Incorporated in Iowa | I.R.S. Employer Identification |
No. 42-1208067 |
Large accelerated filer o | Accelerated Filer þ |
Non-accelerated filer o | Small Reporting Company o |
Emerging Growth Company o |
SHARES OUTSTANDING | |
CLASS | October 31, 2017 |
Common Stock, no par value | 9,339,712 |
Page | ||
Number | ||
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
September 30, 2017 | December 31, 2016 | ||||||
ASSETS | (Unaudited) | ||||||
Cash and cash equivalents | $ | 36,792 | $ | 38,197 | |||
Investment securities available for sale at fair value (amortized cost September 30, 2017 $253,689; December 31, 2016 $269,039) | 254,984 | 267,537 | |||||
Stock of Federal Home Loan Bank | 16,126 | 12,413 | |||||
Loans held for sale | 6,717 | 9,806 | |||||
Loans, net of allowance for loan losses (September 30, 2017 $29,350; December 31, 2016 $26,530) | 2,391,430 | 2,251,445 | |||||
Property and equipment, net | 37,799 | 37,859 | |||||
Tax credit real estate investment | 10,016 | 10,563 | |||||
Accrued interest receivable | 11,484 | 9,121 | |||||
Deferred income taxes, net | 12,871 | 12,611 | |||||
Other real estate | 144 | 237 | |||||
Goodwill | 2,500 | 2,500 | |||||
Other assets | 2,906 | 3,481 | |||||
Total Assets | $ | 2,783,769 | $ | 2,655,770 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities | |||||||
Noninterest-bearing deposits | $ | 349,883 | $ | 348,505 | |||
Interest-bearing deposits | 1,723,159 | 1,687,807 | |||||
Total deposits | $ | 2,073,042 | $ | 2,036,312 | |||
Other borrowings | 13,761 | 33,489 | |||||
Federal Home Loan Bank borrowings | 323,000 | 235,000 | |||||
Accrued interest payable | 1,079 | 984 | |||||
Other liabilities | 20,850 | 19,934 | |||||
Total Liabilities | $ | 2,431,732 | $ | 2,325,719 | |||
Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP) | $ | 42,471 | $ | 40,781 | |||
STOCKHOLDERS' EQUITY | |||||||
Common stock, no par value; authorized 20,000,000 shares; issued September 30, 2017 10,318,906 shares; December 31, 2016 10,227,178 shares | $ | — | $ | — | |||
Paid in capital | 49,194 | 44,606 | |||||
Retained earnings | 337,380 | 319,982 | |||||
Accumulated other comprehensive loss | (1,339 | ) | (3,359 | ) | |||
Treasury stock at cost (September 30, 2017 1,000,774 shares; December 31, 2016 962,951 shares) | (33,198 | ) | (31,178 | ) | |||
Total Stockholders' Equity | $ | 352,037 | $ | 330,051 | |||
Less maximum cash obligation related to ESOP shares | 42,471 | 40,781 | |||||
Total Stockholders' Equity Less Maximum Cash Obligations Related to ESOP Shares | $ | 309,566 | $ | 289,270 | |||
Total Liabilities & Stockholders' Equity | $ | 2,783,769 | $ | 2,655,770 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income: | |||||||||||||||
Loans, including fees | $ | 25,643 | $ | 23,626 | $ | 74,378 | $ | 68,974 | |||||||
Investment securities: | |||||||||||||||
Taxable | 437 | 362 | 1,237 | 1,080 | |||||||||||
Nontaxable | 783 | 786 | 2,425 | 2,414 | |||||||||||
Federal funds sold | 9 | 6 | 145 | 124 | |||||||||||
Total interest income | $ | 26,872 | $ | 24,780 | $ | 78,185 | $ | 72,592 | |||||||
Interest expense: | |||||||||||||||
Deposits | $ | 2,319 | $ | 1,917 | $ | 6,730 | $ | 5,742 | |||||||
