(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of Each Class | Trading Symbol(s) | Name of Exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Page | |||||
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | (Unaudited) | ||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest-bearing deposits in banks | |||||||||||
Total cash and cash equivalents | |||||||||||
Securities: | |||||||||||
Available for sale | |||||||||||
Held to maturity, net allowance for credit losses of $ | |||||||||||
Securities carried at fair value through income | |||||||||||
Total securities | |||||||||||
Non-marketable equity securities held in other financial institutions | |||||||||||
Loans held for sale ($ | |||||||||||
Loans, net of allowance for credit losses of $ | |||||||||||
Premises and equipment, net | |||||||||||
Mortgage servicing rights | |||||||||||
Cash surrender value of bank-owned life insurance | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Accrued interest receivable and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Noninterest-bearing deposits | $ | $ | |||||||||
Interest-bearing deposits | |||||||||||
Time deposits | |||||||||||
Total deposits | |||||||||||
Federal Home Loan Bank (“FHLB”) advances, repurchase obligations and other borrowings | |||||||||||
Subordinated indebtedness, net | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock ($ | |||||||||||
Additional paid‑in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Interest and dividend income | |||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||||||||||||
Investment securities-taxable | |||||||||||||||||||||||
Investment securities-nontaxable | |||||||||||||||||||||||
Interest and dividend income on assets held in other financial institutions | |||||||||||||||||||||||
Total interest and dividend income | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||
FHLB advances and other borrowings | |||||||||||||||||||||||
Subordinated indebtedness | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Insurance commission and fee income | |||||||||||||||||||||||
Service charges and fees | |||||||||||||||||||||||
Mortgage banking revenue (loss) | ( | ||||||||||||||||||||||
Other fee income | |||||||||||||||||||||||
Swap fee income | |||||||||||||||||||||||
(Loss) gain on sales of securities, net | ( | ( | |||||||||||||||||||||
Limited partnership investment (loss) income | ( | ( | |||||||||||||||||||||
Gain (loss) on sales and disposals of other assets, net | ( | ( | |||||||||||||||||||||
Other income | |||||||||||||||||||||||
Total noninterest income |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Salaries and employee benefits | $ | $ | $ | $ | |||||||||||||||||||
Occupancy and equipment, net | |||||||||||||||||||||||
Data processing | |||||||||||||||||||||||
Intangible asset amortization | |||||||||||||||||||||||
Office and operations | |||||||||||||||||||||||
Professional services | |||||||||||||||||||||||
Loan-related expenses | |||||||||||||||||||||||
Advertising and marketing | |||||||||||||||||||||||
Electronic banking | |||||||||||||||||||||||
Franchise tax expense | |||||||||||||||||||||||
Regulatory assessments | |||||||||||||||||||||||
Communications | |||||||||||||||||||||||
Merger-related expense | |||||||||||||||||||||||
Other expenses | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Securities available for sale and transferred securities: | |||||||||||||||||||||||
Net unrealized holding gain (loss) arising during the period | ( | ( | ( | ( | |||||||||||||||||||
Reclassification adjustment for net (gain) loss included in net income | ( | ( | |||||||||||||||||||||
Change in the net unrealized gain (loss) on available for sale investment securities, before tax | ( | ( | ( | ( | |||||||||||||||||||
Net gain realized as a yield adjustment in interest on transferred investment securities | ( | ( | ( | ( | |||||||||||||||||||
Change in the net unrealized gain (loss) on investment securities, before tax | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense (benefit) related to net unrealized gain (loss) arising during the period | ( | ( | ( | ( | |||||||||||||||||||
Change in the net unrealized gain (loss) on investment securities, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Net unrealized gain arising during the period | |||||||||||||||||||||||
Reclassification adjustment for net (gain) loss included in net income | ( | ( | ( | ||||||||||||||||||||
Change in the net unrealized gain on cash flow hedges, before tax | |||||||||||||||||||||||
Income tax expense related to net unrealized gain on cash flow hedges | |||||||||||||||||||||||
Change in net unrealized net gain on cash flow hedges, net of tax | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income (loss) | $ | $ | ( | $ | $ | ( |
Common Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | ( | — | — | ( | |||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation shares vested and distributed, net of shares withheld | ( | — | — | ||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | — | — | |||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | |||||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation shares vested and distributed, net of shares withheld | ( | — | — | ||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | — | — | |||||||||||||||||||||||||||||||||
Options assumed - BTH Merger | — | — | — | — | |||||||||||||||||||||||||||||||
Stock issuance - BTH Merger | — | — | |||||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Common Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation shares vested and distributed, net of shares withheld | ( | — | — | ( | |||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | — | — | |||||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2023 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation shares vested and distributed, net of shares withheld | ( | — | — | ||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | — | — | |||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | |||||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at June 30, 2023 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock based compensation shares vested and distributed, net of shares withheld | ( | — | — | ( | |||||||||||||||||||||||||||||||
Exercise of stock options, net of shares withheld | — | — | |||||||||||||||||||||||||||||||||
Dividends declared - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
Cash flows from operating activities: | 2023 | 2022 | |||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Provision for credit losses | |||||||||||
Depreciation and amortization | |||||||||||
Net amortization on securities | |||||||||||
Accretion of net premium/discount on purchased loans | ( | ( | |||||||||
Amortization of investments in tax credit funds | |||||||||||
Loss (gain) on sale of securities, net | ( | ||||||||||
Deferred income tax expense | |||||||||||
Stock-based compensation expense | |||||||||||
Originations of mortgage loans held for sale | ( | ( | |||||||||
Proceeds from mortgage loans held for sale | |||||||||||
Gain on mortgage loans held for sale, including origination of mortgage servicing rights | ( | ( | |||||||||
Mortgage servicing rights valuation adjustment | ( | ||||||||||
Net loss on disposals of premises and equipment and sale of other real estate owned | |||||||||||
Increase in the cash surrender value of life insurance | ( | ( | |||||||||
Gain on equity securities without a readily determinable fair value | ( | ||||||||||
Net losses on sales and write-downs of other real estate owned | |||||||||||
Net change in operating leases | ( | ||||||||||
Increase in other assets | ( | ( | |||||||||
Increase in other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Cash acquired in business combination | |||||||||||
Purchases of securities available for sale | ( | ( | |||||||||
Maturities and pay downs of securities available for sale | |||||||||||
Proceeds from sales and calls of securities available for sale | |||||||||||
Purchase of securities held to maturity | ( | ||||||||||
Maturities, pay downs and calls of securities held to maturity | |||||||||||
Pay downs of securities carried at fair value | |||||||||||
Net redemption (purchases) of non-marketable equity securities held in other financial institutions | ( | ||||||||||
Originations of mortgage warehouse loans | ( | ( | |||||||||
Proceeds from pay-offs of mortgage warehouse loans | |||||||||||
Net increase in loans, excluding mortgage warehouse and loans held for sale | ( | ( | |||||||||
Return of capital and other distributions from limited partnership investments | |||||||||||
Capital calls on limited partnership investments | ( | ( | |||||||||
Purchase of low-income housing tax credit investments | ( | ||||||||||
Purchases of premises and equipment | ( | ( | |||||||||
Proceeds from sales of premises and equipment | |||||||||||
Net cash used in investing activities | ( | ( |
Nine Months Ended September 30, | |||||||||||
Cash flows from financing activities: | 2023 | 2022 | |||||||||
Net increase (decrease) in deposits | $ | $ | ( | ||||||||
Repayments on long-term FHLB advances | ( | ( | |||||||||
Proceeds from short-term FHLB advances | |||||||||||
Repayments on short-term FHLB advances | ( | ( | |||||||||
Repurchase of subordinated debentures, net | ( | ||||||||||
Net decrease in other short-term borrowings | ( | ||||||||||
Net decrease in securities sold under agreements to repurchase | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Cash received from exercise of stock options | |||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | |||||||||||
Significant non-cash transactions: | |||||||||||
Real estate acquired in settlement of loans | |||||||||||
Decrease in GNMA repurchase obligation | ( | ( | |||||||||
Recognition of operating right-of-use assets | |||||||||||
Recognition of operating lease liabilities | |||||||||||
Total assets acquired in BTH merger | |||||||||||
Total liabilities assumed in BTH merger | |||||||||||
Common stock issued in BTH merger as consideration |
(Dollars in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
Numerator: | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Dilutive effect of stock-based awards | |||||||||||||||||||||||
Weighted average diluted common shares outstanding | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | |||||||||||||||||||||||
(Dollars in thousands) September 30, 2023 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Allowance for Credit Losses | Net Carrying Amount | |||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
U.S. government and agency securities | ( | ||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||||||||||||||
Commercial collateralized mortgage obligations | ( | ||||||||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Securities carried at fair value through income: | |||||||||||||||||||||||||||||||||||
State and municipal securities(1) | $ | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
U.S. government and agency securities | ( | ||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||||||||||||||
Commercial collateralized mortgage obligations | ( | ||||||||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Securities carried at fair value through income: | |||||||||||||||||||||||||||||||||||
State and municipal securities(1) | $ | $ | — | $ | — | $ | $ | — | $ |
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
(Dollars in thousands) September 30, 2023 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Corporate bonds | ( | ( | ( | ||||||||||||||||||||||||||||||||
U.S. government and agency securities | ( | ( | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ( | |||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial collateralized mortgage obligations | ( | ( | |||||||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ( | |||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Corporate bonds | ( | ( | ( | ||||||||||||||||||||||||||||||||
U.S. government and agency securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||||||||||||||
State and municipal securities | $ | $ | ( | $ | $ | $ | $ | ( |
(Dollars in thousands) | Municipal Securities | ||||
Allowance for credit losses: | 2023 | ||||
Balance at January 1, 2023 | $ | ||||
Credit loss expense | ( | ||||
Balance at September 30, 2023 | $ | ||||
Balance at January 1, 2022 | $ | ||||
Credit loss expense | |||||
Balance at September 30, 2022 | $ | ||||
Nine Months Ended September 30, | |||||||||||
(Dollars in thousands) | 2023 | 2022 | |||||||||
Proceeds from sales/calls | $ | $ | |||||||||
Gross realized gains | |||||||||||
Gross realized losses | ( | ( |
(Dollars in thousands) | Held to Maturity | Available for Sale | |||||||||||||||||||||
September 30, 2023 | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
Due after one year through five years | |||||||||||||||||||||||
Due after five years through ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||||||
Residential mortgage-backed securities | |||||||||||||||||||||||
Commercial collateralized mortgage obligations | |||||||||||||||||||||||
Residential collateralized mortgage obligations | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Carrying value of securities pledged to secure public deposits | $ | $ | |||||||||
Carrying value of securities pledged to repurchase agreements |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Loans held for sale | $ | $ | |||||||||
LHFI: | |||||||||||
Loans secured by real estate: | |||||||||||
Owner occupied commercial real estate | $ | $ | |||||||||
Non-owner occupied commercial real estate | |||||||||||
Total commercial real estate | |||||||||||
Construction/land/land development | |||||||||||
Residential real estate | |||||||||||
Total real estate | |||||||||||
Commercial and industrial | |||||||||||
Mortgage warehouse lines of credit | |||||||||||
Consumer | |||||||||||
Total LHFI(1) | |||||||||||
Less: Allowance for loan credit losses (“ALCL”) | |||||||||||
LHFI, net | $ | $ |
• Pass (1-6) | Loans within this risk rating are further categorized as follows: | ||||
Minimal risk (1) | Well-collateralized by cash equivalent instruments held by the Banks. | ||||
Moderate risk (2) | Borrowers with excellent asset quality and liquidity. Borrowers’ capitalization and liquidity exceed industry norms. Borrowers in this category have significant levels of liquid assets and have a low level of leverage. | ||||
Better than average risk (3) | Borrowers with strong financial strength and excellent liquidity that consistently demonstrate strong operating performance. Borrowers in this category generally have a sizable net worth that can be converted into liquid assets within 12 months. | ||||
Average risk (4) | Borrowers with sound credit quality and financial performance, including liquidity. Borrowers are supported by sufficient cash flow coverage generated through operations across the full business cycle. | ||||
Marginally acceptable risk (5) | Loans generally meet minimum requirements for an acceptable loan in accordance with lending policy, but possess one or more attributes that cause the overall risk profile to be higher than the majority of newly approved loans. | ||||
Watch (6) | A passing loan with one or more factors that identify a potential weakness in the overall ability of the borrower to repay the loan. These weaknesses are generally mitigated by other factors that reduce the risk of delinquency or loss. | ||||
• Special Mention (7) | This grade is intended to be temporary and includes borrowers whose credit quality has deteriorated and is at risk of further decline. | ||||
• Substandard (8) | This grade includes “Substandard” loans under regulatory guidelines. Substandard loans exhibit a well-defined weakness that jeopardizes debt repayment in accordance with contractual agreements, even though the loan may be performing. These obligations are characterized by the distinct possibility that a loss may be incurred if these weaknesses are not corrected and repayment may be dependent upon collateral liquidation or secondary source of repayment. | ||||
• Doubtful (9) | This grade includes “Doubtful” loans under regulatory guidelines. Such loans are placed on nonaccrual status and repayment may be dependent upon collateral with no readily determinable valuation or valuations that are highly subjective in nature. Repayment for these loans is considered improbable based on currently existing facts and circumstances. | ||||
• Loss (0) | This grade includes “Loss” loans under regulatory guidelines. Loss loans are charged-off or written down when repayment is not expected. |
Term Loans | |||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial real estate loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Construction/land/land development: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total construction/land/land development loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total residential real estate loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial and industrial loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Mortgage Warehouse Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Term Loans | |||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial real estate loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Construction/land/land development: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total construction/land/land development loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total residential real estate loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial and industrial loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Term Loans | |||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
Mortgage Warehouse Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage warehouse lines of credit | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Classified | |||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Current period year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Loans Past Due 90 Days or More | Total Past Due | Current Loans | Total Loans Receivable | Accruing Loans 90 or More Days Past Due | ||||||||||||||||||||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Construction/land/land development | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Total real estate | |||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
Mortgage warehouse lines of credit | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total LHFI | $ | $ | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Loans Past Due 90 Days or More | Total Past Due | Current Loans | Total Loans Receivable | Accruing Loans 90 or More Days Past Due | ||||||||||||||||||||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Construction/land/land development | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Total real estate | |||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
Mortgage warehouse lines of credit | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total LHFI | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | |||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision(1) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Average balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net charge-offs to loan average balance (annualized) | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
__________________________ (1)The $ | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Allowance for loan credit losses - BTH merger(1) | |||||||||||||||||||||||||||||||||||||||||
Charge-offs | |||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision(2) | |||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Average balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net charge-offs to loan average balance (annualized) | % | ( | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||
____________________________ (1)Excluded from the allowance is $ immediately written off. (2)The $ |
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | |||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Average balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net charge-offs to loan average balance (annualized) | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||
