interest rates, monetary policy and general economic conditions, which may impact Nicolet’s net interest income; |
• | potential difficulties in integrating the operations of Nicolet with those of Choice following the merger; |
• | adoption of new accounting standards, including the effects from the adoption of the current expected credit loss ("CECL") model on January 1, 2020, or changes in existing standards; |
• | compliance or operational risks related to new products, services, ventures, or lines of business, if any, that Nicolet may pursue or implement; and |
• | the risk that Nicolet’s analysis of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful. |
At or for the Three Months Ended | At or for the Nine Months Ended | ||||||||||||||||||||||||||
(In thousands, except per share data) | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 9/30/2019 | 9/30/2018 | ||||||||||||||||||||
Results of operations: | |||||||||||||||||||||||||||
Interest income | $ | 34,667 | $ | 34,570 | $ | 33,159 | $ | 32,327 | $ | 31,880 | $ | 102,396 | $ | 93,210 | |||||||||||||
Interest expense | 5,477 | 5,626 | 5,684 | 5,298 | 4,938 | 16,787 | 13,591 | ||||||||||||||||||||
Net interest income | 29,190 | 28,944 | 27,475 | 27,029 | 26,942 | 85,609 | 79,619 | ||||||||||||||||||||
Provision for loan losses | 400 | 300 | 200 | 240 | 340 | 900 | 1,360 | ||||||||||||||||||||
Net interest income after provision for loan losses | 28,790 | 28,644 | 27,275 | 26,789 | 26,602 | 84,709 | 78,259 | ||||||||||||||||||||
Noninterest income | 12,312 | 18,560 | 9,186 | 9,797 | 10,649 | 40,058 | 29,712 | ||||||||||||||||||||
Noninterest expense | 22,887 | 25,727 | 22,759 | 21,621 | 23,044 | 71,373 | 68,137 | ||||||||||||||||||||
Income before income tax expense | 18,215 | 21,477 | 13,702 | 14,965 | 14,207 | 53,394 | 39,834 | ||||||||||||||||||||
Income tax expense | 4,603 | 2,833 | 3,352 | 4,015 | 3,268 | 10,788 | 9,431 | ||||||||||||||||||||
Net income | 13,612 | 18,644 | 10,350 | 10,950 | 10,939 | 42,606 | 30,403 | ||||||||||||||||||||
Net income attributable to noncontrolling interest | 82 | 95 | 83 | 87 | 80 | 260 | 230 | ||||||||||||||||||||
Net income attributable to Nicolet Bankshares, Inc. | $ | 13,530 | $ | 18,549 | $ | 10,267 | $ | 10,863 | $ | 10,859 | $ | 42,346 | $ | 30,173 | |||||||||||||
Earnings per common share: | |||||||||||||||||||||||||||
Basic | $ | 1.45 | $ | 1.98 | $ | 1.09 | $ | 1.14 | $ | 1.13 | $ | 4.51 | $ | 3.12 | |||||||||||||
Diluted | $ | 1.40 | $ | 1.91 | $ | 1.05 | $ | 1.11 | $ | 1.09 | $ | 4.36 | $ | 3.02 | |||||||||||||
Common Shares: | |||||||||||||||||||||||||||
Basic weighted average | 9,347 | 9,374 | 9,461 | 9,526 | 9,633 | 9,394 | 9,679 | ||||||||||||||||||||
Diluted weighted average | 9,697 | 9,692 | 9,758 | 9,814 | 9,949 | 9,707 | 10,004 | ||||||||||||||||||||
Outstanding (period end) | 9,363 | 9,327 | 9,431 | 9,495 | 9,577 | 9,363 | 9,577 | ||||||||||||||||||||
Period-End Balances: | |||||||||||||||||||||||||||
Loans | $ | 2,242,931 | $ | 2,203,273 | $ | 2,189,688 | $ | 2,166,181 | $ | 2,143,457 | $ | 2,242,931 | $ | 2,143,457 | |||||||||||||
Allowance for loan losses | 13,620 | 13,571 | 13,370 | 13,153 | 12,992 | 13,620 | 12,992 | ||||||||||||||||||||
Securities available-for-sale, at fair value | 419,300 | 403,989 | 407,693 | 400,144 | 410,911 | 419,300 | 410,911 | ||||||||||||||||||||
Goodwill and other intangibles, net | 121,371 | 122,285 | 123,254 | 124,307 | 125,360 | 121,371 | 125,360 | ||||||||||||||||||||
Total assets | 3,105,671 | 3,054,813 | 3,041,091 | 3,096,535 | 3,000,902 | 3,105,671 | 3,000,902 | ||||||||||||||||||||
Deposits | 2,584,447 | 2,536,639 | 2,538,486 | 2,614,138 | 2,522,156 | 2,584,447 | 2,522,156 | ||||||||||||||||||||
Stockholders’ equity | 428,014 | 411,415 | 398,767 | 386,609 | 377,171 | 428,014 | 377,171 | ||||||||||||||||||||
Book value per common share | 45.71 | 44.11 | 42.28 | 40.72 | 39.38 | 45.71 | 39.38 | ||||||||||||||||||||
Tangible book value per common share (2) | 32.75 | 31.00 | 29.21 | 27.62 | 26.29 | 32.75 | 26.29 | ||||||||||||||||||||
Average Balances: | |||||||||||||||||||||||||||
Loans | $ | 2,218,307 | $ | 2,189,070 | $ | 2,179,420 | $ | 2,142,870 | $ | 2,134,448 | $ | 2,195,742 | $ | 2,122,280 | |||||||||||||
Interest-earning assets | 2,763,997 | 2,702,357 | 2,734,936 | 2,693,752 | 2,664,316 | 2,733,870 | 2,664,081 | ||||||||||||||||||||
Goodwill and other intangibles, net | 121,895 | 122,841 | 123,892 | 124,930 | 125,798 | 122,869 | 126,741 | ||||||||||||||||||||
Total assets | 3,094,546 | 3,022,383 | 3,047,068 | 2,996,553 | 2,971,247 | 3,054,840 | 2,971,022 | ||||||||||||||||||||
Deposits | 2,563,821 | 2,514,226 | 2,556,927 | 2,518,378 | 2,497,439 | 2,545,017 | 2,505,776 | ||||||||||||||||||||
Interest-bearing liabilities | 1,895,754 | 1,892,775 | 1,946,210 | 1,867,327 | 1,931,119 | 1,911,395 | 1,980,329 | ||||||||||||||||||||
Stockholders’ equity | 420,864 | 404,345 | 391,027 | 379,846 | 375,507 | 405,521 | 368,867 | ||||||||||||||||||||
Financial Ratios: (1) | |||||||||||||||||||||||||||