Short-term borrowings | 100 | 70 | 149 | 127 | |||||||||||
FHLB borrowings | 2,233 | 1,935 | 5,938 | 6,224 | |||||||||||
Total interest expense | $ | 4,652 | $ | 3,922 | $ | 12,817 | $ | 12,093 | |||||||
Net interest income | $ | 22,220 | $ | 20,858 | $ | 65,368 | $ | 60,499 | |||||||
Provision for loan losses | 130 | (1,832 | ) | 1,827 | (2,004 | ) | |||||||||
Net interest income after provision for loan losses | $ | 22,090 | $ | 22,690 | $ | 63,541 | $ | 62,503 | |||||||
Noninterest income: | |||||||||||||||
Net gain on sale of loans | $ | 423 | $ | 602 | $ | 1,119 | $ | 1,437 | |||||||
Trust fees | 1,980 | 1,731 | 5,883 | 5,185 | |||||||||||
Service charges and fees | 2,197 | 2,243 | 6,557 | 6,516 | |||||||||||
Net gain on sale of other real estate owned and other repossessed assets | 33 | 342 | 89 | 376 | |||||||||||
Other noninterest income | 372 | 396 | 1,599 | 1,541 | |||||||||||
$ | 5,005 | $ | 5,314 | $ | 15,247 | $ | 15,055 | ||||||||
Noninterest expenses: | |||||||||||||||
Salaries and employee benefits | $ | 8,134 | $ | 8,158 | $ | 24,707 | $ | 22,617 | |||||||
Occupancy | 1,087 | 1,017 | 3,148 | 3,001 | |||||||||||
Furniture and equipment | 1,491 | 1,350 | 4,356 | 4,111 | |||||||||||
Office supplies and postage | 516 | 436 | 1,487 | 1,282 | |||||||||||
Advertising and business development | 628 | 800 | 2,123 | 2,426 | |||||||||||
Outside services | 2,077 | 1,845 | 5,943 | 5,386 | |||||||||||
FDIC insurance assessment | 217 | 315 | 636 | 938 | |||||||||||
Other noninterest expense | 671 | 510 | 2,033 | 1,585 | |||||||||||
$ | 14,821 | $ | 14,431 | $ | 44,433 | $ | 41,346 | ||||||||
Income before income taxes | $ | 12,274 | $ | 13,573 | $ | 34,355 | $ | 36,212 | |||||||
Income taxes | 3,722 | 4,397 | 10,472 | 11,369 | |||||||||||
Net income | $ | 8,552 | $ | 9,176 | $ | 23,883 | $ | 24,843 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.92 | $ | 0.99 | $ | 2.56 | $ | 2.67 | |||||||
Diluted | $ | 0.92 | $ | 0.99 | $ | 2.56 | $ | 2.67 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Net income | $ | 8,552 | $ | 9,176 | $ | 23,883 | $ | 24,843 | ||||||
Other comprehensive income (loss) | ||||||||||||||
Securities: | ||||||||||||||
Net change in unrealized (loss) gain on securities available for sale | $ | (302 | ) | $ | (1,090 | ) | $ | 2,797 | $ | 1,104 | ||||
Reclassification adjustment for net gains realized in net income | — | — | — | — | ||||||||||
Income taxes | 116 | 417 | (1,070 | ) | (423 | ) | ||||||||
Other comprehensive (loss) income on securities available for sale | $ | (186 | ) | $ | (673 | ) | $ | 1,727 | $ | 681 | ||||
Derivatives used in cash flow hedging relationships: | ||||||||||||||
Net change in unrealized gain (loss) on derivatives | $ | 259 | $ | 500 | $ | 474 | $ | (1,931 | ) | |||||
Income taxes | (99 | ) | (192 | ) | (181 | ) | 738 | |||||||
Other comprehensive income (loss) on cash flow hedges | $ | 160 | $ | 308 | $ | 293 | $ | (1,193 | ) | |||||
Other comprehensive (loss) income, net of tax | $ | (26 | ) | $ | (365 | ) | $ | 2,020 | $ | (512 | ) | |||
Comprehensive income | $ | 8,526 | $ | 8,811 | $ | 25,903 | $ | 24,331 |
Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Maximum Cash Obligation Related To ESOP Shares | Total | ||||||||||||||||||