_________________________ (1)The $ |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Allowance for loan credit losses - BTH merger(1) | |||||||||||||||||||||||||||||||||||||||||
Charge-offs | |||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision(2) | |||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Average balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net charge-offs to loan average balance (annualized) | % | ( | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||
_________________________ (1)Excluded from the allowance is $ (2)The $ |
September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | ||||||||||||||||||||||||||||||||||
Real Estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Equipment | |||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ALCL Allocation | $ | $ | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | ||||||||||||||||||||||||||||||||||
Real Estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Accounts Receivable | |||||||||||||||||||||||||||||||||||||||||
Equipment | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
ALCL Allocation | $ | $ | $ | $ | $ | $ | $ |
Nonaccrual With No Allowance for Credit Loss | Total Nonaccrual | ||||||||||||||||||||||
(Dollars in thousands) Loans secured by real estate: | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | |||||||||||||||||||
Construction/land/land development | |||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||
Total real estate | |||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total nonaccrual loans | $ | $ | $ | $ |
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Term Extension | Combination: Term Extension and Interest Rate Reduction | Other-Than-Insignificant Payment Delay | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | % of Loans | Amortized Cost | % of Loans | Amortized Cost | % of Loans | |||||||||||||||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Construction/land/land development | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Total real estate | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Term Extension | Combination: Term Extension and Interest Rate Reduction | Other-Than-Insignificant Payment Delay | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | % of Loans | Amortized Cost | % of Loans | Amortized Cost | % of Loans | |||||||||||||||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Construction/land/land development | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Total real estate | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 | |||||||||||||||||
Interest Rate Reduction | Term Extension | Other-Than-Insignificant Payment Delay | |||||||||||||||
Commercial real estate | N/A | Added a weighted average | Delayed payment of weighted average | ||||||||||||||
Construction/land/land development | N/A | Added a weighted average | N/A | ||||||||||||||
Residential real estate | N/A | Added a weighted average | N/A | ||||||||||||||
Commercial and industrial | Reduced weighted average contractual interest rate from | Added a weighted average | Delayed payment of weighted average | ||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||
Interest Rate Reduction | Term Extension | Other-Than-Insignificant Payment Delay | |||||||||||||||
Commercial real estate | N/A | Added a weighted average | Delayed payment of weighted average | ||||||||||||||
Construction/land/land development | N/A | Added a weighted average | N/A | ||||||||||||||
Residential real estate | N/A | Added a weighted average | N/A | ||||||||||||||
Commercial and industrial | Reduced weighted average contractual interest rate from | Added a weighted average | Delayed payment of weighted average | ||||||||||||||
Payment Status (Amortized Cost Basis) | |||||||||||||||||
September 30, 2023 | |||||||||||||||||
(Dollars in thousands) | Current | 30-89 Days Past Due | 90 Days or More Past Due | ||||||||||||||
Loans secured by real estate: | |||||||||||||||||
Commercial real estate | $ | $ | $ | ||||||||||||||
Construction/land/land development | |||||||||||||||||
Residential real estate | |||||||||||||||||
Total real estate | |||||||||||||||||
Commercial and industrial | |||||||||||||||||
Total LHFI | $ | $ | $ |
September 30, 2023 | |||||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
State and municipal securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||||||
Residential mortgage-backed securities | |||||||||||||||||||||||
Commercial collateralized mortgage obligations | |||||||||||||||||||||||
Residential collateralized mortgage obligations | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
Securities carried at fair value through income | |||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||||||
Other assets - derivatives | |||||||||||||||||||||||
Total recurring fair value measurements - assets | $ | $ | $ | $ | |||||||||||||||||||
Other liabilities - derivatives | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Total recurring fair value measurements - liabilities | $ | $ | ( | $ | $ | ( |
December 31, 2022 | |||||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
State and municipal securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||||||
Residential mortgage-backed securities | |||||||||||||||||||||||
Commercial collateralized mortgage obligations | |||||||||||||||||||||||
Residential collateralized mortgage obligations | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
Securities carried at fair value through income | |||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||||||
Other assets - derivatives | |||||||||||||||||||||||
Total recurring fair value measurements - assets | $ | $ | $ | $ | |||||||||||||||||||
Other liabilities - derivatives | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Total recurring fair value measurements - liabilities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
(Dollars in thousands) | MSRs | Securities Available for Sale | Securities at Fair Value Through Income | ||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Gain (loss) recognized in earnings: | |||||||||||||||||
Mortgage banking revenue(1) | ( | ||||||||||||||||
Other noninterest income | |||||||||||||||||
Loss recognized in AOCI | ( | ||||||||||||||||
Purchases, issuances, sales and settlements: | |||||||||||||||||
Originations | |||||||||||||||||
Sales | ( | ||||||||||||||||
Settlements | ( | ( | |||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ||||||||||||||
(Dollars in thousands) | MSRs | Securities Available for Sale | Securities at Fair Value Through Income | ||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ||||||||||||||
Gain (loss) recognized in earnings: | |||||||||||||||||
Mortgage banking revenue(1) | |||||||||||||||||
Other noninterest income | ( | ||||||||||||||||
Loss recognized in AOCI | ( | ||||||||||||||||
Purchases, issuances, sales and settlements: | |||||||||||||||||
Originations | |||||||||||||||||
Purchases | |||||||||||||||||
Acquired in BTH merger | |||||||||||||||||
Settlements | ( | ( | |||||||||||||||
Balance at September 30, 2022 | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Range | Weighted Average(1) | Range | Weighted Average(1) | ||||||||||||||||||||
Prepayment speeds | % | % | |||||||||||||||||||||
Discount rates | |||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||
(Dollars in thousands) | Aggregate Fair Value | Principal Balance/Amortized Cost | Difference | ||||||||||||||
Loans held for sale(1) | $ | $ | $ | ||||||||||||||
Securities carried at fair value through income | ( | ||||||||||||||||
Total | $ | $ | $ |
December 31, 2022 | |||||||||||||||||
(Dollars in thousands) | Aggregate Fair Value | Principal Balance/Amortized Cost | Difference | ||||||||||||||
Loans held for sale(1) | $ | $ | $ | ||||||||||||||
Securities carried at fair value through income | ( | ||||||||||||||||
Total | $ | $ | $ | ( |
(Dollars in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
Changes in fair value included in noninterest income: | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Mortgage banking revenue (loans held for sale) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other income: | |||||||||||||||||||||||
Securities carried at fair value through income | ( | ( | |||||||||||||||||||||
Total fair value option impact on noninterest income (1) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||
Financial assets: Level 1 inputs: | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Level 2 inputs: | |||||||||||||||||||||||
Non-marketable equity securities held in other financial institutions | |||||||||||||||||||||||
GNMA repurchase asset | |||||||||||||||||||||||
Accrued interest and loan fees receivable | |||||||||||||||||||||||
Level 3 inputs: | |||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||
LHFI, net | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Level 2 inputs: | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
FHLB advances and other borrowings | |||||||||||||||||||||||
Subordinated indebtedness | |||||||||||||||||||||||
Accrued interest payable |
(Dollars in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
Mortgage banking revenue | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Origination | $ | $ | $ | $ | |||||||||||||||||||
Gain on sale of loans held for sale | |||||||||||||||||||||||
Originations of MSRs | |||||||||||||||||||||||
Servicing | |||||||||||||||||||||||
Total gross mortgage revenue | |||||||||||||||||||||||
MSR valuation adjustments, net (1) | ( | ( | ( | ||||||||||||||||||||
Mortgage HFS and pipeline fair value adjustment | ( | ( | ( | ( | |||||||||||||||||||
MSR hedge impact | ( | ( | ( | ( | |||||||||||||||||||
Mortgage banking revenue | $ | $ | ( | $ | $ | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Servicing acquired in BTH merger | |||||||||||||||||||||||
Addition of servicing rights | |||||||||||||||||||||||
Settlement of sale of GNMA MSR | ( | ||||||||||||||||||||||
Valuation adjustment, net of amortization | ( | ( | ( | ||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Short-term FHLB advances | $ | $ | |||||||||
Long-term FHLB advances | |||||||||||
GNMA repurchase liability | |||||||||||
Overnight repurchase agreements with depositors | |||||||||||
Correspondent short-term borrowings | |||||||||||
Total FHLB advances and other borrowings | $ | $ | |||||||||
Subordinated indebtedness, net | $ | $ | |||||||||
Debt Security | Issue Year | Interest Rate | Outstanding Amount | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Floating rate subordinated promissory notes due June 2025 | 2015 | Prime + Min: Max: | $ | |||||||||||||||||
Floating rate subordinated promissory notes due December 2023 | 2016 | Prime + Min: Max: | ||||||||||||||||||
Floating rate subordinated promissory notes due December 2026 | 2016 | Prime + Min: Max: | ||||||||||||||||||
Floating rate subordinated promissory notes due December 2024 | 2017 | Prime + Min: Max: | ||||||||||||||||||
Floating rate subordinated promissory notes due December 2027 | 2017 | Prime + Min: Max: | ||||||||||||||||||
Floating rate subordinated promissory notes due December 2025 | 2018 | Prime + Min: Max: | ||||||||||||||||||
Floating rate subordinated promissory notes due December 2028 | 2018 | Prime + Min: Max: | ||||||||||||||||||
Fixed to floating rate subordinated promissory notes due June 2031 | 2021 | Through 6/30/26: After 6/30/26: Prime + Min: Max: | ||||||||||||||||||
Remaining unamortized merger-related fair value adjustment at September 30, 2023 | ( | |||||||||||||||||||
Total assumed subordinated notes | ||||||||||||||||||||
Legacy subordinated indebtedness | ||||||||||||||||||||
Total subordinated indebtedness, excluding junior subordinated debt | $ |
(Dollars in thousands) Issuance Trust | Issuance Date | Maturity Date | Amount Outstanding | Rate Type | Current Rate | Maximum Rate | ||||||||||||||||||||||||||||||||
CTB Statutory Trust I | 07/2001 | 07/2031 | $ | Variable (1) | % | % | ||||||||||||||||||||||||||||||||
First Louisiana Statutory Trust I | 09/2006 | 12/2036 | Variable (2) | |||||||||||||||||||||||||||||||||||
BT Holdings Trust I | 05/2007 | 09/2037 | Variable (3) | N/A | ||||||||||||||||||||||||||||||||||
Par amount | ||||||||||||||||||||||||||||||||||||||
Unamortized original issue discount | ( | |||||||||||||||||||||||||||||||||||||
Unamortized purchase accounting discount | ( | |||||||||||||||||||||||||||||||||||||
Total junior subordinated debt at September 30, 2023 | $ |
(Dollars in thousands) | Notional Amounts(1) | Fair Values | |||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||
Interest rate swaps included in other assets | $ | $ | $ | $ | |||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps included in other assets | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swaps included in other liabilities | ( | ( | |||||||||||||||||||||
Risk participation agreements included in other assets | |||||||||||||||||||||||
Forward commitments to purchase forward-settling mortgage-backed securities included in other liabilities | ( | ( | |||||||||||||||||||||
Forward commitments to purchase treasury notes in other liabilities | ( | ||||||||||||||||||||||
Forward commitments to sell residential mortgage loans included in other assets | |||||||||||||||||||||||
Interest rate-lock commitments on residential mortgage loans included in other assets | |||||||||||||||||||||||
$ | $ | $ | $ |
Weighted-Average Interest Rate | |||||||||||||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Interest rate swaps: | Paid | Received | Paid | Received | |||||||||||||||||||
Cash flow hedges | % | % | % | % | |||||||||||||||||||
Non-hedging interest rate swaps - financial institution counterparties | |||||||||||||||||||||||
Non-hedging interest rate swaps - customer counterparties |
(Dollars in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Amount of loss recognized in mortgage banking revenue (1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Amount of gain recognized in other non-interest income |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Expected term (in years) | |||||||||||||||||||||||
Dividend yield | $ | $ | $ | $ | |||||||||||||||||||
Risk-free interest rate | % | % | % | % | |||||||||||||||||||
Expected volatility |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
ESPP shares purchased | |||||||||||||||||||||||
Shares available for issuance under the ESPP |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
RSA & RSU | $ | $ | $ | $ | |||||||||||||||||||
PSU | |||||||||||||||||||||||
ESPP | |||||||||||||||||||||||
Total stock compensation expense | $ | $ | $ | $ | |||||||||||||||||||
Related tax benefits recognized in net income | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Shares | Weighted Average Grant-Date Fair Value | Shares | Weighted Average Grant-Date Fair Value | ||||||||||||||||||||
Nonvested RSAs, January 1, | $ | $ | |||||||||||||||||||||
Granted RSAs | |||||||||||||||||||||||
Vested RSAs | ( | ( | |||||||||||||||||||||
Nonvested RSAs, September 30, | |||||||||||||||||||||||
Nonvested RSUs, January 1, | $ | $ | |||||||||||||||||||||
Granted RSUs | |||||||||||||||||||||||
Vested RSUs | ( | ( | |||||||||||||||||||||
Forfeited RSUs | ( | ( | |||||||||||||||||||||
Nonvested RSUs, September 30, | |||||||||||||||||||||||
Nonvested PSUs, January 1, | $ | $ | |||||||||||||||||||||
Granted PSUs | |||||||||||||||||||||||
Forfeited PSUs | ( | ||||||||||||||||||||||
Nonvested PSUs, September 30, |
(Dollars in thousands, except per share amounts) | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
Outstanding at January 1, 2023 | $ | $ | |||||||||||||||||||||
Exercised | ( | — | |||||||||||||||||||||
Expired | ( | — | — | ||||||||||||||||||||
Outstanding and exercisable at September 30, 2023 | |||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
Outstanding at January 1, 2022 | $ | $ | |||||||||||||||||||||
BTH options converted to OBNK options | — | — | |||||||||||||||||||||
Exercised | ( | — | |||||||||||||||||||||
Expired | ( | — | — | ||||||||||||||||||||
Outstanding and exercisable at September 30, 2022 | |||||||||||||||||||||||
(Dollars in thousands) | Unrealized (Loss) Gain on AFS Securities | Unrealized Gain (Loss) on Cash Flow Hedges | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||
Balance at January 1, 2023 | $ | ( | $ | $ | ( | ||||||||||||
Net change | ( | ( | |||||||||||||||
Balance at September 30, 2023 | $ | ( | $ | $ | ( | ||||||||||||
Balance at January 1, 2022 | $ | $ | ( | $ | |||||||||||||
Net change | ( | ( | |||||||||||||||
Balance at September 30, 2022 | $ | ( | $ | $ | ( | ||||||||||||
(Dollars in thousands) September 30, 2023 | Actual | Minimum Capital Required - Basel III | To be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
Origin Bancorp, Inc. | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||
Origin Bank | $ | % | |||||||||||||||||||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
Leverage Ratio | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank | |||||||||||||||||||||||||||||||||||
Leverage Ratio | |||||||||||||||||||||||||||||||||||
Origin Bancorp, Inc. | N/A | N/A | |||||||||||||||||||||||||||||||||
Origin Bank |
(Dollars in thousands) September 30, 2023 | |||||||||||||||||||||||||||||
Less than One Year | One-Three Years | Three-Five Years | Greater than Five Years | Total | |||||||||||||||||||||||||
Commitments to extend credit(1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Standby letters of credit | |||||||||||||||||||||||||||||
Total off-balance sheet commitments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
Commitments to extend credit(1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Standby letters of credit | |||||||||||||||||||||||||||||
Total off-balance sheet commitments | $ | $ | $ | $ | $ |
BT Holdings, Inc. | |||||
(Dollars in thousands) | As Recorded by Origin | ||||
Assets Acquired: | |||||
Cash and cash equivalents | $ | ||||
Investment securities | |||||
Loans acquired | |||||
Allowance for credit losses on loans | ( | ||||
Loans receivable, net | |||||
Premises and equipment | |||||
Non-marketable equity securities held in other financial institutions | |||||
Core deposit intangible | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Liabilities Assumed: | |||||
Noninterest-bearing deposits | $ | ||||
Interest-bearing deposits | |||||
Time deposits | |||||
Total deposits | |||||
Securities sold under agreements to repurchase | |||||
Subordinated indebtedness, net | |||||
Accrued expenses and other liabilities | |||||
Total liabilities assumed | |||||
Net assets acquired | |||||
Purchase price | |||||
Goodwill | $ |
August 1, 2022 | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Commercial Real Estate | Construction/ Land/ Land Development | Residential Real Estate | Commercial and Industrial | Mortgage Warehouse Lines of Credit | Consumer | Total | ||||||||||||||||||||||||||||||||||
Unpaid principal balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
PCD allowance for credit loss at merger | |||||||||||||||||||||||||||||||||||||||||
Non-credit related (premium)/discount | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Fair value of PCD loans | $ | $ | $ | $ | $ | $ | $ |
(Dollars in thousands except share and per share data) | Pro-Forma for the Nine Months Ended September 30, 2022 | ||||
Net interest income | $ | ||||
Noninterest income | |||||
Net income | |||||
Pro-forma earnings per share: | |||||
Basic | $ | ||||
Diluted | |||||
Weighted average shares outstanding | |||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) Assets | Average Balance(1) | Income/Expense | Yield/Rate | Average Balance(1) | Income/Expense | Yield/Rate | |||||||||||||||||||||||||||||
Commercial real estate | $ | 2,428,969 | $ | 35,090 | 5.73 | % | $ | 2,046,411 | $ | 23,938 | 4.64 | % | |||||||||||||||||||||||
Construction/land/land development | 1,044,180 | 18,539 | 7.04 | 760,682 | 9,969 | 5.20 | |||||||||||||||||||||||||||||
Residential real estate | 1,663,291 | 21,195 | 5.06 | 1,249,746 | 13,742 | 4.36 | |||||||||||||||||||||||||||||
Commercial and industrial | 2,024,675 | 38,907 | 7.62 | 1,816,912 | 25,815 | 5.64 | |||||||||||||||||||||||||||||
Mortgage warehouse lines of credit | 376,275 | 6,838 | 7.21 | 491,584 | 5,614 | 4.53 | |||||||||||||||||||||||||||||
Consumer | 23,704 | 462 | 7.74 | 24,137 | 414 | 6.80 | |||||||||||||||||||||||||||||