Return on average assets | 1.73 | % | 2.46 | % | 1.37 | % | 1.44 | % | 1.45 | % | 1.85 | % | 1.36 | % | |||||||||||||
Return on average common equity | 12.75 | 18.40 | 10.65 | 11.35 | 11.47 | 13.96 | 10.94 | ||||||||||||||||||||
Return on average tangible common equity (2) | 17.95 | 26.43 | 15.59 | 16.91 | 17.25 | 20.03 | 16.66 | ||||||||||||||||||||
Average equity to average assets | 13.60 | 13.38 | 12.83 | 12.68 | 12.64 | 13.27 | 12.42 | ||||||||||||||||||||
Stockholders' equity to assets | 13.78 | 13.47 | 13.11 | 12.49 | 12.57 | 13.78 | 12.57 | ||||||||||||||||||||
Tangible common equity to tangible assets (2) | 10.28 | 9.86 | 9.44 | 8.83 | 8.76 | 10.28 | 8.76 | ||||||||||||||||||||
Net interest margin | 4.19 | 4.28 | 4.05 | 3.98 | 4.02 | 4.17 | 3.99 | ||||||||||||||||||||
Net loan charge-offs to average loans | 0.06 | 0.02 | (0.00 | ) | 0.01 | 0.04 | 0.03 | 0.06 | |||||||||||||||||||
Nonperforming loans to total loans | 0.41 | 0.35 | 0.40 | 0.25 | 0.48 | 0.41 | 0.48 | ||||||||||||||||||||
Nonperforming assets to total assets | 0.34 | 0.26 | 0.30 | 0.19 | 0.38 | 0.34 | 0.38 | ||||||||||||||||||||
Efficiency ratio | 55.19 | 64.01 | 61.91 | 58.03 | 61.08 | 60.27 | 62.58 | ||||||||||||||||||||
Effective tax rate | 25.27 | 13.19 | 24.46 | 26.83 | 23.00 | 20.20 | 23.68 | ||||||||||||||||||||
Selected Items: | |||||||||||||||||||||||||||
Interest income from resolving PCI loans (rounded) | $ | 1,800 | $ | 1,300 | $ | 200 | $ | 100 | $ | 300 | $ | 3,300 | $ | 1,900 | |||||||||||||
Tax-equivalent adjustment on net interest income | 251 | 263 | 272 | 278 | 285 | 786 | 872 | ||||||||||||||||||||
Tax benefit on stock-based compensation | (128 | ) | (739 | ) | (144 | ) | (23 | ) | — | (1,011 | ) | (159 | ) |
• | During second quarter 2019, net income favorably included $5.4 million (or $0.55 of diluted earnings per common share) related to two actions combined, the sale of 80% of Nicolet's equity investment in UFS, LLC, a data processing and e-banking entity ($7.4 million after-tax gain included in noninterest income under asset gains) and retirement-related compensation declared to benefit all employees after that sale ($2.75 million, or $2.0 million after-tax cost, included in noninterest expense under personnel), impacting the 2019 year-to-date and quarter comparisons. |
• | Net interest income was $85.6 million for the first nine months of 2019, up $6.0 million or 8% over the first nine months of 2018. Interest income grew $9.2 million (overcoming $1.0 million lower aggregate discount income on purchased loans), aided by a slightly higher mix of average interest-earning assets in loans and the elevated rate environment on new, renewed and variable rate loans. Interest expense increased $3.2 million primarily due to rising rates. Net interest margin was 4.17% for the nine months ended September 30, 2019, compared to 3.99% for the nine months ended September 30, 2018. For additional information regarding net interest income, see “Income Statement Analysis — Net Interest Income.” |
• | Noninterest income was $40.1 million for the first nine months of 2019, up $10.3 million or 35% over the comparable 2018 period, mostly due to the $7.4 million gain on the equity investment sale noted above. Excluding net asset gains, noninterest income was $32.0 million for the first nine months of 2019, up $3.6 million or 12.8% over 2018, predominantly on stellar net mortgage income. For additional information regarding noninterest income, see “Income Statement Analysis — Noninterest Income.” |
• | Noninterest expense was $71.4 million, $3.2 million or 5% higher than the first nine months of 2018, mostly due to the retirement-related compensation actions in second quarter 2019 noted above. Personnel costs increased $2.7 million, and non-personnel expenses combined increased $0.6 million or 2% over the comparable 2018 period. For additional information regarding noninterest expense, see “Income Statement Analysis — Noninterest Expense.” |
• | Asset quality remains exceptional. Nonperforming assets were only $10.6 million, representing 0.34% of total assets at September 30, 2019, compared to 0.19% at December 31, 2018 and 0.38% at September 30, 2018. For additional information regarding nonperforming assets, see “Balance Sheet Analysis – Nonperforming Assets.” |
• | At September 30, 2019, assets were $3.1 billion, up slightly (less than l%) from December 31, 2018, with cash and cash equivalents funding strong loan growth, debt repayments and seasonably lower deposits. Compared to September 30, 2018, assets increased $105 million or 3%, on solid growth in loans and deposits. |
• | At September 30, 2019, loans were $2.2 billion, 4% higher than December 31, 2018 and 5% higher than September 30, 2018. On average, loans grew $73 million or 3% over the first nine months of 2018. For additional information regarding loans, see “Balance Sheet Analysis — Loans.” |
• | Total deposits were $2.6 billion at September 30, 2019, a decrease of 1% from December 31, 2018 and 2% higher than September 30, 2018. Year-to-date average deposits were $39 million or 2% higher than the first nine months of 2018. For additional information regarding deposits, see “Balance Sheet Analysis – Deposits.” |