Balance, December 31, 2015 | $ | 43,697 | $ | 294,487 | $ | (1,195 | ) | $ | (27,252 | ) | $ | (37,562 | ) | $ | 272,175 | ||||||||
Issuance of 7,646 shares of common stock | 348 | — | — | — | — | 348 | |||||||||||||||||
Issuance of 3,482 shares of common stock under the employee stock purchase plan | 154 | — | — | — | — | 154 | |||||||||||||||||
Unearned restricted stock compensation | 112 | — | — | — | — | 112 | |||||||||||||||||
Forfeiture of 1,264 shares of common stock | (52 | ) | — | — | — | — | (52 | ) | |||||||||||||||
Share-based compensation | 22 | — | — | — | — | 22 | |||||||||||||||||
Income tax benefit related to share-based compensation | 64 | — | — | — | — | 64 | |||||||||||||||||
Change related to ESOP shares | — | — | — | — | (2,220 | ) | (2,220 | ) | |||||||||||||||
Net income | — | 24,843 | — | — | — | 24,843 | |||||||||||||||||
Cash dividends ($0.65 per share) | — | (6,060 | ) | — | — | — | (6,060 | ) | |||||||||||||||
Purchase of 62,266 shares of common stock | — | — | — | (2,819 | ) | — | (2,819 | ) | |||||||||||||||
Other comprehensive loss | — | — | (512 | ) | — | — | (512 | ) | |||||||||||||||
Balance, September 30, 2016 | $ | 44,345 | $ | 313,270 | $ | (1,707 | ) | $ | (30,071 | ) | $ | (39,782 | ) | $ | 286,055 | ||||||||
Balance, December 31, 2016 | $ | 44,606 | $ | 319,982 | $ | (3,359 | ) | $ | (31,178 | ) | $ | (40,781 | ) | $ | 289,270 | ||||||||
Issuance of 92,621 shares of common stock | 4,208 | — | — | 55 | — | 4,263 | |||||||||||||||||
Issuance of 4,483 shares of common stock under the employee stock purchase plan | 210 | — | — | — | — | 210 | |||||||||||||||||
Unearned restricted stock compensation | 277 | — | — | — | — | 277 | |||||||||||||||||
Forfeiture of 2,934 shares of common stock | (118 | ) | — | — | — | — | (118 | ) | |||||||||||||||
Share-based compensation | 11 | — | — | — | — | 11 | |||||||||||||||||
Change related to ESOP shares | — | — | — | — | (1,690 | ) | (1,690 | ) | |||||||||||||||
Net income | — | 23,883 | — | — | — | 23,883 | |||||||||||||||||
Cash dividends ($0.70 per share) | — | (6,485 | ) | — | — | — | (6,485 | ) | |||||||||||||||
Purchase of 40,265 shares of common stock | — | — | — | (2,075 | ) | — | (2,075 | ) | |||||||||||||||
Other comprehensive income | — | — | 2,020 | — | — | 2,020 | |||||||||||||||||
Balance, September 30, 2017 | $ | 49,194 | $ | 337,380 | $ | (1,339 | ) | $ | (33,198 | ) | $ | (42,471 | ) | $ | 309,566 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 23,883 | $ | 24,843 | |||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | |||||||
Depreciation | 2,270 | 2,182 | |||||
Provision for loan losses | 1,827 | (2,004 | ) | ||||
Share-based compensation | 11 | 22 | |||||
Forfeiture of common stock | (118 | ) | (52 | ) | |||
Compensation expensed through issuance of common stock | 208 | 348 | |||||
Excess tax benefits from share-based compensation | — | (64 | ) | ||||
Provision for deferred income taxes | (1,513 | ) | 54 | ||||
Net gain on sale of other real estate owned and other repossessed assets | (89 | ) | (376 | ) | |||
Increase in accrued interest receivable | (2,363 | ) | (1,867 | ) | |||