LHFI | 7,561,094 | 121,031 | 6.35 | 6,389,472 | 79,492 | 4.94 | |||||||||||||||||||||||||||||
Loans held for sale | 11,829 | 173 | 5.81 | 29,927 | 311 | 4.12 | |||||||||||||||||||||||||||||
Loans receivable | 7,572,923 | 121,204 | 6.35 | 6,419,399 | 79,803 | 4.93 | |||||||||||||||||||||||||||||
Investment securities-taxable | 1,310,459 | 8,194 | 2.48 | 1,547,848 | 7,801 | 2.00 | |||||||||||||||||||||||||||||
Investment securities-non-taxable | 216,700 | 1,281 | 2.35 | 317,175 | 2,151 | 2.69 | |||||||||||||||||||||||||||||
Non-marketable equity securities held in other financial institutions | 58,421 | 952 | 6.47 | 73,819 | 390 | 2.10 | |||||||||||||||||||||||||||||
Interest-bearing deposits in banks | 279,383 | 3,820 | 5.42 | 206,781 | 1,092 | 2.09 | |||||||||||||||||||||||||||||
Total interest-earning assets | 9,437,886 | 135,451 | 5.69 | 8,565,022 | 91,237 | 4.23 | |||||||||||||||||||||||||||||
Noninterest-earning assets(2) | 597,678 | 637,399 | |||||||||||||||||||||||||||||||||
Total assets | $ | 10,035,564 | $ | 9,202,421 | |||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Savings and interest-bearing transaction accounts | $ | 4,728,211 | $ | 39,042 | 3.28 | % | $ | 4,157,092 | $ | 6,878 | 0.66 | % | |||||||||||||||||||||||
Time deposits | 1,626,935 | 16,557 | 4.04 | 669,900 | 856 | 0.51 | |||||||||||||||||||||||||||||
Total interest-bearing deposits | 6,355,146 | 55,599 | 3.47 | 4,826,992 | 7,734 | 0.64 | |||||||||||||||||||||||||||||
FHLB advances & other borrowings | 230,815 | 3,207 | 5.51 | 538,020 | 2,717 | 2.00 | |||||||||||||||||||||||||||||
Subordinated indebtedness | 196,792 | 2,515 | 5.07 | 186,803 | 2,263 | 4.81 | |||||||||||||||||||||||||||||
Total interest-bearing liabilities | 6,782,753 | 61,321 | 3.59 | 5,551,815 | 12,714 | 0.91 | |||||||||||||||||||||||||||||
Noninterest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 2,088,183 | 2,582,500 | |||||||||||||||||||||||||||||||||
Other liabilities(2) | 151,716 | 129,354 | |||||||||||||||||||||||||||||||||
Total liabilities | 9,022,652 | 8,263,669 | |||||||||||||||||||||||||||||||||
Stockholders’ Equity | 1,012,912 | 938,752 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,035,564 | $ | 9,202,421 | |||||||||||||||||||||||||||||||
Net interest spread | 2.10 | % | 3.32 | % | |||||||||||||||||||||||||||||||
Net interest income and margin | $ | 74,130 | 3.12 | $ | 78,523 | 3.64 | |||||||||||||||||||||||||||||
Net interest income and margin - (tax equivalent)(3) | $ | 74,775 | 3.14 | $ | 79,399 | 3.68 |
Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022 | |||||||||||||||||
(Dollars in thousands) Interest-earning assets | Increase (Decrease) Due To Change In | ||||||||||||||||
Loans: | Volume | Yield/Rate | Total Change | ||||||||||||||
Commercial real estate | $ | 4,475 | $ | 6,677 | $ | 11,152 | |||||||||||
Construction/land/land development | 3,715 | 4,855 | 8,570 | ||||||||||||||
Residential real estate | 4,547 | 2,906 | 7,453 | ||||||||||||||
Commercial and industrial | 2,952 | 10,140 | 13,092 | ||||||||||||||
Mortgage warehouse lines of credit | (1,317) | 2,541 | 1,224 | ||||||||||||||
Consumer | (7) | 55 | 48 | ||||||||||||||
Loans held for sale | (188) | 50 | (138) | ||||||||||||||
Loans receivable | 14,177 | 27,224 | 41,401 | ||||||||||||||
Investment securities-taxable | (1,196) | 1,589 | 393 | ||||||||||||||
Investment securities-non-taxable | (681) | (189) | (870) | ||||||||||||||
Non-marketable equity securities held in other financial institutions | (81) | 643 | 562 | ||||||||||||||
Interest-bearing deposits in banks | 383 | 2,345 | 2,728 | ||||||||||||||
Total interest-earning assets | 12,602 | 31,612 | 44,214 | ||||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Savings and interest-bearing transaction accounts | 945 | 31,219 | 32,164 | ||||||||||||||
Time deposits | 1,223 | 14,478 | 15,701 | ||||||||||||||
FHLB advances & other borrowings | (1,551) | 2,041 | 490 | ||||||||||||||
Subordinated indebtedness | 121 | 131 | 252 | ||||||||||||||
Total interest-bearing liabilities | 738 | 47,869 | 48,607 | ||||||||||||||
Net interest income | $ | 11,864 | $ | (16,257) | $ | (4,393) |
(Dollars in thousands) | Three Months Ended September 30, | ||||||||||||||||||||||
Noninterest income: | 2023 | 2022 | $ Change | % Change | |||||||||||||||||||
Insurance commission and fee income | $ | 6,443 | $ | 5,666 | $ | 777 | 13.7 | % | |||||||||||||||
Service charges and fees | 4,621 | 4,734 | (113) | (2.4) | |||||||||||||||||||
Mortgage banking revenue (loss) | 892 | (929) | 1,821 | 196.0 | |||||||||||||||||||
Other fee income | 944 | 1,162 | (218) | (18.8) | |||||||||||||||||||
Swap fee income | 366 | 25 | 341 | N/M | |||||||||||||||||||
(Loss) gain on sales of securities, net | (7,173) | 1,664 | (8,837) | 531.1 | |||||||||||||||||||
Limited partnership investment (loss) income | (425) | 112 | (537) | N/M | |||||||||||||||||||
Gain on sales and disposals of other assets, net | 45 | 70 | (25) | (35.7) | |||||||||||||||||||
Other income | 12,406 | 1,219 | 11,187 | N/M | |||||||||||||||||||
Total noninterest income | $ | 18,119 | $ | 13,723 | $ | 4,396 | 32.0 | ||||||||||||||||
____________________________ N/M = Not meaningful. | |||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended September 30, | ||||||||||||||||||||||
Noninterest expense: | 2023 | 2022 | $ Change | % Change | |||||||||||||||||||
Salaries and employee benefits | $ | 34,624 | $ | 31,834 | $ | 2,790 | 8.8 | % | |||||||||||||||
Occupancy and equipment, net | 6,790 | 5,399 | 1,391 | 25.8 | |||||||||||||||||||
Data processing | 2,775 | 2,689 | 86 | 3.2 | |||||||||||||||||||
Intangible asset amortization | 2,264 | 1,872 | 392 | 20.9 | |||||||||||||||||||
Office and operations | 2,868 | 2,121 | 747 | 35.2 | |||||||||||||||||||
Professional services | 1,409 | 1,188 | 221 | 18.6 | |||||||||||||||||||
Loan-related expenses | 1,220 | 1,599 | (379) | (23.7) | |||||||||||||||||||
Advertising and marketing | 1,371 | 1,196 | 175 | 14.6 | |||||||||||||||||||
Electronic banking | 1,384 | 1,087 | 297 | 27.3 | |||||||||||||||||||
Franchise tax expense | 520 | 957 | (437) | (45.7) | |||||||||||||||||||
Regulatory assessments | 1,913 | 877 | 1,036 | 118.1 | |||||||||||||||||||
Communications | 390 | 279 | 111 | 39.8 | |||||||||||||||||||
Merger-related expense | — | 3,614 | (3,614) | (100.0) | |||||||||||||||||||
Other expenses | 1,135 | 1,529 | (394) | (25.8) | |||||||||||||||||||
Total noninterest expense | $ | 58,663 | $ | 56,241 | $ | 2,422 | 4.3 |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) Assets | Average Balance(1) | Income/Expense | Yield/Rate | Average Balance(1) | Income/Expense | Yield/Rate | |||||||||||||||||||||||||||||
Commercial real estate | $ | 2,393,028 | $ | 99,497 | 5.56 | % | $ | 1,865,658 | $ | 60,010 | 4.30 | % | |||||||||||||||||||||||
Construction/land/land development | 997,296 | 50,354 | 6.75 | 638,683 | 22,466 | 4.70 | |||||||||||||||||||||||||||||
Residential real estate | 1,599,803 | 59,155 | 4.94 | 1,042,397 | 33,008 | 4.23 | |||||||||||||||||||||||||||||
Commercial and industrial | 2,051,272 | 115,750 | 7.54 | 1,548,419 | 55,623 | 4.80 | |||||||||||||||||||||||||||||
Mortgage warehouse lines of credit | 329,205 | 16,262 | 6.60 | 453,658 | 14,055 | 4.14 | |||||||||||||||||||||||||||||
Consumer | 24,836 | 1,431 | 7.71 | 18,887 | 889 | 6.29 | |||||||||||||||||||||||||||||
LHFI | 7,395,440 | 342,449 | 6.19 | 5,567,702 | 186,051 | 4.47 | |||||||||||||||||||||||||||||
Loans held for sale | 20,105 | 693 | 4.61 | 33,428 | 921 | 3.68 | |||||||||||||||||||||||||||||
Loans receivable | 7,415,545 | 343,142 | 6.19 | 5,601,130 | 186,972 | 4.46 | |||||||||||||||||||||||||||||
Investment securities-taxable | 1,358,913 | 24,658 | 2.43 | 1,522,631 | 20,030 | 1.76 | |||||||||||||||||||||||||||||
Investment securities-non-taxable | 224,985 | 3,974 | 2.36 | 276,641 | 5,044 | 2.44 | |||||||||||||||||||||||||||||
Non-marketable equity securities held in other financial institutions | 69,505 | 2,772 | 5.33 | 56,797 | 1,214 | 2.86 | |||||||||||||||||||||||||||||
Interest-bearing deposits in banks | 352,166 | 13,360 | 5.07 | 408,237 | 2,048 | 0.67 | |||||||||||||||||||||||||||||
Total interest-earning assets | 9,421,114 | 387,906 | 5.50 | 7,865,436 | 215,308 | 3.66 | |||||||||||||||||||||||||||||
Noninterest-earning assets(2) | 582,983 | 536,265 | |||||||||||||||||||||||||||||||||
Total assets | $ | 10,004,097 | $ | 8,401,701 | |||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Savings and interest-bearing transaction accounts | $ | 4,706,150 | $ | 101,674 | 2.89 | % | $ | 3,967,253 | $ | 11,514 | 0.39 | % | |||||||||||||||||||||||
Time deposits | 1,329,881 | 35,012 | 3.52 | 569,917 | 2,175 | 0.51 | |||||||||||||||||||||||||||||
Total interest-bearing deposits | 6,036,031 | 136,686 | 3.03 | 4,537,170 | 13,689 | 0.40 | |||||||||||||||||||||||||||||
FHLB advances & other borrowings | 430,650 | 17,038 | 5.29 | 407,869 | 5,203 | 1.71 | |||||||||||||||||||||||||||||
Subordinated indebtedness | 199,568 | 7,614 | 5.10 | 167,366 | 5,887 | 4.70 | |||||||||||||||||||||||||||||
Total interest-bearing liabilities | 6,666,249 | 161,338 | 3.24 | 5,112,405 | 24,779 | 0.65 | |||||||||||||||||||||||||||||
Noninterest-bearing liabilities | |||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 2,205,664 | 2,364,443 | |||||||||||||||||||||||||||||||||
Other liabilities(2) | 136,789 | 147,868 | |||||||||||||||||||||||||||||||||
Total liabilities | 9,008,702 | 7,624,716 | |||||||||||||||||||||||||||||||||
Stockholders’ Equity | 995,395 | 776,985 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,004,097 | $ | 8,401,701 | |||||||||||||||||||||||||||||||
Net interest spread | 2.26 | % | 3.01 | % | |||||||||||||||||||||||||||||||
Net interest income and margin | $ | 226,568 | 3.22 | $ | 190,529 | 3.24 | |||||||||||||||||||||||||||||
Net interest income and margin - (tax equivalent)(3) | $ | 228,538 | 3.24 | $ | 192,784 | 3.28 |
Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022 | |||||||||||||||||
(Dollars in thousands) Interest-earning assets | Increase (Decrease) due to Change in | ||||||||||||||||
Loans: | Volume | Yield/Rate | Total Change | ||||||||||||||
Commercial real estate | $ | 16,963 | $ | 22,524 | $ | 39,487 | |||||||||||
Construction/land/land development | 12,614 | 15,274 | 27,888 | ||||||||||||||
Residential real estate | 17,650 | 8,497 | 26,147 | ||||||||||||||
Commercial and industrial | 18,064 | 42,063 | 60,127 | ||||||||||||||
Mortgage warehouse lines of credit | (3,856) | 6,063 | 2,207 | ||||||||||||||
Consumer | 280 | 262 | 542 | ||||||||||||||
Loans held for sale | (367) | 139 | (228) | ||||||||||||||
Loans receivable | 61,348 | 94,822 | 156,170 | ||||||||||||||
Investment securities-taxable | (2,154) | 6,782 | 4,628 | ||||||||||||||
Investment securities-non-taxable | (942) | (128) | (1,070) | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 272 | 1,286 | 1,558 | ||||||||||||||
Interest-bearing deposits in banks | (281) | 11,593 | 11,312 | ||||||||||||||
Total interest-earning assets | 58,243 | 114,355 | 172,598 | ||||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Savings and interest-bearing transaction accounts | 2,145 | 88,015 | 90,160 | ||||||||||||||
Time deposits | 2,900 | 29,937 | 32,837 | ||||||||||||||
FHLB advances & other borrowings | 291 | 11,544 | 11,835 | ||||||||||||||
Subordinated indebtedness | 1,133 | 594 | 1,727 | ||||||||||||||
Total interest-bearing liabilities | 6,469 | 130,090 | 136,559 | ||||||||||||||
Net interest income | $ | 51,774 | $ | (15,735) | $ | 36,039 |
(Dollars in thousands) | Nine Months Ended September 30, | ||||||||||||||||||||||
Noninterest income: | 2023 | 2022 | $ Change | % Change | |||||||||||||||||||
Insurance commission and fee income | $ | 19,639 | $ | 17,815 | $ | 1,824 | 10.2 | % | |||||||||||||||
Service charges and fees | 13,914 | 13,006 | 908 | 7.0 | |||||||||||||||||||
Mortgage banking revenue | 4,075 | 5,521 | (1,446) | (26.2) | |||||||||||||||||||
Other fee income | 2,856 | 2,398 | 458 | 19.1 | |||||||||||||||||||
Swap fee income | 1,081 | 165 | 916 | N/M | |||||||||||||||||||
(Loss) gain on sales of securities, net | (7,029) | 1,664 | (8,693) | N/M | |||||||||||||||||||
Limited partnership investment (loss) income | (128) | 31 | (159) | N/M | |||||||||||||||||||
Loss on sales and disposals of other assets, net | (3) | (209) | 206 | 98.6 | |||||||||||||||||||
Other income | 15,734 | 3,454 | 12,280 | N/M | |||||||||||||||||||
Total noninterest income | $ | 50,139 | $ | 43,845 | $ | 6,294 | 14.4 | ||||||||||||||||
____________________________ N/M = Not meaningful. |
(Dollars in thousands) | Nine Months Ended September 30, | ||||||||||||||||||||||
Noninterest expense: | 2023 | 2022 | $ Change | % Change | |||||||||||||||||||
Salaries and employee benefits | $ | 102,888 | $ | 85,632 | $ | 17,256 | 20.2 | % | |||||||||||||||
Occupancy and equipment, net | 19,871 | 14,340 | 5,531 | 38.6 | |||||||||||||||||||
Data processing | 8,528 | 7,588 | 940 | 12.4 | |||||||||||||||||||
Intangible asset amortization | 7,369 | 2,934 | 4,435 | N/M | |||||||||||||||||||
Office and operations | 7,887 | 5,843 | 2,044 | 35.0 | |||||||||||||||||||
Professional services | 4,491 | 2,668 | 1,823 | 68.3 | |||||||||||||||||||
Loan-related expenses | 3,941 | 4,421 | (480) | (10.9) | |||||||||||||||||||
Advertising and marketing | 4,296 | 2,926 | 1,370 | 46.8 | |||||||||||||||||||
Electronic banking | 3,609 | 2,900 | 709 | 24.4 | |||||||||||||||||||
Franchise tax expense | 2,392 | 2,565 | (173) | (6.7) | |||||||||||||||||||
Regulatory assessments | 4,596 | 2,305 | 2,291 | 99.4 | |||||||||||||||||||
Communications | 1,181 | 812 | 369 | 45.4 | |||||||||||||||||||
Merger-related expense | — | 4,992 | (4,992) | (100.0) | |||||||||||||||||||
Other expenses | 3,261 | 3,239 | 22 | 0.7 | |||||||||||||||||||
Total noninterest expense | $ | 174,310 | $ | 143,165 | $ | 31,145 | 21.8 |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | 2023 vs. 2022 | ||||||||||||||||||||||||||||||||
Real estate: | Amount | Percent | Amount | Percent | $ Change | % Change | |||||||||||||||||||||||||||||
Commercial real estate | $ | 2,435,891 | 32.2 | % | $ | 2,304,678 | 32.6 | % | $ | 131,213 | 5.7 | % | |||||||||||||||||||||||
Construction/land/land development | 1,076,756 | 14.2 | 945,625 | 13.3 | 131,131 | 13.9 | |||||||||||||||||||||||||||||
Residential real estate | 1,688,169 | 22.3 | 1,477,538 | 20.8 | 210,631 | 14.3 | |||||||||||||||||||||||||||||
Total real estate | 5,200,816 | 68.7 | 4,727,841 | 66.7 | 472,975 | 10.0 | |||||||||||||||||||||||||||||
Commercial and industrial | 2,058,073 | 27.2 | 2,051,161 | 28.9 | 6,912 | 0.3 | |||||||||||||||||||||||||||||
Mortgage warehouse lines of credit | 286,293 | 3.8 | 284,867 | 4.0 | 1,426 | 0.5 | |||||||||||||||||||||||||||||
Consumer | 22,881 | 0.3 | 26,153 | 0.4 | (3,272) | (12.5) | |||||||||||||||||||||||||||||
Total LHFI | $ | 7,568,063 | 100.0 | % | $ | 7,090,022 | 100.0 | % | $ | 478,041 | 6.7 | ||||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||||||||
(Dollars in thousands) | One Year or Less | After One Year Through Five Years | After Five Years Through Fifteen Years | After Fifteen Years | Total | ||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||
Commercial real estate | $ | 326,499 | $ | 1,579,298 | $ | 512,107 | $ | 17,987 | $ | 2,435,891 | |||||||||||||||||||
Construction/land/land development | 283,449 | 611,089 | 142,063 | 40,155 | 1,076,756 | ||||||||||||||||||||||||
Residential real estate | 70,872 | 717,635 | 138,064 | 761,598 | 1,688,169 | ||||||||||||||||||||||||
Total real estate | 680,820 | 2,908,022 | 792,234 | 819,740 | 5,200,816 | ||||||||||||||||||||||||
Commercial and industrial | 798,255 | 1,163,112 | 96,573 | 133 | 2,058,073 | ||||||||||||||||||||||||
Mortgage warehouse lines of credit | 284,367 | 1,926 | — | — | 286,293 | ||||||||||||||||||||||||
Consumer | 8,638 | 13,298 | 513 | 432 | 22,881 | ||||||||||||||||||||||||
Total LHFI | $ | 1,772,080 | $ | 4,086,358 | $ | 889,320 | $ | 820,305 | $ | 7,568,063 | |||||||||||||||||||
Amounts with fixed rates | $ | 397,071 | $ | 2,344,324 | $ | 564,638 | $ | 135,280 | $ | 3,441,313 | |||||||||||||||||||
Amounts with variable rates | 1,375,009 | 1,742,034 | 324,682 | 685,025 | 4,126,750 | ||||||||||||||||||||||||
Total | $ | 1,772,080 | $ | 4,086,358 | $ | 889,320 | $ | 820,305 | $ | 7,568,063 |
(Dollars in thousands) | |||||||||||
Nonperforming LHFI: | September 30, 2023 | December 31, 2022 | |||||||||
Commercial real estate | $ | 942 | $ | 526 | |||||||
Construction/land/land development | 235 | 270 | |||||||||
Residential real estate | 13,236 | 7,712 | |||||||||
Commercial and industrial | 17,072 | 1,383 | |||||||||
Consumer | 123 | 49 | |||||||||
Total nonperforming LHFI | 31,608 | 9,940 | |||||||||
Nonperforming loans held for sale | — | 3,933 | |||||||||
Total nonperforming loans | 31,608 | 13,873 | |||||||||
Other real estate owned: | |||||||||||
Commercial real estate, construction/land/land development | 3,031 | — | |||||||||
Residential real estate | 908 | 806 | |||||||||
Total repossessed assets owned | 3,939 | 806 | |||||||||
Total nonperforming assets | $ | 35,547 | $ | 14,679 | |||||||
Loan modifications made to borrowers experiencing financial difficulty - nonaccrual(1) | $ | 6,397 | $ | 4,389 | |||||||
Loan modifications made to borrowers experiencing financial difficulty - accruing(1) | 24,873 | 3,248 | |||||||||
Total LHFI | 7,568,063 | 7,090,022 | |||||||||
Ratio of nonperforming LHFI to total LHFI | 0.42 | % | 0.14 | % | |||||||
Ratio of nonperforming assets to total assets | 0.37 | 0.15 | |||||||||
(Dollars in thousands) | Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||
ALCL | 2023 | 2022 | 2022 | ||||||||||||||
Balance at beginning of period | $ | 87,161 | $ | 64,586 | $ | 64,586 | |||||||||||
ALCL - BTH merger | — | 5,527 | 5,527 | ||||||||||||||
Provision for loan credit losses(1) | 13,932 | 17,631 | 21,613 | ||||||||||||||
Charge-offs: | |||||||||||||||||
Commercial real estate | 42 | 166 | 166 | ||||||||||||||
Residential real estate | 27 | 75 | 91 | ||||||||||||||
Commercial and industrial | 8,070 | 5,943 | 8,459 | ||||||||||||||
Consumer | 107 | 38 | 43 | ||||||||||||||
Total charge-offs | 8,246 | 6,222 | 8,759 | ||||||||||||||
Recoveries: | |||||||||||||||||
Commercial real estate | 113 | 19 | 40 | ||||||||||||||
Construction/land/land development | 3 | 200 | 211 | ||||||||||||||
Residential real estate | 13 | 98 | 102 | ||||||||||||||
Commercial and industrial | 2,189 | 1,505 | 3,825 | ||||||||||||||
Consumer | 12 | 15 | 16 | ||||||||||||||
Total recoveries | 2,330 | 1,837 | 4,194 | ||||||||||||||
Net charge-offs | 5,916 | 4,385 | 4,565 | ||||||||||||||
Balance at end of period | $ | 95,177 | $ | 83,359 | $ | 87,161 | |||||||||||
Ratio of allowance for loan credit losses to: | |||||||||||||||||
Nonperforming LHFI | 301.12 | % | 594.11 | % | 876.87 | % | |||||||||||
LHFI | 1.26 | 1.21 | 1.23 | ||||||||||||||
Net charge-offs (annualized) as a percentage of: | |||||||||||||||||
Provision for loan credit loss | 42.46 | 24.87 | 21.12 | ||||||||||||||
ALCL | 8.31 | 7.03 | 5.24 | ||||||||||||||
Average LHFI | 0.11 | 0.11 | 0.08 | ||||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | $ Change | % Change | |||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 2,008,671 | 24.0 | % | $ | 2,482,475 | 32.0 | % | $ | (473,804) | (19.1) | % | |||||||||||||||||||||||
Money market | 2,697,540 | 32.1 | 2,442,559 | 31.4 | 254,981 | 10.4 | |||||||||||||||||||||||||||||
Interest-bearing demand | 1,748,261 | 20.9 | 1,737,158 | 22.3 | 11,103 | 0.6 | |||||||||||||||||||||||||||||
Time deposits | 968,352 | 11.6 | 781,880 | 10.0 | 186,472 | 23.8 | |||||||||||||||||||||||||||||
Brokered time deposits | 669,202 | 8.0 | 5,407 | 0.1 | 663,795 | N/M | |||||||||||||||||||||||||||||
Savings | 282,462 | 3.4 | 326,223 | 4.2 | (43,761) | (13.4) | |||||||||||||||||||||||||||||
Total deposits | $ | 8,374,488 | 100.0 | % | $ | 7,775,702 | 100.0 | % | $ | 598,786 | 7.7 | ||||||||||||||||||||||||
__________________ N/M = Not meaningful. |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Expense | Average Rate Paid | Average Balance | Interest Expense | Average Rate Paid | |||||||||||||||||||||||||||||
Interest-bearing demand | $ | 1,797,370 | $ | 35,480 | 2.64 | % | $ | 1,519,327 | $ | 4,688 | 0.41 | % | |||||||||||||||||||||||
