( State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||
☒ | Accelerated filer | ☐ | |||||||||||||||||||||
Non-accelerated filer | ☐ | Small reporting company | |||||||||||||||||||||
Emerging growth company |
Page | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
10 | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 6. | ||||||||
ACL | Allowance for credit losses | GAAP | U.S. generally accepted accounting principles | |||||||||||
AFS | Available-for-sale | GNMA | Government National Mortgage Association | |||||||||||
ALCO | Asset Liability Management Committee | IRLC | Interest rate lock commitment | |||||||||||
ASC | Accounting Standard Codification | LIBOR | London Interbank Offered Rate | |||||||||||
ASU | Accounting Standard Update | MSR | Mortgage servicing rights | |||||||||||
CARES | Coronavirus Aid, Relief, and Economic Security Act | NIM | Net interest margin | |||||||||||
CECL | Current expected credit losses | OREO | Other real estate owned | |||||||||||
CEO | Chief Executive Officer | PPP | Paycheck Protection Program | |||||||||||
CET1 | Common Equity Tier 1 | PSU | Performance-based restricted stock units | |||||||||||
COVID-19 | Coronavirus pandemic | ROAA | Return on average total assets | |||||||||||
CPR | Conditional prepayment rate | ROAE | Return on average shareholders' equity | |||||||||||
EPS | Earnings per share | ROATCE | Return on average tangible common equity | |||||||||||
ESPP | Employee Stock Purchase Plan | ROU | Right-of-use | |||||||||||
EVE | Economic value of equity | RSU | Restricted stock units | |||||||||||
FASB | Financial Accounting Standards Board | SBA | Small Business Administration | |||||||||||
FDIC | Federal Deposit Insurance Corporation | SEC | U.S. Securities and Exchange Commission | |||||||||||
Federal Reserve | Board of Governors of the Federal Reserve System | SOFR | Secured overnight financing rate | |||||||||||
FHLB | Federal Home Loan Bank | TDFI | Tennessee Department of Financial Institutions | |||||||||||
FHLMC | Federal Home Loan Mortgage Corporation | TDR | Troubled debt restructuring | |||||||||||
FNMA | Federal National Mortgage Association |
September 30, | December 31, | |||||||||||||
2022 (Unaudited) | 2021 | |||||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | $ | ||||||||||||
Federal funds sold and reverse repurchase agreements | ||||||||||||||
Interest-bearing deposits in financial institutions | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Investments: | ||||||||||||||
Available-for-sale debt securities, at fair value | ||||||||||||||
Equity securities, at fair value | ||||||||||||||
Federal Home Loan Bank stock, at cost | ||||||||||||||
Loans held for sale, at fair value | ||||||||||||||
Loans | ||||||||||||||
Less: allowance for credit losses | ||||||||||||||
Net loans | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Other real estate owned, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Interest receivable | ||||||||||||||
Mortgage servicing rights, at fair value | ||||||||||||||
Goodwill | ||||||||||||||
Core deposit and other intangibles, net | ||||||||||||||
Bank-owned life insurance | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES | ||||||||||||||
Deposits | ||||||||||||||
Noninterest-bearing | $ | $ | ||||||||||||
Interest-bearing checking | ||||||||||||||
Money market and savings | ||||||||||||||
Customer time deposits | ||||||||||||||
Brokered and internet time deposits | ||||||||||||||
Total deposits | ||||||||||||||
Borrowings | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||
Common stock, $ September 30, 2022 and December 31, 2021, respectively | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive (loss) income, net | ( | |||||||||||||
Total FB Financial Corporation common shareholders' equity | ||||||||||||||
Noncontrolling interest | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | ||||||||||||||||||||||
Interest on securities | ||||||||||||||||||||||||||
Taxable | ||||||||||||||||||||||||||
Tax-exempt | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total interest income | ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||
Total interest expense | ||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||
Provision for credit losses | ( | ( | ||||||||||||||||||||||||
Provision for credit losses on unfunded commitments | ( | |||||||||||||||||||||||||
Net interest income after provisions for credit losses | ||||||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Mortgage banking income | ||||||||||||||||||||||||||
Service charges on deposit accounts | ||||||||||||||||||||||||||
ATM and interchange fees | ||||||||||||||||||||||||||
Investment services and trust income | ||||||||||||||||||||||||||
(Loss) gain from securities, net | ( | ( | ||||||||||||||||||||||||
Gain (loss) on sales or write-downs of other real estate owned | ( | |||||||||||||||||||||||||
(Loss) gain from other assets | ( | |||||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Total noninterest income | ||||||||||||||||||||||||||
Noninterest expenses: | ||||||||||||||||||||||||||
Salaries, commissions and employee benefits | ||||||||||||||||||||||||||
Occupancy and equipment expense | ||||||||||||||||||||||||||
Legal and professional fees | ||||||||||||||||||||||||||
Data processing | ||||||||||||||||||||||||||
Amortization of core deposit and other intangibles | ||||||||||||||||||||||||||
Advertising | ||||||||||||||||||||||||||
Mortgage restructuring expense | ||||||||||||||||||||||||||
Other expense | ||||||||||||||||||||||||||
Total noninterest expense | ||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | ||||||||||||||||||||||||||
Net income applicable to noncontrolling interest | ||||||||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per common share | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||||
Net change in unrealized loss in available-for-sale securities, net of tax benefits of $( | ( | ( | ( | ( | ||||||||||||||||||||||
Reclassification adjustment for gain on sale of securities included in net income, net of tax expenses of $ | ( | ( | ( | ( | ||||||||||||||||||||||
Net change in unrealized gain in hedging activities, net of tax expenses of $ | ||||||||||||||||||||||||||
Total other comprehensive loss, net of tax | ( | ( | ( | ( | ||||||||||||||||||||||
Comprehensive (loss) income applicable to FB Financial Corporation and noncontrolling interest | ( | ( | ||||||||||||||||||||||||
Comprehensive income applicable to noncontrolling interest | ||||||||||||||||||||||||||
Comprehensive (loss) income applicable to FB Financial Corporation | $ | ( | $ | $ | ( | $ |
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss, net | Total common shareholders' equity | Noncontrolling interest | Total shareholders' equity | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Net income attributable to FB Financial Corporation and noncontrolling interest | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units vested and distributed, net of shares withheld | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income attributable to FB Financial Corporation and noncontrolling interest | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units vested and distributed, net of shares withheld | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Noncontrolling interest distribution | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | ( | $ | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income, net | Total common shareholders' equity | Noncontrolling interest | Total shareholders' equity | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income attributable to FB Financial Corporation and noncontrolling interest | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units vested and distributed net of shares withheld | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ share) | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income attributable to FB Financial Corporation and noncontrolling interest | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units vested and distributed net of shares withheld | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||
Shares issued under employee stock purchase program | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ share) | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Noncontrolling interest distribution | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization of fixed assets and software | ||||||||||||||
Amortization of core deposit and other intangibles | ||||||||||||||
Capitalization of mortgage servicing rights | ( | ( | ||||||||||||
Net change in fair value of mortgage servicing rights | ( | |||||||||||||
Stock-based compensation expense | ||||||||||||||
Provision for credit losses | ( | |||||||||||||
Provision for credit losses on unfunded commitments | ( | |||||||||||||
Provision for mortgage loan repurchases | ( | ( | ||||||||||||
Amortization of premiums and accretion of discounts on acquired loans, net | ||||||||||||||
Amortization of premiums and accretion of discounts on securities, net | ||||||||||||||
Loss (gain) from securities, net | ( | |||||||||||||
Originations of loans held for sale | ( | ( | ||||||||||||
Repurchases of loans held for sale | ( | ( | ||||||||||||
Proceeds from sale of loans held for sale | ||||||||||||||
Gain on sale and change in fair value of loans held for sale | ( | ( | ||||||||||||
Net loss (gain) or write-downs of other real estate owned | ( | |||||||||||||
Gain on other assets | ( | ( | ||||||||||||
Provision for deferred income taxes | ||||||||||||||
Earnings on bank-owned life insurance | ( | ( | ||||||||||||
Changes in: | ||||||||||||||
Operating leases | ( | |||||||||||||
Other assets and interest receivable | ( | ( | ||||||||||||
Accrued expenses and other liabilities | ( | |||||||||||||
Net cash provided by (used in) operating activities | ( | |||||||||||||
Cash flows from investing activities: | ||||||||||||||
Activity in available-for-sale securities: | ||||||||||||||
Sales | ||||||||||||||
Maturities, prepayments and calls | ||||||||||||||
Purchases | ( | ( | ||||||||||||
Net change in loans | ( | ( | ||||||||||||
Net change in commercial loans held for sale | ||||||||||||||
Sales of FHLB stock | ||||||||||||||
Purchases of FHLB stock | ( | ( | ||||||||||||
Purchases of premises and equipment | ( | ( | ||||||||||||
Proceeds from the sale of premises and equipment | ||||||||||||||
Proceeds from the sale of other real estate owned | ||||||||||||||
Proceeds from the sale of other assets | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Net (decrease) increase in demand deposits | ( | |||||||||||||
Net increase (decrease) in time deposits | ( | |||||||||||||
Net (decrease) increase in securities sold under agreements to repurchase | ( | |||||||||||||
Net increase in short-term FHLB advances | ||||||||||||||
Payments on subordinated debt | ( | |||||||||||||
Amortization of issuance costs and (accretion) of subordinated debt fair value premium, net | ( | |||||||||||||
Payments on other borrowings | ( | |||||||||||||
Share based compensation withholding payments | ( | ( | ||||||||||||
Net proceeds from sale of common stock under employee stock purchase program | ||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
Dividends paid on common stock | ( | ( | ||||||||||||
Dividend equivalent payments made upon vesting of equity compensation | ( | ( | ||||||||||||
Noncontrolling interest distribution | ( | ( | ||||||||||||
Net cash (used in) provided by financing activities | ( | |||||||||||||
Net change in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents at beginning of the period | ||||||||||||||
Cash and cash equivalents at end of the period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Taxes paid | ||||||||||||||
Supplemental noncash disclosures: | ||||||||||||||
Transfers from loans to other real estate owned | $ | $ | ||||||||||||
Loans provided for sales of other real estate owned | ||||||||||||||
Transfers from loans to loans held for sale | ||||||||||||||
Transfers from loans held for sale to loans | ||||||||||||||
Rebooked GNMA loans under optional repurchase program | ||||||||||||||
Trade date payable - securities | ||||||||||||||
Dividends declared not paid on restricted stock units | ||||||||||||||
Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Basic earnings per common share calculation: | ||||||||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | $ | $ | $ | ||||||||||||||||||||||
Dividends paid on and undistributed earnings allocated to participating securities | ||||||||||||||||||||||||||
Earnings available to common shareholders | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average basic shares outstanding | ||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share: | ||||||||||||||||||||||||||
Earnings available to common shareholders | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average basic shares outstanding | ||||||||||||||||||||||||||
Weighted average diluted shares contingently issuable(1) | ||||||||||||||||||||||||||
Weighted average diluted shares outstanding | ||||||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses for investments | Fair Value | ||||||||||||||||||||||||||||
Investment Securities | ||||||||||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Mortgage-backed securities - residential | ( | |||||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | |||||||||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||||||||
U.S. Treasury securities | ( | |||||||||||||||||||||||||||||||
Corporate securities | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses for investments | Fair Value | ||||||||||||||||||||||||||||
Investment Securities | ||||||||||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Mortgage-backed securities - residential | ( | |||||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | |||||||||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||||||||
U.S. Treasury securities | ( | |||||||||||||||||||||||||||||||
Corporate securities | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
Available-for-sale | Available-for-sale | |||||||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | |||||||||||||||||||||||
Due in one year or less | $ | $ | $ | $ | ||||||||||||||||||||||
Due in one to five years | ||||||||||||||||||||||||||
Due in five to ten years | ||||||||||||||||||||||||||
Due in over ten years | ||||||||||||||||||||||||||
Mortgage-backed securities - residential | ||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ||||||||||||||||||||||||||
Total debt securities | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Proceeds from sales | $ | $ | $ | $ | |||||||||||||||||||
Proceeds from maturities, prepayments and calls | |||||||||||||||||||||||
Gross realized gains | |||||||||||||||||||||||
Gross realized losses | |||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Mortgage-backed securities - residential | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
U.S. Treasury securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized loss | |||||||||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Mortgage-backed securities - residential | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ( | ( | ||||||||||||||||||||||||||||||||||||
Municipal securities | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Commercial and industrial (1) | $ | $ | ||||||||||||
Construction | ||||||||||||||
Residential real estate: | ||||||||||||||
1-to-4 family mortgage | ||||||||||||||
Residential line of credit | ||||||||||||||
Multi-family mortgage | ||||||||||||||
Commercial real estate: | ||||||||||||||
Owner-occupied | ||||||||||||||
Non-owner occupied | ||||||||||||||
Consumer and other | ||||||||||||||
Gross loans | ||||||||||||||
Less: Allowance for credit losses | ( | ( | ||||||||||||
Net loans | $ | $ |
Commercial and industrial | Construction | 1-to-4 family residential mortgage | Residential line of credit | Multi-family residential mortgage | Commercial real estate owner occupied | Commercial real estate non-owner occupied | Consumer and other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance - June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries of loans previously charged-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance - September 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance - December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries of loans previously charged-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance - September 30, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial and industrial | Construction | 1-to-4 family residential mortgage | Residential line of credit | Multi-family residential mortgage | Commercial real estate owner occupied | Commercial real estate non-owner occupied | Consumer and other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance - June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries of loans previously charged-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance - September 30, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance - December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries of loans previously charged-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans charged off | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance - September 30, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Pass. | Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category. | |||||||
Special Mention. | Loans rated Special Mention are those that have potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk. | |||||||
Classified. | Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Also included in this category are loans classified as Doubtful, which have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable. | |||||||
As of September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Term Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | $ | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Term Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Classified | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | $ | $ | $ | $ | $ | $ | $ | $ |
As of September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Term Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | $ | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Term Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | $ | $ | $ | $ | $ | $ | $ | $ |
September 30, 2022 | 30-89 days past due and accruing interest | 90 days or more and accruing interest | Non-accrual loans | Loans current on payments and accruing interest | Total | |||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
December 31, 2021 | 30-89 days past due and accruing interest | 90 days or more and accruing interest | Non-accrual loans | Loans current on payments and accruing interest | Total | |||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
September 30, 2022 | Non-accrual with no related allowance | Non-accrual with related allowance | Related allowance | |||||||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||||||||||
Residential real estate: | ||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | ||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||
Consumer and other | ||||||||||||||||||||
Total | $ | $ | $ |
December 31, 2021 | Non-accrual with no related allowance | Non-accrual with related allowance | Related allowance | |||||||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||||||||||
Construction | ||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner occupied | ||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||
Consumer and other | ||||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Multi-family mortgage | ||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, 2022 | Number of loans | Pre-modification outstanding recorded investment | Post-modification outstanding recorded investment | Charge offs and specific reserves | ||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | $ | $ | $ | |||||||||||||||||||||||
Total | $ | $ | $ |
Nine Months Ended September 30, 2022 | Number of loans | Pre-modification outstanding recorded investment | Post-modification outstanding recorded investment | Charge offs and specific reserves | ||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended September 30, 2021 | Number of loans | Pre-modification outstanding recorded investment | Post-modification outstanding recorded investment | Charge offs and specific reserves | ||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||
Total | $ | $ | $ |
Nine Months Ended September 30, 2021 | Number of loans | Pre-modification outstanding recorded investment | Post-modification outstanding recorded investment | Charge offs and specific reserves | ||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-4 family mortgage | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Total | $ | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||
Type of Collateral | ||||||||||||||||||||||||||
Real Estate | Financial Assets and Equipment | Total | Individually assessed allowance for credit loss | |||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Type of Collateral | ||||||||||||||||||||||||||
Real Estate | Financial Assets and Equipment | Total | Individually assessed allowance for credit loss | |||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Transfers from loans | ||||||||||||||||||||||||||
Proceeds from sale of other real estate owned | ( | ( | ( | ( | ||||||||||||||||||||||
Gain (loss) on sale of other real estate owned | ||||||||||||||||||||||||||
Loans provided for sales of other real estate owned | ( | ( | ||||||||||||||||||||||||
Write-downs and partial liquidations | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
September 30, | December 31, | ||||||||||||||||
Classification | 2022 | 2021 | |||||||||||||||
Right-of-use assets: | |||||||||||||||||
Operating leases | Operating lease right-of-use assets | $ | $ | ||||||||||||||
Finance leases | |||||||||||||||||
Total right-of-use assets | $ | $ | |||||||||||||||
Lease liabilities: | |||||||||||||||||
Operating leases | Operating lease liabilities | $ | $ | ||||||||||||||
Finance leases | |||||||||||||||||
Total lease liabilities | $ | $ | |||||||||||||||
Weighted average remaining lease term (in years) - operating | |||||||||||||||||
Weighted average remaining lease term (in years) - finance | |||||||||||||||||
Weighted average discount rate - operating | % | % | |||||||||||||||
Weighted average discount rate - finance | % | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
Classification | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Operating lease costs: | |||||||||||||||||||||||||||||
Amortization of right-of-use asset | Occupancy and equipment | $ | $ | $ | $ | ||||||||||||||||||||||||
Short-term lease cost | Occupancy and equipment | ||||||||||||||||||||||||||||
Variable lease cost | Occupancy and equipment | ||||||||||||||||||||||||||||
Lease impairment | Mortgage restructuring expense | ||||||||||||||||||||||||||||
Gain on lease modifications and terminations | Occupancy and equipment | ( | ( | ( | |||||||||||||||||||||||||
Finance lease costs: | |||||||||||||||||||||||||||||
Interest on lease liabilities | Interest expense on borrowings | ||||||||||||||||||||||||||||
Amortization of right-of-use asset | Occupancy and equipment | ||||||||||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
Operating | Finance | ||||||||||
Leases | Lease | ||||||||||
Lease payments due: | |||||||||||
September 30, 2023 | $ | $ | |||||||||
September 30, 2024 | |||||||||||
September 30, 2025 | |||||||||||
September 30, 2026 | |||||||||||
September 30, 2027 | |||||||||||
Thereafter | |||||||||||
Total undiscounted future minimum lease payments | |||||||||||
Less: imputed interest | ( | ( | |||||||||
Lease liability | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Carrying value at beginning of period | $ | $ | $ | $ | ||||||||||||||||
Capitalization | ||||||||||||||||||||
Change in fair value: | ||||||||||||||||||||
Due to pay-offs/pay-downs | ( | ( | ( | ( | ||||||||||||||||
Due to change in valuation inputs or assumptions | ||||||||||||||||||||
Carrying value at end of period | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Servicing income: | ||||||||||||||||||||
Servicing income | $ | $ | $ | $ | ||||||||||||||||
Change in fair value of mortgage servicing rights | ( | ( | ||||||||||||||||||