Amortization of premium on investment securities, net | 437 | 452 | |||||
Decrease in other assets | 1,049 | 650 | |||||
Increase (decrease) in accrued interest payable and other liabilities | 1,288 | (92 | ) | ||||
Loans originated for sale | (109,522 | ) | (151,545 | ) | |||
Proceeds on sales of loans | 113,730 | 150,047 | |||||
Net gain on sales of loans | (1,119 | ) | (1,437 | ) | |||
Net cash and cash equivalents provided by operating activities | $ | 29,979 | $ | 21,161 | |||
Cash Flows from Investing Activities | |||||||
Proceeds from maturities of investment securities available for sale | $ | 48,937 | $ | 46,148 | |||
Purchases of investment securities available for sale | (37,735 | ) | (31,456 | ) | |||
Loans made to customers, net of collections | (141,994 | ) | (97,285 | ) | |||
Proceeds on sale of other real estate owned and other repossessed assets | 364 | 764 | |||||
Purchases of property and equipment | (2,210 | ) | (4,180 | ) | |||
Income from tax credit real estate, net | 547 | 545 | |||||
Net cash and cash equivalents used in investing activities | $ | (132,091 | ) | $ | (85,464 | ) | |
Cash Flows from Financing Activities | |||||||
Net increase in deposits | $ | 36,730 | $ | 105,710 | |||
Net decrease in other borrowings | (19,728 | ) | (4,148 | ) | |||
Net increase (decrease) in FHLB borrowings | 88,000 | (15,000 | ) | ||||
Issuance of common stock, net of costs | 3,762 | — | |||||
Stock options exercised | 238 | — | |||||
Excess tax benefits related to share-based compensation | — | 64 | |||||
Issuance of treasury stock | 55 | — | |||||
Purchase of treasury stock | (2,075 | ) | (2,819 | ) | |||
Proceeds from the issuance of common stock through the employee stock purchase plan | 210 | 154 | |||||
Dividends paid | (6,485 | ) | (6,060 | ) | |||
Net cash and cash equivalents provided by financing activities | $ | 100,707 | $ | 77,901 |
HILLS BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued) (Amounts In Thousands) | |||||||
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Decrease) increase in cash and cash equivalents | $ | (1,405 | ) | $ | 13,598 | ||
Cash and cash equivalents: | |||||||
Beginning of period | 38,197 | 35,427 | |||||
End of period | $ | 36,792 | $ | 49,025 | |||
Supplemental Disclosures | |||||||
Cash payments for: | |||||||
Interest paid to depositors | $ | 6,635 | $ | 5,776 | |||
Interest paid on other obligations | 6,087 | 6,351 | |||||
Income taxes paid | 10,530 | 10,201 | |||||
Noncash activities: | |||||||
Increase in maximum cash obligation related to ESOP shares | $ | 1,690 | $ | 2,220 | |||
Transfers to other real estate owned | 182 | 310 | |||||
Sale and financing of other real estate owned | 262 | 135 |
Note 1. | Summary of Significant Accounting Policies |
Note 2. | Earnings Per Share |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Common shares outstanding at the beginning of the period | 9,329,514 | 9,283,341 | 9,264,227 | 9,322,054 | ||||||||||
Weighted average number of net shares (redeemed) issued | (4,596 | ) | (7,633 | ) | 64,144 | (31,950 | ) | |||||||
Weighted average shares outstanding (basic) | 9,324,918 | 9,275,708 | 9,328,371 | 9,290,104 | ||||||||||