For the Nine Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||
ASSETS | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loan fees (1)(2) | $ | 2,195,742 | $ | 92,650 | 5.58 | % | $ | 2,122,280 | $ | 84,786 | 5.28 | % | |||||||||
Investment securities: | |||||||||||||||||||||
Taxable | 269,663 | 5,578 | 2.76 | % | 255,763 | 4,503 | 2.35 | % | |||||||||||||
Tax-exempt (2) | 134,166 | 2,221 | 2.21 | % | 151,643 | 2,467 | 2.17 | % | |||||||||||||
Other interest-earning assets | 134,299 | 2,733 | 2.69 | % | 134,395 | 2,326 | 2.29 | % | |||||||||||||
Total non-loan earning assets | 538,128 | 10,532 | 2.60 | % | 541,801 | 9,296 | 2.28 | % | |||||||||||||
Total interest-earning assets | 2,733,870 | $ | 103,182 | 4.99 | % | 2,664,081 | $ | 94,082 | 4.67 | % | |||||||||||
Other assets, net | 320,970 | 306,941 | |||||||||||||||||||
Total assets | $ | 3,054,840 | $ | 2,971,022 | |||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Savings | $ | 311,438 | $ | 1,136 | 0.49 | % | $ | 282,606 | $ | 818 | 0.39 | % | |||||||||
Interest-bearing demand | 490,661 | 3,748 | 1.02 | % | 545,980 | 3,361 | 0.82 | % | |||||||||||||
Money market accounts (“MMA”) | 569,850 | 2,858 | 0.67 | % | 650,485 | 2,897 | 0.60 | % | |||||||||||||
Core time deposits | 397,530 | 6,070 | 2.04 | % | 323,570 | 3,481 | 1.44 | % | |||||||||||||
Brokered deposits | 64,588 | 291 | 0.60 | % | 99,818 | 455 | 0.61 | % | |||||||||||||
Total interest-bearing deposits | 1,834,067 | 14,103 | 1.03 | % | 1,902,459 | 11,012 | 0.77 | % | |||||||||||||
Other interest-bearing liabilities | 77,328 | 2,684 | 4.59 | % | 77,870 | 2,579 | 4.38 | % | |||||||||||||
Total interest-bearing liabilities | 1,911,395 | 16,787 | 1.17 | % | 1,980,329 | 13,591 | 0.92 | % | |||||||||||||
Noninterest-bearing demand | 710,950 | 603,317 | |||||||||||||||||||
Other liabilities | 26,974 | 18,509 | |||||||||||||||||||
Stockholders’ equity | 405,521 | 368,867 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,054,840 | $ | 2,971,022 | |||||||||||||||||
Net interest income and rate spread | $ | 86,395 | 3.82 | % | $ | 80,491 | 3.75 | % | |||||||||||||
Tax-equivalent adjustment | $ | 786 | $ | 872 | |||||||||||||||||
Net interest margin | 4.17 | % | 3.99 | % |
(1) | Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. |
(2) | The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense. |
For the Three Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(in thousands) | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||
ASSETS | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loan fees (1)(2) | $ | 2,218,307 | $ | 31,380 | 5.56 | % | $ | 2,134,448 | $ | 29,045 | 5.35 | % | |||||||||
Investment securities: | |||||||||||||||||||||
Taxable | 271,632 | 1,904 | 2.80 | % | 264,733 | 1,564 | 2.36 | % | |||||||||||||
Tax-exempt (2) | 127,458 | 708 | 2.22 | % | 147,547 | 809 | 2.19 | % | |||||||||||||
Other interest-earning assets | 146,600 | 926 | 2.49 | % | 117,588 | 747 | 2.51 | % | |||||||||||||
Total non-loan earning assets | 545,690 | 3,538 | 2.58 | % | 529,868 | 3,120 | 2.35 | % | |||||||||||||
Total interest-earning assets | 2,763,997 | $ | 34,918 | 4.97 | % | 2,664,316 | $ | 32,165 | 4.75 | % | |||||||||||
Other assets, net | 330,549 | 306,931 | |||||||||||||||||||
Total assets | $ | 3,094,546 | $ | 2,971,247 | |||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Savings | $ | 323,222 | $ | 384 | 0.47 | % | $ | 291,811 | $ | 313 | 0.43 | % | |||||||||
Interest-bearing demand | 480,395 | 1,199 | 0.99 | % | 536,830 | 1,191 | 0.88 | % | |||||||||||||
MMA | 571,194 | 873 | 0.61 | % | 594,937 | 979 | 0.65 | % | |||||||||||||
Core time deposits | 389,033 | 2,010 | 2.05 | % | 348,899 | 1,472 | 1.67 | % | |||||||||||||
Brokered deposits | 54,661 | 130 | 0.94 | % | 81,441 | 100 | 0.49 | % | |||||||||||||
Total interest-bearing deposits | 1,818,505 | 4,596 | 1.00 | % | 1,853,918 | 4,055 | 0.87 | % | |||||||||||||
Other interest-bearing liabilities | 77,249 | 881 | 4.48 | % | 77,201 | 883 | 4.49 | % | |||||||||||||
Total interest-bearing liabilities | 1,895,754 | 5,477 | 1.14 | % | 1,931,119 | 4,938 | 1.01 | % | |||||||||||||
Noninterest-bearing demand | 745,316 | 643,521 | |||||||||||||||||||
Other liabilities | 32,612 | 21,100 | |||||||||||||||||||
Stockholders’ equity | 420,864 | 375,507 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,094,546 | $ | 2,971,247 | |||||||||||||||||
Net interest income and rate spread | $ | 29,441 | 3.83 | % | $ | 27,227 | 3.74 | % | |||||||||||||
Tax-equivalent adjustment | $ | 251 | $ | 285 | |||||||||||||||||
Net interest margin | 4.19 | % | 4.02 | % |
(1) | Nonaccrual loans and loans held for sale are included in the daily average loan balances outstanding. |
(2) | The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense. |
For the Three Months Ended September 30, 2019 Compared to September 30, 2018: | For the Nine Months Ended September 30, 2019 Compared to September 30, 2018: | ||||||||||||||||||||||