Change in fair value of derivative hedging instruments | ( | ( | ( | ( | ||||||||||||||||
Servicing income | ||||||||||||||||||||
Servicing expenses | ||||||||||||||||||||
Net servicing income(1) | $ | $ | $ | $ |
September 30, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Unpaid principal balance | $ | $ | ||||||||||||
Weighted-average prepayment speed (CPR) | % | % | ||||||||||||
Estimated impact on fair value of a 10% increase | $ | ( | $ | ( | ||||||||||
Estimated impact on fair value of a 20% increase | $ | ( | $ | ( | ||||||||||
Discount rate | % | % | ||||||||||||
Estimated impact on fair value of a 100 bp increase | $ | ( | $ | ( | ||||||||||
Estimated impact on fair value of a 200 bp increase | $ | ( | $ | ( | ||||||||||
Weighted-average coupon interest rate | % | % | ||||||||||||
Weighted-average servicing fee (basis points) | ||||||||||||||
Weighted-average remaining maturity (in months) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Current | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
Federal taxes calculated at statutory rate | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||
Increase (decrease) resulting from: | ||||||||||||||||||||||||||||||||||||||
State taxes, net of federal benefit | % | % | % | % | ||||||||||||||||||||||||||||||||||
Benefit from equity based compensation | ( | ( | % | ( | ( | % | ( | ( | % | ( | ( | % | ||||||||||||||||||||||||||
Municipal interest income, net of interest disallowance | ( | ( | % | ( | ( | % | ( | ( | % | ( | ( | % | ||||||||||||||||||||||||||
Bank-owned life insurance | ( | ( | % | ( | ( | % | ( | ( | % | ( | ( | % | ||||||||||||||||||||||||||
NOL Carryback provision under CARES Act | % | ( | ( | % | % | ( | ( | % | ||||||||||||||||||||||||||||||
Offering costs | % | % | % | % | ||||||||||||||||||||||||||||||||||
Section 162(m) limitation | % | % | % | % | ||||||||||||||||||||||||||||||||||
Other | ( | ( | % | ( | ( | % | ( | ( | % | ( | ( | % | ||||||||||||||||||||||||||
Income tax expense, as reported | $ | % | $ | % | $ | % | $ | % |
September 30, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Allowance for credit losses | $ | $ | ||||||||||||
Operating lease liabilities | ||||||||||||||
Net operating loss | ||||||||||||||
Amortization of core deposit intangibles | ||||||||||||||
Deferred compensation | ||||||||||||||
Unrealized loss on debt securities | ||||||||||||||
Unrealized loss on cash flow hedges | ||||||||||||||
Other assets | ||||||||||||||
Subtotal | ||||||||||||||
Deferred tax liabilities: | ||||||||||||||
FHLB stock dividends | $ | ( | $ | ( | ||||||||||
Operating leases - right of use assets | ( | ( | ||||||||||||
Depreciation | ( | ( | ||||||||||||
Amortization of core deposit intangibles | ( | |||||||||||||
Unrealized gain on equity securities | ( | ( | ||||||||||||
Unrealized gain on cash flow hedges | ( | |||||||||||||
Unrealized gain on debt securities | ( | |||||||||||||
Mortgage servicing rights | ( | ( | ||||||||||||
Goodwill | ( | ( | ||||||||||||
Other liabilities | ( | ( | ||||||||||||
Subtotal | ( | ( | ||||||||||||
Net deferred tax assets (liabilities) | $ | $ | ( |
September 30, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Commitments to extend credit, excluding interest rate lock commitments | $ | $ | ||||||||||||
Letters of credit | ||||||||||||||
Balance at end of period | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||
Provision for credit losses on unfunded commitments | ( | |||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||
Provision for loan repurchases or indemnifications | ( | ( | ( | |||||||||||||||||
Losses on loans repurchased or indemnified | ( | ( | ( | |||||||||||||||||
Balance at end of period | $ | $ | $ | $ | ||||||||||||||||
September 30, 2022 | ||||||||||||||||||||
Notional Amount | Asset | Liability | ||||||||||||||||||
Interest rate contracts | $ | $ | $ | |||||||||||||||||
Forward commitments | ||||||||||||||||||||
Interest rate-lock commitments | ||||||||||||||||||||
Futures contracts | ||||||||||||||||||||
Total | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||
Notional Amount | Asset | Liability | ||||||||||||||||||
Interest rate contracts | $ | $ | $ | |||||||||||||||||
Forward commitments | ||||||||||||||||||||
Interest rate-lock commitments | ||||||||||||||||||||
Futures contracts | ||||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Included in mortgage banking income: | ||||||||||||||||||||
Interest rate lock commitments | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
Forward commitments | ( | |||||||||||||||||||
Futures contracts | ( | ( | ( | ( | ||||||||||||||||
Option contracts | ||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ | ( |
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||
Notional Amount | Estimated fair value | Balance sheet location | Estimated fair value | Balance sheet location | ||||||||||||||||||||||||||||
Interest rate swap agreements- subordinated debt | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Amount of gain recognized in other comprehensive loss, net of tax expense of $ | $ | $ | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||||||||
Notional Amount | Remaining Maturity (In Years) | Receive Fixed Rate | Pay Floating Rate | Estimated fair value | ||||||||||||||||||||||||||||
Derivatives included in other liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swap agreement- subordinated debt | $ | SOFR | $ | ( | ||||||||||||||||||||||||||||
Interest rate swap agreement- fixed rate money market deposits | SOFR | ( | ||||||||||||||||||||||||||||||
Interest rate swap agreement- fixed rate money market deposits | SOFR | ( | ||||||||||||||||||||||||||||||
Total | $ | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2022 | 2022 | |||||||||||||
Designated fair value hedge: | ||||||||||||||
Interest expense on deposits | $ | ( | $ | |||||||||||
Interest expense on borrowings | ( | |||||||||||||
Total | $ | ( | $ |
Line item on the balance sheet | Carrying Amount of the Hedged Item | Cumulative Decrease in Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item | ||||||||||||
Borrowings | $ | (1) | $ | ( | ||||||||||
Money market and savings deposits | (2) | ( | ||||||||||||
Offsetting Derivative Assets | Offsetting Derivative Liabilities | |||||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
Gross amounts recognized | $ | $ | $ | $ | ||||||||||||||||||||||
Gross amounts offset in the consolidated balance sheets | ||||||||||||||||||||||||||
Net amounts presented in the consolidated balance sheets | ||||||||||||||||||||||||||
Gross amounts not offset in the consolidated balance sheets | ||||||||||||||||||||||||||
Less: financial instruments | ||||||||||||||||||||||||||
Less: financial collateral pledged | ||||||||||||||||||||||||||
Net amounts | $ | $ | $ | $ |
Investment Securities | Investment securities are recorded at fair value on a recurring basis. Fair values for securities are based on quoted market prices, where available. If quoted prices are not available, fair values are based on quoted market prices of similar instruments or are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the pricing relationship or correlation among other benchmark quoted securities. Investment securities valued using quoted market prices of similar instruments or that are valued using matrix pricing are classified as Level 2. When significant inputs to the valuation are unobservable, the available-for-sale securities are classified within Level 3 of the fair value hierarchy. Where no active market exists for a security or other benchmark securities, fair value is estimated by the Company with reference to discount margins for other high-risk securities. | ||||
Loans held for sale | Loans held for sale are carried at fair value. Fair value is determined using current secondary market prices for loans with similar characteristics for the mortgage portfolio, that is, using Level 2 inputs. Commercial loans held for sale's fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, credit metrics and collateral value when appropriate. As such, these are considered Level 3. | ||||
Derivatives | The fair value of the Company's interest rate swap agreements to facilitate customer transactions are based upon fair values provided from entities that engage in interest rate swap activity and is based upon projected future cash flows and interest rates. The fair value of interest rate lock commitments associated with the mortgage pipeline is based on fees currently charged to enter into similar agreements, and for fixed-rate commitments, the difference between current levels of interest rates and the committed rates is also considered. The fair values of the Company's designated cash flow and fair value hedges are determined by calculating the difference between the discounted fixed rate cash flows and the discounted variable rate cash flows. The fair values of both the Company's hedges, including designated cash flow hedges and designated fair value hedges are based on pricing models that utilize observable market inputs. These financial instruments are classified as Level 2. | ||||
OREO | OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations and excess land and facilities held for sale. OREO acquired in settlement of indebtedness is recorded at the lower of the carrying amount of the loan or the fair value of the real estate less costs to sell. Fair value is determined on a nonrecurring basis based on appraisals by qualified licensed appraisers and is adjusted for management’s estimates of costs to sell and holding period discounts. The valuations are classified as Level 3. | ||||
Mortgage servicing rights | MSRs are carried at fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. As such, MSRs are considered Level 3. | ||||
Collateral dependent loans | Collateral dependent loans are loans for which, based on current information and events, the Company has determined foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral and it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Collateral dependent loans are classified as Level 3. |
Fair Value | ||||||||||||||||||||||||||||||||
September 30, 2022 | Carrying amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Interest receivable | ||||||||||||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Without stated maturities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
With stated maturities | ||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase and federal funds sold | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | ||||||||||||||||||||||||||||||||
Subordinated debt | ||||||||||||||||||||||||||||||||
Interest payable | ||||||||||||||||||||||||||||||||
Derivatives |
Fair Value | ||||||||||||||||||||||||||||||||
December 31, 2021 | Carrying amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Interest receivable | ||||||||||||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Without stated maturities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
With stated maturities | ||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase and federal funds sold | ||||||||||||||||||||||||||||||||
Subordinated debt | ||||||||||||||||||||||||||||||||
Interest payable | ||||||||||||||||||||||||||||||||
Derivatives |
At September 30, 2022 | Quoted prices in active markets for identical assets (liabilities) (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | Total | ||||||||||||||||||||||
Recurring valuations: | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage-backed securities - residential | ||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Treasury securities | ||||||||||||||||||||||||||
Corporate securities | ||||||||||||||||||||||||||
Equity securities, at fair value | ||||||||||||||||||||||||||
Total securities | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||||||
Derivatives |
At September 30, 2022 | Quoted prices in active markets for identical assets (liabilities (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | Total | ||||||||||||||||||||||
Non-recurring valuations: | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | ||||||||||||||||||||||
Collateral dependent loans: | ||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-4 family mortgage | ||||||||||||||||||||||||||
Total collateral dependent loans | $ | $ | $ | $ |
At December 31, 2021 | Quoted prices in active markets for identical assets (liabilities) (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | Total | ||||||||||||||||||||||
Recurring valuations: | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage-backed securities - residential | ||||||||||||||||||||||||||
Mortgage-backed securities - commercial | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Treasury securities | ||||||||||||||||||||||||||
Corporate securities | ||||||||||||||||||||||||||
Equity securities, at fair value | ||||||||||||||||||||||||||
Total securities | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||||||
Derivatives |
At December 31, 2021 | Quoted prices in active markets for identical assets (liabilities) (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | Total | ||||||||||||||||||||||
Non-recurring valuations: | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | ||||||||||||||||||||||
Collateral dependent loans: | ||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential line of credit | ||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Total collateral dependent loans | $ | $ | $ | $ |
As of September 30, 2022 | ||||||||||||||||||||||||||
Financial instrument | Fair Value | Valuation technique | Significant unobservable inputs | Range of inputs | ||||||||||||||||||||||
Collateral dependent loans | $ | Valuation of collateral | Discount for comparable sales | |||||||||||||||||||||||
Other real estate owned | $ | Appraised value of property less costs to sell | Discount for costs to sell |
As of December 31, 2021 | ||||||||||||||||||||||||||
Financial instrument | Fair Value | Valuation technique | Significant unobservable inputs | Range of inputs | ||||||||||||||||||||||
Collateral dependent loans | $ | Valuation of collateral | Discount for comparable sales | |||||||||||||||||||||||
Other real estate owned | $ | Appraised value of property less costs to sell | Discount for costs to sell |
September 30, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Commercial loans held for sale, at fair value | $ | $ | ||||||||||||
Mortgage loans held for sale: | ||||||||||||||
Mortgage loans held for sale, at fair value | ||||||||||||||
Mortgage loans held for sale - guaranteed GNMA repurchase option | ||||||||||||||
Total loans held for sale | $ | $ |
Three Months Ended September 30, 2022 | ||||||||||||||||||||
Principal Balance | Fair Value Discount | Fair Value | ||||||||||||||||||
Carrying value at beginning of period | $ | $ | ( | $ | ||||||||||||||||
Change in fair value: | ||||||||||||||||||||
Pay-downs and pay-offs | ( | ( | ||||||||||||||||||
Write-offs to discount | ( | |||||||||||||||||||
Changes in valuation included in other noninterest income | ( | ( | ||||||||||||||||||
Carrying value at end of period | $ | $ | ( | $ | ||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Principal Balance | Fair Value Discount | Fair Value | ||||||||||||||||||
Carrying value at beginning of period | $ | $ | ( | $ | ||||||||||||||||
Change in fair value: | ||||||||||||||||||||
Pay-downs and pay-offs | ( | ( | ||||||||||||||||||
Write-offs to discount | ( | |||||||||||||||||||
Changes in valuation included in other noninterest income | ( | ( | ||||||||||||||||||
Carrying value at end of period | $ | $ | ( | $ | ||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||
Principal balance | Fair Value discount | Fair Value | ||||||||||||||||||
Carrying value at beginning of period | $ | $ | ( | $ | ||||||||||||||||
Change in fair value: | ||||||||||||||||||||
Pay-downs and pay-offs | ( | ( | ||||||||||||||||||
Changes in valuation included in other noninterest income | ||||||||||||||||||||
Carrying value at end of period | $ | $ | ( | $ | ||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||
Principal balance | Fair Value discount | Fair Value | ||||||||||||||||||
Carrying value at beginning of period | $ | $ | ( | $ | ||||||||||||||||
Change in fair value: | ||||||||||||||||||||
Pay-downs and pay-offs | ( | ( | ||||||||||||||||||
Write-offs to discount | ( | |||||||||||||||||||
Changes in valuation included in other noninterest income | ||||||||||||||||||||
Carrying value at end of period | $ | $ | ( | $ |
September 30, 2022 | Aggregate fair value | Aggregate Unpaid Principal Balance | Difference | |||||||||||||||||
Mortgage loans held for sale measured at fair value | $ | $ | $ | ( | ||||||||||||||||
Commercial loans held for sale measured at fair value | ( | |||||||||||||||||||
Nonaccrual commercial loans held for sale | ||||||||||||||||||||
December 31, 2021 | Aggregate fair value | Aggregate Unpaid Principal Balance | Difference | |||||||||||||||||
Mortgage loans held for sale measured at fair value | $ | $ | $ | |||||||||||||||||
Commercial loans held for sale measured at fair value | ( | |||||||||||||||||||
Nonaccrual commercial loans held for sale | ( |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Interest rate lock commitment volume by line of business: | ||||||||||||||||||||
Direct-to-consumer | $ | $ | $ | $ | ||||||||||||||||
Retail | ||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||
Interest rate lock commitment volume % by line of business: | ||||||||||||||||||||
Direct-to-consumer | % | % | % | % | ||||||||||||||||
Retail | % | % | % | % | ||||||||||||||||
Mortgage sales by line of business: | ||||||||||||||||||||
Direct-to-consumer | $ | $ | $ | $ | ||||||||||||||||
Retail | ||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||
Mortgage sales % by line of business: | ||||||||||||||||||||
Direct-to-consumer | % | % | % | % | ||||||||||||||||
Retail | % | % | % | % |
Three Months Ended September 30, 2022 | Banking(4) | Mortgage | Consolidated | |||||||||||||||||
Net interest income | $ | $ | $ | |||||||||||||||||
Provisions for credit losses(1) | ||||||||||||||||||||
Mortgage banking income(2) | ||||||||||||||||||||
Change in fair value of mortgage servicing rights, net of hedging(2) | ( | ( | ||||||||||||||||||
Other noninterest income | ( | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Amortization of intangibles | ||||||||||||||||||||
Other noninterest expense | ||||||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | ||||||||||||||||||||
Net income applicable to noncontrolling interest(3) | ||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | |||||||||||||||||||
Total assets | $ | $ | $ | |||||||||||||||||
Goodwill |
Three Months Ended September 30, 2021 | Banking(3) | Mortgage | Consolidated | |||||||||||||||||
Net interest income | $ | $ | ( | $ | ||||||||||||||||
Provisions for credit losses(1) | ( | ( | ||||||||||||||||||
Mortgage banking income(2) | ||||||||||||||||||||
Change in fair value of mortgage servicing rights, net of hedging(2) | ( | ( | ||||||||||||||||||
Other noninterest income | ( | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Amortization of intangibles | ||||||||||||||||||||
Other noninterest expense | ||||||||||||||||||||
Income before income taxes | $ | $ | $ | |||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | ||||||||||||||||||||
Net income applicable to noncontrolling interest(3) | ||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | |||||||||||||||||||
Total assets | $ | $ | $ | |||||||||||||||||
Goodwill |
Nine Months Ended September 30, 2022 | Banking(4) | Mortgage | Consolidated | |||||||||||||||||
Net interest income | $ | $ | ( | $ | ||||||||||||||||
Provisions for credit losses(1) | ||||||||||||||||||||
Mortgage banking income(2) | ||||||||||||||||||||
Change in fair value of mortgage servicing rights, net of hedging(2) | ( | ( | ||||||||||||||||||
Other noninterest income | ( | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Amortization of intangibles | ||||||||||||||||||||
Other noninterest expense(3) | ||||||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | ||||||||||||||||||||
Net income applicable to noncontrolling interest(4) | ||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | |||||||||||||||||||
Total assets | $ | $ | $ | |||||||||||||||||
Goodwill |
Nine Months Ended September 30, 2021 | Banking(3) | Mortgage | Consolidated | |||||||||||||||||
Net interest income | $ | $ | ( | $ | ||||||||||||||||
Provisions for credit losses(1) | ( | ( | ||||||||||||||||||
Mortgage banking income(2) | ||||||||||||||||||||
Change in fair value of mortgage servicing rights, net of hedging(2) | ( | ( | ||||||||||||||||||
Other noninterest income | ( | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Amortization of intangibles | ||||||||||||||||||||
Other noninterest expense(3) | ||||||||||||||||||||
Income before income taxes | $ | $ | $ | |||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | ||||||||||||||||||||
Net income applicable to noncontrolling interest(3) | ||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | |||||||||||||||||||
Total assets | $ | $ | $ | |||||||||||||||||
Goodwill |
As oAs of September 30, 2022 | Actual | Minimum Capital adequacy with capital buffer | To be well capitalized under prompt corrective action provisions | |||||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||
Total Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 Capital (to average assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % |
As of December 31, 2021 | Actual | Minimum Capital adequacy with capital buffer | To be well capitalized under prompt corrective action provisions | |||||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||
Total Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 Capital (to average assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % | ||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
FB Financial Corporation | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
FirstBank | % | % | $ | % |
Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | |||||||||||||
Balance at beginning of period (unvested) | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Balance at end of period (unvested) | $ |
Performance Stock Units Outstanding | Weighted Average Grant Date Fair Value | |||||||||||||
Balance at beginning of period (unvested) | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ||||||||||||||
Forfeited or expired | ( | |||||||||||||
Balance at end of period (unvested) | $ |
Grant Year | Vest Year | Shares Outstanding | ||||||||||||
2020 | 2023 | |||||||||||||
2021 | 2024 | |||||||||||||
2022 | 2025 |
Loans outstanding at January 1, 2022 | $ | |||||||
New loans and advances | ||||||||
Change in related party status | ( | |||||||
Repayments | ( | |||||||
Loans outstanding at September 30, 2022 | $ |
As of or for the three months ended | As of or for the nine months ended, | As of or for the year-ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | December 31, | ||||||||||||||||||||||||||||||
(dollars in thousands, except per share data and %) | 2022 | 2021 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||||
Statement of Income Data | ||||||||||||||||||||||||||||||||
Net interest income | 111,384 | 88,476 | $ | 301,737 | $ | 257,615 | $ | 347,370 | ||||||||||||||||||||||||
Provisions for credit losses | 11,367 | (2,531) | 19,438 | (30,224) | (40,993) | |||||||||||||||||||||||||||
Total noninterest income | 22,592 | 59,006 | 97,198 | 175,036 | 228,255 | |||||||||||||||||||||||||||
Total noninterest expense | 81,847 | 95,007 | 268,116 | 282,665 | 373,567 | |||||||||||||||||||||||||||
Income before income taxes | 40,762 | 55,006 | 111,381 | 180,210 | 243,051 | |||||||||||||||||||||||||||
Income tax expense | 8,931 | 9,716 | 24,961 | 38,744 | 52,750 | |||||||||||||||||||||||||||
Net income applicable to noncontrolling interest | — | — | 8 | 8 | 16 | |||||||||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | 31,831 | $ | 45,290 | $ | 86,412 | $ | 141,458 | $ | 190,285 | ||||||||||||||||||||||
Net income applicable to FB Financial Corporation and noncontrolling interest | 31,831 | 45,290 | 86,420 | 141,466 | 190,301 | |||||||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 112,145 | $ | 89,230 | $ | 304,003 | $ | 259,919 | $ | 350,456 | ||||||||||||||||||||||
Per Common Share | ||||||||||||||||||||||||||||||||