Money market | 2,612,275 | 64,332 | 3.29 | 2,167,616 | 6,670 | 0.41 | |||||||||||||||||||||||||||||
Time deposits | 898,227 | 18,738 | 2.79 | 569,917 | 2,175 | 0.51 | |||||||||||||||||||||||||||||
Brokered time deposits | 431,654 | 16,274 | 5.04 | — | — | ||||||||||||||||||||||||||||||
Savings | 296,505 | 1,862 | 0.84 | 280,310 | 156 | 0.07 | |||||||||||||||||||||||||||||
Total interest-bearing | 6,036,031 | 136,686 | 3.03 | 4,537,170 | 13,689 | 0.40 | |||||||||||||||||||||||||||||
Noninterest-bearing demand | 2,205,664 | — | 2,364,443 | — | |||||||||||||||||||||||||||||||
Total average deposits | $ | 8,241,695 | $ | 136,686 | 2.22 | $ | 6,901,613 | $ | 13,689 | 0.27 |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Total deposits | $ | 8,374,488 | $ | 7,775,702 | |||||||
Estimated insured deposits: | |||||||||||
FDIC insured | (3,434,530) | (3,331,724) | |||||||||
FDIC insured reciprocal | (781,054) | (245,621) | |||||||||
FDIC insured brokered time deposits and CDARS | (669,202) | (5,407) | |||||||||
Total estimated FDIC insured deposits | (4,884,786) | (3,582,752) | |||||||||
Estimated FDIC uninsured deposits | 3,489,702 | 4,192,950 | |||||||||
Collateralized public funds | (739,329) | (762,366) | |||||||||
Estimated uninsured/uncollateralized deposits | $ | 2,750,373 | $ | 3,430,584 | |||||||
Percentage of estimated uninsured/uncollateralized deposits to total deposits | 32.8 | % | 44.1 | % |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Short-term FHLB advances | $ | — | $ | 550,000 | |||||||
Long-term FHLB advances | 6,541 | 6,740 | |||||||||
GNMA repurchase liability | — | 24,569 | |||||||||
Overnight repurchase agreements with depositors | 5,672 | 27,921 | |||||||||
Correspondent short-term borrowings | — | 30,000 | |||||||||
Total FHLB advances and other borrowings | $ | 12,213 | $ | 639,230 | |||||||
Subordinated indebtedness, net | $ | 196,825 | $ | 201,765 |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Available cash balances at the holding company (unconsolidated) | $ | 55,490 | $ | 99,810 | |||||||
Cash and liquid securities as a percentage of total assets | 11.6 | % | 12.1 | % |
(Dollars in thousands) | Total Stockholders’ Equity | ||||
Balance at January 1, 2023 | $ | 949,943 | |||
Net income | 70,375 | ||||
Other comprehensive loss, net of tax | (12,854) | ||||
Dividends declared - common stock ($0.45 per share) | (14,085) | ||||
Stock compensation, net | 5,566 | ||||
Balance at September 30, 2023 | $ | 998,945 | |||
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||
Origin Bancorp, Inc. | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | $ | 988,951 | 11.46 | % | $ | 906,859 | 10.93 | % | |||||||||||||||
Tier 1 capital (to risk-weighted assets) | 1,004,742 | 11.64 | 922,584 | 11.12 | |||||||||||||||||||
Total capital (to risk-weighted assets) | 1,261,080 | 14.61 | 1,180,665 | 14.23 | |||||||||||||||||||
Tier 1 capital (to average total consolidated assets) | 1,004,742 | 10.00 | 922,584 | 9.66 | |||||||||||||||||||
Origin Bank | |||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | $ | 1,034,519 | 12.02 | % | $ | 952,579 | 11.50 | % | |||||||||||||||
Tier 1 capital (to risk-weighted assets) | 1,034,519 | 12.02 | 952,579 | 11.50 | |||||||||||||||||||
Total capital (to risk-weighted assets) | 1,201,282 | 13.96 | 1,109,257 | 13.39 | |||||||||||||||||||
Tier 1 capital (to average total consolidated assets) | 1,034,519 | 10.33 | 952,579 | 9.94 |
September 30, 2023 | |||||||||||
Change in Interest Rates (basis points) | % Change in Net Interest Income | % Change in Fair Value of Equity | |||||||||
+400 | 9.6 | % | (7.1) | % | |||||||
+300 | 7.2 | (5.9) | |||||||||
+200 | 5.0 | (3.5) | |||||||||
+100 | (1.2) | (3.9) | |||||||||
Base | |||||||||||
-100 | 0.8 | 2.8 | |||||||||
-200 | 1.6 | 5.6 | |||||||||
-300 | 2.5 | 8.6 | |||||||||
-400 | 3.1 | 9.3 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101 | The following financial information from Origin Bancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, is formatted in Inline XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income (Loss), (iv) the Unaudited Consolidated Statements of Changes in Stockholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Condensed Notes to Unaudited Consolidated Financial Statements | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Origin Bancorp, Inc. |
Date: | November 7, 2023 | By: | /s/ Drake Mills | ||||||||
Drake Mills | |||||||||||
Chairman, President and Chief Executive Officer |
Date: | November 7, 2023 | By: | /s/ William J. Wallace, IV | ||||||||
William J. Wallace, IV | |||||||||||
Senior Executive Officer and Chief Financial Officer |
Date: November 7, 2023 | By: | /s/ Drake Mills | ||||||
Drake Mills | ||||||||
Chairman, President and Chief Executive Officer |
Date: November 7, 2023 | By: | /s/ William J. Wallace, IV | ||||||
William J. Wallace, IV | ||||||||
Senior Executive Officer and Chief Financial Officer |
Date: November 7, 2023 | By: | /s/ Drake Mills | ||||||
Drake Mills | ||||||||
Chairman, President and Chief Executive Officer |
Date: November 7, 2023 | By: | /s/ William J. Wallace, IV | ||||||
William J. Wallace, IV | ||||||||
Senior Executive Officer and Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Held to maturity, allowance for credit losses | $ 890 | $ 899 |
Held to maturity, fair value | 11,005 | 11,970 |
Loans held for sale | 14,944 | 25,389 |
Allowance for credit losses | $ 95,177 | $ 87,161 |
Common stock, par value (in dollars per share) | $ 5.00 | $ 5.00 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 30,906,716 | 30,746,600 |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Common stock dividends declared (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.13 |
Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 1 — Significant Accounting Policies Nature of Operations. Origin Bancorp, Inc. (“Company”) is a financial holding company headquartered in Ruston, Louisiana. The Company’s wholly-owned bank subsidiary, Origin Bank (“Bank”), was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates 60 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi. The Company principally operates in one business segment, community banking. Basis of Presentation. The consolidated financial statements in this quarterly report on Form 10-Q include the accounts of the Company and all other entities in which Origin Bancorp, Inc. has a controlling financial interest, including the Bank and Davison Insurance Agency, LLC, doing business as Lincoln Agency, LLC, Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency, Reeves, Coon and Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s accounting and financial reporting policies conform, in all material respects, to generally accepted accounting principles in the United States (“U.S. GAAP”) and to general practices within the financial services industry. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these consolidated financial statements were issued. The consolidated financial statements in this quarterly report on Form 10-Q have not been audited by an independent registered public accounting firm, excluding the figures as of December 31, 2022, but in the opinion of management, reflect all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the Company’s financial position and results of operations for the periods presented. These consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K (“2022 Form 10-K”) filed with the SEC. Operating results for the interim periods disclosed herein are not necessarily indicative of results that may be expected for a full year. Certain prior period amounts have been reclassified to conform to the current year financial statement presentations. These reclassifications did not impact previously reported net income or comprehensive income (loss). Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information that affect the amounts reported in the financial statements and disclosures provided, including the accompanying notes, and actual results could differ. Material estimates that are particularly susceptible to change include the allowance for credit losses for loans, off-balance sheet commitments and available for sale securities; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Company’s consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual results could differ from those estimates. Allowance for Credit Losses. Accounting Standards Update (“ASU”) No. 2022-02 eliminated the accounting guidance for troubled debt restructurings (“TDRs”) and enhanced disclosure requirements for certain loan modifications. The Company may provide modifications to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant payment delays, or term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company may provide multiple types of concessions on one loan. The Company will evaluate whether the modification represents a new loan or a continuation of an existing loan. The Company assesses all loan modifications to determine whether they were made to borrowers experiencing financial difficulty. Reclassifications. Certain amounts previously reported have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior year net income or stockholders’ equity. Effect of Recently Adopted Accounting Standards ASU No. 2021-06, Presentation of Financial Statements (Topic 205), Financial Services —Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants amends the Accounting Standards Codification (“ASC”) in order to codify to the new SEC releases 33-10786 and 33-10835 (the “Releases”). The Releases clearly define whether an acquired or disposed business subsidiary is significant; update, expand and eliminate certain disclosures; eliminate overlap with certain SEC and U.S. GAAP rules; and add a new subpart of Regulation S-K. The ASU is effective upon issuance; however, the SEC release on which the ASU is based is effective for registrants with the first fiscal year ending after December 15, 2021, while Guide 3 was rescinded effective January 1, 2023. Implementation of this ASU did not materially impact the Company’s financial statement disclosures. ASU No. 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this Update affect accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-01, Derivatives and Hedging (Topic 815) — Fair Value Hedging - Portfolio Layer Method. The amendments in this Update clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers. Additionally, this Update allows entities to elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) — Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 — The amendments in this Update provide temporary relief during the transition period in complying with Update No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The Board included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. At the time that Update 2020-04 was issued, the UK Financial Conduct Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022 - 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848. Because the relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The ASU is effective immediately. Implementation of this ASU did not materially impact the Company's financial statements or disclosures. Effect of Newly Issued But Not Yet Effective Accounting Standards ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method — The amendments in this Update allow entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. The amendments in this Update also eliminate certain low income housing tax credits (“LIHTC”)-specific guidance to align the accounting more closely for LIHTCs with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution guidance apply only to tax equity investments accounted for using the proportional amortization method. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Implementation of this ASU is not expected to materially impact the Company's financial statements or disclosures.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 2 — Earnings Per Share Basic and diluted earnings per common share are calculated using the treasury method. Under the treasury method, basic earnings per share is calculated as net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under the Company’s stock and incentive compensation plans. Information regarding the Company’s basic and diluted earnings per common share is presented in the following table:
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Securities |
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Securities | Note 3 — Securities The following table is a summary of the amortized cost and estimated fair value, including the allowance for credit losses and gross unrealized gains and losses, of available for sale, held to maturity and securities carried at fair value through income for the dates indicated:
________________________ (1)Securities carried at fair value through income have no unrealized gains or losses at the consolidated balance sheet dates as all changes in value have been recognized in the consolidated statements of income. See Note 5 — Fair Value of Financial Instruments for more information. Securities with unrealized losses at September 30, 2023, and December 31, 2022, aggregated by investment category and those individual securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or more, were as follows.
At September 30, 2023, the Company had 647 individual securities that were in an unrealized loss position. Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than the cost, and (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Management does not currently intend to sell any securities in an unrealized loss position and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, at September 30, 2023, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions. The following table presents the activity in the allowance for credit losses for held-to-maturity debt securities.
Accrued interest of $6.4 million and $8.2 million was not included in the calculation of the allowance or the amortized cost basis of the debt securities at September 30, 2023 or 2022, respectively. There were no past due held-to-maturity securities or held-to-maturity securities in nonaccrual status at September 30, 2023, or December 31, 2022. Proceeds from sales and calls, and related gross gains and losses of securities available for sale, are shown below.
The following table presents the amortized cost and fair value of securities available for sale and held to maturity at September 30, 2023, grouped by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which do not have contractual payments due at a single maturity date, are shown separately. Actual maturities for mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities will differ from contractual maturities as a result of prepayments made on the underlying loans.
The following table presents carrying amounts of securities pledged as collateral for deposits and repurchase agreements at the periods presented.
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Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Note 4 — Loans Loans consist of the following:
____________________________ (1)Includes unamortized purchase accounting adjustment and net deferred loan fees of $11.5 million and $14.2 million at September 30, 2023, and December 31, 2022, respectively. As of September 30, 2023, and December 31, 2022, the remaining purchase accounting net loan discount was $179,000 and $2.2 million, respectively. Credit quality indicators. As part of the Company’s commitment to managing the credit quality of its loan portfolio, management annually and periodically updates and evaluates certain credit quality indicators, which include but are not limited to (i) weighted-average risk rating of the loan portfolio, (ii) net charge-offs, (iii) level of non-performing loans, (iv) level of classified loans (defined as substandard, doubtful and loss), and (v) the general economic conditions in the cities and states in which the Company operates. The Company maintains an internal risk rating system where ratings are assigned to individual loans based on assessed risk. Loan risk ratings are the primary indicator of credit quality for the loan portfolio and are continually evaluated to ensure they are appropriate based on currently available information. The following is a summary description of the Company’s internal risk ratings:
In connection with the review of the loan portfolio, the Company considers risk elements attributable to particular loan types or categories in assessing the quality of individual loans. The list of loans to be reviewed for possible individual evaluation consists of nonaccrual commercial loans over $100,000 with direct exposure, unsecured loans over 90 days past due, commercial loans classified as substandard or worse over $100,000 with direct exposure, modified loans to borrowers experiencing financial difficulty, consumer loans greater than $100,000 with a FICO score under 625, loans greater than $100,000 in which the borrower has filed bankruptcy, and all loans 180 days or more past due. Loans under $50,000 will be evaluated collectively in designated pools unless a loss exposure has been identified. Some additional risk elements considered by loan type include: •for commercial real estate loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type; •for construction, land and land development loans, the perceived feasibility of the project, including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio; •for residential mortgage loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral; and •for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral. Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other individually evaluated loans. As a result of the merger with BT Holdings, Inc., (“BTH”), the Company held approximately $36.8 million and $48.1 million of unpaid principal balance PCD loans at September 30, 2023, and December 31, 2022, respectively. Please see Note 1 — Significant Accounting Policies included in the 2022 Form 10-K, filed with the SEC for a description of our accounting policies related to purchased financial assets with credit deterioration. The following table reflects recorded investments in loans by credit quality indicator and origination year at September 30, 2023, and gross charge-offs for the nine months ended September 30, 2023, excluding loans held for sale. Loans acquired are shown in the table by origination year, not merger date. The Company had an immaterial amount of revolving loans converted to term loans at September 30, 2023.
The following table reflects recorded investments in loans by credit quality indicator and origination year at December 31, 2022, and gross charge-offs for the year ended December 31, 2022, excluding loans held for sale. Loans acquired are shown in the table by origination year, not merger date. The Company had an immaterial amount of revolving loans converted to term loans at December 31, 2022.
The following tables present the Company’s loan portfolio aging analysis at the dates indicated:
The following tables detail activity in the ALCL by portfolio segment. Accrued interest of $33.0 million and $21.9 million was not included in the book value for the purposes of calculating the allowance at September 30, 2023 and 2022, respectively. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
The decrease in provision expense during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, was primarily due to the provision expense increase associated with the BTH merger which occurred on August 1, 2022, offset by an increase in loan provision primarily due to loan growth during the intervening period, as well as an increase in the provision for individually evaluated loan balances at September 30, 2023, compared to September 30, 2022. The Company’s credit quality profile in relation to the ALCL drove an increase of $7.3 million in the collectively evaluated portion of the reserve at September 30, 2023, when compared to September 30, 2022, primarily due to qualitative factor changes across the Company’s risk pools. The individually evaluated portion of the reserve increased $4.5 million at September 30, 2023, when compared to September 30, 2022. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ALCL allocated to these loans.