Increase (Decrease) Due to Changes in | Increase (Decrease) Due to Changes in | ||||||||||||||||||||||
(in thousands) | Volume | Rate | Net (1) | Volume | Rate | Net (1) | |||||||||||||||||
Interest-earning assets | |||||||||||||||||||||||
Loans (2) | $ | 1,214 | $ | 1,121 | $ | 2,335 | $ | 3,179 | $ | 4,685 | $ | 7,864 | |||||||||||
Investment securities: | |||||||||||||||||||||||
Taxable | 91 | 249 | 340 | 568 | 507 | 1,075 | |||||||||||||||||
Tax-exempt (2) | (111 | ) | 10 | (101 | ) | (288 | ) | 42 | (246 | ) | |||||||||||||
Other interest-earning assets | 172 | 7 | 179 | 24 | 383 | 407 | |||||||||||||||||
Total non-loan earning assets | 152 | 266 | 418 | 304 | 932 | 1,236 | |||||||||||||||||
Total interest-earning assets | $ | 1,366 | $ | 1,387 | $ | 2,753 | $ | 3,483 | $ | 5,617 | $ | 9,100 | |||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||
Savings | $ | 36 | $ | 35 | $ | 71 | $ | 89 | $ | 229 | $ | 318 | |||||||||||
Interest-bearing demand | (132 | ) | 140 | 8 | (365 | ) | 752 | 387 | |||||||||||||||
MMA | (38 | ) | (68 | ) | (106 | ) | (382 | ) | 343 | (39 | ) | ||||||||||||
Core time deposits | 182 | 356 | 538 | 913 | 1,676 | 2,589 | |||||||||||||||||
Brokered deposits | (41 | ) | 71 | 30 | (158 | ) | (6 | ) | (164 | ) | |||||||||||||
Total interest-bearing deposits | 7 | 534 | 541 | 97 | 2,994 | 3,091 | |||||||||||||||||
Other interest-bearing liabilities | 7 | (9 | ) | (2 | ) | 7 | 98 | 105 | |||||||||||||||
Total interest-bearing liabilities | 14 | 525 | 539 | 104 | 3,092 | 3,196 | |||||||||||||||||
Net interest income | $ | 1,352 | $ | 862 | $ | 2,214 | $ | 3,379 | $ | 2,525 | $ | 5,904 |
(1) | The change in interest due to both rate and volume has been allocated in proportion to the relationship of dollar amounts of change in each. |
(2) | The yield on tax-exempt loans and tax-exempt investment securities is computed on a tax-equivalent basis using a federal tax rate of 21% and adjusted for the disallowance of interest expense. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | $ Change | % Change | 2019 | 2018 | $ Change | % Change | |||||||||||||||||||||
Trust services fee income | $ | 1,594 | $ | 1,638 | $ | (44 | ) | (3 | )% | $ | 4,631 | $ | 4,915 | $ | (284 | ) | (6 | )% | |||||||||||
Brokerage fee income | 2,113 | 1,732 | 381 | 22 | 5,925 | 5,074 | 851 | 17 | |||||||||||||||||||||
Mortgage income, net | 3,700 | 1,902 | 1,798 | 95 | 6,962 | 4,510 | 2,452 | 54 | |||||||||||||||||||||
Service charges on deposit accounts | 1,223 | 1,247 | (24 | ) | (2 | ) | 3,587 | 3,637 | (50 | ) | (1 | ) | |||||||||||||||||
Card interchange income | 1,735 | 1,481 | 254 | 17 | 4,815 | 4,082 | 733 | 18 | |||||||||||||||||||||
BOLI income | 495 | 1,019 | (524 | ) | (51 | ) | 1,834 | 1,929 | (95 | ) | (5 | ) | |||||||||||||||||
Other income | 1,166 | 1,484 | (318 | ) | (21 | ) | 4,274 | 4,243 | 31 | 1 | |||||||||||||||||||
Noninterest income without net gains | 12,026 | 10,503 | 1,523 | 15 | 32,028 | 28,390 | 3,638 | 13 | |||||||||||||||||||||
Asset gains (losses), net | 286 | 146 | 140 | N/M | 8,030 | 1,322 | 6,708 | N/M | |||||||||||||||||||||
Total noninterest income | $ | 12,312 | $ | 10,649 | $ | 1,663 | 16 | % | $ | 40,058 | $ | 29,712 | $ | 10,346 | 35 | % | |||||||||||||
Trust services fee income & Brokerage fee income combined | $ | 3,707 | $ | 3,370 | $ | 337 | 10 | % | $ | 10,556 | $ | 9,989 | $ | 567 | 6 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
($ in thousands) | 2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | |||||||||||||||||||||
Personnel | $ | 12,914 | $ | 12,983 | $ | (69 | ) | (1 | )% | $ | 40,809 | $ | 38,149 | $ | 2,660 | 7 | % | ||||||||||||
Occupancy, equipment and office | 3,454 | 3,660 | (206 | ) | (6 | ) | 10,961 | 10,901 | 60 | 1 | |||||||||||||||||||
Business development and marketing | 1,428 | 1,334 | 94 | 7 | 4,288 | 4,139 | 149 | 4 | |||||||||||||||||||||
Data processing | 2,515 | 2,375 | 140 | 6 | 7,220 | 7,094 | 126 | 2 | |||||||||||||||||||||
Intangibles amortization | 914 | 1,054 | (140 | ) | (13 | ) | 2,936 | 3,336 | (400 | ) | (12 | ) | |||||||||||||||||
Other expense | 1,662 | 1,638 | 24 | 1 | 5,159 | 4,518 | 641 | 14 | |||||||||||||||||||||
Total noninterest expense | $ | 22,887 | $ | 23,044 | $ | (157 | ) | (1 | )% | $ | 71,373 | $ | 68,137 | $ | 3,236 | 5 | % | ||||||||||||
Non-personnel expenses | $ | 9,973 | $ | 10,061 | $ | (88 | ) | (1 | )% | $ | 30,564 | $ | 29,988 | $ | 576 | 2 | % | ||||||||||||
Average full-time equivalent employees | 568 | 567 | 1 | — | % | 557 | 554 | 3 | 1 | % |
September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||
(in thousands) | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||
Commercial & industrial | $ | 763,742 | 34 | % | $ | 684,920 | 32 | % | $ | 665,754 | 31 | % | ||||||||
Owner-occupied CRE | 456,508 | 20 | 441,353 | 20 | 449,151 | 21 | ||||||||||||||
AG production | 36,050 | 2 | 35,625 | 2 | 35,727 | 2 | ||||||||||||||
Commercial | 1,256,300 | 56 | 1,161,898 | 54 | 1,150,632 | 54 | ||||||||||||||
AG real estate | 58,591 | 3 | 53,444 | 2 | 52,378 | 2 | ||||||||||||||