Basic net income | $ | 0.68 | $ | 0.96 | $ | 1.83 | $ | 2.99 | $ | 4.01 | ||||||||||||||||||||||
Diluted net income | 0.68 | 0.94 | 1.83 | 2.95 | 3.97 | |||||||||||||||||||||||||||
Book value(1) | 27.30 | 29.36 | 27.30 | 29.36 | 30.13 | |||||||||||||||||||||||||||
Tangible book value(2) | 21.85 | 23.90 | 21.85 | 23.90 | 24.67 | |||||||||||||||||||||||||||
Cash dividends declared | 0.13 | 0.11 | 0.39 | 0.33 | 0.44 | |||||||||||||||||||||||||||
Selected Ratios | ||||||||||||||||||||||||||||||||
Return on average: | ||||||||||||||||||||||||||||||||
Assets(3) | 1.05 | % | 1.51 | % | 0.93 | % | 1.61 | % | 1.61 | % | ||||||||||||||||||||||
Common shareholders' equity(3) | 9.45 | % | 12.9 | % | 8.45 | % | 14.1 | % | 14.0 | % | ||||||||||||||||||||||
Tangible common equity(2) | 11.7 | % | 15.9 | % | 10.4 | % | 17.5 | % | 17.3 | % | ||||||||||||||||||||||
Average shareholders' equity to average assets | 11.1 | % | 11.7 | % | 11.1 | % | 11.4 | % | 11.5 | % | ||||||||||||||||||||||
Net interest margin (tax-equivalent basis) | 3.93 | % | 3.20 | % | 3.50 | % | 3.19 | % | 3.19 | % | ||||||||||||||||||||||
Efficiency ratio | 61.1 | % | 64.4 | % | 67.2 | % | 65.3 | % | 64.9 | % | ||||||||||||||||||||||
Adjusted efficiency ratio (tax-equivalent basis)(2) | 60.7 | % | 64.7 | % | 63.3 | % | 65.4 | % | 65.8 | % | ||||||||||||||||||||||
Loans held for investment to deposit ratio | 91.0 | % | 72.4 | % | 91.0 | % | 72.4 | % | 70.2 | % | ||||||||||||||||||||||
Yield on interest-earning assets | 4.53 | % | 3.49 | % | 3.86 | % | 3.56 | % | 3.53 | % | ||||||||||||||||||||||
Cost of interest-bearing liabilities | 0.90 | % | 0.42 | % | 0.54 | % | 0.52 | % | 0.48 | % | ||||||||||||||||||||||
Cost of total deposits | 0.52 | % | 0.26 | % | 0.32 | % | 0.32 | % | 0.30 | % | ||||||||||||||||||||||
Credit Quality Ratios | ||||||||||||||||||||||||||||||||
Allowance for credit losses to loans, net of unearned income(4) | 1.48 | % | 1.91 | % | 1.48 | % | 1.91 | % | 1.65 | % | ||||||||||||||||||||||
Net recoveries (charge-offs) as a percentage of average loans HFI | — | % | (0.13) | % | (0.02) | % | (0.07) | % | (0.08) | % | ||||||||||||||||||||||
Total nonperforming assets as a percentage of total assets(5) | 0.62 | % | 0.50 | % | 0.62 | % | 0.50 | % | 0.50 | % | ||||||||||||||||||||||
Nonperforming loans HFI to loans HFI, net of unearned income | 0.47 | % | 0.59 | % | 0.47 | % | 0.59 | % | 0.62 | % | ||||||||||||||||||||||
As of or for the three months ended | As of or for the nine months ended, | As of or for the year ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | December 31, | ||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||
Capital Ratios (Company) | ||||||||||||||||||||||||||||||||
Total common shareholders' equity to assets | 10.5 | % | 11.9 | % | 10.5 | % | 11.9 | % | 11.4 | % | ||||||||||||||||||||||
Tier 1 capital (to average assets) | 10.7 | % | 10.4 | % | 10.7 | % | 10.4 | % | 10.5 | % | ||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets(6) | 11.2 | % | 12.7 | % | 11.2 | % | 12.7 | % | 12.6 | % | ||||||||||||||||||||||
Total capital (to risk-weighted assets)(6) | 13.0 | % | 14.6 | % | 13.0 | % | 14.6 | % | 14.5 | % | ||||||||||||||||||||||
Tangible common equity to tangible assets(2) | 8.54 | % | 9.87 | % | 8.54 | % | 9.87 | % | 9.51 | % | ||||||||||||||||||||||
Common Equity Tier 1 (to risk-weighted assets) (CET1) (6) | 10.9 | % | 12.4 | % | 10.9 | % | 12.4 | % | 12.3 | % | ||||||||||||||||||||||
Capital Ratios (Bank) | ||||||||||||||||||||||||||||||||
Total common Shareholders' equity to assets | 10.5 | % | 11.7 | % | 10.5 | % | 11.7 | % | 11.3 | % | ||||||||||||||||||||||
Tier 1 capital (to average assets) | 10.5 | % | 10.0 | % | 10.5 | % | 10.0 | % | 10.2 | % | ||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets)(6) | 10.9 | % | 12.2 | % | 10.9 | % | 12.2 | % | 12.3 | % | ||||||||||||||||||||||
Total capital to (risk-weighted assets)(6) | 12.8 | % | 14.2 | % | 12.8 | % | 14.2 | % | 14.1 | % | ||||||||||||||||||||||
Common Equity Tier 1 (to risk-weighted assets) (CET1) (6) | 10.9 | % | 12.2 | % | 10.9 | % | 12.2 | % | 12.3 | % |
(In Thousands, Except Share Data and %) | Three Months Ended September 30, | Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||
Adjusted efficiency ratio (tax-equivalent basis) | ||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 81,847 | $ | 95,007 | $ | 268,116 | $ | 282,665 | $ | 373,567 | ||||||||||||||||||||||
Less mortgage restructuring expenses | — | — | 12,458 | — | — | |||||||||||||||||||||||||||
Less offering expenses | — | — | — | 605 | 605 | |||||||||||||||||||||||||||
Less gain on lease terminations | — | — | — | (787) | (787) | |||||||||||||||||||||||||||
Less certain charitable contributions | — | — | — | — | 1,422 | |||||||||||||||||||||||||||
Adjusted noninterest expense | $ | 81,847 | $ | 95,007 | $ | 255,658 | $ | 282,847 | $ | 372,327 | ||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 112,145 | $ | 89,230 | $ | 304,003 | $ | 259,919 | $ | 350,456 | ||||||||||||||||||||||
Total noninterest income | 22,592 | 59,006 | 97,198 | 175,036 | 228,255 | |||||||||||||||||||||||||||
Less (loss) gain on change in fair value on commercial loans held for sale | (387) | 740 | (2,571) | 1,251 | 11,172 | |||||||||||||||||||||||||||
Less loss on swap cancellation | — | (1,510) | — | (1,510) | (1,510) | |||||||||||||||||||||||||||
Less gain (loss) on sales or write-downs of other real estate owned | 435 | 2,005 | (89) | 2,478 | 2,504 | |||||||||||||||||||||||||||
Less (loss) gain on other assets | (6) | 177 | 76 | 162 | 323 | |||||||||||||||||||||||||||
Less (loss) gain from securities, net | (140) | 51 | (401) | 278 | 324 | |||||||||||||||||||||||||||
Adjusted noninterest income | $ | 22,690 | $ | 57,543 | $ | 100,183 | $ | 172,377 | $ | 215,442 | ||||||||||||||||||||||
Adjusted operating revenue | $ | 134,835 | $ | 146,773 | $ | 404,186 | $ | 432,296 | $ | 565,898 | ||||||||||||||||||||||
Efficiency ratio (GAAP) | 61.1 | % | 64.4 | % | 67.2 | % | 65.3 | % | 64.9 | % | ||||||||||||||||||||||
Adjusted efficiency ratio (tax-equivalent basis) | 60.7 | % | 64.7 | % | 63.3 | % | 65.4 | % | 65.8 | % |
As of September 30, | As of December 31, | |||||||||||||||||||
(In Thousands, Except Share Data and %) | 2022 | 2021 | 2021 | |||||||||||||||||
Tangible Assets | ||||||||||||||||||||
Total assets | $ | 12,258,082 | $ | 11,810,290 | $ | 12,597,686 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (242,561) | (242,561) | (242,561) | |||||||||||||||||
Core deposit and other intangibles | (13,407) | (18,248) | (16,953) | |||||||||||||||||
Tangible assets | $ | 12,002,114 | $ | 11,549,481 | $ | 12,338,172 | ||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total common shareholders' equity | $ | 1,281,161 | $ | 1,400,913 | $ | 1,432,602 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (242,561) | (242,561) | (242,561) | |||||||||||||||||
Core deposit and other intangibles | (13,407) | (18,248) | (16,953) | |||||||||||||||||
Tangible common equity | $ | 1,025,193 | $ | 1,140,104 | $ | 1,173,088 | ||||||||||||||
Common shares outstanding | 46,926,377 | 47,707,634 | 47,549,241 | |||||||||||||||||
Book value per common share | $ | 27.30 | $ | 29.36 | $ | 30.13 | ||||||||||||||
Tangible book value per common share | $ | 21.85 | $ | 23.90 | $ | 24.67 | ||||||||||||||
Total common shareholders' equity to total assets | 10.5 | % | 11.9 | % | 11.4 | % | ||||||||||||||
Tangible common equity to tangible assets | 8.54 | % | 9.87 | % | 9.51 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Year Ended December 31, | ||||||||||||||||||||||||||||||
(In Thousands, Except %) | 2022 | 2021 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||||
Return on average tangible common equity | ||||||||||||||||||||||||||||||||
Total average common shareholders' equity | $ | 1,336,143 | $ | 1,389,201 | $ | 1,368,025 | $ | 1,344,613 | $ | 1,361,637 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Average goodwill | (242,561) | (242,561) | (242,561) | (242,561) | (242,561) | |||||||||||||||||||||||||||
Average intangibles, net | (13,953) | (18,950) | (15,149) | (22,289) | (19,606) | |||||||||||||||||||||||||||
Average tangible common equity | $ | 1,079,629 | $ | 1,127,690 | $ | 1,110,315 | $ | 1,079,763 | $ | 1,099,470 | ||||||||||||||||||||||
Net income applicable to FB Financial Corporation | $ | 31,831 | $ | 45,290 | $ | 86,412 | $ | 141,458 | $ | 190,285 | ||||||||||||||||||||||
Return on average common shareholders' equity | 9.45 | % | 12.9 | % | 8.45 | % | 14.1 | % | 14.0 | % | ||||||||||||||||||||||
Return on average tangible common equity | 11.7 | % | 15.9 | % | 10.4 | % | 17.5 | % | 17.3 | % |
Three Months Ended September 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
(dollars in thousands) | Interest income | Average yield | Interest income | Average yield | ||||||||||||||||||||||
Loans HFI yield components: | ||||||||||||||||||||||||||
Contractual interest rate on loans held for investment(1)(2) | $ | 106,405 | 4.79 | % | $ | 77,150 | 4.23 | % | ||||||||||||||||||
Origination and other loan fee income(2) | 6,665 | 0.30 | % | 6,377 | 0.35 | % | ||||||||||||||||||||
Accretion on purchased loans | 949 | 0.05 | % | 157 | 0.01 | % | ||||||||||||||||||||
Nonaccrual interest collections | 469 | 0.02 | % | 431 | 0.02 | % | ||||||||||||||||||||
Total loans HFI yield | $ | 114,488 | 5.16 | % | $ | 84,115 | 4.61 | % |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands on tax-equivalent basis) | Average balances (1) | Interest income/ expense | Average yield/ rate | Average balances (1) | Interest income/ expense | Average yield/ rate | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Loans(2)(3) | $ | 8,810,094 | $ | 114,488 | 5.16 | % | $ | 7,245,313 | $ | 84,115 | 4.61 | % | ||||||||||||||||||||||||||
Mortgage loans held for sale(4) | 124,358 | 1,626 | 5.19 | % | 709,654 | 4,687 | 2.62 | % | ||||||||||||||||||||||||||||||
Commercial loans held for sale | 36,291 | 670 | 7.32 | % | 108,863 | 1,282 | 4.67 | % | ||||||||||||||||||||||||||||||
Securities:(4) | ||||||||||||||||||||||||||||||||||||||
Taxable | 1,469,934 | 6,843 | 1.85 | % | 1,117,647 | 3,989 | 1.42 | % | ||||||||||||||||||||||||||||||
Tax-exempt(3) | 298,905 | 2,459 | 3.26 | % | 311,151 | 2,546 | 3.25 | % | ||||||||||||||||||||||||||||||
Total Securities(3) | 1,768,839 | 9,302 | 2.09 | % | 1,428,798 | 6,535 | 1.81 | % | ||||||||||||||||||||||||||||||
Federal funds sold and reverse repurchase agreements’ | 160,597 | 877 | 2.17 | % | 145,315 | 135 | 0.37 | % | ||||||||||||||||||||||||||||||
Interest-bearing deposits with other financial institutions | 361,684 | 1,850 | 2.03 | % | 1,404,772 | 508 | 0.14 | % | ||||||||||||||||||||||||||||||
FHLB stock | 49,478 | 431 | 3.46 | % | 28,422 | 157 | 2.19 | % | ||||||||||||||||||||||||||||||
Total interest earning assets(3) | 11,311,341 | 129,244 | 4.53 | % | 11,071,137 | 97,419 | 3.49 | % | ||||||||||||||||||||||||||||||
Noninterest Earning Assets: | ||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 109,681 | 107,263 | ||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (127,710) | (144,652) | ||||||||||||||||||||||||||||||||||||
Other assets(5) | 744,803 | 881,314 | ||||||||||||||||||||||||||||||||||||
Total noninterest earning assets | 726,774 | 843,925 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 12,038,115 | $ | 11,915,062 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 2,821,415 | $ | 5,831 | 0.82 | % | $ | 2,937,273 | $ | 2,298 | 0.31 | % | ||||||||||||||||||||||||||
Money market(6) | 2,551,521 | 4,684 | 0.73 | % | 2,997,595 | 2,322 | 0.31 | % | ||||||||||||||||||||||||||||||
Savings deposits | 515,882 | 70 | 0.05 | % | 439,470 | 60 | 0.05 | % | ||||||||||||||||||||||||||||||
Customer time deposits(6) | 1,151,843 | 2,535 | 0.87 | % | 1,200,760 | 1,840 | 0.61 | % | ||||||||||||||||||||||||||||||
Brokered and internet time deposits(6) | 3,501 | 13 | 1.47 | % | 32,009 | 76 | 0.94 | % | ||||||||||||||||||||||||||||||
Time deposits | 1,155,344 | 2,548 | 0.87 | % | 1,232,769 | 1,916 | 0.62 | % | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 7,044,162 | 13,133 | 0.74 | % | 7,607,107 | 6,596 | 0.34 | % | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 29,580 | 12 | 0.16 | % | 40,437 | 20 | 0.20 | % | ||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 329,130 | 2,155 | 2.60 | % | — | — | — | % | ||||||||||||||||||||||||||||||
Subordinated debt | 127,263 | 1,792 | 5.59 | % | 129,395 | 1,565 | 4.80 | % | ||||||||||||||||||||||||||||||
Other borrowings | 1,457 | 7 | 1.91 | % | 1,547 | 8 | 2.05 | % | ||||||||||||||||||||||||||||||
Total other interest-bearing liabilities | 487,430 | 3,966 | 3.23 | % | 171,379 | 1,593 | 3.69 | % | ||||||||||||||||||||||||||||||
Total Interest-bearing liabilities | 7,531,592 | 17,099 | 0.90 | % | 7,778,486 | 8,189 | 0.42 | % | ||||||||||||||||||||||||||||||
Noninterest bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Demand deposits | 2,973,650 | 2,596,650 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 196,637 | 150,632 | ||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 3,170,287 | 2,747,282 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 10,701,879 | 10,525,768 | ||||||||||||||||||||||||||||||||||||
FB Financial Corporation common shareholders' equity | 1,336,143 | 1,389,201 | ||||||||||||||||||||||||||||||||||||
Noncontrolling interest | 93 | 93 | ||||||||||||||||||||||||||||||||||||
Shareholders' equity | 1,336,236 | 1,389,294 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 12,038,115 | $ | 11,915,062 | ||||||||||||||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 112,145 | $ | 89,230 | ||||||||||||||||||||||||||||||||||
Interest rate spread (tax-equivalent basis) | 3.63 | % | 3.07 | % | ||||||||||||||||||||||||||||||||||
Net interest margin (tax-equivalent basis)(7) | 3.93 | % | 3.20 | % | ||||||||||||||||||||||||||||||||||
Cost of total deposits | 0.52 | % | 0.26 | % | ||||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 150.2 | % | 142.3 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
(dollars in thousands) | Interest income | Average yield | Interest income | Average yield | ||||||||||||||||||||||
Loans HFI yield components: | ||||||||||||||||||||||||||
Contractual interest rate on loans held for investment (1)(2) | $ | 273,199 | 4.40 | % | $ | 229,105 | 4.31 | % | ||||||||||||||||||
Origination and other loan fee income (2) | 18,574 | 0.30 | % | 19,945 | 0.37 | % | ||||||||||||||||||||
Amortization on purchased loans | (1,339) | (0.02) | % | (127) | — | % | ||||||||||||||||||||
Nonaccrual interest collections | 2,059 | 0.03 | % | 1,623 | 0.03 | % | ||||||||||||||||||||
Syndicated loan fee income | 1,150 | 0.02 | % | — | — | % | ||||||||||||||||||||
Total loans HFI yield | $ | 293,643 | 4.73 | % | $ | 250,546 | 4.71 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands on tax-equivalent basis) | Average balances(1) | Interest income/ expense | Average yield/ rate | Average balances(1) | Interest income/ expense | Average yield/ rate | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Loans (2)(3) | $ | 8,302,649 | $ | 293,643 | 4.73 | % | $ | 7,111,240 | $ | 250,546 | 4.71 | % | ||||||||||||||||||||||||||
Mortgage loans held for sale(4) | 269,794 | 7,542 | 3.74 | % | 695,056 | 13,925 | 2.68 | % | ||||||||||||||||||||||||||||||
Commercial loans held for sale | 56,951 | 2,316 | 5.44 | % | 152,802 | 5,065 | 4.43 | % | ||||||||||||||||||||||||||||||
Securities:(4) | ||||||||||||||||||||||||||||||||||||||
Taxable | 1,442,397 | 18,762 | 1.74 | % | 975,886 | 10,652 | 1.46 | % | ||||||||||||||||||||||||||||||
Tax-exempt (3) | 308,418 | 7,474 | 3.24 | % | 323,034 | 7,806 | 3.23 | % | ||||||||||||||||||||||||||||||
Total Securities (3) | 1,750,815 | 26,236 | 2.00 | % | 1,298,920 | 18,458 | 1.90 | % | ||||||||||||||||||||||||||||||
Federal funds sold and reverse repurchase agreements | 196,282 | 1,490 | 1.01 | % | 128,504 | 196 | 0.20 | % | ||||||||||||||||||||||||||||||
Interest-bearing deposits with other financial institutions | 1,012,061 | 4,039 | 0.53 | % | 1,481,939 | 1,423 | 0.13 | % | ||||||||||||||||||||||||||||||
FHLB stock | 39,030 | 824 | 2.82 | % | 30,527 | 470 | 2.06 | % | ||||||||||||||||||||||||||||||
Total interest earning assets (3) | 11,627,582 | 336,090 | 3.86 | % | 10,898,988 | 290,083 | 3.56 | % | ||||||||||||||||||||||||||||||
Noninterest Earning Assets: | ||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 98,202 | 137,934 | ||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (124,635) | (157,910) | ||||||||||||||||||||||||||||||||||||
Other assets (5) | 759,791 | 896,042 | ||||||||||||||||||||||||||||||||||||
Total noninterest earning assets | 733,358 | 876,066 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 12,360,940 | $ | 11,775,054 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||||||
Interest bearing checking | $ | 3,262,730 | $ | 11,573 | 0.47 | % | $ | 2,904,387 | $ | 8,005 | 0.37 | % | ||||||||||||||||||||||||||
Money market deposits(6) | 2,802,070 | 7,672 | 0.37 | % | 2,958,864 | 8,753 | 0.40 | % | ||||||||||||||||||||||||||||||
Savings deposits | 504,215 | 202 | 0.05 | % | 407,183 | 170 | 0.06 | % | ||||||||||||||||||||||||||||||
Customer time deposits(6) | 1,119,905 | 5,653 | 0.67 | % | 1,288,348 | 6,892 | 0.72 | % | ||||||||||||||||||||||||||||||
Brokered and internet time deposits(6) | 8,605 | 86 | 1.34 | % | 37,347 | 521 | 1.87 | % | ||||||||||||||||||||||||||||||
Time deposits | 1,128,510 | 5,739 | 0.68 | % | 1,325,695 | 7,413 | 0.75 | % | ||||||||||||||||||||||||||||||
Total interest bearing deposits | 7,697,525 | 25,186 | 0.44 | % | 7,596,129 | 24,341 | 0.43 | % | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 28,954 | 38 | 0.18 | % | 34,807 | 77 | 0.30 | % | ||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 110,916 | 2,155 | 2.60 | % | — | — | — | % | ||||||||||||||||||||||||||||||
Subordinated debt(7) | 128,387 | 4,686 | 4.88 | % | 155,704 | 5,725 | 4.92 | % | ||||||||||||||||||||||||||||||
Other borrowings | 1,480 | 22 | 1.99 | % | 2,997 | 21 | 0.94 | % | ||||||||||||||||||||||||||||||
Total other interest-bearing liabilities | 269,737 | 6,901 | 3.42 | % | 193,508 | 5,823 | 4.02 | % | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 7,967,262 | 32,087 | 0.54 | % | 7,789,637 | 30,164 | 0.52 | % | ||||||||||||||||||||||||||||||
Noninterest bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Demand deposits | 2,874,223 | 2,477,454 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 151,337 | 163,257 | ||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 3,025,560 | 2,640,711 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 10,992,822 | 10,430,348 | ||||||||||||||||||||||||||||||||||||
FB Financial Corporation common shareholders' equity | 1,368,025 | 1,344,613 | ||||||||||||||||||||||||||||||||||||
Noncontrolling interest | 93 | 93 | ||||||||||||||||||||||||||||||||||||
Shareholders' equity | 1,368,118 | 1,344,706 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 12,360,940 | $ | 11,775,054 | ||||||||||||||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 304,003 | $ | 259,919 | ||||||||||||||||||||||||||||||||||
Interest rate spread (tax-equivalent basis) | 3.32 | % | 3.04 | % | ||||||||||||||||||||||||||||||||||
Net interest margin (tax-equivalent basis) (8) | 3.50 | % | 3.19 | % | ||||||||||||||||||||||||||||||||||
Cost of total deposits | 0.32 | % | 0.32 | % | ||||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 145.9 | % | 139.9 | % |
Three months ended September 30, 2022 compared to three months ended September 30, 2021 due to changes in | ||||||||||||||||||||
(in thousands on a tax-equivalent basis) | Volume | Yield/ rate | Net increase (decrease) | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans(1)(2) | $ | 20,334 | $ | 10,039 | $ | 30,373 | ||||||||||||||
Loans held for sale - residential | (7,653) | 4,592 | (3,061) | |||||||||||||||||
Loans held for sale - commercial | (1,340) | 728 | (612) | |||||||||||||||||
Securities available-for-sale and other securities: | ||||||||||||||||||||
Taxable | 1,640 | 1,214 | 2,854 | |||||||||||||||||
Tax Exempt(2) | (101) | 14 | (87) | |||||||||||||||||
Federal funds sold and reverse repurchase agreements | 83 | 659 | 742 | |||||||||||||||||
Time deposits in other financial institutions | (5,335) | 6,677 | 1,342 | |||||||||||||||||
FHLB stock | 183 | 91 | 274 | |||||||||||||||||
Total interest income(2) | 7,811 | 24,014 | 31,825 | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing checking | (239) | 3,772 | 3,533 | |||||||||||||||||
Money market(3) | (819) | 3,181 | 2,362 | |||||||||||||||||
Savings deposits | 10 | — | 10 | |||||||||||||||||
Customer time deposits(3) | (108) | 803 | 695 | |||||||||||||||||
Brokered and internet time deposits(3) | (106) | 43 | (63) | |||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | (4) | (4) | (8) | |||||||||||||||||
Federal Home Loan Bank advances | 2,155 | — | 2,155 | |||||||||||||||||
Subordinated debt | (30) | 257 | 227 | |||||||||||||||||
Other borrowings | — | (1) | (1) | |||||||||||||||||
Total interest expense | 859 | 8,051 | 8,910 | |||||||||||||||||
Change in net interest income(2) | $ | 6,952 | $ | 15,963 | $ | 22,915 |
Nine months ended September 30, 2022 compared to nine months ended September 30, 2021 due to changes in | ||||||||||||||||||||
(dollars in thousands on a tax-equivalent basis) | Volume | Yield/ rate | Net increase (decrease) | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans(1) | $ | 42,137 | $ | 960 | $ | 43,097 | ||||||||||||||
Loans held for sale - residential | (11,888) | 5,505 | (6,383) | |||||||||||||||||
Loans held for sale - commercial | (3,898) | 1,149 | (2,749) | |||||||||||||||||
Securities available-for-sale and other securities: | ||||||||||||||||||||
Taxable | 6,068 | 2,042 | 8,110 | |||||||||||||||||
Tax Exempt(2) | (354) | 22 | (332) | |||||||||||||||||
Federal funds sold and reverse repurchase agreements | 515 | 779 | 1,294 | |||||||||||||||||
Time deposits in other financial institutions | (1,875) | 4,491 | 2,616 | |||||||||||||||||
FHLB stock | 180 | 174 | 354 | |||||||||||||||||
Total interest income(2) | 30,885 | 15,122 | 46,007 | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest bearing checking | 1,271 | 2,297 | 3,568 | |||||||||||||||||
Money market deposits(4) | (429) | (652) | (1,081) | |||||||||||||||||
Savings deposits | 39 | (7) | 32 | |||||||||||||||||
Customer time deposits(4) | (850) | (389) | (1,239) | |||||||||||||||||
Brokered and internet time deposits(4) | (287) | (148) | (435) | |||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | (8) | (31) | (39) | |||||||||||||||||
Federal Home Loan Bank advances | 2,155 | — | 2,155 | |||||||||||||||||
Subordinated debt(3) | (997) | (42) | (1,039) | |||||||||||||||||
Other borrowings | (23) | 24 | 1 | |||||||||||||||||
Total interest expense | 871 | 1,052 | 1,923 | |||||||||||||||||
Change in net interest income(2) | $ | 30,014 | $ | 14,070 | $ | 44,084 | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Mortgage banking income | $ | 12,384 | $ | 45,384 | $ | 64,474 | $ | 136,215 | ||||||||||||||||||
Service charges on deposit accounts | 3,208 | 2,612 | 9,030 | 7,217 | ||||||||||||||||||||||
ATM and interchange fees | 2,614 | 4,868 | 13,054 | 14,590 | ||||||||||||||||||||||
Investment services and trust income | 2,227 | 2,511 | 6,634 | 7,518 | ||||||||||||||||||||||
(Loss) gain from securities, net | (140) | 51 | (401) | 278 | ||||||||||||||||||||||
Gain (loss) on sales or write-downs of other real estate owned | 435 | 2,005 | (89) | 2,478 | ||||||||||||||||||||||
(Loss) gain from other assets | (6) | 177 | 76 | 162 | ||||||||||||||||||||||
Other income | 1,870 | 1,398 | 4,420 | 6,578 | ||||||||||||||||||||||
Total noninterest income | $ | 22,592 | $ | 59,006 | $ | 97,198 | $ | 175,036 |
Three Months Ended September 30, | ||||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||
Mortgage banking income: | ||||||||||||||
Origination and sales of mortgage loans | $ | 11,085 | $ | 39,210 | ||||||||||
Net change in fair value of loans held for sale and derivatives | (2,460) | 1,002 | ||||||||||||
Change in fair value on MSRs | (4,345) | (2,367) | ||||||||||||
Mortgage servicing income | 8,104 | 7,539 | ||||||||||||
Total mortgage banking income | $ | 12,384 | $ | 45,384 | ||||||||||
Interest rate lock commitment volume by line of business: | ||||||||||||||
Direct-to-consumer | $ | — | $ | 1,085,180 | ||||||||||
Retail | 408,879 | 926,723 | ||||||||||||