Collateral-dependent loans consist primarily of residential real estate, commercial real estate and commercial and industrial loans. These loans are individually evaluated when foreclosure is probable or when the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral. In the case of commercial and industrial loans secured by equipment, the fair value of the collateral is estimated by third-party valuation experts. Loan balances are charged down to the underlying collateral value when they are deemed uncollectible. Note that the Company did not elect to use the collateral maintenance agreement practical expedient available under CECL. Nonaccrual LHFI was as follows:
All interest formerly accrued but not received for loans placed on nonaccrual status is reversed from interest income. Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. At September 30, 2023, and December 31, 2022, the Company had $682,000 and zero funding commitments for loans in which the terms were modified as a result of the borrowers experiencing financial difficulty, respectively. For the nine months ended September 30, 2023 and 2022, gross interest income that would have been recorded had the nonaccruing loans been current in accordance with their original terms, was $884,000 and $799,000, respectively. No interest income was recorded on these loans while they were considered nonaccrual during the nine months ended September 30, 2023 and 2022. The Company elects the fair value option for recording residential mortgage loans held for sale in accordance with U.S. GAAP. The Company transferred $7.1 million of nonperforming mortgage loans from the held for sale portfolio to the held for investment portfolio during the three months ended June 30, 2023. As a result, the company had zero nonaccrual mortgage loans held for sale that were recorded using the fair value option election at September 30, 2023, compared to $3.9 million at December 31, 2022. The tables below summarize modifications made to borrowers experiencing financial difficulty by loan and modification type during the dates indicated.
The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty during three and nine months ended September 30, 2023, respectively.
The following table depicts the performance of loans that have been modified during the nine months ended September 30, 2023.
There were no loans to borrowers experiencing financial difficulty that defaulted during the nine months ended September 30, 2023, that were modified within the last nine months. A payment default is defined as a loan that was 90 or more days past due. The Company monitors the performance of modified loans on an ongoing basis. In the event of subsequent default, the ALCL is assessed on the basis of an individual evaluation of each loan. The modifications made during the periods presented did not significantly impact the Company’s determination of the allowance for credit losses.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Note 5 — Fair Value of Financial Instruments Fair value is the exchange price that is expected to be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Certain assets and liabilities are recorded in the Company’s consolidated financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis. The Company utilizes fair value measurement to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to estimate the fair values of its financial instruments. Such valuation techniques are consistently applied. A hierarchy for fair value has been established, which categorizes the valuation techniques into three levels used to measure fair value. The three levels are as follows: Level 1 - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Fair value is based on significant other observable inputs that are generally determined based on a single price for each financial instrument provided to the Company by an unrelated third-party pricing service and is based on one or more of the following: •Quoted prices for similar, but not identical, assets or liabilities in active markets; •Quoted prices for identical or similar assets or liabilities in markets that are not active; •Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and •Other inputs derived from or corroborated by observable market inputs. Level 3 - Prices or valuation techniques that require inputs that are both significant and unobservable in the market. These instruments are valued using the best information available, some of which is internally developed, and reflects the Company’s own assumptions about the risk premiums that market participants would generally require and the assumptions they would use. These estimates can be inherently uncertain. There were no transfers between fair value reporting levels for any period presented. Fair Values of Assets and Liabilities Recorded on a Recurring Basis The following tables summarize financial assets and financial liabilities recorded at fair value on a recurring basis at September 30, 2023, and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value. There were no changes in the valuation techniques during 2023 or 2022.
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2023 and 2022, are summarized as follows:
___________________________ (1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.
(1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off. The Company obtains fair value measurements for loans at fair value, securities available for sale and securities at fair value through income from an independent pricing service; therefore, quantitative unobservable inputs are unknown. The following methodologies were used to measure the fair value of financial assets and liabilities valued on a recurring basis: Securities Available for Sale Securities classified as available for sale are reported at fair value utilizing Level 1, Level 2 or Level 3 inputs. For Level 1 securities, the Company obtains the fair value measurements for those identical assets from an independent pricing service. For Level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, market consensus prepayment speeds, credit information and the security's terms and conditions, among other things. In order to ensure the fair values are consistent with ASC 820, Fair Value Measurements and Disclosures, the Company periodically checks the fair value by comparing them to other pricing sources, such as Bloomberg LP. The third-party pricing service is subject to an annual review of internal controls in accordance with the Statement on Standards for Attestation Engagements No. 16, which was made available to the Company. In certain cases where Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. For level 3 securities, the Company determines the fair value of the instruments based on their callability, putability and prepay optionality. Putable instruments are valued at book value, non-putable instruments are priced mainly using a present value calculation based on the spread to the yield curve. Mortgage Servicing Rights (“MSRs”) The carrying amounts of the MSRs equal fair value, which are determined using a discounted cash flow valuation model. The significant assumptions used to value MSRs were as follows:
__________________________ (1)The weighted average was calculated with reference to the principal balance of the underlying mortgages. Recently there have been significant market-driven fluctuations in the assumptions listed above. These fluctuations can be rapid and may continue to be significant. Typically, loans with higher average coupon rates have a greater likelihood of prepayment during comparatively low interest rate environments, while loans with lower average coupon rates have a lower likelihood of prepayment. The recent increase in rates has caused a decrease in the weighted average prepayment speed. Estimating these assumptions within ranges that market participants would use in determining the fair value of MSRs requires significant management judgment. Derivatives Fair values for interest rate swap agreements and interest rate lock commitments are based upon the amounts that would be required to settle the contracts. Fair values for risk participations, forward mortgage backed security purchases or loan sale commitments and future contracts to purchase United States treasury notes are based on the fair values of the underlying mortgage loans or securities and the probability of such commitments being exercised. Significant management judgment and estimation is required in determining these fair value measurements. Fair Values of Assets Recorded on a Recurring Basis for which the Fair Value Option has been Elected Certain assets are measured at fair value on a recurring basis due to the Company’s election to adopt fair value accounting treatment for those assets. This election allows for a more effective offset of the changes in fair values of the assets and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting under ASC Topic 815, Derivatives and Hedging. For assets for which the fair value has been elected, the earned current contractual interest payment is recognized in interest income, loan origination costs and fees on fair value option loans are recognized in earnings as incurred and not deferred. At September 30, 2023, and December 31, 2022, there were no gains or losses recorded attributable to changes in instrument-specific credit risk. The following tables summarize the difference between the fair value and the unpaid principal balance for financial instruments for which the fair value option has been elected:
____________________________ (1)There were no loans held for sale that were designated as nonaccrual or 90 days or more past due at September 30, 2023.
____________________________ (1)$3.9 million of loans held for sale were designated as nonaccrual or 90 days or more past due at December 31, 2022. Of this balance, $3.3 million was guaranteed by U.S. Government agencies. Changes in the fair value of assets for which the Company elected the fair value option are classified in the consolidated statements of income line items reflected in the following table:
____________________________ (1)The fair value option impact on noninterest income is offset by the derivative gain/loss recognized in noninterest income. Please see Note 6 — Mortgage Banking for more detail. The following methodologies were used to measure the fair value of financial assets valued on a recurring basis for which the fair value option was elected: Securities at Fair Value through Income Securities carried at fair value through income are valued using a discounted cash flow with a credit spread applied to each instrument based on the creditworthiness of each issuer. Credit spreads ranged from 83 to 227 basis points at both September 30, 2023, and December 31, 2022. The Company believes the fair value approximates an exit price. Loans Held for Sale Fair values for loans held for sale are established using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans allocated. The Company believes the fair value approximates an exit price. Fair Value of Assets Recorded on a Nonrecurring Basis Equity Securities without Readily Determinable Fair Values Equity securities without readily determinable fair values totaled $63.8 million and $67.4 million at September 30, 2023, and December 31, 2022, respectively, and are shown on the face of the consolidated balance sheets. The majority of the Company’s equity investments qualify for the practical expedient allowed for equity securities without a readily determinable fair value, such that the Company has elected to carry these securities at cost adjusted for any observable transactions during the period, less any impairment. To date, no impairment has been recorded on the Company's investments in equity securities that do not have readily determinable fair values. During the three months ended September 30, 2023, the Company observed a price change in multiple orderly transactions for identical equity securities and adjusted the Company’s basis upwards in one of the Company’s equity securities by $10.1 million. Government National Mortgage Association Repurchase Asset The Company had zero and $24.6 million Government National Mortgage Association (“GNMA”) repurchase assets included in loans held for sale on the consolidated balance sheets at September 30, 2023, and December 31, 2022, respectively. The assets were valued at the lower of cost or market and, where market is lower than cost, valued using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans. During the second half of 2022, the Company entered into an agreement to sell its GNMA MSR portfolio, which met all final sale conditions in early 2023. The Company sold $1.8 million in GNMA MSR, with no significant additional gain or loss realized, and derecognized the related GNMA repurchase asset and offsetting liability during the quarter ended March 31, 2023. Individually Evaluated Loans with Credit Losses Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured to determine if any credit loss exists. Allowable methods for determining the amount of credit loss include estimating the fair value using the fair value of the collateral for collateral-dependent loans and a discounted cash flow methodology for other evaluated loans that are not collateral dependent. If the loan is identified as collateral-dependent, the fair value method of measuring the amount of credit loss is utilized. Evaluating the fair value of the collateral for collateral-dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the loan is not collateral-dependent, the discounted cash flow method is utilized, which involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. Loans that have experienced a credit loss with specific allocated losses are within Level 3 of the fair value hierarchy when the credit loss is determined using the fair value method. The fair value of loans that have experienced a credit loss with specific allocated losses was approximately $15.9 million and $20.7 million at September 30, 2023, and December 31, 2022, respectively. Non-Financial Assets Foreclosed assets held for sale are the only non-financial assets valued on a non-recurring basis that are initially recorded by the Company at fair value, less estimated costs to sell. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the ALCL. Additionally, valuations are periodically performed by management, and any subsequent reduction in value is recognized by a charge to income. The carrying value and fair value of foreclosed assets held for sale was estimated using Level 3 inputs based on observable market data and was $3.9 million and $806,000 at September 30, 2023, and December 31, 2022, respectively. At September 30, 2023, and December 31, 2022, the Company had zero and $10,000, respectively, in principal amount of residential mortgage loans in the process of foreclosure. Fair Values of Financial Instruments Not Recorded at Fair Value Loans The estimated fair value approximates carrying value for variable-rate loans that reprice frequently and with no significant change in credit risk. The fair value of fixed rate loans and variable-rate loans, which reprice on an infrequent basis, is estimated by discounting future cash flows using exit level pricing, which combines the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality and an estimated additional rate to reflect a liquidity premium. An overall valuation adjustment is made for specific credit risks as well as general portfolio credit risk. Deposits The estimated fair value approximates carrying value for demand deposits. The fair value of fixed rate deposit liabilities with defined maturities is estimated by discounting future cash flows using the interest rates currently available for funding from the FHLB. The estimated fair value of deposits does not take into account the value of our long-term relationships with depositors, commonly known as core deposit intangibles, which are separate intangible assets, and not considered financial instruments. Nonetheless, the Company would likely realize a core deposit premium if the deposit portfolio were sold in the principal market for such deposits. Borrowed Funds The estimated fair value approximates carrying value for short-term borrowings. The fair value of long-term fixed rate and fixed-to-floating-rate borrowings is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments. The estimated fair value approximates carrying value for variable-rate junior subordinated debentures that reprice quarterly. The carrying value and estimated fair values of financial instruments not recorded at fair value are as follows:
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Mortgage Banking |
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Mortgage Banking [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Banking | Note 6 — Mortgage Banking The following table presents the Company’s revenue from mortgage banking operations:
(1)Based upon broker estimate, the Company recorded a $2.0 million impairment on the held for sale GNMA MSR portfolio during the quarter ended September 30, 2022. Management uses forward-settling mortgage-backed securities and U.S. Treasury futures to mitigate the impact of changes in fair value of MSRs. See Note 8 — Derivative Financial Instruments for further information. Mortgage Servicing Rights Activity in MSRs was as follows:
During the second half of 2022, the Company entered into an agreement to sell its GNMA MSR portfolio, which met all final sale conditions in early 2023. The Company sold $1.8 million in GNMA MSR, with no significant additional gain or loss realized, and derecognized the related GNMA repurchase asset and offsetting liability during the quarter ended March 31, 2023. The Company receives annual servicing fee income approximating 0.25% of the outstanding balance of the underlying loans. In connection with the Company's activities as a servicer of mortgage loans, the investors and the securitization trusts have no recourse to the Company’s assets for failure of debtors to pay when due. The Company is potentially subject to losses in its loan servicing portfolio due to loan foreclosures. The Company has obligations to either repurchase the outstanding principal balance of a loan or make the purchaser whole for the economic benefits of a loan if it is determined that the loan sold violated representations or warranties made by the Company and/or the borrower at the time of the sale, which the Company refers to as mortgage loan servicing putback expenses. Such representations and warranties typically include those made regarding loans that had missing or insufficient file documentation and/or loans obtained through fraud by borrowers or other third parties. Putback claims may be made until the loan is paid in full. When a putback claim is received, the Company evaluates the claim and takes appropriate actions based on the nature of the claim. The Company is required by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to provide a response to putback claims within 60 days of the date of receipt. At September 30, 2023, and December 31, 2022, the reserve for mortgage loan servicing putback expenses totaled $146,000 and $217,000, respectively. There is inherent uncertainty in reasonably estimating the requirement for reserves against future mortgage loan servicing putback expenses. Future putback expenses depend on many subjective factors, including the review procedures of the purchasers and the potential refinance activity on loans sold with servicing released and the subsequent consequences under the representations and warranties. GNMA optional repurchase programs allow financial institutions to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer’s option, and without GNMA's prior authorization, the servicer may repurchase a delinquent loan for an amount equal to 100% of the remaining principal balance of the loan. This buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When a financial institution is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be included in the consolidated balance sheets as mortgage loans held for sale, regardless of whether the institution intends to exercise the buy-back option. These loans totaled $24.6 million at December 31, 2022, and were recorded as mortgage loans held for sale at the lower of cost or fair value with a corresponding liability in FHLB advances and other borrowings on the Company’s consolidated balance sheets. The final sale conditions of the GNMA MSR portfolio were met during the quarter ended March 31, 2023, and, accordingly, there were no GNMA repurchase program loans on the balance sheet at September 30, 2023.
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Note 7 — Borrowings Borrowed funds are summarized as follows:
The following table is a summary of the terms of the current junior subordinated debentures at September 30, 2023:
____________________________ (1)The trust preferred securities reprice quarterly based on the three-month average SOFR plus 3.30%, with the last reprice date on July 27, 2023. (2)The trust preferred securities reprice quarterly based on the three-month CME Term SOFR plus 1.80%, plus 0.26161% SOFR spread adjustment, with the last reprice date on September 13, 2023. (3)The trust preferred securities reprice quarterly based on the three-month CME Term SOFR plus 1.64%, plus 0.26161% SOFR spread adjustment, with the last reprice date on September 1, 2023.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Note 8 — Derivative Financial Instruments Risk Management Objective of Using Derivatives The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments, as well as to manage changes in fair values of some assets which are marked at fair value through the consolidated statement of income on a recurring basis. Cash Flow Hedges of Interest Rate Risk The Company is a party to interest rate swap agreements under which the Company receives interest at a variable rate and pays at a fixed rate. The derivative instruments represented by these swap agreements are designated as cash flow hedges of the Company’s forecasted variable cash flows under a variable-rate term borrowing agreements. During the terms of the swap agreements, the effective portion of changes in the fair value of the derivative instruments are recorded in accumulated other comprehensive (loss) income and subsequently reclassified into earnings in the periods that the hedged forecasted variable-rate interest payments affected earnings. There was no ineffective portion of the change in fair value of the derivatives recognized directly in earnings. The entire swap fair value will be reclassified into earnings before the expiration dates of the swap agreements. Derivatives Not Designated as Hedges Customer interest rate derivative program The Company offers certain derivatives products, primarily interest rate swaps, directly to qualified commercial banking customers to facilitate their risk management strategies. In most instances, the Company acts only as an intermediary, simultaneously entering into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions without significantly impacting its results of operations. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and any offsetting derivatives are recognized directly in earnings as a component of noninterest income. From time to time, the Company shares in credit risk on interest rate swap arrangements, by entering into risk participation agreements with syndication partners. These are accounted for at fair value and disclosed as risk participation derivatives. Mortgage banking derivatives The Company enters into certain derivative agreements as part of its mortgage banking and related risk management activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a mandatory delivery basis. The Company also economically hedges the value of MSRs by entering into a series of commitments to purchase mortgage-backed securities in the future and U.S. Treasury future contracts. Fair Values of Derivative Instruments on the Consolidated Balance Sheets The following tables disclose the fair value of derivative instruments in the Company’s consolidated balance sheets at September 30, 2023, and December 31, 2022, as well as the effect of these derivative instruments on the Company’s consolidated statements of income for the nine months ended September 30, 2023 and 2022. Derivative instruments and their related gains and losses are reported in other operating activities, net in the statements of cash flows.
____________________________ (1)Notional or contractual amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. The weighted-average rates paid and received for interest rate swaps at September 30, 2023, and December 31, 2022, were as follows:
Gains and losses recognized on derivative instruments not designated as hedging instruments are as follows:
____________________________ (1)Gains and losses on these instruments are largely offset by market fluctuations in mortgage servicing rights. See Note 6 — Mortgage Banking for more information on components of mortgage banking revenue. Some interest rate swaps included in other assets were subject to a master netting arrangement with the counterparty in all periods presented and could be offset against some amounts included in interest rate swaps included in other liabilities. The Company has chosen not to net these exposures in the consolidated balance sheets, and any impact of netting these amounts would not be significant. At September 30, 2023, and December 31, 2022, the Company had cash collateral on deposit with swap counterparties totaling $4.0 million and $7.6 million, respectively. These amounts are included in interest-bearing deposits in banks in the consolidated balance sheets and are considered restricted cash until such time as the underlying swaps are settled.