CRE investment | 336,442 | 15 | 343,652 | 16 | 331,312 | 16 | ||||||||||||||
Construction & land development | 61,810 | 3 | 80,599 | 4 | 86,533 | 4 | ||||||||||||||
Commercial real estate | 456,843 | 21 | 477,695 | 22 | 470,223 | 22 | ||||||||||||||
Commercial-based loans | 1,713,143 | 77 | 1,639,593 | 76 | 1,620,855 | 76 | ||||||||||||||
Residential construction | 41,496 | 2 | 30,926 | 1 | 30,295 | 1 | ||||||||||||||
Residential first mortgage | 343,400 | 15 | 357,841 | 17 | 357,163 | 17 | ||||||||||||||
Residential junior mortgage | 116,179 | 5 | 111,328 | 5 | 109,692 | 5 | ||||||||||||||
Residential real estate | 501,075 | 22 | 500,095 | 23 | 497,150 | 23 | ||||||||||||||
Retail & other | 28,713 | 1 | 26,493 | 1 | 25,452 | 1 | ||||||||||||||
Retail-based loans | 529,788 | 23 | 526,588 | 24 | 522,602 | 24 | ||||||||||||||
Total loans | $ | 2,242,931 | 100 | % | $ | 2,166,181 | 100 | % | $ | 2,143,457 | 100 | % |
Nine Months Ended | Year Ended | ||||||||||
(in thousands) | September 30, 2019 | September 30, 2018 | December 31, 2018 | ||||||||
Allowance for loan losses: | |||||||||||
Balance at beginning of period | $ | 13,153 | $ | 12,653 | $ | 12,653 | |||||
Provision for loan losses | 900 | 1,360 | 1,600 | ||||||||
Charge-offs | (629 | ) | (1,110 | ) | (1,213 | ) | |||||
Recoveries | 196 | 89 | 113 | ||||||||
Net (charge-offs) recoveries | (433 | ) | (1,021 | ) | (1,100 | ) | |||||
Balance at end of period | $ | 13,620 | $ | 12,992 | $ | 13,153 | |||||
Net loan (charge-offs) recoveries: | |||||||||||
Commercial & industrial | $ | 31 | $ | (713 | ) | $ | (770 | ) | |||
Owner-occupied CRE | (11 | ) | (52 | ) | (60 | ) | |||||
AG production | — | — | — | ||||||||
AG real estate | — | — | — | ||||||||
CRE investment | — | (37 | ) | (37 | ) | ||||||
Construction & land development | — | — | — | ||||||||
Residential construction | (226 | ) | — | — | |||||||
Residential first mortgage | 36 | (82 | ) | (80 | ) | ||||||
Residential junior mortgage | (48 | ) | 31 | 35 | |||||||
Retail & other | (215 | ) | (168 | ) | (188 | ) | |||||
Total net (charge-offs) recoveries | $ | (433 | ) | $ | (1,021 | ) | $ | (1,100 | ) | ||
Ratios: | |||||||||||
ALLL to total loans | 0.61 | % | 0.61 | % | 0.61 | % | |||||
Net charge-offs to average loans, annualized | 0.03 | % | 0.06 | % | 0.05 | % |
(in thousands) | September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||
Nonperforming loans: | |||||||||||
Commercial & industrial | $ | 2,279 | $ | 2,816 | $ | 5,803 | |||||
Owner-occupied CRE | 2,302 | 673 | 474 | ||||||||
AG production | 1,251 | — | — | ||||||||
AG real estate | 846 | 164 | 175 | ||||||||
CRE investment | 1,111 | 210 | 1,381 | ||||||||
Construction & land development | — | 80 | 80 | ||||||||
Residential construction | — | 1 | 28 | ||||||||
Residential first mortgage | 865 | 1,265 | 1,973 | ||||||||
Residential junior mortgage | 576 | 262 | 268 | ||||||||
Retail & other | 8 | — | — | ||||||||
Total nonaccrual loans | 9,238 | 5,471 | 10,182 | ||||||||
Accruing loans past due 90 days or more | — | — | — | ||||||||
Total nonperforming loans | $ | 9,238 | $ | 5,471 | $ | 10,182 | |||||
OREO: | |||||||||||
Commercial real estate owned | $ | 525 | $ | 420 | $ | 505 | |||||
Residential real estate owned | — | — | 51 | ||||||||
Bank property real estate owned | 800 | — | 725 | ||||||||
Total OREO | 1,325 | 420 | 1,281 | ||||||||
Total nonperforming assets | $ | 10,563 | $ | 5,891 | $ | 11,463 | |||||
Performing troubled debt restructurings | $ | 459 | $ | — | $ | — | |||||
Ratios: | |||||||||||
Nonperforming loans to total loans | 0.41 | % | 0.25 | % | 0.48 | % | |||||
Nonperforming assets to total loans plus OREO | 0.47 | % | 0.27 | % | 0.53 | % | |||||
Nonperforming assets to total assets | 0.34 | % | 0.19 | % | 0.38 | % | |||||
ALLL to nonperforming loans | 147.4 | % | 240.4 | % | 127.6 | % |
September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||
(in thousands) | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||
Noninterest-bearing demand | $ | 782,968 | 30 | % | $ | 753,065 | 29 | % | $ | 664,788 | 26 | % | ||||||||
Money market and interest-bearing demand | 1,079,233 | 42 | % | 1,163,369 | 45 | % | 1,174,912 | 47 | % | |||||||||||
Savings | 329,122 | 13 | % | 294,068 | 11 | % | 291,058 | 12 | % | |||||||||||
Time | 393,124 | 15 | % | 403,636 | 15 | % | 391,398 | 15 | % | |||||||||||
Total deposits | $ | 2,584,447 | 100 | % | $ | 2,614,138 | 100 | % | $ | 2,522,156 | 100 | % | ||||||||
Brokered transaction accounts | $ | 38,078 | 1 | % | $ | 62,021 | 2 | % | $ | 45,894 | 2 | % | ||||||||
Brokered time deposits | 15,450 | 1 | % | 19,130 | 1 | % | 31,056 | 1 | % | |||||||||||
Total brokered deposits | $ | 53,528 | 2 | % | $ | 81,151 | 3 | % | $ | 76,950 | 3 | % | ||||||||
Customer transaction accounts | $ | 2,153,245 | 83 | % | $ | 2,148,481 | 82 | % | $ | 2,084,864 | 83 | % | ||||||||
Customer time deposits | 377,674 | 15 | % | 384,506 | 15 | % | 360,342 | 14 | % | |||||||||||
Total customer deposits (core) | $ | 2,530,919 | 98 | % | $ | 2,532,987 | 97 | % | $ | 2,445,206 | 97 | % |