Total | $ | 408,879 | $ | 2,011,903 | ||||||||||
Interest rate lock commitment volume by purpose (%): | ||||||||||||||
Purchase | 85.8 | % | 33.9 | % | ||||||||||
Refinance | 14.2 | % | 66.1 | % | ||||||||||
Mortgage sales | $ | 569,655 | $ | 1,535,897 | ||||||||||
Mortgage sale margin | 1.95 | % | 2.55 | % | ||||||||||
Closing volume | $ | 409,641 | $ | 1,617,508 | ||||||||||
Outstanding principal balance of mortgage loans serviced | $ | 11,233,249 | $ | 10,633,805 | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
(dollars in thousands) | 2022 | 2021 | ||||||||||||
Mortgage banking income | ||||||||||||||
Origination and sales of mortgage loans | $ | 61,581 | $ | 146,538 | ||||||||||
Net change in fair value of loans held for sale and derivatives | (15,362) | (20,806) | ||||||||||||
Change in fair value on MSRs | (5,244) | (10,775) | ||||||||||||
Mortgage servicing income | 23,499 | 21,258 | ||||||||||||
Total mortgage banking income | $ | 64,474 | $ | 136,215 | ||||||||||
Interest rate lock commitment volume by line of business: | ||||||||||||||
Direct-to-consumer | $ | 663,848 | $ | 2,948,530 | ||||||||||
Retail | 1,755,008 | 2,726,956 | ||||||||||||
Total | $ | 2,418,856 | $ | 5,675,486 | ||||||||||
Interest rate lock commitment volume by purpose (%): | ||||||||||||||
Purchase | 69.7 | % | 36.3 | % | ||||||||||
Refinance | 30.3 | % | 63.7 | % | ||||||||||
Mortgage sales | $ | 2,723,825 | $ | 4,789,476 | ||||||||||
Mortgage sale margin | 2.26 | % | 3.06 | % | ||||||||||
Closing volume | $ | 2,129,129 | $ | 4,926,390 | ||||||||||
Outstanding principal balance of mortgage loans serviced | $ | 11,233,249 | $ | 10,633,805 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Salaries, commissions and employee benefits | $ | 51,028 | $ | 62,818 | $ | 165,652 | $ | 189,756 | ||||||||||||||||||
Occupancy and equipment expense | 6,011 | 5,979 | 17,267 | 17,184 | ||||||||||||||||||||||
Legal and professional fees | 4,448 | 2,177 | 10,171 | 6,701 | ||||||||||||||||||||||
Data processing | 2,334 | 2,595 | 7,219 | 7,456 | ||||||||||||||||||||||
Amortization of core deposit and other intangibles | 1,108 | 1,344 | 3,546 | 4,178 | ||||||||||||||||||||||
Advertising | 2,050 | 4,200 | 8,114 | 10,012 | ||||||||||||||||||||||
Mortgage restructuring expense | — | — | 12,458 | — | ||||||||||||||||||||||
Other expense | 14,868 | 15,894 | 43,689 | 47,378 | ||||||||||||||||||||||
Total noninterest expense | $ | 81,847 | $ | 95,007 | $ | 268,116 | $ | 282,665 |
September 30, | December 31, | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Committed | Amount Outstanding | % of total outstanding | Committed | Amount Outstanding | % of total outstanding | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial (1) | $ | 2,596,816 | $ | 1,534,159 | 17 | % | $ | 2,060,028 | $ | 1,290,565 | 17 | % | ||||||||||||||||||||||||||
Construction | 3,376,230 | 1,679,497 | 18 | % | 2,886,088 | 1,327,659 | 17 | % | ||||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||
1-to-4 family mortgage | 1,546,120 | 1,545,252 | 17 | % | 1,272,477 | 1,270,467 | 17 | % | ||||||||||||||||||||||||||||||
Residential line of credit | 1,101,608 | 460,774 | 5 | % | 935,571 | 383,039 | 5 | % | ||||||||||||||||||||||||||||||
Multi-family mortgage | 422,773 | 394,366 | 4 | % | 339,882 | 326,551 | 4 | % | ||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner-occupied | 1,221,800 | 1,158,343 | 13 | % | 1,005,534 | 951,582 | 13 | % | ||||||||||||||||||||||||||||||
Non-owner occupied | 2,090,382 | 1,954,219 | 22 | % | 1,839,990 | 1,730,165 | 23 | % | ||||||||||||||||||||||||||||||
Consumer and other | 408,764 | 378,406 | 4 | % | 351,153 | 324,634 | 4 | % | ||||||||||||||||||||||||||||||
Total loans | $ | 12,764,493 | $ | 9,105,016 | 100 | % | $ | 10,690,723 | $ | 7,604,662 | 100 | % |
As a percentage (%) of tier 1 capital plus allowance for credit losses | ||||||||||||||
FirstBank | FB Financial Corporation | |||||||||||||
September 30, 2022 | ||||||||||||||
Construction | 123.6 | % | 121.1 | % | ||||||||||
Commercial real estate | 298.5 | % | 292.4 | % | ||||||||||
December 31, 2021 | ||||||||||||||
Construction | 102.7 | % | 99.8 | % | ||||||||||
Commercial real estate | 263.5 | % | 256.0 | % |
Commercial and industrial loans. | We provide a mix of variable and fixed rate commercial and industrial loans. Our commercial and industrial loans are typically made to small and medium-sized manufacturing, wholesale, retail and service businesses for working capital and operating needs and business expansions, including the purchase of capital equipment and loans made to farmers relating to their operations. This category also includes loans secured by manufactured housing receivables. Commercial and industrial loans generally include lines of credit and loans with maturities of five years or less. Commercial and industrial loans are generally made with operating cash flows as the primary source of repayment, but may also include collateralization by inventory, accounts receivable, equipment and personal guarantees. Growth in our commercial and industrial loans portfolio is expected to decrease as we position for potential economic headwinds. | ||||
Construction loans. | Our construction loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small- and medium-sized businesses and individuals. These loans are generally secured by the land or the real property being built and are made based on our assessment of the value of the property on an as-completed basis. These loans can carry risk of repayment when projects incur cost overruns, have an increase in the price of building materials, encounter zoning and environmental issues, or encounter other factors that may affect the completion of a project on time and on budget. Additionally, repayment risk may be negatively impacted when the market experiences a deterioration in the value of real estate. We expect to make construction loans at a more moderate pace compared to prior quarters due to our current macroeconomic forecasts and our increasing expectation that the economy may be nearing a recession. | ||||
Residential real estate 1-4 family mortgage loans. | Our residential real estate 1-4 family mortgage loans are primarily made with respect to and secured by single family homes, including manufactured homes with real estate, which are both owner-occupied and investor owned. Our future origination volume could be impacted by any deterioration of housing values in our markets and increased unemployment or underemployment. | ||||
Residential line of credit loans. | Our residential line of credit loans are primarily revolving, open-end lines of credit secured by 1-4 family residential properties. We intend to continue to make residential line of credit loans if housing values in our markets do not deteriorate from current prevailing levels and we are able to make such loans consistent with our current credit and underwriting standards. Residential line of credit loans may be affected by unemployment or underemployment and deteriorating market values of real estate. | ||||
Multi-family residential loans. | Our multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. The value of these loans and growth in this area of our portfolio may be affected by unemployment or underemployment and deteriorating market values of real estate. | ||||
Commercial real estate owner-occupied loans. | Our commercial real estate owner-occupied loans include loans to finance commercial real estate owner occupied properties for various purposes including use as offices, warehouses, production facilities, health care facilities, retail centers, restaurants, churches and agricultural based facilities. Commercial real estate owner-occupied loans are typically repaid through the ongoing business operations of the borrower, and hence are dependent on the success of the underlying business for repayment and are more exposed to general economic conditions. Due to current market conditions and macroeconomic forecasts, we expect growth in commercial real estate owner-occupied loans in future quarters to be moderated compared to prior quarters. | ||||
Commercial real estate non-owner occupied loans. | Our commercial real estate non-owner occupied loans include loans to finance commercial real estate non-owner occupied investment properties for various purposes including use as offices, warehouses, health care facilities, hotels, mixed-use residential/commercial, manufactured housing communities, retail centers, multifamily properties, assisted living facilities and agricultural based facilities. Commercial real estate non-owner occupied loans are typically repaid with the funds received from the sale of the completed property or rental proceeds from such property, and are therefore more sensitive to adverse conditions in the real estate market, which can also be affected by general economic conditions. We expect growth in commercial real estate non-owner occupied loans to be reduced in comparison to prior quarters due to current macroeconomic outlook. | ||||
Consumer and other loans. | Consumer and other loans include consumer loans made to individuals for personal, family and household purposes, including car, boat, manufactured homes (without real estate) and other recreational vehicle loans and personal lines of credit. These loans are generally secured by vehicles, manufactured homes, and other household goods. The collateral securing consumer loans may depreciate over time. The company seeks to minimize these risks through its underwriting standards. Other loans also include loans to states and political subdivisions in the U.S. These loans are generally subject to the risk that the borrowing municipality or political subdivision may lose a significant portion of its tax base or that the project for which the loan was made may produce inadequate revenue. None of these categories of loans represents a significant portion of our loan portfolio. | ||||
Loan type (dollars in thousands) | Maturing in one year or less | Maturing in one to five years | Maturing in five years to fifteen years | Maturing after fifteen years | Total | |||||||||||||||||||||||||||
As of September 30, 2022 | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 541,119 | $ | 771,016 | $ | 221,110 | $ | 914 | $ | 1,534,159 | ||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Owner-occupied | 129,047 | 549,679 | 449,825 | 29,792 | 1,158,343 | |||||||||||||||||||||||||||
Non-owner occupied | 165,373 | 845,148 | 916,603 | 27,095 | 1,954,219 | |||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||
1-to-4 family mortgage | 73,853 | 418,281 | 301,628 | 751,490 | 1,545,252 | |||||||||||||||||||||||||||
Residential line of credit | 28,203 | 94,291 | 337,647 | 633 | 460,774 | |||||||||||||||||||||||||||
Multi-family mortgage | 13,137 | 231,698 | 132,973 | 16,558 | 394,366 | |||||||||||||||||||||||||||
Construction | 840,313 | 619,513 | 195,832 | 23,839 | 1,679,497 | |||||||||||||||||||||||||||
Consumer and other | 44,064 | 88,120 | 59,214 | 187,008 | 378,406 | |||||||||||||||||||||||||||
Total ($) | $ | 1,835,109 | $ | 3,617,746 | $ | 2,614,832 | $ | 1,037,329 | $ | 9,105,016 | ||||||||||||||||||||||
Total (%) | 20.2 | % | 39.7 | % | 28.7 | % | 11.4 | % | 100.0 | % |
Loan type (dollars in thousands) | Fixed interest rate | Floating interest rate | Total | |||||||||||||||||
As of September 30, 2022 | ||||||||||||||||||||
Commercial and industrial | $ | 471,945 | $ | 521,095 | $ | 993,040 | ||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Owner-occupied | 755,304 | 273,992 | 1,029,296 | |||||||||||||||||
Non-owner occupied | 951,746 | 837,100 | 1,788,846 | |||||||||||||||||
Residential real estate: | ||||||||||||||||||||
1-to-4 family mortgage | 1,173,229 | 298,170 | 1,471,399 | |||||||||||||||||
Residential line of credit | 4,999 | 427,572 | 432,571 | |||||||||||||||||
Multi-family mortgage | 242,392 | 138,837 | 381,229 | |||||||||||||||||
Construction | 307,791 | 531,393 | 839,184 | |||||||||||||||||
Consumer and other | 328,632 | 5,710 | 334,342 | |||||||||||||||||
Total ($) | $ | 4,236,038 | $ | 3,033,869 | $ | 7,269,907 | ||||||||||||||
Total (%) | 58.3 | % | 41.7 | % | 100.0 | % |
(dollars in thousands) | Fixed interest rate | Floating interest rate | Total | |||||||||||||||||
As of September 30, 2022 | ||||||||||||||||||||
One year or less | $ | 569,166 | $ | 1,265,943 | $ | 1,835,109 | ||||||||||||||
One to five years | 2,141,724 | 1,476,022 | 3,617,746 | |||||||||||||||||
Five to fifteen years | 1,334,168 | 1,280,664 | 2,614,832 | |||||||||||||||||
Over fifteen years | 760,146 | 277,183 | 1,037,329 | |||||||||||||||||
Total ($) | $ | 4,805,204 | $ | 4,299,812 | $ | 9,105,016 | ||||||||||||||
Total (%) | 52.8 | % | 47.2 | % | 100.0 | % |
Loans with interest rate floors (dollars in thousands) | Maturing in one year or less | Weighted average level of support (bps) | Maturing in one to five years | Weighted average level of support (bps) | Maturing in five years to fifteen years | Weighted average level of support (bps) | Maturing after fifteen years | Weighted average level of support (bps) | Total | Weighted average level of support (bps) | |||||||||||||||||||||||||
Loans with current rates above floors: | |||||||||||||||||||||||||||||||||||
1-25 bps | $ | 1,438 | 24.98 | $ | 29,791 | 22.45 | $ | 3,430 | 13.62 | $ | 91 | 25.00 | $ | 34,750 | 21.69 | ||||||||||||||||||||
26-50 bps | 1,850 | 46.90 | 4,680 | 50.00 | 8,590 | 31.63 | — | — | 15,120 | 39.18 | |||||||||||||||||||||||||
51-75 bps | 19,485 | 75.00 | 11,308 | 74.32 | 4,883 | 69.92 | 5,744 | 67.91 | 41,420 | 73.23 | |||||||||||||||||||||||||
76-100 bps | 2,989 | 98.60 | 37,613 | 99.99 | 19,443 | 88.98 | 5,957 | 92.28 | 66,002 | 95.99 | |||||||||||||||||||||||||
101-125 bps | 5,285 | 119.49 | 16,834 | 120.65 | 10,994 | 117.93 | 5,773 | 115.15 | 38,886 | 118.90 | |||||||||||||||||||||||||
126-150 bps | 32,563 | 147.73 | 50,762 | 142.88 | 35,921 | 137.40 | 9,014 | 144.17 | 128,260 | 142.67 | |||||||||||||||||||||||||
151-200 bps | 103,336 | 188.10 | 71,761 | 187.93 | 130,261 | 175.35 | 11,504 | 180.71 | 316,862 | 182.55 | |||||||||||||||||||||||||
201-250 bps | 259,123 | 235.03 | 330,537 | 233.68 | 299,825 | 236.79 | 125,311 | 241.34 | 1,014,796 | 235.89 | |||||||||||||||||||||||||
251 bps and above | 536,364 | 297.51 | 429,643 | 301.98 | 443,023 | 310.19 | 71,312 | 375.07 | 1,480,342 | 306.34 | |||||||||||||||||||||||||
Total loans with current rates above floors | $ | 962,433 | 256.88 | $ | 982,929 | 239.34 | $ | 956,370 | 250.82 | $ | 234,706 | 264.05 | $ | 3,136,438 | 250.08 | ||||||||||||||||||||
Loans at interest rate floors providing support: | |||||||||||||||||||||||||||||||||||
1-25 bps | $ | 2,132 | 23.60 | $ | 6,928 | 25.00 | $ | 16,886 | 15.12 | $ | 140 | 19.00 | $ | 26,086 | 18.46 | ||||||||||||||||||||
26-50 bps | — | — | 7,015 | 50.00 | 36 | 50.00 | — | — | 7,051 | 50.00 | |||||||||||||||||||||||||
51-75 bps | — | — | 2,391 | 62.21 | — | — | — | — | 2,391 | 62.21 | |||||||||||||||||||||||||
76-100 bps | — | — | — | — | 1,544 | 87.63 | — | — | 1,544 | 87.63 | |||||||||||||||||||||||||
101-125 bps | — | — | — | — | 292 | 119.00 | — | — | 292 | 119.00 | |||||||||||||||||||||||||
126-150 bps | — | — | 42 | 134.00 | — | — | — | — | 42 | 134.00 | |||||||||||||||||||||||||
Total loans at interest rate floors providing support | $ | 2,132 | 23.60 | $ | 16,376 | 41.42 | $ | 18,758 | 22.77 | $ | 140 | 19.00 | $ | 37,406 | 30.97 |
September 30, | December 31, | ||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2021 | ||||||||||||||
Loan Type | |||||||||||||||||
Commercial and industrial | $ | 1,768 | $ | 3,022 | $ | 1,583 | |||||||||||
Construction | — | 4,908 | 4,340 | ||||||||||||||
Residential real estate: | |||||||||||||||||
1-to-4 family mortgage | 19,347 | 11,925 | 13,956 | ||||||||||||||
Residential line of credit | 1,880 | 1,269 | 1,736 | ||||||||||||||
Multi-family mortgage | 44 | 50 | 49 | ||||||||||||||
Commercial real estate: | |||||||||||||||||
Owner-occupied | 4,873 | 6,239 | 6,710 | ||||||||||||||
Non-owner occupied | 6,960 | 11,666 | 14,084 | ||||||||||||||
Consumer and other | 7,755 | 3,948 | 4,845 | ||||||||||||||
Total nonperforming loans held for investment | $ | 42,627 | $ | 43,027 | $ | 47,303 | |||||||||||
Commercial loans held for sale | — | 5,625 | 5,217 | ||||||||||||||
Mortgage loans held for sale(1) | 26,485 | — | — | ||||||||||||||
Other real estate owned | 5,919 | 10,015 | 9,777 | ||||||||||||||
Other | 639 | 347 | 686 | ||||||||||||||
Total nonperforming assets | $ | 75,670 | $ | 59,014 | $ | 62,983 | |||||||||||
Total nonperforming loans held for investment as a percentage of total loans HFI | 0.47 | % | 0.59 | % | 0.62 | % | |||||||||||
Total nonperforming assets as a percentage of total assets | 0.62 | % | 0.50 | % | 0.50 | % | |||||||||||
Total nonaccrual loans HFI as a percentage of loans HFI | 0.29 | % | 0.47 | % | 0.47 | % | |||||||||||
Total accruing loans over 90 days delinquent as a percentage of total assets | 0.13 | % | 0.08 | % | 0.09 | % | |||||||||||
Loans restructured as troubled debt restructurings | $ | 14,959 | $ | 29,645 | $ | 32,435 | |||||||||||
Troubled debt restructurings as a percentage of total loans held for investment | 0.16 | % | 0.41 | % | 0.43 | % |
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | % of Loans | ACL as a % of loans HFI category | Amount | % of Loans | ACL as a % of loans HFI category | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 10,538 | 17 | % | 0.69 | % | $ | 15,751 | 17 | % | 1.22 | % | ||||||||||||||||||||||||||
Construction | 41,427 | 18 | % | 2.47 | % | 28,576 | 17 | % | 2.15 | % | ||||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||
1-to-4 family mortgage | 25,366 | 17 | % | 1.64 | % | 19,104 | 17 | % | 1.50 | % | ||||||||||||||||||||||||||||
Residential line of credit | 6,952 | 5 | % | 1.51 | % | 5,903 | 5 | % | 1.54 | % | ||||||||||||||||||||||||||||
Multi-family mortgage | 5,874 | 4 | % | 1.49 | % | 6,976 | 4 | % | 2.14 | % | ||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | 8,068 | 13 | % | 0.70 | % | 12,593 | 13 | % | 1.32 | % | ||||||||||||||||||||||||||||
Non-owner occupied | 22,783 | 22 | % | 1.17 | % | 25,768 | 23 | % | 1.49 | % | ||||||||||||||||||||||||||||
Consumer and other | 13,468 | 4 | % | 3.56 | % | 10,888 | 4 | % | 3.35 | % | ||||||||||||||||||||||||||||
Total allowance | $ | 134,476 | 100 | % | 1.48 | % | $ | 125,559 | 100 | % | 1.65 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Year Ended December 31, | ||||||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||||
Allowance for credit losses at beginning of period | $ | 126,272 | $ | 144,663 | $ | 125,559 | $ | 170,389 | $ | 170,389 | ||||||||||||||||||||||
Charge-offs: | ||||||||||||||||||||||||||||||||
Commercial and industrial | — | (2,175) | (1,755) | (2,812) | (4,036) | |||||||||||||||||||||||||||
Construction | — | (1) | — | (30) | (30) | |||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||
1-to-4 family mortgage | (20) | — | (43) | (149) | (154) | |||||||||||||||||||||||||||
Residential line of credit | — | — | — | (18) | (18) | |||||||||||||||||||||||||||
Multi-family mortgage | — | — | — | — | (1) | |||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Non-owner occupied | — | — | — | — | (1,566) | |||||||||||||||||||||||||||
Consumer and other | (441) | (438) | (1,630) | (1,634) | (2,063) | |||||||||||||||||||||||||||
Total charge-offs | $ | (461) | $ | (2,614) | $ | (3,428) | $ | (4,643) | $ | (7,868) | ||||||||||||||||||||||
Recoveries: | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 342 | $ | 19 | $ | 1,326 | $ | 235 | $ | 861 | ||||||||||||||||||||||
Construction | — | 3 | 11 | 3 | 3 | |||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||
1-to-4 family mortgage | 13 | 33 | 39 | 98 | 125 | |||||||||||||||||||||||||||
Residential line of credit | — | 1 | 17 | 16 | 115 | |||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Owner-occupied | 51 | 4 | 76 | 143 | 156 | |||||||||||||||||||||||||||
Consumer and other | 70 | 169 | 635 | 554 | 773 | |||||||||||||||||||||||||||
Total recoveries | $ | 476 | $ | 229 | $ | 2,104 | $ | 1,049 | $ | 2,033 | ||||||||||||||||||||||
Net charge-offs | 15 | (2,385) | (1,324) | (3,594) | (5,835) | |||||||||||||||||||||||||||
Provision for credit losses | 8,189 | (2,832) | 10,241 | (27,349) | (38,995) | |||||||||||||||||||||||||||
Allowance for credit losses at the end of period | $ | 134,476 | $ | 139,446 | $ | 134,476 | $ | 139,446 | $ | 125,559 | ||||||||||||||||||||||
Ratio of net charge-offs during the period to average loans outstanding during the period | — | % | (0.13) | % | (0.02) | % | (0.07) | % | (0.08) | % | ||||||||||||||||||||||
Allowance for credit losses as a percentage of loans at end of period(1) | 1.48 | % | 1.91 | % | 1.48 | % | 1.91 | % | 1.65 | % | ||||||||||||||||||||||
Allowance for credit losses as a percentage of nonaccrual loans HFI(1) | 505.1 | % | 408.6 | % | 505.1 | % | 408.6 | % | 353.0 | % | ||||||||||||||||||||||
Allowance for credit losses as a percentage of nonperforming loans at end of period(1) | 315.5 | % | 324.1 | % | 315.5 | % | 324.1 | % | 265.4 | % | ||||||||||||||||||||||
Provision for credit losses(1) | Net charge-offs | Average loans held for investment | Ratio of annualized net recoveries (charge-offs) to average loans | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Three months ended September 30, 2022 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 5 | $ | 342 | $ | 1,505,262 | 0.09 | % | ||||||||||||||||||
Construction | 3,044 | — | 1,577,025 | — | % | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | 3,975 | (7) | 1,495,509 | — | % | |||||||||||||||||||||
Residential line of credit | 77 | — | 443,881 | — | % | |||||||||||||||||||||
Multi-family mortgage | (629) | — | 385,030 | — | % | |||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner-occupied | 688 | 51 | 1,146,149 | 0.02 | % | |||||||||||||||||||||
Non-owner occupied | 247 | — | 1,904,720 | — | % | |||||||||||||||||||||
Consumer and other | 782 | (371) | 352,518 | (0.42) | % | |||||||||||||||||||||
Total | $ | 8,189 | $ | 15 | $ | 8,810,094 | — | % | ||||||||||||||||||
Three months ended September 30, 2021 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 3,203 | $ | (2,156) | $ | 1,248,440 | (0.69) | % | ||||||||||||||||||
Construction | (3,080) | 2 | 1,155,051 | — | % | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | (2,677) | 33 | 1,153,768 | 0.01 | % | |||||||||||||||||||||
Residential line of credit | (952) | 1 | 397,300 | — | % | |||||||||||||||||||||
Multi-family mortgage | (1,462) | — | 366,166 | — | % | |||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner-occupied | 7,665 | 4 | 925,069 | — | % | |||||||||||||||||||||
Non-owner occupied | (6,450) | — | 1,674,382 | — | % | |||||||||||||||||||||
Consumer and other | 921 | (269) | 325,137 | (0.33) | % | |||||||||||||||||||||
Total | $ | (2,832) | $ | (2,385) | $ | 7,245,313 | (0.13) | % | ||||||||||||||||||
Nine months ended September 30, 2022 | ||||||||||||||||||||||||||
Commercial and industrial | $ | (4,784) | $ | (429) | $ | 1,424,734 | (0.04) | % | ||||||||||||||||||
Construction | 12,840 | 11 | 1,491,710 | — | % | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | 6,266 | (4) | 1,405,879 | — | % | |||||||||||||||||||||
Residential line of credit | 1,032 | 17 | 415,006 | 0.01 | % | |||||||||||||||||||||
Multi-family mortgage | (1,102) | — | 383,093 | — | % | |||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner-occupied | (4,601) | 76 | 1,049,851 | 0.01 | % | |||||||||||||||||||||
Non-owner occupied | (2,985) | — | 1,798,010 | — | % | |||||||||||||||||||||
Consumer and other | 3,575 | (995) | 334,366 | (0.40) | % | |||||||||||||||||||||
Total | $ | 10,241 | $ | (1,324) | $ | 8,302,649 | (0.02) | % | ||||||||||||||||||
Nine months ended September 30, 2021 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 2,667 | $ | (2,577) | $ | 1,278,041 | (0.27) | % | ||||||||||||||||||
Construction | (28,690) | (27) | 1,112,248 | — | % | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | (2,141) | (51) | 1,110,943 | (0.01) | % | |||||||||||||||||||||
Residential line of credit | (4,767) | (2) | 396,695 | — | % | |||||||||||||||||||||
Multi-family mortgage | 4,839 | — | 304,709 | — | % | |||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner occupied | 7,384 | 143 | 914,687 | 0.02 | % | |||||||||||||||||||||
Non-owner occupied | (7,741) | — | 1,685,293 | — | % | |||||||||||||||||||||