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Stock and Incentive Compensation Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock and Incentive Compensation Plans | Note 9 — Stock and Incentive Compensation Plans The Company has granted, and currently has outstanding, stock and incentive compensation awards subject to the provisions of the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan is designed to provide flexibility to the Company regarding its ability to motivate, attract and retain the services of key officers, employees and directors. The 2012 Plan allows the Company to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards (“RSA”), restricted stock units (“RSU”), dividend equivalent rights, performance stock units (“PSU”) or any combination thereof. At September 30, 2023, the maximum number of shares of the Company’s common stock available for issuance under the 2012 Plan was 33,097 shares. Additionally, the Company’s stockholders approved an employee stock purchase plan (“ESPP”) which qualified as an ESPP under IRS guidelines. The ESPP provides for the purchase of up to an aggregate one million shares of the Company’s common stock by employees. Under the ESPP, employees of the Company, who elect to participate, have the right to purchase a limited number of shares of the Company’s common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each one year offering period, beginning on June 1st. The ESPP benefit is treated as compensation to the employee, and the compensation expense will be recognized over the service period based on the grant date fair value of the rights determined at the beginning of the purchase period, adjusted for forfeitures and certain modifications. At September 30, 2023, there was $312,000 of total unrecognized compensation cost related to estimated ESPP shares for the June 1, 2023, ESPP purchase period. These costs are expected to be recognized over a period of 0.67 year. The table below includes the weighted-average assumptions used to calculate the grant date fair value of the ESPP rights for the periods indicated using the Black-Scholes option pricing model:
The ESPP shares purchased are as follows for the dates indicated:
The Compensation Committee (“Committee”) has approved and the Company has granted PSUs to select officers and employees under the 2012 Plan. Each PSU represents a right for the participant to receive shares of Company common stock or cash equal to the fair market value of such stock, as determined by the Committee. The number of PSUs to which the participant may be entitled will vary from 0% to 150% of the target number of PSUs, based on the Company’s achievement of specified performance criteria during the performance period compared to performance benchmarks adopted by the Committee and, further, the participant’s continuous service with the Company through the third anniversary of the date of the grant. Each performance period commences on January 1 and ends three years later on December 31, (“Performance Period”). Share-based compensation cost charged to income for the three and nine months ended September 30, 2023 and 2022, is presented below. There was no stock option expense for any of the periods shown.
Restricted Stock and Performance Stock Grants The Company’s RSAs and RSUs are time-vested awards and are granted to the Company’s Board of Directors, executives and senior management team. The service period in which time-vested awards are earned ranges from to seven years. Time-vested awards are valued utilizing the fair value of the Company’s stock at the grant date. These awards are recognized on the straight-line method over the requisite service period, with forfeitures recognized as they occur. The Company’s PSU awards, excluding the CEO PSUs, are three-year cliff-vested awards, with each unit divided into two categories (“ROAA Unit Group” and “ROAE Unit Group”), composed of an equivalent number of initial PSUs granted. The PSUs do not reflect potential increases or decreases resulting from the interim performance results until the final performance results are determined at the end of the three-year period. The ROAA Unit Group is based upon the Company’s Performance Period Return on Average Assets performance, and the ROAE Unit Group is based upon the Company’s Performance Period Return on Average Equity performance. The PSUs are initially valued utilizing the fair value of the Company’s stock at the grant date, assuming 100% of the target number of units are achieved. Subsequent valuation of the PSUs is determined using the ratio of the actual Company’s Performance Period ROAA or ROAE to the Company’s targeted Performance Period ROAA or ROAE, applied to the PSUs awarded times the Company’s closing month end stock price for the month immediately preceding the period end date. Forfeitures are recognized as they occur. The following table summarizes the Company’s award activity:
At September 30, 2023, there was $342,000, $10.6 million and $2.8 million of total unrecognized compensation cost related to nonvested RSA shares, RSU shares and PSU shares under the 2012 Plan, respectively. Those costs are expected to be recognized over a weighted-average period of 0.4, 3.8 and 2.1 years for RSA, RSU and PSU shares, respectively. Stock Option Grants The Company has previously issued common stock options to select officers and employees primarily through individual agreements. The exercise price of each option varies by agreement and is based on the fair value of the stock at the date of the grant. No outstanding stock option has a term that exceeds twenty years, and all of the outstanding options are fully vested. The Company recognized compensation cost for stock option grants over the required service period based upon the grant date fair value, which is established using a Black-Scholes valuation model. The Black-Scholes valuation model uses assumptions of risk-free interest rate, expected term of stock options, expected stock price volatility and expected dividends. Forfeitures are recognized as they occur. In conjunction with the BTH merger, the Company assumed the BTH 2012 Equity Incentive Plan and converted all outstanding options to purchase BTH common stock into options to purchase an aggregate of 611,676 shares of the Company’s common stock. Under the terms of applicable change in control provisions within the BTH 2012 Equity Incentive Plan and BTH Notice Of Stock Option Award, all BTH stock options fully vested immediately prior to the closing of the merger that occurred on August 1, 2022. BTH converted options have no expiration dates past August 16, 2031, and no further grants will be made under the BTH 2012 Equity Incentive Plan. The table below summarizes the status of the Company’s stock options and changes during the nine months ended September 30, 2023 and 2022.
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Accumulated Other Comprehensive (Loss) Income |
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Accumulated Other Comprehensive (Loss) Income | Note 10 — Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income (“AOCI”) includes the after-tax change in unrealized gains and losses on AFS securities and cash flow hedging activities.
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Capital and Regulatory Matters |
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Banking Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital and Regulatory Matters | Note 11 — Capital and Regulatory Matters The Company (on a consolidated basis) and the Bank is subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. The Company is subject to the Basel III regulatory capital framework (“Basel III Capital Rules”), which includes a 2.5% capital conservation buffer. The capital conservation buffer is designed to absorb losses during periods of economic stress and requires increased capital levels for the purpose of capital distributions and other payments. Failure to meet the full amount of the buffer will result in restrictions on the Company’s ability to make capital distributions, which include dividend payments, stock repurchases and to pay discretionary bonuses to executive officers. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total, common equity Tier 1 capital, Tier 1 capital, Tier 1 capital, and total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average total consolidated assets (as defined). Management believes, at September 30, 2023, and December 31, 2022, that the Company and the Bank met all capital adequacy requirements to which they are subject, including the capital buffer requirement. At September 30, 2023, and December 31, 2022, Origin’s capital ratios exceeded those levels necessary to be categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” Origin must maintain minimum total risk-based, common equity Tier 1 capital, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. A final rule adopted by the federal banking agencies in February 2019 provides banking organizations with the option to phase in, over a three-year period, the adverse day-one regulatory capital effects of the adoption of CECL. In addition, on March 27, 2020, the federal banking agencies issued an interim final rule that gives banking organizations that were required to implement CECL before the end of 2020 the option to delay for two years CECL’s adverse effects on regulatory capital. Origin elected to adopt CECL in the first quarter of 2020 and exercised the option to delay the estimated impact of the adoption of CECL on the Company’s regulatory capital for two years (from January 2020 through December 31, 2021). The two-year delay is followed by a three-year transition period of CECL’s initial impact on the Company’s regulatory capital (from January 1, 2022, through December 31, 2024). The amount representing the CECL impact to the Company’s regulatory capital that will be ratably transitioning back into regulatory capital over the transition period is $3.2 million and $5.1 million at September 30, 2023, and December 31, 2022, respectively. The actual capital amounts and ratios of the Company and the Bank at September 30, 2023, and December 31, 2022, are presented in the following table:
In the ordinary course of business, the Company depends on dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared and paid exceed the Bank’s year-to-date net income combined with the retained net income for the preceding year, which was $141.4 million at September 30, 2023. Stock Repurchases In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50 million of its outstanding common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the SEC. The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time. There have been no stock repurchases during the nine months ended September 30, 2023 or 2022.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Note 12 — Commitments and Contingencies Credit-Related Commitments In the ordinary course of business, the Company enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of its customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Company to varying degrees of credit risk and interest rate risk in much the same way as funded loans. Commitments to extend credit include revolving commercial credit lines, non-revolving loan commitments issued mainly to finance the merger and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and has not violated other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower’s credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements of the Company. A substantial majority of the letters of credit are standby agreements that obligate the Company to fulfill a customer’s financial commitments to a third party if the customer is unable to perform. The Company issues standby letters of credit primarily to provide credit enhancement to its customers’ other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services. The contract amounts of these instruments reflect the Company’s exposure to credit risk. The Company undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support. The table below presents the Company’s commitments to extend credit by commitment expiration date for the dates indicated:
____________________________ (1)Includes $723.3 million and $594.6 million of unconditionally cancellable commitments at September 30, 2023, and December 31, 2022, respectively. At September 30, 2023, the Company held 29 unfunded letters of credit from the FHLB totaling $584.1 million, with expiration dates ranging from October 2, 2023, to September 22, 2027. At December 31, 2022, the Company held 28 unfunded letters of credit from the FHLB totaling $277.4 million, with expiration dates ranging from January 14, 2023, to September 22, 2027. The Company has a total contingent liability of $1.8 million as of September 30, 2023, for retention bonuses and guaranteed minimum incentives associated with the BTH merger. The retention bonuses for former BTH employees total $846,000, with $423,000, or 50%, due at December 31, 2023, and the remaining $423,000, or 50%, due at December 31, 2024. The guaranteed minimum incentives for former BTH employees total $950,000, with approximately 50% due at February 28, 2024, and the remaining 50% due at February 28, 2025. In all cases, continued employment through the payout date is required in order to receive the compensation. In conjunction with the December 31, 2021, acquisitions of the Lincoln Agency, LLC and Pulley-White Insurance Agency, Inc., the Company has a total estimated fair value contingent liability of $1.5 million as of September 30, 2023. The Company expects 30% of the estimated fair value contingent liability will be payable on or about December 31, 2023, with the remaining 70% payable on or about December 31, 2024, if Davison Insurance Agency, LLC, the acquirer and surviving wholly-owned subsidiary of the Company, meets certain revenue growth objectives over three years. The fair value and probability of payout of this liability is reassessed annually at the fiscal year end of the Company. Management establishes an asset-specific allowance for certain lending-related commitments and computes a formula-based allowance for performing consumer and commercial lending-related commitments. These are computed using a methodology similar to that used for the commercial loan portfolio, modified for expected maturities and probabilities of drawdown. The reserve for lending-related commitments was $4.7 million and $4.6 million at September 30, 2023, and December 31, 2022, respectively, and is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. Loss Contingencies From time to time, the Company is also party to various legal actions arising in the ordinary course of business. At this time, management does not expect that loss contingencies, if any, arising from any such proceedings, either individually or in the aggregate, would have a material adverse effect on the consolidated financial position or liquidity of the Company.
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Note 13 — Business Combinations BT Holdings, Inc. On August 1, 2022, the Company completed its merger with BT Holdings, Inc. (“BTH”), a Texas corporation and the registered bank holding company of BTH Bank, acquiring 100% of the voting equity interests of BTH. The Company issued 6,794,910 shares of its common stock, and all outstanding BTH common stock options were converted into options to purchase an aggregate of 611,676 shares of Origin common stock. Based on the closing price of the Company’s common stock on July 29, 2022, of $43.07 per share, the aggregate consideration to be paid to holders of BTH common stock in connection with the merger is valued at approximately $307.8 million. Goodwill of $94.5 million was recorded as a result of the transaction. The merger added new markets for expansion and brings complementary businesses together to drive synergies and growth, which are the factors that gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes. Including the effects of the known purchase accounting adjustments, as of the merger date, Origin had approximately $9.84 billion in assets, $6.77 billion in loans and $7.99 billion in deposits on a consolidated basis. Origin Bank and BTH Bank, N.A. operated as separate banking subsidiaries of the Company until the merger of the banks, which Origin completed on October 7, 2022, concurrently with the data processing conversion. BTH formerly operated its banking business from 13 locations in East Texas, Dallas and Fort Worth, Texas, each of which now operates as a banking location of Origin Bank. The Company has determined that the merger of the net assets of BTH constitutes a business combination as defined by the ASC Topic 805. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as required. Fair values were determined based on the requirements of ASC Topic 820. The Company has finalized its analysis of the loans acquired along with the other acquired assets and assumed liabilities related to the merger with BT Holdings, Inc. The following schedule is a breakdown of the assets acquired and liabilities assumed as of the merger date:
The Company’s operating results include the operating results of the acquired assets and assumed liabilities of BTH subsequent to the merger date. Acquisition Accounting. The following is a description of the methods used to determine the fair values of significant assets and liabilities acquired as part of a merger or acquisition. The Company elected to use the pushdown accounting method to record the merger. Loans acquired – Fair values for PCD loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates except when a fair value of collateral approach was applied. The discount rates used for PCD loans were based on current market rates and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses, as that has been included in the estimated cash flows. Non-PCD loans were grouped together according to similar characteristics and were treated in the aggregate when applying valuation techniques. See Note 4 — Loans in these condensed notes to the consolidated financial statements for more information related to loans acquired. Loan Acquisition Accounting – The Company accounts for its acquisitions/mergers under ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. The fair value for acquired loans at the time of acquisition or merger is based on a variety of factors, including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, the fair value adjustment is recorded as premium or discount to the unpaid principal balance of each acquired loan. Loans that have been identified as having experienced a more-than-insignificant deterioration in credit quality since origination are PCD loans. The net premium or discount on PCD loans is adjusted by the Company’s allowance for credit losses recorded at the time of merger/acquisition. The remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using the effective interest rate method. The net premium or discount on loans that are not classified as PCD (“non-PCD”), that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using a constant yield method. The Company then records the necessary allowance for credit losses on the non-PCD loans through provision for credit losses expense. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit loss on the date of the merger using the same methodology as other loans held for investment as discussed in Note 4 — Loans in these condensed notes to the consolidated financial statements. The following table provides a summary of loans purchased with credit deterioration at the merger transaction date with BTH:
Revenue and earnings of BTH since the acquisition date have not been disclosed as the acquired company was merged into the Company and separate financial information is not readily available. The following table presents unaudited pro-forma information as if the merger with BTH had occurred on January 1, 2022. This pro-forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of core deposit intangible and related income tax effects and is based on our historical results for the periods presented. Transaction-related costs related to the merger are not reflected in the pro-forma amounts. The pro-forma information does not necessarily reflect the results of operations that would have occurred had the Company acquired BTH at the beginning of fiscal year 2021. Cost savings are also not reflected in the unaudited pro-forma amounts.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
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Mar. 31, 2022 |
Sep. 30, 2023 |
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Pay vs Performance Disclosure | ||||||||
Net income | $ 24,313 | $ 21,760 | $ 24,302 | $ 16,243 | $ 21,311 | $ 20,683 | $ 70,375 | $ 58,237 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. The consolidated financial statements in this quarterly report on Form 10-Q include the accounts of the Company and all other entities in which Origin Bancorp, Inc. has a controlling financial interest, including the Bank and Davison Insurance Agency, LLC, doing business as Lincoln Agency, LLC, Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency, Reeves, Coon and Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s accounting and financial reporting policies conform, in all material respects, to generally accepted accounting principles in the United States (“U.S. GAAP”) and to general practices within the financial services industry. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these consolidated financial statements were issued. The consolidated financial statements in this quarterly report on Form 10-Q have not been audited by an independent registered public accounting firm, excluding the figures as of December 31, 2022, but in the opinion of management, reflect all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the Company’s financial position and results of operations for the periods presented. These consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K (“2022 Form 10-K”) filed with the SEC. Operating results for the interim periods disclosed herein are not necessarily indicative of results that may be expected for a full year. Certain prior period amounts have been reclassified to conform to the current year financial statement presentations. These reclassifications did not impact previously reported net income or comprehensive income (loss).
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Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information that affect the amounts reported in the financial statements and disclosures provided, including the accompanying notes, and actual results could differ. Material estimates that are particularly susceptible to change include the allowance for credit losses for loans, off-balance sheet commitments and available for sale securities; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Company’s consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual results could differ from those estimates. |
Allowance for Credit Losses | Allowance for Credit Losses. Accounting Standards Update (“ASU”) No. 2022-02 eliminated the accounting guidance for troubled debt restructurings (“TDRs”) and enhanced disclosure requirements for certain loan modifications. The Company may provide modifications to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant payment delays, or term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company may provide multiple types of concessions on one loan. The Company will evaluate whether the modification represents a new loan or a continuation of an existing loan. The Company assesses all loan modifications to determine whether they were made to borrowers experiencing financial difficulty. |
Reclassifications | Reclassifications. Certain amounts previously reported have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior year net income or stockholders’ equity. |
Effect of Recently Adopted Accounting Standards and Effect of Newly Issued But Not Yet Effective Accounting Standards | Effect of Recently Adopted Accounting Standards ASU No. 2021-06, Presentation of Financial Statements (Topic 205), Financial Services —Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants amends the Accounting Standards Codification (“ASC”) in order to codify to the new SEC releases 33-10786 and 33-10835 (the “Releases”). The Releases clearly define whether an acquired or disposed business subsidiary is significant; update, expand and eliminate certain disclosures; eliminate overlap with certain SEC and U.S. GAAP rules; and add a new subpart of Regulation S-K. The ASU is effective upon issuance; however, the SEC release on which the ASU is based is effective for registrants with the first fiscal year ending after December 15, 2021, while Guide 3 was rescinded effective January 1, 2023. Implementation of this ASU did not materially impact the Company’s financial statement disclosures. ASU No. 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this Update affect accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-01, Derivatives and Hedging (Topic 815) — Fair Value Hedging - Portfolio Layer Method. The amendments in this Update clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers. Additionally, this Update allows entities to elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) — Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures. ASU No. 2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 — The amendments in this Update provide temporary relief during the transition period in complying with Update No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The Board included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. At the time that Update 2020-04 was issued, the UK Financial Conduct Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022 - 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848. Because the relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The ASU is effective immediately. Implementation of this ASU did not materially impact the Company's financial statements or disclosures. Effect of Newly Issued But Not Yet Effective Accounting Standards ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method — The amendments in this Update allow entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. The amendments in this Update also eliminate certain low income housing tax credits (“LIHTC”)-specific guidance to align the accounting more closely for LIHTCs with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution guidance apply only to tax equity investments accounted for using the proportional amortization method. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Implementation of this ASU is not expected to materially impact the Company's financial statements or disclosures.