(in thousands) | September 30, 2019 | December 31, 2018 | |||||
Commitments to extend credit | $ | 718,772 | $ | 721,098 | |||
Financial standby letters of credit | 10,791 | 8,571 | |||||
Performance standby letters of credit | 9,344 | 7,094 |
September 30, 2019 | December 31, 2018 | ||||
200 bps decrease in interest rates | (2.3 | )% | (0.6 | )% | |
100 bps decrease in interest rates | (1.2 | )% | — | % | |
100 bps increase in interest rates | 1.0 | % | (0.1 | )% | |
200 bps increase in interest rates | 2.1 | % | — | % |
At or for the Nine Months Ended | At or for the Year Ended | ||||||
($ in thousands) | September 30, 2019 | December 31, 2018 | |||||
Company Stock Repurchases: * | |||||||
Common stock repurchased during the period (dollars) | $ | 15,318 | $ | 22,178 | |||
Common stock repurchased during the period (full shares) | 263,053 | 408,071 | |||||
Company Risk-Based Capital: | |||||||
Total risk-based capital | $ | 360,697 | $ | 326,235 | |||
Tier 1 risk-based capital | 335,093 | 301,125 | |||||
Common equity Tier 1 capital | 305,058 | 271,435 | |||||
Total capital ratio | 13.5 | % | 12.9 | % | |||
Tier 1 capital ratio | 12.6 | % | 11.9 | % | |||
Common equity tier 1 capital ratio | 11.4 | % | 10.7 | % | |||
Tier 1 leverage ratio | 11.3 | % | 10.4 | % | |||
Bank Risk-Based Capital: | |||||||
Total risk-based capital | $ | 288,080 | $ | 274,492 | |||
Tier 1 risk-based capital | 274,460 | 261,339 | |||||
Common equity Tier 1 capital | 274,460 | 261,339 | |||||
Total capital ratio | 10.8 | % | 10.8 | % | |||
Tier 1 capital ratio | 10.3 | % | 10.3 | % | |||
Common equity tier 1 capital ratio | 10.3 | % | 10.3 | % | |||
Tier 1 leverage ratio | 9.2 | % | 9.1 | % | |||
* Reflects common stock repurchased under board of director authorizations for the common stock repurchase program. |
Total Number of Shares Purchased (a) | 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 (b) | |||||||||
(#) | ($) | (#) | (#) | |||||||||
Period | ||||||||||||
July 1 – July 31, 2019 | 5,057 | $ | 63.98 | 1,853 | 604,100 | |||||||
August 1 – August 31, 2019 | 7,447 | $ | 61.99 | 7,447 | 596,700 | |||||||
September 1 – September 30, 2019 | 2,267 | $ | 67.81 | — | 596,700 | |||||||
Total | 14,771 | $ | 63.57 | 9,300 | 596,700 |
(a) | During third quarter 2019, the Company repurchased 84 common shares for minimum tax withholding settlements on restricted stock and repurchased 5,387 common shares to satisfy the exercise price and / or tax withholding requirements of stock options, respectively. These purchases do not count against the maximum number of shares that may yet be purchased under the board of directors' authorization. |
(b) | During third quarter 2019, Nicolet utilized $0.6 million to repurchase and cancel approximately 9,300 shares of common stock pursuant to our common stock repurchase program. At September 30, 2019, approximately $24.4 million remained available under this common stock repurchase program. |
Exhibit Number | Description | |
2.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101 | The following material from Nicolet’s Form 10-Q Report for the three and nine months ended September 30, 2019, formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Unaudited Consolidated Financial Statements. |
NICOLET BANKSHARES, INC. | |
October 31, 2019 | /s/ Robert B. Atwell |
Robert B. Atwell | |
Chairman, President and Chief Executive Officer | |
October 31, 2019 | /s/ Ann K. Lawson |
Ann K. Lawson | |
Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Nicolet Bankshares, Inc. (the "registrant"); |
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(s) 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 Rules 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; and |
5. | The registrant’s other certifying officer(s) 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 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. |
October 31, 2019 | /s/ Robert B. Atwell |
Robert B. Atwell | |
Chairman, President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Nicolet Bankshares, Inc. (the “registrant”); |
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(s) 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 Rules 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; and |
5. | The registrant’s other certifying officer(s) 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 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. |
October 31, 2019 | /s/ Ann K. Lawson |
Ann K. Lawson | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
October 31, 2019 | /s/ Robert B. Atwell |
Robert B. Atwell | |
Chairman, President and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
October 31, 2019 | /s/ Ann K. Lawson |
Ann K. Lawson | |
Chief Financial Officer |
Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Leases | Operating Leases As of January 1, 2019, the Company adopted ASU 2016-02 (Topic 842) on a prospective basis using the effective date method. The adoption of the new standard did not have a material impact on Nicolet's financial statements; however, additional disclosures have been added in accordance with the ASU. See Note 1 for additional information on this new accounting standard. The operating lease ROU asset represents the right to use an underlying asset during the lease term, while the operating lease liability represents the obligation to make lease payments arising from the lease. The ROU asset and lease liability are recognized at lease commencement based on the present value of the remaining lease payments, considering a discount rate that represents Nicolet's incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term and is recognized in occupancy, equipment, and office on the consolidated statements of income. Nicolet leases space under non-cancelable operating lease agreements for certain bank and nonbank branch facilities with remaining lease terms of 2 to 7 years. Certain lease arrangements contain extension options which typically range from 5 to 10 years at the then fair market rental rates. The lease asset and liability considers renewal options when they are reasonably certain of being exercised. A summary of net lease cost and selected other information related to operating leases was as follows.
The following table summarizes the maturity of remaining lease liabilities.
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Loans, Allowance for Loan Losses, and Credit Quality |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Allowance for Loan Losses, and Credit Quality | Loans, Allowance for Loan Losses, and Credit Quality The loan composition is summarized as follows.
As a further breakdown, loans are summarized by originated and acquired as follows.
Practically all of the Company’s loans, commitments, and letters of credit have been granted to customers in the Company’s market area. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of underlying collateral, if any. A roll forward of the allowance for loan losses is summarized as follows.
The following tables present the balance and activity in the ALLL by portfolio segment and the recorded investment in loans by portfolio segment.
As a further breakdown, the ALLL is summarized by originated and acquired as follows.
For comparison purposes, the following tables present the balance and activity in the ALLL by portfolio segment and the recorded investment in loans by portfolio segment for the prior year-end period.
As a further breakdown, the ALLL is summarized by originated and acquired as follows.
The following table presents nonaccrual loans by portfolio segment in total and then as a further breakdown by originated or acquired.
The following tables present past due loans by portfolio segment.
A description of the loan risk categories used by the Company follows. Grades 1-4, Pass: Credits exhibit adequate cash flows, appropriate management and financial ratios within industry norms and/or are supported by sufficient collateral. Some credits in these rating categories may require a need for monitoring but elements of concern are not severe enough to warrant an elevated rating. Grade 5, Watch: Credits with this rating are adequately secured and performing but are being monitored due to the presence of various short-term weaknesses which may include unexpected, short-term adverse financial performance, managerial problems, potential impact of a decline in the entire industry or local economy and delinquency issues. Loans to individuals or loans supported by guarantors with marginal net worth or collateral may be included in this rating category. Grade 6, Special Mention: Credits with this rating have potential weaknesses that, without the Company’s attention and correction may result in deterioration of repayment prospects. These assets are considered Criticized Assets. Potential weaknesses may include adverse financial trends for the borrower or industry, repeated lack of compliance with Company requests, increasing debt to net worth, serious management conditions and decreasing cash flow. Grade 7, Substandard: Assets with this rating are characterized by the distinct possibility the Company will sustain some loss if deficiencies are not corrected. All foreclosures, liquidations, and nonaccrual loans are considered to be categorized in this rating, regardless of collateral sufficiency. Grade 8, Doubtful: Assets with this rating exhibit all the weaknesses as one rated Substandard with the added characteristic that such weaknesses make collection or liquidation in full highly questionable. Grade 9, Loss: Assets in this category are considered uncollectible. Pursuing any recovery or salvage value is impractical but does not preclude partial recovery in the future. The following tables present total loans by risk categories.
The following tables present impaired loans.
Total purchased credit impaired loans (in aggregate since the Company’s 2013 acquisitions) were initially recorded at a fair value of $43.6 million on their respective acquisition dates, net of an initial $34.4 million nonaccretable mark and a zero accretable mark. At September 30, 2019, $8.3 million of the $43.6 million remain in impaired loans.