Consumer and other | 1,100 | (1,080) | 308,624 | (0.47) | % | |||||||||||||||||||||
Total | $ | (27,349) | $ | (3,594) | $ | 7,111,240 | (0.07) | % |
Provision for credit losses(1) | Net recoveries (charge-offs) | Average loans held for investment | Ratio of annualized net recoveries (charge-offs) to average loans | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Year ended December 31, 2021 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 4,178 | $ | (3,175) | $ | 1,271,476 | (0.25) | % | ||||||||||||||||||
Construction | (29,874) | (27) | 1,138,769 | — | % | |||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
1-to-4 family mortgage | (87) | (29) | 1,130,019 | — | % | |||||||||||||||||||||
Residential line of credit | (4,728) | 97 | 392,907 | 0.02 | % | |||||||||||||||||||||
Multi-family mortgage | (197) | (1) | 310,874 | — | % | |||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Owner-occupied | 7,588 | 156 | 917,334 | 0.02 | % | |||||||||||||||||||||
Non-owner occupied | (16,813) | (1,566) | 1,683,413 | (0.09) | % | |||||||||||||||||||||
Consumer and other | 938 | (1,290) | 352,421 | (0.37) | % | |||||||||||||||||||||
Total | $ | (38,995) | $ | (5,835) | $ | 7,197,213 | (0.08) | % |
As of September 30, | As of December 31, | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | % of total deposits | Average rate | Amount | % of total deposits | Average rate | ||||||||||||||||||||||||||||||||
Deposit Type | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 2,966,514 | 30 | % | — | % | $ | 2,740,214 | 26 | % | — | % | ||||||||||||||||||||||||||
Interest-bearing demand | 2,648,161 | 26 | % | 0.47 | % | 3,418,666 | 32 | % | 0.35 | % | ||||||||||||||||||||||||||||
Money market | 2,721,186 | 27 | % | 0.37 | % | 3,066,347 | 28 | % | 0.36 | % | ||||||||||||||||||||||||||||
Savings deposits | 507,151 | 5 | % | 0.05 | % | 480,589 | 4 | % | 0.06 | % | ||||||||||||||||||||||||||||
Customer time deposits | 1,160,726 | 12 | % | 0.67 | % | 1,103,594 | 10 | % | 0.67 | % | ||||||||||||||||||||||||||||
Brokered and internet time deposits | 2,344 | — | % | 1.34 | % | 27,487 | — | % | 1.69 | % | ||||||||||||||||||||||||||||
Total deposits | $ | 10,006,082 | 100 | % | 0.32 | % | $ | 10,836,897 | 100 | % | 0.30 | % | ||||||||||||||||||||||||||
Total Uninsured Deposits | $ | 4,959,418 | 50 | % | $ | 4,877,819 | 45 | % | ||||||||||||||||||||||||||||||
Customer Time Deposits | ||||||||||||||||||||||||||||||||||||||
0.00-0.50% | $ | 538,237 | 46 | % | $ | 792,020 | 72 | % | ||||||||||||||||||||||||||||||
0.51-1.00% | 91,248 | 8 | % | 97,644 | 9 | % | ||||||||||||||||||||||||||||||||
1.01-1.50% | 75,289 | 6 | % | 78,539 | 7 | % | ||||||||||||||||||||||||||||||||
1.51-2.00% | 270,231 | 23 | % | 36,090 | 3 | % | ||||||||||||||||||||||||||||||||
2.01-2.50% | 48,140 | 4 | % | 44,653 | 4 | % | ||||||||||||||||||||||||||||||||
Above 2.50% | 137,581 | 13 | % | 54,648 | 5 | % | ||||||||||||||||||||||||||||||||
Total customer time deposits | $ | 1,160,726 | 100 | % | $ | 1,103,594 | 100 | % | ||||||||||||||||||||||||||||||
Brokered and Internet Time Deposits | ||||||||||||||||||||||||||||||||||||||
0.00-0.50% | $ | 99 | 4 | % | $ | 99 | — | % | ||||||||||||||||||||||||||||||
0.51-1.00% | — | — | % | — | — | % | ||||||||||||||||||||||||||||||||
1.01-1.50% | 247 | 11 | % | 595 | 2 | % | ||||||||||||||||||||||||||||||||
1.51-2.00% | 752 | 32 | % | 16,358 | 60 | % | ||||||||||||||||||||||||||||||||
2.01-2.50% | 747 | 32 | % | 4,464 | 16 | % | ||||||||||||||||||||||||||||||||
Above 2.50% | 499 | 21 | % | 5,971 | 22 | % | ||||||||||||||||||||||||||||||||
Total brokered and internet time deposits | $ | 2,344 | 100 | % | $ | 27,487 | 100 | % | ||||||||||||||||||||||||||||||
Total time deposits | $ | 1,163,070 | $ | 1,131,081 |
As of September 30, | As of December 31, | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Fair value | % of total investment securities | Weighted average yield (1) | Fair value | % of total investment securities | Weighted average yield (1) | ||||||||||||||||||||||||||||||||
Treasury securities: | ||||||||||||||||||||||||||||||||||||||
Maturing within one year | $ | 487 | — | % | 2.55 | % | $ | — | — | % | — | % | ||||||||||||||||||||||||||
Maturing in one to five years | 106,810 | 7.2 | % | 2.10 | % | 14,908 | 0.9 | % | 1.24 | % | ||||||||||||||||||||||||||||
Maturing in five to ten years | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Maturing after ten years | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Total Treasury securities | 107,297 | 7.2 | % | 2.10 | % | 14,908 | 0.9 | % | 1.24 | % | ||||||||||||||||||||||||||||
Government agency securities: | ||||||||||||||||||||||||||||||||||||||
Maturing within one year | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Maturing in one to five years | 20,838 | 1.4 | % | 1.58 | % | 20,141 | 1.2 | % | 1.33 | % | ||||||||||||||||||||||||||||
Maturing in five to ten years | 18,015 | 1.2 | % | 1.54 | % | 13,729 | 0.8 | % | 1.40 | % | ||||||||||||||||||||||||||||
Maturing after ten years | 978 | 0.1 | % | 1.85 | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Total government agency securities | 39,831 | 2.7 | % | 1.57 | % | 33,870 | 2.0 | % | 1.36 | % | ||||||||||||||||||||||||||||
Municipal securities: | ||||||||||||||||||||||||||||||||||||||
Maturing within one year | 3,475 | 0.2 | % | 2.18 | % | 21,884 | 1.3 | % | 1.26 | % | ||||||||||||||||||||||||||||
Maturing in one to five years | 18,413 | 1.2 | % | 2.35 | % | 19,903 | 1.2 | % | 2.05 | % | ||||||||||||||||||||||||||||
Maturing in five to ten years | 31,821 | 2.1 | % | 3.42 | % | 27,086 | 1.6 | % | 3.38 | % | ||||||||||||||||||||||||||||
Maturing after ten years | 198,434 | 13.5 | % | 3.13 | % | 269,737 | 16.1 | % | 3.14 | % | ||||||||||||||||||||||||||||
Total obligations of state and municipal subdivisions | 252,143 | 17.0 | % | 3.09 | % | 338,610 | 20.2 | % | 2.97 | % | ||||||||||||||||||||||||||||
Residential and commercial mortgage backed securities guaranteed by FNMA, GNMA and FHLMC: | ||||||||||||||||||||||||||||||||||||||
Maturing within one year | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Maturing in one to five years | 3,700 | 0.2 | % | 2.74 | % | 4,041 | 0.2 | % | 2.55 | % | ||||||||||||||||||||||||||||
Maturing in five to ten years | 20,596 | 1.4 | % | 2.67 | % | 17,368 | 1.0 | % | 2.28 | % | ||||||||||||||||||||||||||||
Maturing after ten years | 1,051,314 | 71.0 | % | 1.86 | % | 1,263,213 | 75.3 | % | 1.51 | % | ||||||||||||||||||||||||||||
Total residential and commercial mortgage backed securities guaranteed by FNMA, GNMA and FHLMC | 1,075,610 | 72.6 | % | 1.88 | % | 1,284,622 | 76.5 | % | 1.53 | % | ||||||||||||||||||||||||||||
Corporate securities: | ||||||||||||||||||||||||||||||||||||||
Maturing within one year | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Maturing in one to five years | 367 | — | % | 5.00 | % | 355 | — | % | 5.06 | % | ||||||||||||||||||||||||||||
Maturing in five to ten years | 6,923 | 0.5 | % | 3.87 | % | 6,160 | 0.4 | % | 4.05 | % | ||||||||||||||||||||||||||||
Maturing after ten years | — | — | % | — | % | — | — | % | — | % | ||||||||||||||||||||||||||||
Total Corporate securities | 7,290 | 0.5 | % | 3.94 | % | 6,515 | 0.4 | % | 4.13 | % | ||||||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 1,482,171 | 100.0 | % | 2.10 | % | $ | 1,678,525 | 100.0 | % | 1.83 | % |
Percentage change in: | ||||||||||||||||||||||||||
Net interest income (1) | ||||||||||||||||||||||||||
Year 1 | Year 2 | |||||||||||||||||||||||||
Change in interest rates | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||||
(in basis points) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
+400 | 19.3 | % | 40.9 | % | 29.5 | % | 54.8 | % | ||||||||||||||||||
+300 | 14.2 | % | 30.2 | % | 21.9 | % | 40.8 | % | ||||||||||||||||||
+200 | 10.3 | % | 20.9 | % | 15.3 | % | 28.3 | % | ||||||||||||||||||
+100 | 5.67 | % | 10.8 | % | 8.23 | % | 14.7 | % | ||||||||||||||||||
-100 | (5.83) | % | (6.32) | % | (8.59) | % | (10.2) | % | ||||||||||||||||||
-200 | (12.5) | % | (8.73) | % | (18.2) | % | (13.5) | % |
Percentage change in: | ||||||||||||||
Economic value of equity (2) | ||||||||||||||
Change in interest rates | September 30, | December 31, | ||||||||||||
(in basis points) | 2022 | 2021 | ||||||||||||
+400 | (9.89) | % | 5.30 | % | ||||||||||
+300 | (6.79) | % | 5.67 | % | ||||||||||
+200 | (3.71) | % | 5.72 | % | ||||||||||
+100 | (1.33) | % | 3.90 | % | ||||||||||
-100 | 0.50 | % | (8.13) | % | ||||||||||
-200 | (0.08) | % | (21.4) | % |
Period | (a) Total number of shares purchased(1) | (b) Average price paid per share | (c) Total number of shares purchased as part of publicly announced plans or programs | (d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs(2) | ||||||||||||||||||||||
July 1 - July 31, 2022 | — | $ | — | — | $ | 73,440,676 | ||||||||||||||||||||
August 1 - August 31, 2022 | — | — | — | 73,440,676 | ||||||||||||||||||||||
September 1 - September 30, 2022 | — | — | — | 73,440,676 | ||||||||||||||||||||||
Total | — | $ | — | — | $ | 73,440,676 |
Exhibit Number | Description | ||||
101.INS | Inline XBRL Instance Document* | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. | ||||
** | Furnished herewith. | ||||
† | Represents a management contract or a compensatory plan or arrangement. |
FB Financial Corporation | ||||||||
/s/ Michael M. Mettee | ||||||||
November 7, 2022 | Michael M. Mettee Chief Financial Officer (Principal Financial Officer) | |||||||
/s/ Keith Rainwater | ||||||||
November 7, 2022 | Keith Rainwater Chief Accounting Officer (Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of FB Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
Date: November 7, 2022 | /s/ Christopher T. Holmes | ||||||||||
Christopher T. Holmes | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of FB Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
Date: November 7, 2022 | /s/ Michael M. Mettee | ||||||||||
Michael M. Mettee | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
Date: November 7, 2022 | /s/ Christopher T. Holmes | ||||||||||
Christopher T. Holmes | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Date: November 7, 2022 | /s/ Michael M. Mettee | ||||||||||
Michael M. Mettee | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 46,926,377 | 47,549,241 |
Common stock, shares outstanding (in shares) | 46,926,377 | 47,549,241 |
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net tax (benefits) expenses on net change in unrealized gain (loss) on available-for-sale securities | $ (23,750) | $ (2,054) | $ (68,576) | $ (4,708) |
Net tax expense (benefit) on reclassification adjustment for gain on sale of securities included in net income | 0 | (19) | (1) | (23) |
Net tax expenses (benefits) recognized on net change in unrealized gain (loss) on hedging activities | $ 145 | $ 38 | $ 517 | $ 173 |
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 0.13 | $ 0.11 | $ 0.39 | $ 0.33 |
Basis of Presentation |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of presentation: Overview and presentation FB Financial Corporation (the “Company”) is a financial holding company headquartered in Nashville, Tennessee. The Company operates through its wholly-owned subsidiaries, FirstBank (the "Bank") and FirstBank Risk Management, Inc. As of September 30, 2022, the Bank had 82 full-service branches throughout Tennessee, Alabama, southern Kentucky and north Georgia, and a national mortgage business with office locations across the Southeast, which primarily originates loans to be sold in the secondary market. The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with U.S. GAAP interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported results of operations for the reporting periods and the related disclosures. Although management's estimates contemplate current conditions and how they are expected to change in the future, it is reasonably possible that actual conditions could vary from those anticipated, which could affect the Company's financial condition and results of operations. Actual results could differ significantly from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity. Earnings per share Basic EPS excludes dilution and is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares issuable under the restricted stock units granted but not yet vested and distributable. Diluted EPS is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period, plus an incremental number of common-equivalent shares computed using the treasury stock method. Unvested share-based payment awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered to participate with common shareholders in undistributed earnings for purposes of computing EPS. Companies that have such participating securities are required to calculate basic and diluted EPS using the two-class method. Certain restricted stock awards granted by the Company include non-forfeitable dividend equivalents and are considered participating securities. Calculations of EPS under the two-class method (i) exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities and (ii) exclude from the denominator the dilutive impact of the participating securities. The following is a summary of the basic and diluted earnings per common share calculation for each of the periods presented:
(1)Excludes 15,408 and 11,888 restricted stock units outstanding considered to be antidilutive for the three and nine months ended September 30, 2022 and 15,974 and 20,448 restricted stock units outstanding considered to be antidilutive for three and nine months ended September 30, 2021. Recently modified accounting policies: The Company did not modify or adopt any new accounting policies during the three and nine months ended September 30, 2022 that were not disclosed in the Company's 2021 audited consolidated financial statements included on Form 10-K, other than as described below. During the three months ended March 31, 2022, the Company appended the following language to the below referenced existing accounting policy related to derivative financial instruments and hedging activities described in Note 1 of the Company's 2021 Annual Report on Form 10-K as a result of entering into designated fair value hedges during the period. (A) Derivative financial instruments and hedging activities: The Company enters into fair value hedge relationships to mitigate the effect of changing interest rates on the fair values of fixed rate securities and loans. The gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. During the three months ended September 30, 2022, the Company modified the below referenced existing accounting policy. (B) Loans held for sale: Mortgage loans held for sale Mortgage loans originated and intended for sale in the secondary market are carried at fair value as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”). The change in fair value of both mortgage loans held for sale and the related derivative instruments used to hedge exposure to market related risks are recorded in “Mortgage banking income” in the Consolidated Statements of Income. Gains and losses on sale are recognized at the time the loan is closed. Pass through origination costs and related loan fees are also included in “Mortgage banking income”. Periodically, the Company transfers mortgage loans originated for sale in the secondary markets into the loan HFI portfolio based on current market conditions, overall secondary marketability and status of the loan. The loans are transferred into the portfolio at fair value at the date of transfer. Additionally, occasionally the Company will transfer loans from the held for investment portfolio into loans held for sale. At the time of the transfer, loans are marked to fair value through the allowance for credit losses and reclassified to loans held for sale. The Company sells mortgage loans originated for sale on the secondary market to GNMA and retains servicing rights after sale. Under the GNMA optional repurchase program, financial institutions are permitted 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 such a delinquent loan for an amount equal to 100 percent of the remaining principal balance of the loan. Under FASB ASC Topic 860, “Transfers and Servicing,” this buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When the Company 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 recorded on the balance sheet, regardless of whether the Company intends to exercise the buy-back option if the buyback options provides the transferor a more-than-trivial benefit. Prior to September 30, 2022, the Company deemed there was not a more than trivial benefit associated with repurchasing these loans based on quarterly analyses and as such, these were not rebooked to the balance sheet. During the quarter ended September 30, 2022, the Company revised its accounting estimate by applying the removal of accounts provision regardless of whether the transferor is provided a more-than-trivial benefit to align with developing industry best practice and regulatory expectations. Upon application of the change, as of September 30, 2022 the Company recorded $26,485 of optional rights to repurchase delinquent GNMA loans. The fair value option election does not apply to the GNMA optional repurchase loans which do not meet the requirements under FASB ASC Topic 825. These loans are reported at current unpaid principal balance in LHFS on the consolidated balance sheets with the offsetting liability being reported in borrowings. These are considered nonperforming assets as the Company does not earn any interest on the unexercised option to repurchase these loans. This change in accounting estimate was applied prospectively without modification to prior periods. Recently adopted accounting standards: The Company did not adopt any new accounting standards that were not disclosed in the Company's 2021 audited consolidated financial statements included on Form 10-K. Newly issued not yet effective accounting standards: In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this update to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, to amend a related illustrative example, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The ASU becomes effective January 1, 2024 and the Company is evaluating the potential impact of this standard on its consolidated financial statements and related disclosures. In March 2022, the FASB issued ASU 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method", to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU No. 2022-01 for any entity that has adopted the amendments in ASU No.2017-12 for the corresponding period. Adoption of this update will not have an impact on the Company's consolidated financial statements or related disclosures. Additionally, in March 2022, the FASB issued ASU 2022-02, "'Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" related to troubled debt restructurings and vintage disclosures for financing receivables. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan modifications and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures. In March 2022, the SEC released SAB 121 to add interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for clients. The new guidance requires reporting entities who allow clients to transact in crypto-assets and act as a custodian to record a liability with a corresponding asset regardless of whether they control the crypto-asset. The crypto-asset will need to be marked at fair value for each reporting period. The new guidance requires disclosures in the footnotes to address the amount of crypto-assets reported, and the safeguarding and recordkeeping of the assets. The guidance in this update requires that reporting companies implement SAB 121 no later than the financial statements covering the first interim or annual period ending after June 15, 2022, with retrospective application back to the beginning of the fiscal year. During the three months ended March 31, 2022, the Company became a founding member of the USDF Consortium (the "Consortium"), which plans to utilize blockchain and technology to streamline peer-to-peer financial transactions. The USDF Consortium is a membership-based association of insured depository institutions with a mission to build a network of banks to further the adoption and interoperability of a bank-minted tokenized deposit. While the Company does not currently hold or facilitate transactions with crypto-assets, the Company is evaluating the potential future financial statement and disclosure impact from adopting this guidance when it becomes applicable based on the Company's crypto-asset activities. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 is intended to provide relief for companies preparing for discontinuation of interest rates based on LIBOR. The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued. ASU 2020-04 also provides for a onetime sale and/or transfer to AFS or trading to be made for HTM debt securities that both reference an eligible reference rate and were classified as HTM before January 1, 2020. ASU 2020-04 was effective for all entities as of March 12, 2020 and through December 31, 2022. Companies can apply the ASU as of the beginning of the interim period that includes March 12, 2020 or any date thereafter. The guidance requires companies to apply the guidance prospectively to contract modifications and hedging relationships while the one-time election to sell and/or transfer debt securities classified as HTM may be made any time after March 12, 2020. Our LIBOR Transition Committee was established to transition from LIBOR to alternative rates and has continued its efforts consistent with industry timelines. As part of these efforts, during the fourth quarter of 2021, we ceased utilization of LIBOR as an index in newly originated loans or loans that are refinanced. Additionally, we identified existing products that utilize LIBOR and are reviewing contractual language to facilitate the transition to alternative reference rates. ASU 2020-04 and ASU 2021-01 are not expected to have a material impact on our consolidated financial statements. Subsequent events The Company has evaluated, for consideration of recognition or disclosure, subsequent events that occurred through the date of issuance of these financial statements. The Company has determined that there were no subsequent events that occurred after September 30, 2022, but prior to the issuance of these financial statements that would have a material impact on the Company’s consolidated financial statements.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment securities: The following tables summarize the amortized cost, allowance for credit losses and fair value of the available-for-sale debt securities and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income at September 30, 2022 and December 31, 2021:
The components of amortized cost for debt securities on the consolidated balance sheets excludes accrued interest receivable since the Company elected to present accrued interest receivable separately on the consolidated balance sheets. As of September 30, 2022 and December 31, 2021, total accrued interest receivable on debt securities was $5,535 and $5,051, respectively. As of September 30, 2022 and December 31, 2021, the Company had $2,962 and $3,367, in marketable equity securities recorded at fair value, respectively. Securities pledged at September 30, 2022 and December 31, 2021 had carrying amounts of $1,213,747 and $1,226,646, respectively, and were pledged to secure a Federal Reserve Bank line of credit, public deposits and repurchase agreements. There were no holdings of securities of any one issuer, other than U.S. Government sponsored enterprises, in an amount greater than 10% of shareholders' equity during any period presented. Investment securities transactions are recorded as of the trade date. At September 30, 2022 and December 31, 2021, there were no trade date receivables nor payables that related to sales or purchases settled after period end. The amortized cost and fair value of debt securities by contractual maturity at September 30, 2022 and December 31, 2021 are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgage underlying the security may be called or repaid without any penalties. Therefore, mortgage-backed securities are not included in the maturity categories in the following summary.