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Fair Value of Financial Instruments | Fair value is the exchange price that is expected to be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Certain assets and liabilities are recorded in the Company’s consolidated financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis. The Company utilizes fair value measurement to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to estimate the fair values of its financial instruments. Such valuation techniques are consistently applied. A hierarchy for fair value has been established, which categorizes the valuation techniques into three levels used to measure fair value. The three levels are as follows: Level 1 - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Fair value is based on significant other observable inputs that are generally determined based on a single price for each financial instrument provided to the Company by an unrelated third-party pricing service and is based on one or more of the following: •Quoted prices for similar, but not identical, assets or liabilities in active markets; •Quoted prices for identical or similar assets or liabilities in markets that are not active; •Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and •Other inputs derived from or corroborated by observable market inputs. Level 3 - Prices or valuation techniques that require inputs that are both significant and unobservable in the market. These instruments are valued using the best information available, some of which is internally developed, and reflects the Company’s own assumptions about the risk premiums that market participants would generally require and the assumptions they would use. These estimates can be inherently uncertain. Securities Available for Sale Securities classified as available for sale are reported at fair value utilizing Level 1, Level 2 or Level 3 inputs. For Level 1 securities, the Company obtains the fair value measurements for those identical assets from an independent pricing service. For Level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, market consensus prepayment speeds, credit information and the security's terms and conditions, among other things. In order to ensure the fair values are consistent with ASC 820, Fair Value Measurements and Disclosures, the Company periodically checks the fair value by comparing them to other pricing sources, such as Bloomberg LP. The third-party pricing service is subject to an annual review of internal controls in accordance with the Statement on Standards for Attestation Engagements No. 16, which was made available to the Company. In certain cases where Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. For level 3 securities, the Company determines the fair value of the instruments based on their callability, putability and prepay optionality. Putable instruments are valued at book value, non-putable instruments are priced mainly using a present value calculation based on the spread to the yield curve. Mortgage Servicing Rights (“MSRs”) The carrying amounts of the MSRs equal fair value, which are determined using a discounted cash flow valuation model.Derivatives Fair values for interest rate swap agreements and interest rate lock commitments are based upon the amounts that would be required to settle the contracts. Fair values for risk participations, forward mortgage backed security purchases or loan sale commitments and future contracts to purchase United States treasury notes are based on the fair values of the underlying mortgage loans or securities and the probability of such commitments being exercised. Significant management judgment and estimation is required in determining these fair value measurements. Fair Values of Assets Recorded on a Recurring Basis for which the Fair Value Option has been ElectedCertain assets are measured at fair value on a recurring basis due to the Company’s election to adopt fair value accounting treatment for those assets. This election allows for a more effective offset of the changes in fair values of the assets and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting under ASC Topic 815, Derivatives and Hedging. For assets for which the fair value has been elected, the earned current contractual interest payment is recognized in interest income, loan origination costs and fees on fair value option loans are recognized in earnings as incurred and not deferred.The following methodologies were used to measure the fair value of financial assets valued on a recurring basis for which the fair value option was elected: Securities at Fair Value through Income Securities carried at fair value through income are valued using a discounted cash flow with a credit spread applied to each instrument based on the creditworthiness of each issuer. Credit spreads ranged from 83 to 227 basis points at both September 30, 2023, and December 31, 2022. The Company believes the fair value approximates an exit price. Loans Held for Sale Fair values for loans held for sale are established using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans allocated. The Company believes the fair value approximates an exit price. Fair Value of Assets Recorded on a Nonrecurring Basis Equity Securities without Readily Determinable Fair Values Equity securities without readily determinable fair values totaled $63.8 million and $67.4 million at September 30, 2023, and December 31, 2022, respectively, and are shown on the face of the consolidated balance sheets. The majority of the Company’s equity investments qualify for the practical expedient allowed for equity securities without a readily determinable fair value, such that the Company has elected to carry these securities at cost adjusted for any observable transactions during the period, less any impairment. To date, no impairment has been recorded on the Company's investments in equity securities that do not have readily determinable fair values. During the three months ended September 30, 2023, the Company observed a price change in multiple orderly transactions for identical equity securities and adjusted the Company’s basis upwards in one of the Company’s equity securities by $10.1 million. Government National Mortgage Association Repurchase Asset The Company had zero and $24.6 million Government National Mortgage Association (“GNMA”) repurchase assets included in loans held for sale on the consolidated balance sheets at September 30, 2023, and December 31, 2022, respectively. The assets were valued at the lower of cost or market and, where market is lower than cost, valued using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans. During the second half of 2022, the Company entered into an agreement to sell its GNMA MSR portfolio, which met all final sale conditions in early 2023. The Company sold $1.8 million in GNMA MSR, with no significant additional gain or loss realized, and derecognized the related GNMA repurchase asset and offsetting liability during the quarter ended March 31, 2023. Individually Evaluated Loans with Credit Losses Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured to determine if any credit loss exists. Allowable methods for determining the amount of credit loss include estimating the fair value using the fair value of the collateral for collateral-dependent loans and a discounted cash flow methodology for other evaluated loans that are not collateral dependent. If the loan is identified as collateral-dependent, the fair value method of measuring the amount of credit loss is utilized. Evaluating the fair value of the collateral for collateral-dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the loan is not collateral-dependent, the discounted cash flow method is utilized, which involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. Loans that have experienced a credit loss with specific allocated losses are within Level 3 of the fair value hierarchy when the credit loss is determined using the fair value method. The fair value of loans that have experienced a credit loss with specific allocated losses was approximately $15.9 million and $20.7 million at September 30, 2023, and December 31, 2022, respectively. Non-Financial Assets Foreclosed assets held for sale are the only non-financial assets valued on a non-recurring basis that are initially recorded by the Company at fair value, less estimated costs to sell. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the ALCL. Additionally, valuations are periodically performed by management, and any subsequent reduction in value is recognized by a charge to income. The carrying value and fair value of foreclosed assets held for sale was estimated using Level 3 inputs based on observable market data
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Derivative Financial Instruments | Risk Management Objective of Using Derivatives The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments, as well as to manage changes in fair values of some assets which are marked at fair value through the consolidated statement of income on a recurring basis. Cash Flow Hedges of Interest Rate Risk The Company is a party to interest rate swap agreements under which the Company receives interest at a variable rate and pays at a fixed rate. The derivative instruments represented by these swap agreements are designated as cash flow hedges of the Company’s forecasted variable cash flows under a variable-rate term borrowing agreements. During the terms of the swap agreements, the effective portion of changes in the fair value of the derivative instruments are recorded in accumulated other comprehensive (loss) income and subsequently reclassified into earnings in the periods that the hedged forecasted variable-rate interest payments affected earnings. There was no ineffective portion of the change in fair value of the derivatives recognized directly in earnings. The entire swap fair value will be reclassified into earnings before the expiration dates of the swap agreements. Derivatives Not Designated as Hedges Customer interest rate derivative program The Company offers certain derivatives products, primarily interest rate swaps, directly to qualified commercial banking customers to facilitate their risk management strategies. In most instances, the Company acts only as an intermediary, simultaneously entering into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions without significantly impacting its results of operations. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and any offsetting derivatives are recognized directly in earnings as a component of noninterest income. From time to time, the Company shares in credit risk on interest rate swap arrangements, by entering into risk participation agreements with syndication partners. These are accounted for at fair value and disclosed as risk participation derivatives. Mortgage banking derivatives The Company enters into certain derivative agreements as part of its mortgage banking and related risk management activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a mandatory delivery basis. The Company also economically hedges the value of MSRs by entering into a series of commitments to purchase mortgage-backed securities in the future and U.S. Treasury future contracts. Some interest rate swaps included in other assets were subject to a master netting arrangement with the counterparty in all periods presented and could be offset against some amounts included in interest rate swaps included in other liabilities. The Company has chosen not to net these exposures in the consolidated balance sheets, and any impact of netting these amounts would not be significant.
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Earnings Per Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | Information regarding the Company’s basic and diluted earnings per common share is presented in the following table:
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amortized Cost and Estimated Fair Value of Securities | The following table is a summary of the amortized cost and estimated fair value, including the allowance for credit losses and gross unrealized gains and losses, of available for sale, held to maturity and securities carried at fair value through income for the dates indicated:
________________________ (1)Securities carried at fair value through income have no unrealized gains or losses at the consolidated balance sheet dates as all changes in value have been recognized in the consolidated statements of income. See Note 5 — Fair Value of Financial Instruments for more information.
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Schedule of Unrealized Losses | Securities with unrealized losses at September 30, 2023, and December 31, 2022, aggregated by investment category and those individual securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or more, were as follows.
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Schedule of Allowance for Credit Losses for Held-to-Maturity Securities | The following table presents the activity in the allowance for credit losses for held-to-maturity debt securities.
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Proceeds from Sales of Securities Available for Sale and Gross Gains | Proceeds from sales and calls, and related gross gains and losses of securities available for sale, are shown below.
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Securities Classified by Contractual Maturity | The following table presents the amortized cost and fair value of securities available for sale and held to maturity at September 30, 2023, grouped by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which do not have contractual payments due at a single maturity date, are shown separately. Actual maturities for mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities will differ from contractual maturities as a result of prepayments made on the underlying loans.
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Securities Pledged as Collateral | The following table presents carrying amounts of securities pledged as collateral for deposits and repurchase agreements at the periods presented.
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Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans | Loans consist of the following:
____________________________ (1)Includes unamortized purchase accounting adjustment and net deferred loan fees of $11.5 million and $14.2 million at September 30, 2023, and December 31, 2022, respectively. As of September 30, 2023, and December 31, 2022, the remaining purchase accounting net loan discount was $179,000 and $2.2 million, respectively.
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Recorded Investment in Loans by Credit Quality Indicator | The following table reflects recorded investments in loans by credit quality indicator and origination year at September 30, 2023, and gross charge-offs for the nine months ended September 30, 2023, excluding loans held for sale. Loans acquired are shown in the table by origination year, not merger date. The Company had an immaterial amount of revolving loans converted to term loans at September 30, 2023.
The following table reflects recorded investments in loans by credit quality indicator and origination year at December 31, 2022, and gross charge-offs for the year ended December 31, 2022, excluding loans held for sale. Loans acquired are shown in the table by origination year, not merger date. The Company had an immaterial amount of revolving loans converted to term loans at December 31, 2022.
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Loan Portfolio Aging Analysis | The following tables present the Company’s loan portfolio aging analysis at the dates indicated:
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Allowance for Loan Losses by Portfolio Segment | The following tables detail activity in the ALCL by portfolio segment. Accrued interest of $33.0 million and $21.9 million was not included in the book value for the purposes of calculating the allowance at September 30, 2023 and 2022, respectively. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
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Financing Receivable Individually Evaluated to Determine Expected Credit Losses and ACL Allocation | The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ALCL allocated to these loans.
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Non-performing (Nonaccrual) Loans Held for Investment | Nonaccrual LHFI was as follows:
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Loans Classified as Troubled Debt Restructurings (TDRs) | The tables below summarize modifications made to borrowers experiencing financial difficulty by loan and modification type during the dates indicated.
The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty during three and nine months ended September 30, 2023, respectively.
The following table depicts the performance of loans that have been modified during the nine months ended September 30, 2023.
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities Recorded on a Recurring Basis | The following tables summarize financial assets and financial liabilities recorded at fair value on a recurring basis at September 30, 2023, and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value. There were no changes in the valuation techniques during 2023 or 2022.
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Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2023 and 2022, are summarized as follows:
___________________________ (1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.
(1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.
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Significant Assumptions Used to Value Mortgage Servicing Rights | The significant assumptions used to value MSRs were as follows:
__________________________ (1)The weighted average was calculated with reference to the principal balance of the underlying mortgages.
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Difference Between Fair Value and the Unpaid Principal Balance for Financial Instruments for which the Fair Value Option has been Elected and Classification in Income Statement | The following tables summarize the difference between the fair value and the unpaid principal balance for financial instruments for which the fair value option has been elected:
____________________________ (1)There were no loans held for sale that were designated as nonaccrual or 90 days or more past due at September 30, 2023.
____________________________ (1)$3.9 million of loans held for sale were designated as nonaccrual or 90 days or more past due at December 31, 2022. Of this balance, $3.3 million was guaranteed by U.S. Government agencies. Changes in the fair value of assets for which the Company elected the fair value option are classified in the consolidated statements of income line items reflected in the following table:
____________________________ (1)The fair value option impact on noninterest income is offset by the derivative gain/loss recognized in noninterest income. Please see Note 6 — Mortgage Banking for more detail.
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Carrying Value and Estimated Fair Value of Financial Instruments Not Measured at Fair Value | The carrying value and estimated fair values of financial instruments not recorded at fair value are as follows:
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Mortgage Banking (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mortgage Banking [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Banking Operations | The following table presents the Company’s revenue from mortgage banking operations:
(1)Based upon broker estimate, the Company recorded a $2.0 million impairment on the held for sale GNMA MSR portfolio during the quarter ended September 30, 2022.
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Schedule of Activity in Mortgages Servicing Rights (MSRs) | Activity in MSRs was as follows:
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Borrowings (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Borrowed Funds | Borrowed funds are summarized as follows:
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Summary of Terms of Current Debentures |
The following table is a summary of the terms of the current junior subordinated debentures at September 30, 2023:
____________________________ (1)The trust preferred securities reprice quarterly based on the three-month average SOFR plus 3.30%, with the last reprice date on July 27, 2023. (2)The trust preferred securities reprice quarterly based on the three-month CME Term SOFR plus 1.80%, plus 0.26161% SOFR spread adjustment, with the last reprice date on September 13, 2023. (3)The trust preferred securities reprice quarterly based on the three-month CME Term SOFR plus 1.64%, plus 0.26161% SOFR spread adjustment, with the last reprice date on September 1, 2023
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Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments on the Balance Sheet | The following tables disclose the fair value of derivative instruments in the Company’s consolidated balance sheets at September 30, 2023, and December 31, 2022, as well as the effect of these derivative instruments on the Company’s consolidated statements of income for the nine months ended September 30, 2023 and 2022. Derivative instruments and their related gains and losses are reported in other operating activities, net in the statements of cash flows.
____________________________ (1)Notional or contractual amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.
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Weighted-average Rates Paid and Received for Interest Rate Swaps | The weighted-average rates paid and received for interest rate swaps at September 30, 2023, and December 31, 2022, were as follows:
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Gains and Losses Recognized on Derivative Instruments Not Designated as Hedging Instruments | Gains and losses recognized on derivative instruments not designated as hedging instruments are as follows:
____________________________ (1)Gains and losses on these instruments are largely offset by market fluctuations in mortgage servicing rights. See Note 6 — Mortgage Banking for more information on components of mortgage banking revenue.
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Stock and Incentive Compensation Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Black-Scholes Option Pricing Model | The table below includes the weighted-average assumptions used to calculate the grant date fair value of the ESPP rights for the periods indicated using the Black-Scholes option pricing model:
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Schedule of ESPP Shares Purchased | The ESPP shares purchased are as follows for the dates indicated:
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Schedule of Share-Based Compensation Cost Charged to Income | Share-based compensation cost charged to income for the three and nine months ended September 30, 2023 and 2022, is presented below. There was no stock option expense for any of the periods shown.
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Schedule of Time-Vested Award Activity | The following table summarizes the Company’s award activity:
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Schedule of Stock Option Activity | The table below summarizes the status of the Company’s stock options and changes during the nine months ended September 30, 2023 and 2022.
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Accumulated Other Comprehensive (Loss) Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive (Loss) Income | Accumulated other comprehensive (loss) income (“AOCI”) includes the after-tax change in unrealized gains and losses on AFS securities and cash flow hedging activities.
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Capital and Regulatory Matters (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Banking Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual Capital Amounts and Ratios | The actual capital amounts and ratios of the Company and the Bank at September 30, 2023, and December 31, 2022, are presented in the following table:
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Commitments and Contingencies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Off-Balance Sheet Financial Instruments | The table below presents the Company’s commitments to extend credit by commitment expiration date for the dates indicated:
____________________________ (1)Includes $723.3 million and $594.6 million of unconditionally cancellable commitments at September 30, 2023, and December 31, 2022, respectively.
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Business Combinations (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Values of Assets Acquired and Liabilities Assumed | The following schedule is a breakdown of the assets acquired and liabilities assumed as of the merger date:
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Financing Receivable, Purchased With Credit Deterioration | The following table provides a summary of loans purchased with credit deterioration at the merger transaction date with BTH:
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Unaudited Pro-Forma Information Merger with BTH | The following table presents unaudited pro-forma information as if the merger with BTH had occurred on January 1, 2022. This pro-forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of core deposit intangible and related income tax effects and is based on our historical results for the periods presented. Transaction-related costs related to the merger are not reflected in the pro-forma amounts. The pro-forma information does not necessarily reflect the results of operations that would have occurred had the Company acquired BTH at the beginning of fiscal year 2021. Cost savings are also not reflected in the unaudited pro-forma amounts.