Troubled Debt Restructurings At September 30, 2019, there were five loans classified as troubled debt restructurings with a current outstanding balance of $1.2 million (including performing TDRs of $0.5 million and the remainder on nonaccrual) and pre-modification balance of $1.4 million. In comparison, at December 31, 2018, there were four loans classified as troubled debt restructurings with an outstanding balance of $0.6 million and pre-modification balance of $2.7 million. There were no loans classified as troubled debt restructurings during the previous twelve months that subsequently defaulted during the nine months ended September 30, 2019. As of September 30, 2019, there were no commitments to lend additional funds to debtors whose terms have been modified in troubled debt restructurings. |
Pending Acquisition |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Pending Acquisition | Pending Acquisition Nicolet entered into an Agreement and Plan of Merger with Choice Bancorp, Inc. ("Choice" (OTC Pink "CBKW")) on June 26, 2019 (the "Merger Agreement"), pursuant to which Choice will merge with and into Nicolet (the "Merger") to create the largest community bank in the Oshkosh, Wisconsin marketplace. Immediately following the Merger, Choice Bank, the wholly owned bank subsidiary of Choice, will merge with and into Nicolet's wholly owned bank subsidiary (the "Bank Merger"), with Nicolet National Bank as the surviving entity in the Bank Merger. The transaction will involve stock-for-stock consideration at a fixed exchange ratio, subject to cap and collar provisions provided for in the Merger Agreement. At September 30, 2019, Choice had total assets of $436 million, loans of $352 million, deposits of $306 million, and equity of $41 million. Choice assets represented approximately 14% of Nicolet assets at September 30, 2019. As of September 17, 2019, Nicolet received all regulatory approvals for the Merger and Bank Merger, and Choice shareholders approved the Merger on October 22, 2019. The merger is expected to close on November 8, 2019, pending satisfaction of customary closing conditions. |
Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 6.3 | $ 7.4 |
Restricted cash pledged as collateral on interest rate swaps | $ 1.3 |
Stock-Based Compensation - Weighted average assumptions (Details) - Stock Incentive Plan - Stock Options - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 25.00% | 25.00% |
Risk-free interest rate | 2.37% | 2.48% |
Expected average life (in years) | 7 years | 7 years |
Weighted average per share fair value of options (in usd per share) | $ 19.23 | $ 17.60 |
Short and Long-Term Borrowings (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument | ||
Long-term borrowings | $ 57,495 | $ 77,305 |
Percent of fixed rate long-term borrowings | 58.00% | 69.00% |
Percent of floating rate long-term borrowings | 42.00% | 31.00% |
FHLB advances | ||
Debt Instrument | ||
Long-term borrowings | $ 15,056 | $ 35,252 |
Junior subordinated debentures | ||
Debt Instrument | ||
Subordinated debt | 30,455 | 30,096 |
Subordinated notes | ||
Debt Instrument | ||
Subordinated debt | $ 11,984 | $ 11,957 |
Goodwill and Other Intangibles and Mortgage Servicing Rights - Other intangible assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Net book value | $ 14,005 | $ 14,005 | $ 16,941 | ||
Amortization during the period | 914 | $ 1,054 | 2,936 | $ 3,336 | |
Core deposit intangibles: | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amount | 29,015 | 29,015 | 29,015 | ||
Accumulated amortization | (19,009) | (19,009) | (16,453) | ||
Net book value | 10,006 | 10,006 | 12,562 | ||
Additions during the period | 0 | 0 | |||
Amortization during the period | 2,556 | 3,915 | |||
Customer list intangibles: | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amount | 5,523 | 5,523 | 5,523 | ||
Accumulated amortization | (1,524) | (1,524) | (1,144) | ||
Net book value | $ 3,999 | 3,999 | 4,379 | ||
Additions during the period | 0 | 290 | |||
Amortization during the period | $ 380 | $ 474 |
Loans, Allowance for Loan Losses, and Credit Quality - Summary of allowance for loan losses (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 13,153 | $ 12,653 | $ 12,653 |
Provision for loan losses | 900 | 1,360 | 1,600 |
Charge-offs | (629) | (1,110) | (1,213) |
Recoveries | 196 | 89 | 113 |
Net (charge-offs) recoveries | (433) | (1,021) | (1,100) |
Ending balance | $ 13,620 | $ 12,992 | $ 13,153 |
Operating Leases - Operating Lease Maturity Schedule (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Jan. 01, 2019 |
---|---|---|
Leases [Abstract] | ||
2019 (remaining three months) | $ 951 | |
2020 | 1,037 | |
2021 | 911 | |
2022 | 851 | |
2023 | 607 | |
2024 | 499 | |
Thereafter | 16 | |
Total future minimum lease payments | 4,872 | |
Less: amount representing interest | (122) | |
Present value of net future minimum lease payments | $ 4,750 | $ 5,000 |
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented.
|
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Schedule of changes in the Level 3 securities AFS measured at fair value on a recurring basis | The following table presents the changes in the Level 3 securities AFS measured at fair value on a recurring basis.
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Schedule of assets measured at fair value on a nonrecurring basis | The following table presents the Company’s assets measured at fair value on a nonrecurring basis, aggregated by level in the fair value hierarchy within which those measurements fall.
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Schedule of estimated fair values of financial instruments | The carrying amounts and estimated fair values of the Company’s financial instruments are shown below.
|
Securities Available for Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost and fair value of securities available for sale | Amortized cost and fair value of securities available for sale are summarized as follows.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unrealized losses and fair value | The following table presents gross unrealized losses and the related estimated fair value of investment securities available for sale, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost and fair value classified by contractual maturities | The amortized cost and fair value of securities AFS 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; as this is particularly inherent in mortgage-backed securities, these securities are not included in the maturity categories below.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of proceeds from sale of securities AFS | Proceeds and realized gains / losses from the sale of securities AFS were as follows.
|
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