Sales and other dispositions of available-for-sale securities were as follows:
Additionally, changes in fair value and the sale of equity securities with readily determinable fair values resulted in a net loss of $141 and of $24 for the three months ended September 30, 2022 and 2021, respectively, and in a net loss of $405 and gain of $188 for the nine months ended September 30, 2022 and 2021, respectively. The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at September 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
As of September 30, 2022 and December 31, 2021, the Company’s securities portfolio consisted of 504 and 511 securities, 487 and 80 of which were in an unrealized loss position, respectively. During the three months ended September 30, 2022, the Company's available-for-sale debt securities portfolio unrealized value declined $91,104 to an unrealized loss position of $258,614 as of September 30, 2022 from an unrealized loss position of $167,510 as of June 30, 2022. During the nine months ended September 30, 2022, the Company's available-for-sale debt securities portfolio unrealized value declined $263,341 from an unrealized gain position of $4,727 as of December 31, 2021. During the three months ended September 30, 2021, the Company's available-for-sale debt securities portfolio unrealized value decreased $7,947 to an unrealized gain position of $14,374 as of September 30, 2021 from an unrealized gain position of $22,321 as of June 30, 2021. During the nine months ended September 30, 2021, the Company's available-for-sale debt securities portfolio unrealized value declined $20,178 from an unrealized gain position of $34,552 as of December 31, 2020. The majority of the investment portfolio was either government guaranteed or an issuance of a government sponsored entity or highly rated by major credit rating agencies and the Company has historically not recorded any losses associated with these investments. As such, as of September 30, 2022 and December 31, 2021, it was determined that all available-for-sale debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Therefore, there was no provision for credit losses recognized on available-for-sale debt securities during the three and nine months ended September 30, 2022 or 2021.
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Loans and Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Credit Losses | Loans and allowance for credit losses: Loans outstanding as of September 30, 2022 and December 31, 2021, by class of financing receivable are as follows:
(1)Includes $851 and $3,990 of loans originated as part of the Paycheck Protection Program as of September 30, 2022 and December 31, 2021, respectively. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans. As of September 30, 2022 and December 31, 2021, $865,616 and $1,136,294, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,665,345 and $1,581,673, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. Additionally, as of September 30, 2022 and December 31, 2021, qualifying loans of $3,012,814 and $2,440,097, respectively, were pledged to the Federal Reserve Bank under the Borrower-in-Custody program. The components of amortized cost for loans on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of September 30, 2022 and December 31, 2021, accrued interest receivable on loans held for investment was $32,247 and $31,676, respectively. Allowance for Credit Losses The Company calculates its expected credit loss using a lifetime loss rate methodology. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history. The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool. The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss. When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; and loans with other unique risk characteristics. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs and TDRs use the same methodology. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis. The Company performed qualitative evaluations within the Company's established qualitative framework, assessing the impact of the current economic outlook (including uncertainty due to inflation, negative economic forecasts, predicted Federal Reserve rate increases, status of federal government stimulus programs, and other considerations). The increase in estimated required reserve during the three and nine months ended September 30, 2022 was a result of increased loan growth and a tightening monetary policy environment both of which were incorporated into the Company's reasonable and supportable forecasts. Qualitative adjustments increased the reserve on loans with commercial exposure to address elevated risk in these assets not covered by the model. Loss rates on residential backed loans were qualitatively adjusted downwards, addressing the relative strength of asset values in the Company's predominant markets. Qualitative factors also included weighted projections that the economy may be nearing a recession. The following tables provide the changes in the allowance for credit losses by class of financing receivable for the three and nine months ended September 30, 2022 and 2021:
Credit Quality - Commercial Loans The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually. The Company uses the following definitions for risk ratings:
Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes. During the nine months ended September 30, 2022, the Company revised the presentation of the below credit quality vintage tables without change to accounting or credit policies. The updated presentation disaggregates between commercial and consumer loan types with consumer loans reported as either performing or nonperforming based on their delinquency and accrual status. As such, the tables presented below as of December 31, 2021 have been revised to align with current period presentation. The following tables present the credit quality of our commercial loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.
Credit Quality - Consumer Loans For consumer and residential loan classes, the company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following tables present the credit quality by classification (performing or nonperforming) of our consumer loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.
Non-accrual and Past Due Loans Nonperforming loans include loans that are no longer accruing interest (non-accrual loans) and loans past due ninety or more days and still accruing interest. The following tables represent an analysis of the aging by class of financing receivable as of September 30, 2022 and December 31, 2021:
The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of September 30, 2022 and December 31, 2021 by class of financing receivable.
The following presents interest income recognized on non-accrual loans for the three and nine months ended September 30, 2022 and 2021:
Accrued interest receivable written off as an adjustment to interest income amounted to $151 and $63 for the three months ended September 30, 2022 and 2021, respectively, and $458 and $660 for the nine months ended September 30, 2022 and 2021, respectively. Troubled debt restructurings As of September 30, 2022 and December 31, 2021, the Company had a recorded investment in TDRs of $14,959 and $32,435, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. Of these loans, $7,592 and $11,084 were classified as non-accrual loans as of September 30, 2022 and December 31, 2021, respectively. The Company has calculated $258 and $1,245 in allowances for credit losses on TDRs as of September 30, 2022 and December 31, 2021, respectively. There were no significant unfunded loan commitments to extend additional funds on troubled debt restructurings as of September 30, 2022 or December 31, 2021. The following tables present the financial effect of TDRs recorded during the periods indicated:
Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $304 during the nine months ended September 30, 2022. Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $304 during the three and nine months ended September 30, 2022. Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $305 during the three and nine months ended September 30, 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the three and nine months ended September 30, 2022 and 2021 that did not meet the definition of a TDR. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments. Collateral Dependent Loans For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.
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Other Real Estate Owned |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Owned | Other real estate owned The amount reported as other real estate owned includes property acquired through foreclosure in addition to excess facilities held for sale and is carried at fair value less estimated cost to sell the property. The following table summarizes the other real estate owned for the three and nine months ended September 30, 2022 and 2021:
Foreclosed residential real estate properties totaled $614 and $775 as of September 30, 2022 and December 31, 2021, respectively. The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $755 at September 30, 2022. As of December 31, 2021, there were no such residential foreclosure proceedings in process. Excess land and facilities held for sale resulting from branch consolidations totaled $2,467 and $3,348 as of September 30, 2022 and December 31, 2021, respectively.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases: As of September 30, 2022, the Company was the lessee in 59 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 45 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 33 years. Leases with initial terms of less than one year and equipment leases are not included on the consolidated balance sheets as these are insignificant. Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability. As previously disclosed, during the year ended December 31, 2020, the Company entered into an operating lease for a new corporate headquarters building located in downtown Nashville. During the three months ended September 30, 2022, construction of the exterior of the building was completed and the Company took possession of the leased space and began the build-out of the interior space. On August 1, 2022, the Company recorded an ROU asset and operating lease liability of $22,082 and $26,100, respectively, in connection with the initial term of this lease. Information related to the Company's leases is presented below as of September 30, 2022 and December 31, 2021:
The components of total lease expense included in the consolidated statements of income were as follows:
During the nine months ended September 30, 2022, the Company recorded $364 of lease impairment related to vacating two locations associated with the Mortgage restructuring and recorded gains of $18 related to early lease terminations and modifications on other vacated locations. During the three and nine months ended September 30, 2021, the Company recorded $14 and $801, respectively, in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous acquisitions. The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes. A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of September 30, 2022 is as follows:
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Leases | Leases: As of September 30, 2022, the Company was the lessee in 59 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 45 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 33 years. Leases with initial terms of less than one year and equipment leases are not included on the consolidated balance sheets as these are insignificant. Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability. As previously disclosed, during the year ended December 31, 2020, the Company entered into an operating lease for a new corporate headquarters building located in downtown Nashville. During the three months ended September 30, 2022, construction of the exterior of the building was completed and the Company took possession of the leased space and began the build-out of the interior space. On August 1, 2022, the Company recorded an ROU asset and operating lease liability of $22,082 and $26,100, respectively, in connection with the initial term of this lease. Information related to the Company's leases is presented below as of September 30, 2022 and December 31, 2021:
The components of total lease expense included in the consolidated statements of income were as follows:
During the nine months ended September 30, 2022, the Company recorded $364 of lease impairment related to vacating two locations associated with the Mortgage restructuring and recorded gains of $18 related to early lease terminations and modifications on other vacated locations. During the three and nine months ended September 30, 2021, the Company recorded $14 and $801, respectively, in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous acquisitions. The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes. A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of September 30, 2022 is as follows:
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Mortgage Servicing Rights |
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Transfers and Servicing of Financial Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Servicing Rights | Mortgage servicing rights: Changes in the Company’s mortgage servicing rights were as follows for the three and nine months ended September 30, 2022 and 2021:
The following table summarizes servicing income and expense, which are included in 'Mortgage banking income' and 'Other noninterest expense', respectively, within the Mortgage segment operating results for the three and nine months ended September 30, 2022 and 2021:
(1) Excludes benefit of custodial servicing related noninterest-bearing deposits held by the Bank. Data and key economic assumptions related to the Company’s mortgage servicing rights as of September 30, 2022 and December 31, 2021 are as follows:
The Company economically hedges the mortgage servicing rights portfolio with various derivative instruments to offset changes in the fair value of the related mortgage servicing rights. See Note 9, "Derivatives" for additional information on these hedging instruments. As of September 30, 2022 and December 31, 2021, mortgage escrow deposits totaled to $140,768 and $127,617, respectively.
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Income Taxes |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income taxes: An allocation of federal and state income taxes between current and deferred portions is presented below:
The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the three and nine months ended September 30, 2022 and 2021:
The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation paid to certain individuals. It is the Company’s policy to apply the Section 162(m) limitations to stock-based compensation first and then followed by cash compensation. As a result of the vesting of these units and cash compensation paid to date, the Company has disallowed a portion of its compensation paid to the applicable individuals. The components of the net deferred tax assets (liabilities) at September 30, 2022 and December 31, 2021, are as follows:
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Commitments and Contingencies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and contingencies: Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.
As of September 30, 2022 and December 31, 2021, loan commitments included above with floating interest rates totaled $2.97 billion and $2.26 billion, respectively. The Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives under the CECL methodology. When applying this methodology, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions. The table below presents activity within the allowance for credit losses on unfunded commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets for the three and nine months ended September 30, 2022 and 2021:
In connection with the sale of mortgage loans to third party investors, the Company makes usual and customary representations and warranties as to the propriety of its origination activities. Occasionally, the investors require the Company to repurchase loans sold to them under the terms of the warranties. When this happens, the loans are recorded at fair value with a corresponding charge to a valuation reserve. The total principal amount of loans repurchased (or indemnified for) was $4,442 and $5,988 for the three and nine months ended September 30, 2022, respectively, and $2,917 and $4,386 for the three and nine months ended September 30, 2021, respectively. The Company has established a reserve associated with loan repurchases. The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
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Derivatives |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives: The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure as well as the exposure for its customers. Derivative financial instruments are included in the consolidated balance sheets line items “Other assets” or “Other liabilities” at fair value in accordance with ASC 815, “Derivatives and Hedging.” Derivatives not designated as hedging instruments The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate-lock commitments). Under such commitments, interest rates for mortgage loans are typically locked in for between 45 to 90 days with the customer. These interest rate lock commitments are recorded at fair value in the Company’s consolidated balance sheets. The Company also enters into best effort or mandatory delivery forward commitments to sell residential mortgage loans to secondary market investors. Gains and losses arising from changes in the valuation of the rate-lock commitments and forward commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the consolidated statements of income. The Company enters into forward commitments, futures and options contracts as economic hedges to offset the changes in fair value of Mortgage servicing rights. Gains and losses associated with these instruments are included in earnings and are reflected under the line item “Mortgage banking income” on the consolidated statements of income. Additionally, the Company enters into derivative instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with customer contracts, the Company enters into an offsetting derivative contract. The Company manages its credit risk, or potential risk of default by its commercial customers through credit limit approval and monitoring procedures. The following tables provide details on the Company’s non-designated derivative financial instruments as of the dates presented:
(Losses) gains included in the consolidated statements of income related to the Company’s non-designated derivative financial instruments were as follows:
Derivatives designated as cash flow hedges The Company also maintains two interest rate swap agreements with notional amounts totaling $30,000 used to hedge interest rate exposure on outstanding subordinated debentures included in long-term debt totaling $30,930. Under these agreements, the Company receives a variable rate of interest equal to 3-month LIBOR and pays a weighted average fixed rate of interest of 2.08%. Upon the cessation of LIBOR in June 2023, the rate will convert to SOFR plus an adjustment in accordance with market standards. The interest rate swap contracts, which mature in June of 2024, are designated as cash flow hedges with the objective of reducing the variability in cash flows resulting from changes in interest rates. The following presents a summary of the Company's designated cash flow hedges as of the dates presented:
The Company's consolidated statements of income included a gain of $26 and loss of $214 for the three and nine months ended September 30, 2022, respectively, and losses of $148 and $428 for the three and nine months ended September 30, 2021, respectively, in interest expense on borrowings related to these cash flow hedges. The cash flow hedges were effective during the periods presented and as a result qualified for hedge accounting treatment. As such, no amounts were reclassified from accumulated other comprehensive (loss) income into earnings during either period presented. The following discloses the amount included in other comprehensive loss, net of tax, for derivative instruments designated as cash flow hedges for the periods presented:
Derivatives designated as fair value hedges During the first quarter of 2022, the Company entered into three designated fair value hedges to mitigate the effect of changing rates on the fair value of various fixed rate liabilities, including certain money market deposits and subordinated debt. The hedging strategy converts the fixed interest rates of the hedged items to the daily compounded SOFR in arrears paid monthly. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. As of September 30, 2022, the fair value hedges were deemed effective.
The following discloses the amount of (expense) income included in interest expense on borrowings and deposits, related to these fair value hedging instruments:
The following amounts were recorded on the balance sheet related to cumulative adjustments for fair value hedges as of September 30, 2022:
(1) The carrying value also includes unamortized subordinated debt issuance costs of $1,095. (2) The carrying value also includes an unaccreted purchase accounting fair value premium of $7,299. Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheets when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements, however the Company has not elected to offset such financial instruments in the consolidated balance sheets. The following table presents the Company's gross derivative positions as recognized in the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
Most derivative contracts with clients are secured by collateral. Additionally, in accordance with the interest rate agreements with derivatives dealers, the Company may be required to post margin to these counterparties. As of September 30, 2022 and December 31, 2021, the Company had minimum collateral posting thresholds with certain derivative counterparties and had collateral posted of $19,169 and $57,868, respectively, against its obligations under these agreements. Cash pledged as collateral on derivative contracts is recorded in other assets on the consolidated balance sheets.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair value of financial instruments: FASB ASC 820-10 defines fair value as the exchange price that would 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. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The hierarchy is broken down into the following three levels, based on the reliability of inputs: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities. The Company records the fair values of financial assets and liabilities on a recurring and non-recurring basis using the following methods and assumptions:
The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Items which are not financial instruments are not included.
The balances and levels of the assets measured at fair value on a recurring basis at September 30, 2022 are presented in the following table:
The balances and levels of the assets measured at fair value on a non-recurring basis at September 30, 2022 are presented in the following table:
The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2021 are presented in the following table:
The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2021 are presented in the following table:
The following tables present information as of September 30, 2022 and December 31, 2021 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
For collateral dependent loans, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. Fair value of the loan's collateral is determined by third-party appraisals, which are then adjusted for estimated selling and closing costs related to liquidation of the collateral. Collateral dependent loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on changes in market conditions from the time of valuation and management's knowledge of the borrower and borrower's business. As of September 30, 2022 and December 31, 2021, total amortized cost of collateral dependent loans measured on a non-recurring basis amounted to $578 and $5,781, respectively. Other real estate owned acquired in settlement of indebtedness is recorded at fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Any write-downs based on the asset's fair value at the date of foreclosure are charged to the allowance for credit losses. Appraisals for both collateral dependent loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the lending administrative department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry wide statistics. Collateral dependent loans that are dependent on recovery through sale of equipment, such as farm equipment, automobiles and aircrafts are generally valued based on public source pricing or subscription services while more complex assets are valued through leveraging brokers who have expertise in the collateral involved. Fair value option The following table summarizes the Company's loans held for sale as of the dates presented:
Mortgage loans held for sale The Company measures mortgage loans originated for sale at fair value under the fair value option as permitted under ASC 825, "Financial Instruments" ("ASC 825"). Electing to measure these assets at fair value reduces certain timing differences and more accurately matches the changes in fair value of the loans with changes in the fair value of derivative instruments used to economically hedge them. Net losses of $4,276 and $16,479 resulting from fair value changes of mortgage loans were recorded in income during the three and nine months ended September 30, 2022, respectively, compared to net losses of $3,908 and $14,894 during the three and nine months ended September 30, 2021, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both loans held for sale and the related derivative instruments are recorded in Mortgage Banking Income in the consolidated statements of income. Election of the fair value option allows the Company to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these mortgage loans held for sale, valuation adjustments attributable to instrument-specific credit risk is nominal. During the three months ended September 30, 2022, the Company revised its accounting estimate with regard to GNMA loans previously sold that are contractually delinquent greater than 90 days and began recording this guaranteed repurchase option on the balance sheet on a prospective basis without impact to prior periods. See Note 1, "Basis of presentation" for additional information regarding the Company's change in accounting estimate. Rebooked GNMA optional repurchase loans do not meet the requirements under FASB ASC Topic 825 to be accounted for under the fair value option. As such, these loans are excluded from the below disclosures. As of December 31, 2021, there were $94,648 of delinquent GNMA loans previously sold that the Company did not record on its consolidated balance sheets as the Company determined there not to be a more-than-trivial benefit based on an analysis of interest rates and an assessment of potential reputational risk associated with these loans. Commercial loans held for sale The Company also has a portfolio of shared national credits and institutional healthcare loans that were acquired during 2020 in the acquisition of Franklin. These commercial loans are also being measured under the fair value option. As such, these loans are excluded from the allowance for credit losses. The following tables sets forth the changes in fair value associated with this portfolio for the three and nine months ended September 30, 2022 and 2021.