Weighted average of potential dilutive shares attributable to stock options granted, computed under the treasury stock method | 3,559 | 6,584 | 4,874 | 6,357 | ||||||||||
Weighted average number of shares (diluted) | 9,328,477 | 9,282,292 | 9,333,245 | 9,296,461 | ||||||||||
Net income (In thousands) | $ | 8,552 | $ | 9,176 | $ | 23,883 | $ | 24,843 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.92 | $ | 0.99 | $ | 2.56 | $ | 2.67 | ||||||
Diluted | $ | 0.92 | $ | 0.99 | $ | 2.56 | $ | 2.67 |
Note 3. | Other Comprehensive Income (Loss) |
September 30, 2017 | December 31, 2016 | ||||||
(amounts in thousands) | |||||||
Net unrealized gain (loss) on available-for-sale securities | $ | 1,295 | $ | (1,502 | ) | ||
Net unrealized loss on derivatives used for cash flow hedges | (3,464 | ) | (3,938 | ) | |||
Tax effect | $ | 830 | $ | 2,081 | |||
Net-of-tax amount | $ | (1,339 | ) | $ | (3,359 | ) |
Note 4. | Securities |
September 30, 2017 | December 31, 2016 | ||||||||||||
Amount | Percent | Amount | Percent | ||||||||||
Securities available for sale | |||||||||||||
U.S. Treasury | $ | 39,894 | 15.65 | % | $ | 27,482 | 10.27 | % | |||||
Other securities (FHLB, FHLMC and FNMA) | 48,759 | 19.12 | 61,660 | 23.05 | |||||||||
State and political subdivisions | 166,331 | 65.23 | 178,395 | 66.68 | |||||||||
Total securities available for sale | $ | 254,984 | 100.00 | % | $ | 267,537 | 100.00 | % |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
September 30, 2017: | |||||||||||||||
U.S. Treasury | $ | 39,823 | $ | 90 | $ | (19 | ) | $ | 39,894 | ||||||
Other securities (FHLB, FHLMC and FNMA) | 48,992 | 11 | (244 | ) | 48,759 | ||||||||||
State and political subdivisions | 164,874 | 1,721 | (264 | ) | 166,331 | ||||||||||
Total | $ | 253,689 | $ | 1,822 | $ | (527 | ) | $ | 254,984 | ||||||
December 31, 2016: | |||||||||||||||
U.S. Treasury | $ | 27,418 | $ | 82 | $ | (18 | ) | $ | 27,482 | ||||||
Other securities (FHLB, FHLMC and FNMA) | 62,047 | 65 | (452 | ) | 61,660 | ||||||||||
State and political subdivisions | 179,574 | 626 | (1,805 | ) | 178,395 | ||||||||||
Total | $ | 269,039 | $ | 773 | $ | (2,275 | ) | $ | 267,537 |
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 42,320 | $ | 42,423 | |||
Due after one year through five years | 138,727 | 139,316 | |||||
Due after five years through ten years | 72,022 | 72,625 | |||||
Due over ten years | 620 | 620 | |||||
Total | $ | 253,689 | $ | 254,984 |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||
September 30, 2017 Description of Securities | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | |||||||||||||||||||||||||||||
U.S. Treasury | 4 | $ | 10,006 | $ | (19 | ) | 0.19 | % | — | $ | — | $ | — | — | % | 4 | $ | 10,006 | $ | (19 | ) | 0.19 | % | ||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | 11 | 26,539 | (81 | ) | 0.31 | 4 | 10,208 | (163 | ) | 1.60 | 15 | 36,747 | (244 | ) | 0.66 | ||||||||||||||||||||||||||
State and political subdivisions | 45 | 11,566 | (66 | ) | 0.57 | 65 | 15,212 | (198 | ) | 1.30 | 110 | 26,778 | (264 | ) | 0.99 | ||||||||||||||||||||||||||