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Significant Accounting Policies (Details) |
9 Months Ended |
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Sep. 30, 2023
segment
banking_center
| |
Accounting Policies [Abstract] | |
Number of banking centers | banking_center | 60 |
Number of segments | segment | 1 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Numerator: | ||||||||
Net income | $ 24,313 | $ 21,760 | $ 24,302 | $ 16,243 | $ 21,311 | $ 20,683 | $ 70,375 | $ 58,237 |
Denominator: | ||||||||
Weighted average common shares outstanding (in shares) | 30,856,649 | 28,298,984 | 30,797,399 | 25,263,681 | ||||
Dilutive effect of stock-based awards (in shares) | 87,211 | 182,635 | 105,823 | 103,126 | ||||
Weighted average diluted common shares outstanding (in shares) | 30,943,860 | 28,481,619 | 30,903,222 | 25,366,807 | ||||
Basic earnings per common share (in dollars per share) | $ 0.79 | $ 0.57 | $ 2.29 | $ 2.31 | ||||
Diluted earnings per common share (in dollars per share) | $ 0.79 | $ 0.57 | $ 2.28 | $ 2.30 |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 613,010 | 12,486 | 459,434 | 13,412 |
Securities - Narrative (Details) |
Sep. 30, 2023
USD ($)
security
|
Dec. 31, 2022
USD ($)
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Sep. 30, 2022
USD ($)
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---|---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | |||
Number of securities in an unrealized loss position | security | 647 | ||
Held-to-maturity securities, accrued interest | $ 6,400,000 | $ 8,200,000 | |
Held to maturity, amortized cost | 11,680,000 | ||
Held-to-maturity securities, nonaccrual status | 0 | $ 0 | |
Total Past Due | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, amortized cost | $ 0 | $ 0 |
Securities - Allowance for Credit Losses for Held-to-Maturity Securities (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Allowance for credit losses: | ||||
Beginning Balance | $ 899,000 | $ 167,000 | ||
Credit loss expense | $ (45,000) | $ 0 | (9,000) | 725,000 |
Ending Balance | $ 890,000 | $ 892,000 | $ 890,000 | $ 892,000 |
Securities - Proceeds from Sales of Securities Available for Sale and Gross Gains (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
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Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales/calls | $ 214,302 | $ 484,421 |
Gross realized gains | 596 | 3,766 |
Gross realized losses | $ (7,625) | $ (2,102) |
Securities - Securities Pledged as Collateral (Details) - Asset Pledged as Collateral - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Carrying value of securities pledged to secure public deposits | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities | $ 412,829 | $ 769,691 |
Carrying value of securities pledged to repurchase agreements | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities | $ 5,530 | $ 6,797 |
Loans - Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
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Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 94,353,000 | $ 63,123,000 | $ 87,161,000 | $ 64,586,000 | $ 64,586,000 |
Allowance for loan credit losses - BTH merger | 5,527,000 | 5,527,000 | |||
Charge-offs | 3,202,000 | 1,628,000 | 8,246,000 | 6,222,000 | |
Recoveries | 516,000 | 550,000 | 2,330,000 | 1,837,000 | |
Provision | 3,510,000 | 15,787,000 | 13,932,000 | 17,631,000 | |
Ending balance | 95,177,000 | 83,359,000 | 95,177,000 | 83,359,000 | 87,161,000 |
Average balance | $ 7,561,094,000 | $ 6,389,472,000 | $ 7,395,440,000 | $ 5,567,702,000 | |
Net charge-offs to loan average balance (annualized) | 0.14% | 0.07% | 0.11% | 0.11% | |
PCD loans acquired | $ 10,800,000 | $ 10,800,000 | |||
Provision (benefit) for credit losses | $ 3,500,000 | 16,900,000 | $ 14,000,000 | 20,100,000 | |
Provision (release) for off-balance sheet commitments | 50,000 | 1,200,000 | 95,000 | 1,700,000 | |
Credit loss expense (benefit) for held to maturity securities | (45,000) | 0 | (9,000) | 725,000 | |
Real estate | Commercial real estate | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | 20,839,000 | 16,112,000 | 19,772,000 | 13,425,000 | 13,425,000 |
Allowance for loan credit losses - BTH merger | 1,000 | 1,000 | |||
Charge-offs | 0 | 0 | 42,000 | 166,000 | 166,000 |
Recoveries | 28,000 | 17,000 | 113,000 | 19,000 | |
Provision | (1,758,000) | 1,901,000 | (734,000) | 4,752,000 | |
Ending balance | 19,109,000 | 18,031,000 | 19,109,000 | 18,031,000 | 19,772,000 |
Average balance | $ 2,428,969,000 | $ 2,046,411,000 | $ 2,393,028,000 | $ 1,865,658,000 | |
Net charge-offs to loan average balance (annualized) | 0.00% | 0.00% | 0.00% | 0.01% | |
Real estate | Construction/land/land development | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 8,729,000 | $ 4,707,000 | $ 7,776,000 | $ 4,011,000 | 4,011,000 |
Allowance for loan credit losses - BTH merger | 0 | 0 | |||
Charge-offs | 0 | 0 | 0 | 0 | 0 |
Recoveries | 3,000 | 200,000 | 3,000 | 200,000 | |
Provision | 613,000 | 2,159,000 | 1,566,000 | 2,855,000 | |
Ending balance | 9,345,000 | 7,066,000 | 9,345,000 | 7,066,000 | 7,776,000 |
Average balance | $ 1,044,180,000 | $ 760,682,000 | $ 997,296,000 | $ 638,683,000 | |
Net charge-offs to loan average balance (annualized) | 0.00% | (0.10%) | 0.00% | (0.04%) | |
Real estate | Residential real estate | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 9,018,000 | $ 5,851,000 | $ 8,230,000 | $ 6,116,000 | 6,116,000 |
Allowance for loan credit losses - BTH merger | 0 | 0 | |||
Charge-offs | 0 | 0 | 27,000 | 75,000 | 91,000 |
Recoveries | 3,000 | 6,000 | 13,000 | 98,000 | |
Provision | 1,048,000 | 1,898,000 | 1,853,000 | 1,616,000 | |
Ending balance | 10,069,000 | 7,755,000 | 10,069,000 | 7,755,000 | 8,230,000 |
Average balance | $ 1,663,291,000 | $ 1,249,746,000 | $ 1,599,803,000 | $ 1,042,397,000 | |
Net charge-offs to loan average balance (annualized) | 0.00% | 0.00% | 0.00% | 0.00% | |
Commercial and Industrial | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 54,173,000 | $ 35,477,000 | $ 50,148,000 | $ 40,146,000 | 40,146,000 |
Allowance for loan credit losses - BTH merger | 5,525,000 | 5,525,000 | |||
Charge-offs | 3,187,000 | 1,618,000 | 8,070,000 | 5,943,000 | 8,459,000 |
Recoveries | 477,000 | 325,000 | 2,189,000 | 1,505,000 | |
Provision | 3,990,000 | 9,349,000 | 11,186,000 | 7,825,000 | |
Ending balance | 55,453,000 | 49,058,000 | 55,453,000 | 49,058,000 | 50,148,000 |
Average balance | $ 2,024,675,000 | $ 1,816,912,000 | $ 2,051,272,000 | $ 1,548,419,000 | |
Net charge-offs to loan average balance (annualized) | 0.53% | 0.28% | 0.38% | 0.38% | |
Mortgage warehouse lines of credit | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 817,000 | $ 459,000 | $ 379,000 | $ 340,000 | 340,000 |
Allowance for loan credit losses - BTH merger | 0 | 0 | |||
Charge-offs | 0 | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 | |
Provision | (359,000) | 97,000 | 79,000 | 216,000 | |
Ending balance | 458,000 | 556,000 | 458,000 | 556,000 | 379,000 |
Average balance | $ 376,275,000 | $ 491,584,000 | $ 329,205,000 | $ 453,658,000 | |
Net charge-offs to loan average balance (annualized) | 0.00% | 0.00% | 0.00% | 0.00% | |
Consumer | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 777,000 | $ 517,000 | $ 856,000 | $ 548,000 | 548,000 |
Allowance for loan credit losses - BTH merger | 1,000 | 1,000 | |||
Charge-offs | 15,000 | 10,000 | 107,000 | 38,000 | 43,000 |
Recoveries | 5,000 | 2,000 | 12,000 | 15,000 | |
Provision | (24,000) | 383,000 | (18,000) | 367,000 | |
Ending balance | 743,000 | 893,000 | 743,000 | 893,000 | $ 856,000 |
Average balance | $ 23,704,000 | $ 24,137,000 | $ 24,836,000 | $ 18,887,000 | |
Net charge-offs to loan average balance (annualized) | 0.17% | 0.13% | 0.51% | 0.16% |
Fair Value of Financial Instruments - Assumptions Used to Value Mortgage Servicing Rights (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Minimum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Prepayment speeds | 7.31% | 7.65% |
Discount rates | 10.25% | 950.00% |
Maximum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Prepayment speeds | 7.89% | 9.20% |
Discount rates | 12.75% | 2207.00% |
Weighted Average | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Prepayment speeds | 7.64% | 8.11% |
Discount rates | 10.31% | 12.55% |
Fair Value of Financial Instruments - Difference Between Fair Value and Unpaid Principal Balance (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate Fair Value | $ 21,716,000 | $ 31,757,000 |
Principal Balance/Amortized Cost | 21,530,000 | 32,046,000 |
Difference | 186,000 | (289,000) |
Nonaccrual mortgage loans held for sale recorded at fair value | 0 | 3,900,000 |
Loans held for sale | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate Fair Value | 14,944,000 | 25,389,000 |
Principal Balance/Amortized Cost | 14,715,000 | 24,946,000 |
Difference | 229,000 | 443,000 |
Securities carried at fair value through income | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate Fair Value | 6,772,000 | 6,368,000 |
Principal Balance/Amortized Cost | 6,815,000 | 7,100,000 |
Difference | $ (43,000) | (732,000) |
U.S. government agency securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Loans, 90 days or more past due | $ 3,300,000 |
Fair Value of Financial Instruments - Changes in Fair Value of Assets Classified in the Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Mortgage banking revenue (loans held for sale) | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||||
Total fair value option impact on noninterest income | $ (22) | $ (309) | $ (214) | $ (741) |
Other income | Securities carried at fair value through income | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||||
Total fair value option impact on noninterest income | 666 | (282) | 689 | (875) |
Noninterest income | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | ||||
Total fair value option impact on noninterest income | $ 644 | $ (591) | $ 475 | $ (1,616) |
Mortgage Banking - Mortgage Banking Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Mortgage Banking [Abstract] | ||||
Origination | $ 124 | $ 207 | $ 384 | $ 641 |
Gain on sale of loans held for sale | 757 | 636 | 2,380 | 4,477 |
Originations of MSRs | 225 | 462 | 656 | 1,926 |
Servicing | 915 | 1,446 | 2,840 | 4,306 |
Total gross mortgage revenue | 2,021 | 2,751 | 6,260 | 11,350 |
MSR valuation adjustments, net | (122) | (2,034) | (485) | 2,409 |
Mortgage HFS and pipeline fair value adjustment | (110) | (410) | (27) | (971) |
MSR hedge impact | (897) | (1,236) | (1,673) | (7,267) |
Mortgage banking revenue | $ 892 | (929) | 4,075 | 5,521 |
Mortgage servicing right impairment | $ 2,000 | $ 485 | $ (2,409) |
Mortgage Banking - Activity in Mortgage Servicing Rights (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Balance at beginning of period | $ 19,086 | $ 20,824 | $ 22,127 | $ 20,824 | $ 16,220 |
Addition of servicing rights | 225 | 462 | 656 | 1,926 | |
Settlement of sale of GNMA MSR | 0 | $ (1,800) | 0 | (1,806) | 0 |
Valuation adjustment, net of amortization | (122) | (2,034) | (485) | 2,409 | |
Balance at end of period | 19,189 | 21,654 | 19,189 | 21,654 | |
BTH | |||||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||||
Addition of servicing rights | $ 0 | $ 1,099 | $ 0 | $ 1,099 |
Mortgage Banking - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Mortgage Banking [Abstract] | ||||||
Settlement of sale of GNMA MSR | $ 0 | $ 1,800,000 | $ 0 | $ 1,806,000 | $ 0 | |
Annual servicing fee income rate | 0.25% | |||||
Reserve for mortgage loan servicing putback expenses | 146,000 | $ 146,000 | $ 217,000 | |||
Liability to repurchase past due GNMA loans | $ 0 | $ 0 | $ 24,600,000 |
Borrowings - Summary of Borrowed Funds (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | $ 12,213 | $ 639,230 |
FHLB advances | ||
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | 6,541 | 6,740 |
GNMA repurchase liability | ||
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | 0 | 24,569 |
Subordinated indebtedness, net | ||
Debt Instrument, Redemption [Line Items] | ||
Subordinated indebtedness, net | 196,825 | 201,765 |
FHLB advances | ||
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | 0 | 550,000 |
Overnight repurchase agreements with depositors | ||
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | 5,672 | 27,921 |
Correspondent short-term borrowings | ||
Debt Instrument, Redemption [Line Items] | ||
Total FHLB advances and other borrowings | $ 0 | $ 30,000 |
Derivative Financial Instruments - Weighted-average Rates Paid and Received (Details) - Interest Rate Swaps |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Cash flow hedges | Paid | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 4.24% | 4.98% |
Cash flow hedges | Received | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 8.25% | 5.72% |
Non-Hedging | Financial Institution | Paid | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 4.77% | 3.72% |
Non-Hedging | Financial Institution | Received | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 7.87% | 5.75% |
Non-Hedging | Customer | Paid | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 7.87% | 5.75% |
Non-Hedging | Customer | Received | ||
Derivative [Line Items] | ||
Weighted-Average Interest Rate | 4.77% | 3.72% |
Derivative Financial Instruments - Gains and Losses Recognized on Derivative Instruments Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Amount of loss recognized in mortgage banking revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized on derivatives not designated as hedging instruments | $ (1,102) | $ (1,317) | $ (1,613) | $ (3,537) |
Amount of gain recognized in other non-interest income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized on derivatives not designated as hedging instruments | $ 82 | $ 210 | $ 167 | $ 652 |
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash collateral on deposit | $ 4.0 | $ 7.6 |
Stock and Incentive Compensation Plans - Black-Scholes Option Pricing Model (Details) - Employee Stock - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 1 year | 1 year | 1 year | 1 year |
Dividend yield (in dollars per share) | $ 2.08 | $ 1.52 | $ 1.81 | $ 1.38 |
Risk-free interest rate | 4.94% | 2.00% | 3.52% | 0.98% |
Expected volatility | 31.12% | 32.56% | 31.81% | 39.75% |
Stock and Incentive Compensation Plans - Compensation Expense (Details) - Employee Stock - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP shares purchased (in shares) | 0 | 0 | 46,213 | 26,089 |
Shares available for issuance under the ESPP (in shares) | 927,698 | 973,911 | 927,698 | 973,911 |
Stock and Incentive Compensation Plans - Share-based Compensation Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock compensation expense | $ 1,335 | $ 970 | $ 3,886 | $ 2,548 |
Related tax benefits recognized in net income | 280 | 204 | 816 | 535 |
RSA & RSU | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock compensation expense | 1,180 | 753 | 3,236 | 2,030 |
PSU | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock compensation expense | 41 | 134 | 336 | 283 |
ESPP | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock compensation expense | $ 114 | $ 83 | $ 314 | $ 235 |
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 997,859 | $ 992,587 | $ 949,943 | $ 646,373 | $ 676,865 | $ 730,211 | $ 949,943 | $ 730,211 |
Net change | (19,850) | (14,398) | 21,394 | (59,254) | (50,089) | (71,619) | (12,854) | (180,962) |
Ending balance | 998,945 | 997,859 | 992,587 | 907,024 | 646,373 | 676,865 | 998,945 | 907,024 |
Unrealized (Loss) Gain on AFS Securities | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (160,700) | 5,809 | (160,700) | 5,809 | ||||
Net change | (12,904) | (181,919) | ||||||
Ending balance | (173,604) | (176,110) | (173,604) | (176,110) | ||||
Unrealized Gain (Loss) on Cash Flow Hedges | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | 825 | (80) | 825 | (80) | ||||
Net change | 50 | 957 | ||||||
Ending balance | 875 | 877 | 875 | 877 | ||||
Accumulated Other Comprehensive (Loss) Income | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (152,879) | (138,481) | (159,875) | (115,979) | (65,890) | 5,729 | (159,875) | 5,729 |
Net change | (19,850) | (14,398) | 21,394 | (59,254) | (50,089) | (71,619) | ||
Ending balance | $ (172,729) | $ (152,879) | $ (138,481) | $ (175,233) | $ (115,979) | $ (65,890) | $ (172,729) | $ (175,233) |
Capital and Regulatory Matters - Narrative (Details) - USD ($) |
1 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jul. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Resale Agreement Counterparty [Line Items] | ||||
Transition regulatory capital amount | $ 3,200,000 | $ 5,100,000 | ||
Purchase price | $ 50,000,000 | |||
Stock buyback program, period | 3 years | |||
Repurchase of stock (in shares) | 0 | 0 | ||
Origin Bank | Origin Bank | ||||
Resale Agreement Counterparty [Line Items] | ||||
Aggregate dividends without prior regulatory approval | $ 141,400,000 |
Business Combinations - Narrative (Details) |
Aug. 01, 2022
USD ($)
shares
|
Jul. 29, 2022
USD ($)
$ / shares
|
Sep. 30, 2023
USD ($)
banking_center
|
Dec. 31, 2022
USD ($)
|
Jul. 31, 2022
location
|
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Goodwill | $ 128,679,000 | $ 128,679,000 | |||
Assets | $ 9,840,000,000 | 9,733,303,000 | 9,686,067,000 | ||
Loans | 6,770,000,000 | 7,472,886,000 | 7,002,861,000 | ||
Deposits | $ 7,990,000,000 | $ 8,374,488,000 | $ 7,775,702,000 | ||
Number of banking centers | banking_center | 60 | ||||
Common Stock | |||||
Business Acquisition [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 43.07 | ||||
BTH | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 100.00% | ||||
Consideration transaction value | $ 307,800,000 | ||||
Goodwill | $ 94,500,000 | $ 94,526,000 | |||
Goodwill, tax deductible amount | $ 0 | ||||
Number of banking centers | location | 13 | ||||
BTH | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued (in shares) | shares | 6,794,910 | ||||
Stock converted (in shares) | shares | 611,676 |
Business Combinations - Fair Values of Assets Acquired and Liabilities Assumed from Acquisition of BTH (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Aug. 01, 2022 |
---|---|---|---|
Liabilities Assumed: | |||
Goodwill | $ 128,679 | $ 128,679 | |
BTH | |||
Assets Acquired: | |||
Cash and cash equivalents | 69,953 | ||
Investment securities | 456,808 | ||
Loans acquired | 1,239,532 | ||
Allowance for credit losses on loans | (5,527) | ||
Loans receivable, net | 1,234,005 | ||
Premises and equipment | 17,825 | ||
Non-marketable equity securities held in other financial institutions | 5,873 | ||
Core deposit intangible | 38,356 | ||
Other assets | 23,778 | ||
Total assets acquired | 1,846,598 | ||
Liabilities Assumed: | |||
Noninterest-bearing deposits | 398,089 | ||
Interest-bearing deposits | 865,864 | ||
Time deposits | 302,506 | ||
Total deposits | 1,566,459 | ||
Securities sold under agreements to repurchase | 10,133 | ||
Subordinated indebtedness, net | 44,074 | ||
Accrued expenses and other liabilities | 12,674 | ||
Total liabilities assumed | 1,633,340 | ||
Net assets acquired | 213,258 | ||
Purchase price | 307,784 | ||
Goodwill | $ 94,526 | $ 94,500 |
Business Combinations - Pro Forma Information (Details) - BTH $ / shares in Units, $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
$ / shares
shares
| |
Business Acquisition, Pro Forma Information [Abstract] | |
Net interest income | $ 243,932 |
Noninterest income | 49,425 |
Net income | $ 76,286 |
Pro-forma earnings per share, basic (in dollars per share) | $ / shares | $ 2.50 |
Pro-forma earnings per share, diluted (in dollars per share) | $ / shares | $ 2.48 |
Weighted average shares outstanding (in shares) | shares | 32,092,071 |
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