Interest income on loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in interest income in the consolidated statements of income. The following table summarizes the differences between the fair value and the principal balance for loans held for sale and nonaccrual loans measured at fair value as of September 30, 2022 and December 31, 2021:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment reporting: The Company and the Bank are engaged in the business of banking and provide a full range of financial services. The Company determines reportable segments based on the significance of the segment’s operating results to the overall Company, the products and services offered, customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company’s chief operating decision maker. The Company has identified two distinct reportable segments—Banking and Mortgage. The Company’s primary segment is Banking, which provides a full range of deposit and lending products and services to corporate, commercial and consumer customers. The Company also offers conforming residential mortgage loans through the Mortgage segment, which activities also include the servicing of residential mortgage loans and the packaging and securitization of loans to governmental agencies. The Company’s mortgage division represents a distinct reportable segment which differs from the Company’s primary business of commercial and retail banking. The financial performance of the Mortgage segment is assessed based on results of operations reflecting direct revenues and expenses and allocated expenses. This approach gives management a better indication of the operating performance of the segment. When assessing the Banking segment’s financial performance, the CEO utilizes reports with indirect revenues and expenses including but not limited to the investment portfolio, electronic delivery channels and areas that primarily support the banking segment operations. Therefore, these are included in the results of the Banking segment. Other indirect revenue and expenses related to general administrative areas are also included in the internal financial results reports of the Banking segment utilized by the CEO for analysis and are thus included for Banking segment reporting. Additionally, the Banking segment includes the results of the Company's specialty lending group, which is concentrated in manufactured housing lending. The Mortgage segment utilizes funding sources from the Banking segment in order to fund mortgage loans that are ultimately sold on the secondary market and uses proceeds from loan sales to repay obligations due to the Banking segment. On May 10, 2022, the Company announced the restructuring of its Mortgage segment, including the exit from the direct-to-consumer delivery channel, which is one of two delivery channels in the Mortgage segment. As a result of exiting this channel, the Company incurred $12,458 of restructuring expenses during the second quarter of 2022. No such expenses were incurred during the first or third quarter of 2022. The repositioning of our Mortgage segment does not qualify to be reported as discontinued operations. The Company plans to continue originating and selling residential mortgage loans within its Mortgage segment through its traditional mortgage retail channel, retain mortgage servicing rights and continue holding residential 1-4 family mortgage loans in the loan portfolio. The Mortgage segment's interest rate lock commitment volume and sales volume by line of business for the three and nine months ended September 30, 2022 and 2021 is as follows:
The following tables provide segment financial information for the periods indicated:
(1)Includes $3,178 in provision for credit losses on unfunded commitments. (2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3)Banking segment includes noncontrolling interest.
(1) Includes $301 in provision for credit losses on unfunded commitments. (2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3) Banking segment includes noncontrolling interest.
(1) Includes $9,197 in provision for credit losses on unfunded commitments. (2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3) Includes $12,458 in Mortgage restructuring expenses in the Mortgage segment related to the exit from the direct-to-consumer delivery channel. (4) Banking segment includes noncontrolling interest.
(1)Includes $(2,875) in provision for credit losses on unfunded commitments. (2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3)Banking segment includes noncontrolling interest. The Banking segment provides the Mortgage segment with a warehouse line of credit that is used to fund mortgage loans held for sale. The warehouse line of credit, which is eliminated in consolidation, is limited based on interest income earned by the Mortgage segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit is recorded as interest income to our Banking segment and as interest expense to the Mortgage segment, both of which are included in the calculation of net interest income for each segment. The amount of interest paid by the Mortgage segment to the Banking segment under this warehouse line of credit was $4,143 and $14,659 for the three and nine months ended September 30, 2022, respectively, and $6,075 and $17,585 for the three and nine months ended September 30, 2021, respectively.
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Minimum Capital Requirements |
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum Capital Requirements | Minimum capital requirements: Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under regulatory guidance for non-advanced approaches institutions, the Bank and Company are required to maintain minimum capital ratios as outlined in the table below. Additionally, under U.S. Basel III Capital Rules, the decision was made to opt out of including accumulated other comprehensive income in regulatory capital. As of September 30, 2022 and December 31, 2021, the Bank and Company met all capital adequacy requirements to which they are subject. In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC announced a final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The final rule maintained the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company adopted the capital transition relief over the permissible five-year period and delayed the initial impact of CECL adoption plus 25% of the quarterly increases in ACL through December 31, 2021. As of January 1, 2022, the cumulative amount of the transition adjustments became fixed and are being phased out of regulatory capital calculations evenly over a three year period, with 75% of the transition provision’s impact being recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024. Actual and required capital amounts and ratios are included below as of the dates indicated.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation: Restricted Stock Units The Company grants RSUs under compensation arrangements for the benefit of employees, executive officers, and directors. RSU grants are subject to time-based vesting. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the service conditions set forth in the grant agreements. The following table summarizes information about the changes in restricted stock units for the nine months ended September 30, 2022.
The total fair value of restricted stock units vested and released was $1,474 and $7,320 for the three and nine months ended September 30, 2022, respectively, and $10,749 and $15,941 for the three and nine months ended September 30, 2021, respectively. The compensation cost related to stock grants and vesting of restricted stock units was $1,701 and $5,753 for the three and nine months ended September 30, 2022, respectively, and $2,365 and $7,024 for the three and nine months ended September 30, 2021, respectively. This included amounts paid related to director grants and compensation elected to be settled in stock amounting to $171 and $485 during the three and nine months ended September 30, 2022, respectively, and $168 and $467 during the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, there was $10,686 of total unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted-average period of 2.3 years. Additionally, as of September 30, 2022, there were 1,737,539 shares available for issuance under the Company's stock compensation plans. As of September 30, 2022 and December 31, 2021, there were $265 and $274, respectively, accrued in other liabilities related to dividend equivalent units declared to be paid upon vesting and distribution of the underlying restricted stock units. Performance Based Restricted Stock Units The following table summarizes information about the changes in PSUs as of and for the nine months ended September 30, 2022.
The Company awards performance-based restricted stock units to executives and other officers and employees. Under the terms of the awards, the number of units that will vest and convert to shares of common stock will be based on the Company's performance relative to a predefined peer group over a fixed three-year performance period. The number of shares issued upon vesting will range from 0% to 200% of the PSUs granted. The Company's performance relative to the peer group will be measured based on calculated non-GAAP adjusted return on average tangible common equity, adjusted for unusual gains/losses, merger expenses, and other items as approved by the compensation committee of the Company's board of directors. Compensation expense for PSUs is estimated each period based on the fair value of the Company's stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the vesting period of the awards. As of September 30, 2022, the Company determined the probability of meeting the performance criteria for each grant and recorded compensation cost associated when factoring in the conversion of PSUs to shares of common stock.
The Company recorded compensation cost of $832 and $2,400 during the three and nine months ended September 30, 2022 respectively, and $551 and $1,041 for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $9,753, and the remaining performance period over which the cost could be recognized was 2.0 years. Employee Stock Purchase Plan: The Company maintains an employee stock purchase plan under which employees, through payroll deductions, are able to purchase shares of Company common stock. The employee purchase price is 95% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares and a participant may not purchase more than 725 shares during any offering period (and, in any event, no more than $25 worth of common stock in any calendar year). During the three and nine months ended September 30, 2022, there were 11,798 and 26,950 shares of common stock, respectively, issued under the ESPP with proceeds from employee payroll withholdings of $499 and $1,087. During the three and nine months ended September 30, 2021, there were 15,744 and 37,310 shares of common stock issued under the ESPP, respectively, with proceeds from employee payroll withholdings of $632 and $1,443, respectively. As of September 30, 2022, there were 2,314,746 shares available for issuance under the ESPP, respectively.
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related party transactions: (A) Loans: The Bank has made and expects to continue to make loans to the directors, certain management, significant shareholders, and executive officers of the Company and their related interests in the ordinary course of business, in compliance with regulatory requirements. An analysis of loans to executive officers, certain management, and directors of the Bank and their related interests is presented below:
Unfunded commitments to certain executive officers, certain management and directors and their related interests totaled $34,875 and $10,994 at September 30, 2022 and December 31, 2021, respectively. (B) Deposits: The Bank held deposits from related parties totaling $311,197 and $312,956 as of September 30, 2022 and December 31, 2021, respectively. (C) Leases: The Bank leases various office spaces from entities owned by certain directors of the Company under varying terms. The Company had $1 and $6 in unamortized leasehold improvements related to these leases at September 30, 2022 and December 31, 2021, respectively. These improvements are being amortized over a term not to exceed the length of the lease. Lease expense for these properties totaled $96 and $297 for the three and nine months ended September 30, 2022, respectively, and $128 and $388 for the three and nine months ended September 30, 2021. (D) Aviation lease and time sharing agreement: During the year ended December 31, 2021, the Bank formed a subsidiary, FBK Aviation, LLC and purchased an aircraft under this entity. FBK Aviation, LLC also maintains a non-exclusive aircraft lease agreement with an entity owned by one of the Company's directors. During the three and nine months ended September 30, 2022, the Company recognized income amounting to $17 and $36, respectively, under this agreement. No such income was recognized during the three and nine months ended September 30, 2021. Additionally, the Company is a participant to an aviation time sharing agreement for an aircraft owned by an entity that is owned by one of the Company's directors and one of the Company's former directors. During the nine months ended September 30, 2021, the Company made payments of $32 under this agreement. No such payments were made during the three months ended September 30, 2021 nor the three and nine months ended September 30, 2022. (E) Registration rights agreement: The Company is party to a registration rights agreement with its former majority shareholder entered into in connection with the 2016 IPO, under which the Company is responsible for payment of expenses (other than underwriting discounts and commissions) relating to sales to the public by the shareholder of shares of the Company’s common stock beneficially owned by him. Such expenses include registration fees, legal and accounting fees, and printing costs payable by the Company and expensed when incurred. During the nine months ended September 30, 2021, the Company paid $605 under this agreement related to the secondary offering completed during the second quarter of 2021. No such expenses were incurred during the three months ended September 30, 2021 nor three and nine months ended September 30, 2022.
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Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview and Presentation | The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with U.S. GAAP interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported results of operations for the reporting periods and the related disclosures. Although management's estimates contemplate current conditions and how they are expected to change in the future, it is reasonably possible that actual conditions could vary from those anticipated, which could affect the Company's financial condition and results of operations. Actual results could differ significantly from those estimates.
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Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings per share Basic EPS excludes dilution and is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares issuable under the restricted stock units granted but not yet vested and distributable. Diluted EPS is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period, plus an incremental number of common-equivalent shares computed using the treasury stock method. Unvested share-based payment awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered to participate with common shareholders in undistributed earnings for purposes of computing EPS. Companies that have such participating securities are required to calculate basic and diluted EPS using the two-class method. Certain restricted stock awards granted by the Company include non-forfeitable dividend equivalents and are considered participating securities. Calculations of EPS under the two-class method (i) exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities and (ii) exclude from the denominator the dilutive impact of the participating securities.
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Recently Modified Accounting Policies, Recently Adopted Accounting Standards and Newly Issued Not Yet Effective Accounting Standards | Recently modified accounting policies: The Company did not modify or adopt any new accounting policies during the three and nine months ended September 30, 2022 that were not disclosed in the Company's 2021 audited consolidated financial statements included on Form 10-K, other than as described below. During the three months ended March 31, 2022, the Company appended the following language to the below referenced existing accounting policy related to derivative financial instruments and hedging activities described in Note 1 of the Company's 2021 Annual Report on Form 10-K as a result of entering into designated fair value hedges during the period. (A) Derivative financial instruments and hedging activities: The Company enters into fair value hedge relationships to mitigate the effect of changing interest rates on the fair values of fixed rate securities and loans. The gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. During the three months ended September 30, 2022, the Company modified the below referenced existing accounting policy. (B) Loans held for sale: Mortgage loans held for sale Mortgage loans originated and intended for sale in the secondary market are carried at fair value as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”). The change in fair value of both mortgage loans held for sale and the related derivative instruments used to hedge exposure to market related risks are recorded in “Mortgage banking income” in the Consolidated Statements of Income. Gains and losses on sale are recognized at the time the loan is closed. Pass through origination costs and related loan fees are also included in “Mortgage banking income”. Periodically, the Company transfers mortgage loans originated for sale in the secondary markets into the loan HFI portfolio based on current market conditions, overall secondary marketability and status of the loan. The loans are transferred into the portfolio at fair value at the date of transfer. Additionally, occasionally the Company will transfer loans from the held for investment portfolio into loans held for sale. At the time of the transfer, loans are marked to fair value through the allowance for credit losses and reclassified to loans held for sale. The Company sells mortgage loans originated for sale on the secondary market to GNMA and retains servicing rights after sale. Under the GNMA optional repurchase program, financial institutions are permitted 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 such a delinquent loan for an amount equal to 100 percent of the remaining principal balance of the loan. Under FASB ASC Topic 860, “Transfers and Servicing,” this buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When the Company 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 recorded on the balance sheet, regardless of whether the Company intends to exercise the buy-back option if the buyback options provides the transferor a more-than-trivial benefit. Prior to September 30, 2022, the Company deemed there was not a more than trivial benefit associated with repurchasing these loans based on quarterly analyses and as such, these were not rebooked to the balance sheet. During the quarter ended September 30, 2022, the Company revised its accounting estimate by applying the removal of accounts provision regardless of whether the transferor is provided a more-than-trivial benefit to align with developing industry best practice and regulatory expectations. Upon application of the change, as of September 30, 2022 the Company recorded $26,485 of optional rights to repurchase delinquent GNMA loans. The fair value option election does not apply to the GNMA optional repurchase loans which do not meet the requirements under FASB ASC Topic 825. These loans are reported at current unpaid principal balance in LHFS on the consolidated balance sheets with the offsetting liability being reported in borrowings. These are considered nonperforming assets as the Company does not earn any interest on the unexercised option to repurchase these loans. This change in accounting estimate was applied prospectively without modification to prior periods. Recently adopted accounting standards: The Company did not adopt any new accounting standards that were not disclosed in the Company's 2021 audited consolidated financial statements included on Form 10-K. Newly issued not yet effective accounting standards: In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this update to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, to amend a related illustrative example, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The ASU becomes effective January 1, 2024 and the Company is evaluating the potential impact of this standard on its consolidated financial statements and related disclosures. In March 2022, the FASB issued ASU 2022-01, "Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method", to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU No. 2022-01 for any entity that has adopted the amendments in ASU No.2017-12 for the corresponding period. Adoption of this update will not have an impact on the Company's consolidated financial statements or related disclosures. Additionally, in March 2022, the FASB issued ASU 2022-02, "'Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" related to troubled debt restructurings and vintage disclosures for financing receivables. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan modifications and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures. In March 2022, the SEC released SAB 121 to add interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for clients. The new guidance requires reporting entities who allow clients to transact in crypto-assets and act as a custodian to record a liability with a corresponding asset regardless of whether they control the crypto-asset. The crypto-asset will need to be marked at fair value for each reporting period. The new guidance requires disclosures in the footnotes to address the amount of crypto-assets reported, and the safeguarding and recordkeeping of the assets. The guidance in this update requires that reporting companies implement SAB 121 no later than the financial statements covering the first interim or annual period ending after June 15, 2022, with retrospective application back to the beginning of the fiscal year. During the three months ended March 31, 2022, the Company became a founding member of the USDF Consortium (the "Consortium"), which plans to utilize blockchain and technology to streamline peer-to-peer financial transactions. The USDF Consortium is a membership-based association of insured depository institutions with a mission to build a network of banks to further the adoption and interoperability of a bank-minted tokenized deposit. While the Company does not currently hold or facilitate transactions with crypto-assets, the Company is evaluating the potential future financial statement and disclosure impact from adopting this guidance when it becomes applicable based on the Company's crypto-asset activities. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 is intended to provide relief for companies preparing for discontinuation of interest rates based on LIBOR. The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued. ASU 2020-04 also provides for a onetime sale and/or transfer to AFS or trading to be made for HTM debt securities that both reference an eligible reference rate and were classified as HTM before January 1, 2020. ASU 2020-04 was effective for all entities as of March 12, 2020 and through December 31, 2022. Companies can apply the ASU as of the beginning of the interim period that includes March 12, 2020 or any date thereafter. The guidance requires companies to apply the guidance prospectively to contract modifications and hedging relationships while the one-time election to sell and/or transfer debt securities classified as HTM may be made any time after March 12, 2020. Our LIBOR Transition Committee was established to transition from LIBOR to alternative rates and has continued its efforts consistent with industry timelines. As part of these efforts, during the fourth quarter of 2021, we ceased utilization of LIBOR as an index in newly originated loans or loans that are refinanced. Additionally, we identified existing products that utilize LIBOR and are reviewing contractual language to facilitate the transition to alternative reference rates. ASU 2020-04 and ASU 2021-01 are not expected to have a material impact on our consolidated financial statements.
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Allowance for Credit Losses | Allowance for Credit Losses The Company calculates its expected credit loss using a lifetime loss rate methodology. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history. The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool. The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss. When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; and loans with other unique risk characteristics. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs and TDRs use the same methodology. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis.
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Loans (Credit Quality - Commercial Loans) | Credit Quality - Commercial Loans The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually. The Company uses the following definitions for risk ratings:
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Fair Value of Financial Instruments | Fair value of financial instruments: FASB ASC 820-10 defines fair value as the exchange price that would 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. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The hierarchy is broken down into the following three levels, based on the reliability of inputs: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities. The Company records the fair values of financial assets and liabilities on a recurring and non-recurring basis using the following methods and assumptions:
For collateral dependent loans, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. Fair value of the loan's collateral is determined by third-party appraisals, which are then adjusted for estimated selling and closing costs related to liquidation of the collateral. Collateral dependent loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on changes in market conditions from the time of valuation and management's knowledge of the borrower and borrower's business. As of September 30, 2022 and December 31, 2021, total amortized cost of collateral dependent loans measured on a non-recurring basis amounted to $578 and $5,781, respectively. Other real estate owned acquired in settlement of indebtedness is recorded at fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Any write-downs based on the asset's fair value at the date of foreclosure are charged to the allowance for credit losses. Appraisals for both collateral dependent loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the lending administrative department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry wide statistics. Collateral dependent loans that are dependent on recovery through sale of equipment, such as farm equipment, automobiles and aircrafts are generally valued based on public source pricing or subscription services while more complex assets are valued through leveraging brokers who have expertise in the collateral involved.
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Subsequent events | Subsequent events The Company has evaluated, for consideration of recognition or disclosure, subsequent events that occurred through the date of issuance of these financial statements. The Company has determined that there were no subsequent events that occurred after September 30, 2022, but prior to the issuance of these financial statements that would have a material impact on the Company’s consolidated financial statements.
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Basis of Presentation (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Common Share Calculation | The following is a summary of the basic and diluted earnings per common share calculation for each of the periods presented:
(1)Excludes 15,408 and 11,888 restricted stock units outstanding considered to be antidilutive for the three and nine months ended September 30, 2022 and 15,974 and 20,448 restricted stock units outstanding considered to be antidilutive for three and nine months ended September 30, 2021.
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Investment securities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost of Securities and Fair Values | The following tables summarize the amortized cost, allowance for credit losses and fair value of the available-for-sale debt securities and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income at September 30, 2022 and December 31, 2021:
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Schedule of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | Therefore, mortgage-backed securities are not included in the maturity categories in the following summary.
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Schedule of Sales and Other Dispositions of Available-for-Sale Securities | Sales and other dispositions of available-for-sale securities were as follows:
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Schedule of Gross Unrealized Losses | The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at September 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
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Loans and Allowance for Credit Losses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Outstanding by Class of Financing Receivable | Loans outstanding as of September 30, 2022 and December 31, 2021, by class of financing receivable are as follows:
(1)Includes $851 and $3,990 of loans originated as part of the Paycheck Protection Program as of September 30, 2022 and December 31, 2021, respectively. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans.
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Schedule of Changes in Allowance for Credit Losses by Class of Financing Receivable | The following tables provide the changes in the allowance for credit losses by class of financing receivable for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Credit Quality of Loan Portfolio by Year of Origination | The following tables present the credit quality of our commercial loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.
The following tables present the credit quality by classification (performing or nonperforming) of our consumer loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below.
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Schedule of Analysis of Aging by Class of Financing Receivable | The following tables represent an analysis of the aging by class of financing receivable as of September 30, 2022 and December 31, 2021:
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Schedule of Amortized Cost, Related Allowance and Interest Income of Non-accrual Loans | The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of September 30, 2022 and December 31, 2021 by class of financing receivable.
The following presents interest income recognized on non-accrual loans for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Financial Effect of TDRs | The following tables present the financial effect of TDRs recorded during the periods indicated:
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Schedule of Individually Assessed Allowance for Credit Losses for Collateral Dependent Loans | For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.
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Other Real Estate Owned (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Real Estate Owned | The following table summarizes the other real estate owned for the three and nine months ended September 30, 2022 and 2021:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Information Related to Company's Leases and Lease Expense | Information related to the Company's leases is presented below as of September 30, 2022 and December 31, 2021:
The components of total lease expense included in the consolidated statements of income were as follows:
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Schedule of Maturity Analysis of Operating Lease Liabilities | A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of September 30, 2022 is as follows:
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Schedule of Maturity of Finance Lease Liabilities | A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of September 30, 2022 is as follows:
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Mortgage Servicing Rights (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing of Financial Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Mortgage Servicing Rights | Changes in the Company’s mortgage servicing rights were as follows for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Servicing Income and Expense Included in Mortgage Banking Income | The following table summarizes servicing income and expense, which are included in 'Mortgage banking income' and 'Other noninterest expense', respectively, within the Mortgage segment operating results for the three and nine months ended September 30, 2022 and 2021:
(1) Excludes benefit of custodial servicing related noninterest-bearing deposits held by the Bank.