Total temporarily impaired securities | 60 | $ | 48,111 | $ | (166 | ) | 0.35 | % | 69 | $ | 25,420 | $ | (361 | ) | 1.42 | % | 129 | $ | 73,531 | $ | (527 | ) | 0.72 | % |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||
December 31, 2016 Description of Securities | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | |||||||||||||||||||||||||||||
U.S. Treasury | 2 | $ | 4,957 | $ | (18 | ) | 0.36 | % | — | $ | — | $ | — | — | % | 2 | $ | 4,957 | $ | (18 | ) | 0.36 | % | ||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | 14 | 34,648 | (452 | ) | 1.30 | — | — | — | — | 14 | 34,648 | (452 | ) | 1.30 | |||||||||||||||||||||||||||
State and political subdivisions | 365 | 87,841 | (1,762 | ) | 2.01 | 11 | 1,486 | (43 | ) | 2.89 | 376 | 89,327 | (1,805 | ) | 2.02 | ||||||||||||||||||||||||||
Total temporarily impaired securities | 381 | $ | 127,446 | $ | (2,232 | ) | 1.75 | % | 11 | $ | 1,486 | $ | (43 | ) | 2.89 | % | 392 | $ | 128,932 | $ | (2,275 | ) | 1.76 | % |
September 30, 2017 | December 31, 2016 | ||||||
(Amounts In Thousands) | |||||||
Agricultural | $ | 76,484 | $ | 92,871 | |||
Commercial and financial | 214,199 | 192,995 | |||||
Real estate: | |||||||
Construction, 1 to 4 family residential | 73,404 | 57,864 | |||||
Construction, land development and commercial | 107,170 | 121,561 | |||||
Mortgage, farmland | 208,982 | 202,340 | |||||
Mortgage, 1 to 4 family first liens | 823,529 | 767,469 | |||||
Mortgage, 1 to 4 family junior liens | 137,271 | 125,400 | |||||
Mortgage, multi-family | 335,439 | 302,831 | |||||
Mortgage, commercial | 359,332 | 334,198 | |||||
Loans to individuals | 26,223 | 25,157 | |||||
Obligations of state and political subdivisions | 57,861 | 54,462 | |||||
$ | 2,419,894 | $ | 2,277,148 | ||||
Net unamortized fees and costs | 886 | 827 | |||||
$ | 2,420,780 | $ | 2,277,975 | ||||
Less allowance for loan losses | 29,350 | 26,530 | |||||
$ | 2,391,430 | $ | 2,251,445 |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Beginning balance | $ | 2,341 | $ | 4,586 | $ | 3,165 | $ | 4,009 | $ | 8,340 | $ | 5,414 | $ | 1,095 | $ | 28,950 | |||||||||||||||
Charge-offs | (27 | ) | (21 | ) | — | (3 | ) | (55 | ) | (86 | ) | (113 | ) | (305 | ) | ||||||||||||||||
Recoveries | 56 | 219 | 33 | — | 203 | 7 | 57 | 575 | |||||||||||||||||||||||
Provision | 92 | (43 | ) | (182 | ) | 2 | 98 | 107 | 56 | 130 | |||||||||||||||||||||
Ending balance | $ | 2,462 | $ | 4,741 | $ | 3,016 | $ | 4,008 | $ | 8,586 | $ | 5,442 | $ | 1,095 | $ | 29,350 | |||||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Beginning balance | $ | 2,947 | $ | 4,531 | $ | 2,890 | $ | 3,417 | $ | 7,677 | $ | 4,045 | $ | 1,023 | $ | 26,530 | |||||||||||||||
Charge-offs | (66 | ) | (478 | ) | (114 | ) | (3 | ) | (263 | ) | (130 | ) | (410 | ) | (1,464 | ) | |||||||||||||||
Recoveries | 123 | 882 | 443 | — | 570 | 236 | 203 | 2,457 | |||||||||||||||||||||||
Provision | (542 | ) | (194 | ) | (203 | ) | 594 | 602 | 1,291 | 279 | 1,827 | ||||||||||||||||||||
Ending balance | $ | 2,462 | $ | 4,741 | $ | 3,016 | $ | 4,008 | $ | 8,586 | $ | 5,442 | $ | 1,095 | $ | 29,350 | |||||||||||||||
Ending balance, individually evaluated for impairment | $ | 653 | $ | 913 | $ | 46 | $ | 784 | $ | 110 | $ | 409 | $ | 85 | $ | 3,000 | |||||||||||||||