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Schedule of Data and Key Economic Assumptions Related to Mortgage Servicing Rights | Data and key economic assumptions related to the Company’s mortgage servicing rights as of September 30, 2022 and December 31, 2021 are as follows:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocation of Federal and State Income Taxes between Current and Deferred Portions | An allocation of federal and state income taxes between current and deferred portions is presented below:
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Schedule of Reconciliation of Income Taxes Computed at the United States Federal Statutory Tax Rates to the Provision for Income Taxes | The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Net Deferred Tax Assets (Liabilities) | The components of the net deferred tax assets (liabilities) at September 30, 2022 and December 31, 2021, are as follows:
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Commitments and Contingencies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments with Off-Balance Sheet Credit Risk |
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Schedule of Allowance of Credit Losses on Unfunded Commitments | The table below presents activity within the allowance for credit losses on unfunded commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Activity in the Repurchase Reserve | The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
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Derivatives (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Financial Instruments | The following tables provide details on the Company’s non-designated derivative financial instruments as of the dates presented:
The following presents a summary of the Company's designated cash flow hedges as of the dates presented:
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Schedule of Gains (Losses) Included in the Consolidated Statements of Income Related to Derivative Financial Instruments | ains included in the consolidated statements of income related to the Company’s non-designated derivative financial instruments were as follows:
The following discloses the amount included in other comprehensive loss, net of tax, for derivative instruments designated as cash flow hedges for the periods presented:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following discloses the amount of (expense) income included in interest expense on borrowings and deposits, related to these fair value hedging instruments:
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Schedule of Derivative Liabilities at Fair Value | The following amounts were recorded on the balance sheet related to cumulative adjustments for fair value hedges as of September 30, 2022:
(1) The carrying value also includes unamortized subordinated debt issuance costs of $1,095. (2) The carrying value also includes an unaccreted purchase accounting fair value premium of $7,299.
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Schedule of Offsetting Assets | The following table presents the Company's gross derivative positions as recognized in the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
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Schedule of Offsetting Liabilities | The following table presents the Company's gross derivative positions as recognized in the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Values and Carrying Values of Financial Instruments | The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Items which are not financial instruments are not included.
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Schedule of Balances and Levels of Assets Measured at Fair Value on Recurring Basis | The balances and levels of the assets measured at fair value on a recurring basis at September 30, 2022 are presented in the following table:
The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2021 are presented in the following table:
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Schedule of Balances and Levels of Assets Measured at Fair Value on Non-recurring Basis | The balances and levels of the assets measured at fair value on a non-recurring basis at September 30, 2022 are presented in the following table:
The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2021 are presented in the following table:
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Schedule of Information About Significant Unobservable Inputs (Level 3) Used in Valuation of Assets Measured at Fair Value on Nonrecurring Basis | The following tables present information as of September 30, 2022 and December 31, 2021 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
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Schedule of Loans Held For Sale at Fair Value | The following table summarizes the Company's loans held for sale as of the dates presented:
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Schedule of Changes in Associated with Commercial Loans Held For Sale | The following tables sets forth the changes in fair value associated with this portfolio for the three and nine months ended September 30, 2022 and 2021.
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Schedule of Differences between Fair Value and Principal Balance for Loans Held for Sale Measured at Fair Value | The following table summarizes the differences between the fair value and the principal balance for loans held for sale and nonaccrual loans measured at fair value as of September 30, 2022 and December 31, 2021:
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Segment Reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Direct-to-Consumer Channel Volume | nterest rate lock commitment volume and sales volume by line of business for the three and nine months ended September 30, 2022 and 2021 is as follows:
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Schedule of Segment Financial Information | The following tables provide segment financial information for the periods indicated:
(1)Includes $3,178 in provision for credit losses on unfunded commitments. (2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3)Banking segment includes noncontrolling interest.
(1) Includes $301 in provision for credit losses on unfunded commitments. (2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3) Banking segment includes noncontrolling interest.
(1) Includes $9,197 in provision for credit losses on unfunded commitments. (2) Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3) Includes $12,458 in Mortgage restructuring expenses in the Mortgage segment related to the exit from the direct-to-consumer delivery channel. (4) Banking segment includes noncontrolling interest.
(1)Includes $(2,875) in provision for credit losses on unfunded commitments. (2)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income. (3)Banking segment includes noncontrolling interest. The
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Minimum Capital Requirements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Actual and Required Capital Amounts and Ratios | Actual and required capital amounts and ratios are included below as of the dates indicated.
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Restricted Stock Units | The following table summarizes information about the changes in restricted stock units for the nine months ended September 30, 2022.
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Schedule of Changes in Performance Stock Units | The following table summarizes information about the changes in PSUs as of and for the nine months ended September 30, 2022.
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Share-Based Payment Arrangement, Performance Shares, Activity | As of September 30, 2022, the Company determined the probability of meeting the performance criteria for each grant and recorded compensation cost associated when factoring in the conversion of PSUs to shares of common stock.
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Related Party Transactions (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Analysis to Executive Officers, Certain Management, Bank Directors and Related Interests | An analysis of loans to executive officers, certain management, and directors of the Bank and their related interests is presented below:
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Basis of Presentation - Narrative (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
branch
| |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Number of full-service branches | branch | 82 |
Percent of remaining principal allowed to buy back under GNMA optional repurchase programs | 100.00% |
GNMA | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Optional rights to repurchase loans | $ | $ 26,485 |
Investment Securities - Narrative (Details) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
security
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
security
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
security
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Accrued interest receivable | $ 39,034,000 | $ 39,034,000 | $ 38,528,000 | |||||
Marketable securities at fair value | 2,962,000 | 2,962,000 | 3,367,000 | |||||
Trade date receivable - securities | 0 | 0 | ||||||
Net (loss) gain on change in fair value and sale of equity securities | (141,000) | $ (24,000) | (405,000) | $ 188,000 | ||||
Allowance for credit losses for investments | $ 0 | $ 0 | $ 0 | |||||
Number of securities in securities portfolio | security | 504 | 504 | 511 | |||||
Number of securities in securities portfolio, unrealized loss position | security | 487 | 487 | 80 | |||||
Unrealized loss position | $ 1,476,628,000 | $ 1,476,628,000 | $ 1,030,914,000 | |||||
Collateral Pledged | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Securities pledged | 1,213,747,000 | 1,213,747,000 | 1,226,646,000 | |||||
Debt Securities | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Accrued interest receivable | 5,535,000 | 5,535,000 | 5,051,000 | |||||
Increase (decrease) in debt securities, available for sale | (91,104,000) | 7,947,000 | (263,341,000) | 20,178,000 | ||||
Unrealized loss position | $ 258,614,000 | $ 258,614,000 | ||||||
Unrealized gain position | $ (14,374,000) | $ (14,374,000) | $ (4,727,000) | $ (167,510,000) | $ (22,321,000) | $ (34,552,000) |
Investment Securities - Summary of Sales and Other Dispositions of Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 0 | $ 8,855 | $ 1,218 | $ 8,855 |
Proceeds from maturities, prepayments and calls | 44,352 | 68,126 | 170,701 | 216,032 |
Gross realized gains | 1 | 76 | 4 | 91 |
Gross realized losses | $ 0 | $ 1 | $ 0 | $ 1 |
Other Real Estate Owned - Summary of Other Real Estate Owned (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Other Real Estate [Roll Forward] | ||||
Balance at beginning of period | $ 9,398 | $ 11,986 | $ 9,777 | $ 12,111 |
Transfers from loans | 421 | 349 | 984 | 4,945 |
Proceeds from sale of other real estate owned | (4,335) | (4,173) | (4,753) | (8,834) |
Gain (loss) on sale of other real estate owned | 483 | 2,090 | 353 | 3,190 |
Loans provided for sales of other real estate owned | 0 | (152) | 0 | (685) |
Write-downs and partial liquidations | (48) | (85) | (442) | (712) |
Balance at end of period | $ 5,919 | $ 10,015 | $ 5,919 | $ 10,015 |
Other Real Estate Owned - Narrative (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Real Estate Properties [Line Items] | ||
Other real estate owned included excess land and facilities held for sale | $ 2,467,000 | $ 3,348,000 |
Residential Real Estate Properties | ||
Real Estate Properties [Line Items] | ||
Foreclosed residential real estate properties | 614,000 | 775,000 |
Total foreclosure proceedings in process | $ 755,000 | $ 0 |
Leases - Information Related to Company's Leases (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Operating leases | $ 61,444 | $ 41,686 |
Finance leases | 1,394 | 1,487 |
Total right-of-use assets | 62,838 | 43,173 |
Operating leases | 70,610 | 46,367 |
Finance leases | 1,443 | 1,518 |
Total lease liabilities | $ 72,053 | $ 47,885 |
Weighted average remaining lease term (in years) - operating | 12 years 2 months 12 days | 12 years 4 months 24 days |
Weighted average remaining lease term (in years) - finance | 12 years 7 months 6 days | 13 years 4 months 24 days |
Weighted average discount rate - operating | 3.05% | 2.73% |
Weighted average discount rate - finance | 1.76% | 1.76% |
Right-of-use asset - finance [Extensible Enumeration] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Lease liabilities - finance [Extensible Enumeration] | Borrowings | Borrowings |
Leases - Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Amortization of right-of-use asset | $ 2,269 | $ 1,838 | $ 5,830 | $ 5,948 |
Short-term lease cost | 132 | 107 | 387 | 296 |
Variable lease cost | 215 | 284 | 764 | 760 |
Lease impairment | 0 | 0 | 364 | 0 |
Gain on lease modifications and terminations | 0 | (14) | (18) | (801) |
Interest on lease liabilities | 7 | 7 | 22 | 21 |
Amortization of right-of-use asset | 27 | 28 | 92 | 83 |
Total lease cost | $ 2,650 | $ 2,250 | $ 7,441 | $ 6,307 |
Leases - Maturity Analysis of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
September 30, 2023 | $ 7,508 | |
September 30, 2024 | 8,257 | |
September 30, 2025 | 7,797 | |
September 30, 2023 | 7,650 | |
September 30, 2027 | 7,449 | |
Thereafter | 48,089 | |
Total undiscounted future minimum lease payments | 86,750 | |
Less: imputed interest | (16,140) | |
Operating leases | 70,610 | $ 46,367 |
Finance Lease | ||
September 30, 2023 | 29 | |
September 30, 2024 | 118 | |
September 30, 2025 | 120 | |
September 30, 2026 | 121 | |
September 30, 2027 | 123 | |
Thereafter | 1,102 | |
Total undiscounted future minimum lease payments | 1,613 | |
Less: imputed interest | (170) | |
Finance leases | $ 1,443 | $ 1,518 |
Mortgage Servicing Rights - Changes in Mortgage Servicing Rights (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Carrying value at beginning of period | $ 158,678 | $ 101,615 | $ 115,512 | $ 79,997 |
Capitalization | 4,453 | 9,215 | 19,523 | 31,382 |
Change in fair value: | ||||
Due to pay-offs/pay-downs | (3,670) | (7,302) | (13,165) | (24,488) |
Due to change in valuation inputs or assumptions | 11,966 | 7,063 | 49,557 | 23,700 |
Carrying value at end of period | $ 171,427 | $ 110,591 | $ 171,427 | $ 110,591 |
Mortgage Servicing Rights - Servicing Income and Expense Included in Mortgage Banking Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Servicing income: | ||||
Servicing income | $ 8,104 | $ 7,539 | $ 23,499 | $ 21,258 |
Change in fair value of mortgage servicing rights | 8,296 | (239) | 36,392 | (788) |
Change in fair value of derivative hedging instruments | (12,641) | (2,128) | (41,636) | (9,987) |
Servicing income | 3,759 | 5,172 | 18,255 | 10,483 |
Servicing expenses | 1,923 | 2,156 | 7,848 | 7,381 |
Net servicing income (loss) | $ 1,836 | $ 3,016 | $ 10,407 | $ 3,102 |
Mortgage Servicing Rights - Data and Key Economic Assumptions Related to Mortgage Servicing Rights (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Transfers and Servicing of Financial Assets [Abstract] | ||
Unpaid principal balance | $ 11,233,249 | $ 10,759,286 |
Weighted-average prepayment speed (CPR) | 5.40% | 9.31% |
Estimated impact on fair value of a 10% increase | $ (4,751) | $ (4,905) |
Estimated impact on fair value of a 20% increase | $ (9,191) | $ (9,429) |
Discount rate | 9.60% | 9.81% |
Estimated impact on fair value of a 100 bp increase | $ (8,164) | $ (4,785) |
Estimated impact on fair value of a 200 bp increase | $ (15,623) | $ (9,198) |
Weighted-average coupon interest rate | 3.29% | 3.23% |
Weighted-average servicing fee (basis points) | 0.27% | 0.27% |
Weighted-average remaining maturity (in months) | 331 months | 330 months |
Mortgage Servicing Rights - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Transfers and Servicing of Financial Assets [Abstract] | ||
Mortgage escrow deposit | $ 140,768 | $ 127,617 |
Income Taxes - Allocation of Federal and State Income Taxes between Current and Deferred Portions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Current | $ 5,513 | $ 2,350 | $ 9,082 | $ 17,840 |
Deferred | 3,418 | 7,366 | 15,879 | 20,904 |
Income tax expense, as reported | $ 8,931 | $ 9,716 | $ 24,961 | $ 38,744 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Business Acquisition [Line Items] | |||||
Federal taxes calculated at statutory rate, percent | 21.00% | 21.00% | 21.00% | 21.00% | |
Acquired net operating losses | $ 1,158 | $ 1,158 | $ 1,370 | ||
Franklin Financial Network, Inc. | |||||
Business Acquisition [Line Items] | |||||
Acquired net operating losses | $ 5,515 | $ 5,515 | $ 6,523 |
Income Taxes - Reconciliation of Income Taxes Computed at the United States Federal Statutory Tax Rates to the Provision for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
State taxes, net of federal benefit | $ 8,560 | $ 11,551 | $ 23,390 | $ 37,844 |
Increase (decrease) resulting from: | ||||
State taxes, net of federal benefit | 1,018 | 3,279 | 3,551 | 6,908 |
Benefit from equity based compensation | (82) | (1,784) | (388) | (2,129) |
Municipal interest income, net of interest disallowance | (443) | (416) | (1,331) | (1,259) |
Bank-owned life insurance | (78) | (74) | (231) | (240) |
NOL Carryback provision under CARES Act | 0 | (3,424) | 0 | (3,424) |
Offering costs | 0 | 0 | 0 | 127 |
Section 162(m) limitation | 39 | 1,065 | 201 | 1,313 |
Other | (83) | (481) | (231) | (396) |
Income tax expense, as reported | $ 8,931 | $ 9,716 | $ 24,961 | $ 38,744 |
Federal taxes calculated at statutory rate, percent | 21.00% | 21.00% | 21.00% | 21.00% |
Percentage increase (decrease) resulting from: | ||||
State taxes, net of federal benefit | 2.50% | 6.00% | 3.20% | 3.80% |
Benefit from equity based compensation | (0.20%) | (3.20%) | (0.30%) | (1.20%) |
Municipal interest income, net of interest disallowance | (1.10%) | (0.80%) | (1.20%) | (0.70%) |
Bank-owned life insurance | (0.20%) | (0.10%) | (0.20%) | (0.10%) |
NOL Carryback provision under CARES Act | 0.00% | (6.20%) | 0.00% | (1.90%) |
Offering costs | 0.00% | 0.00% | 0.00% | 0.10% |
Section 162(m) limitation | 0.10% | 1.90% | 0.20% | 0.70% |
Other | (0.20%) | (0.90%) | (0.30%) | (0.20%) |
Total | 21.90% | 17.70% | 22.40% | 21.50% |
Commitments and Contingencies - Financial Instruments with Off-Balance Sheet Credit Risk (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Balance at end of period | $ 3,751,251 | $ 3,184,021 |
Commitments to extend credit, excluding interest rate lock commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Balance at end of period | 3,686,559 | 3,106,594 |
Letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Balance at end of period | $ 64,692 | $ 77,427 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||
Floating interest rate loan commitments | $ 2,970,000 | $ 2,260,000 | |||
Total principal amount of loans repurchased or indemnified | $ 4,442 | $ 2,917 | $ 5,988 | $ 4,386 |
Commitments and Contingencies - Allowance for Credit Losses on Unfunded Commitments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Commitments and Contingencies [Roll Forward] | ||||
Balance at beginning of period | $ 126,272 | $ 144,663 | $ 125,559 | $ 170,389 |
Balance at end of period | 134,476 | 139,446 | 134,476 | 139,446 |
Unfunded Commitments | ||||
Commitments and Contingencies [Roll Forward] | ||||
Balance at beginning of period | 20,399 | 13,202 | 14,380 | 16,378 |
Provision for credit losses on unfunded commitments | 3,178 | 301 | 9,197 | (2,875) |
Balance at end of period | $ 23,577 | $ 13,503 | $ 23,577 | $ 13,503 |
Commitments and Contingencies - Activity in the Repurchase Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Commitments and Contingencies [Roll Forward] | ||||
Balance at beginning of period | $ 3,445 | $ 5,489 | $ 4,802 | $ 5,928 |
Provision for loan repurchases or indemnifications | (800) | 0 | (1,989) | (266) |
Losses on loans repurchased or indemnified | 16 | (120) | (152) | (293) |
Balance at end of period | $ 2,661 | $ 5,369 | $ 2,661 | $ 5,369 |
Derivatives - Fair Value Hedges (Details) - Interest Rate Swap - Designated as Hedging Instrument |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Derivative [Line Items] | |
Notional Amount | $ 300,000,000 |
Remaining Maturity (In Years) | 1 year 8 months 23 days |
Receive Fixed Rate | 1.48% |
Estimated fair value | $ (14,006,000) |
Subordinated debt | |
Derivative [Line Items] | |
Notional Amount | $ 100,000,000 |
Remaining Maturity (In Years) | 1 year 5 months 1 day |
Receive Fixed Rate | 1.46% |
Estimated fair value | $ (3,831,000) |
Fixed Rate Money Market Deposits One | |
Derivative [Line Items] | |
Notional Amount | $ 75,000,000 |
Remaining Maturity (In Years) | 1 year 10 months 20 days |
Receive Fixed Rate | 1.50% |
Estimated fair value | $ (3,816,000) |
Fixed Rate Money Market Deposits Two | |
Derivative [Line Items] | |
Notional Amount | $ 125,000,000 |
Remaining Maturity (In Years) | 1 year 10 months 20 days |
Receive Fixed Rate | 1.50% |
Estimated fair value | $ (6,359,000) |
Derivatives - Income Included In Interest Expense On Borrowings And Deposits (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Derivatives, Fair Value [Line Items] | ||||
Interest expense on deposits | $ 13,133 | $ 6,596 | $ 25,186 | $ 24,341 |
Interest expense on borrowings | 3,966 | 1,593 | 6,901 | 5,823 |
Total interest expense | 17,099 | $ 8,189 | 32,087 | $ 30,164 |
Interest Rate Swap | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest expense on deposits | (331) | 377 | ||
Interest expense on borrowings | (181) | 167 | ||
Total interest expense | $ (512) | $ 544 |
Derivatives - Balance Sheet (Details) - Interest Rate Swap $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Borrowings | |
Derivative [Line Items] | |
Carrying Amount of the Hedged Item | $ 95,074 |
Cumulative Decrease in Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item | (3,831) |
Borrowings | Subordinated debt | |
Derivative [Line Items] | |
Unamortized subordinated debt issuance costs | 1,095 |
Money market and savings deposits | |
Derivative [Line Items] | |
Carrying Amount of the Hedged Item | 197,124 |
Cumulative Decrease in Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item | (10,175) |
Purchase accounting fair value premium | $ 7,299 |
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Mortgage Loans | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Net (losses) gains from fair value changes of mortgage loans held for sale recorded in income | $ (4,276) | $ (3,908) | $ (16,479) | $ (14,894) | |
GNMA | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Delinquent GNMA loans that had been previously sold | $ 94,648 | ||||
Level 3 | Non-recurring Basis | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Amortized costs of collateral dependent loans | $ 578 | $ 578 | $ 5,781 |
Fair Value of Financial Instruments - Loans Held for Sale at Fair Value (Details) - Recurring Basis - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total loans held for sale | $ 130,733 | $ 752,223 |
Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held for sale, at fair value | 70,526 | 672,924 |
GNMA | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held for sale, at fair value | 26,485 | 0 |
Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total loans held for sale | $ 33,722 | $ 79,299 |
Segment Reporting - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
May 10, 2022
channel
|
Sep. 30, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
segment
channel
|
Sep. 30, 2021
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||||
Number of distinct reportable segments | segment | 2 | |||||
Number of delivery channels, discontinued | channel | 1 | |||||
Number of distinct delivery channels | channel | 2 | |||||
Mortgage | ||||||
Segment Reporting Information [Line Items] | ||||||
Restructuring charges | $ | $ 12,458 | $ 0 | ||||
Interest paid | $ | $ 4,143 | $ 6,075 | $ 14,659 | $ 17,585 |
Stock-Based Compensation - Changes in Restricted Stock Units (Details) - RSUs |
9 Months Ended |
---|---|
Sep. 30, 2022
$ / shares
shares
| |
Restricted Stock Units Outstanding | |
Balance at beginning of period (in shares) | shares | 492,320,000 |
Granted (in shares) | shares | 143,036,000 |
Vested (in shares) | shares | (202,652,000) |
Forfeited (in shares) | shares | (46,496,000) |
Balance at end of period (in shares) | shares | 386,208,000 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 36.06 |
Granted (in dollars per share) | $ / shares | 43.74 |
Vested (in dollars per share) | $ / shares | 36.12 |
Forfeited (in dollars per share) | $ / shares | 34.51 |
Balance at end of period (in dollars per share) | $ / shares | $ 38.99 |
Stock-Based Compensation - Changes in Performance Stock Units (Details) - PSUs |
9 Months Ended |
---|---|
Sep. 30, 2022
$ / shares
shares
| |
Performance Stock Units Outstanding | |
Balance at beginning of period (in shares) | shares | 115,750 |
Granted (in shares) | shares | 69,291 |
Vested (in shares) | shares | 0 |
Forfeited or expired (in shares) | shares | (10,659) |
Balance at end of period (in shares) | shares | 174,382 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 40.13 |
Granted (in dollars per share) | $ / shares | 44.44 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 42.76 |
Balance at end of period (in dollars per share) | $ / shares | $ 41.68 |
Stock-Based Compensation - Performance Shares, Activity (Details) - PSUs |
Sep. 30, 2022
shares
|
---|---|
Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | 49,964 |
Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | 59,496 |
Tranche Three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | 64,922 |
Related Party Transactions - Loans Analysis to Executive Officers, Certain Management, Bank Directors and Related Interests (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Financing Receivable, Related Parties [Roll Forward] | |
Loans outstanding at January 1, 2022 | $ 29,010 |
New loans and advances | 55,428 |
Change in related party status | (9,939) |
Repayments | (2,345) |
Loans outstanding at September 30, 2022 | $ 72,154 |
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