Ending balance, collectively evaluated for impairment | $ | 1,809 | $ | 3,828 | $ | 2,970 | $ | 3,224 | $ | 8,476 | $ | 5,033 | $ | 1,010 | $ | 26,350 | |||||||||||||||
Loans: | |||||||||||||||||||||||||||||||
Ending balance | $ | 76,484 | $ | 214,199 | $ | 180,574 | $ | 208,982 | $ | 960,800 | $ | 694,771 | $ | 84,084 | $ | 2,419,894 | |||||||||||||||
Ending balance, individually evaluated for impairment | $ | 6,181 | $ | 2,985 | $ | 1,161 | $ | 8,179 | $ | 7,097 | $ | 8,097 | $ | 85 | $ | 33,785 | |||||||||||||||
Ending balance, collectively evaluated for impairment | $ | 70,303 | $ | 211,214 | $ | 179,413 | $ | 200,803 | $ | 953,703 | $ | 686,674 | $ | 83,999 | $ | 2,386,109 |
Three Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Beginning balance | $ | 2,997 | $ | 4,011 | $ | 2,898 | $ | 3,927 | $ | 8,226 | $ | 4,201 | $ | 1,030 | $ | 27,290 | |||||||||||||||
Charge-offs | (19 | ) | (38 | ) | — | (105 | ) | (176 | ) | — | (140 | ) | (478 | ) | |||||||||||||||||
Recoveries | — | 289 | 186 | — | 276 | 358 | 51 | 1,160 | |||||||||||||||||||||||
Provision | 201 | (252 | ) | (75 | ) | (204 | ) | (425 | ) | (589 | ) | (86 | ) | (1,832 | ) | ||||||||||||||||
Ending balance | $ | 2,777 | $ | 4,010 | $ | 3,009 | $ | 3,618 | $ | 7,901 | $ | 3,970 | $ | 855 | $ | 26,140 | |||||||||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||
Beginning balance | $ | 3,082 | $ | 4,517 | $ | 2,280 | $ | 3,342 | $ | 8,172 | $ | 4,223 | $ | 894 | $ | 26,510 | |||||||||||||||
Charge-offs | (44 | ) | (172 | ) | — | (116 | ) | (704 | ) | (66 | ) | (416 | ) | (1,518 | ) | ||||||||||||||||
Recoveries | 173 | 910 | 792 | — | 767 | 379 | 132 | 3,153 | |||||||||||||||||||||||
Provision | (434 | ) | (1,245 | ) | (63 | ) | 392 | (334 | ) | (566 | ) | 246 | (2,004 | ) | |||||||||||||||||
Ending balance | $ | 2,777 | $ | 4,010 | $ | 3,009 | $ | 3,618 | $ | 7,901 | $ | 3,970 | $ | 855 | $ | 26,140 | |||||||||||||||
Ending balance, individually evaluated for impairment | $ | 746 | $ | 221 | $ | 223 | $ | 549 | $ | 283 | $ | 62 | $ | 29 | $ | 2,113 | |||||||||||||||
Ending balance, collectively evaluated for impairment | $ | 2,031 | $ | 3,789 | $ | 2,786 | $ | 3,069 | $ | 7,618 | $ | 3,908 | $ | 826 | $ | 24,027 | |||||||||||||||
Loans: | |||||||||||||||||||||||||||||||
Ending balance | $ | 88,104 | $ | 188,365 | $ | 178,820 | $ | 193,819 | $ | 883,693 | $ | 619,214 | $ | 74,917 | $ | 2,226,932 | |||||||||||||||
Ending balance, individually evaluated for impairment | $ | 12,276 | $ | 2,529 | $ | 2,877 | $ | 8,371 | $ | 6,497 | $ | 3,356 | $ | 29 | $ | 35,935 | |||||||||||||||
Ending balance, collectively evaluated for impairment | $ | 75,828 | $ | 185,836 | $ | 175,943 | $ | 185,448 | $ | 877,196 | $ | 615,858 | $ | 74,888 | $ | 2,190,997 |
Agricultural | Commercial and Financial | Real Estate: Construction, 1 to 4 family residential | Real Estate: Construction, land development and commercial | ||||||||||||
September 30, 2017 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 2,502 | $ | 10,234 | $ | 548 | $ | 2,950 | |||||||
Good | 12,073 | 47,103 | 6,773 | 26,216 | |||||||||||
Satisfactory | 37,109 | 117,612 | 49,639 | 41,317 | |||||||||||
Monitor | 14,622 | 28,619 | 15,248 | 33,226 | |||||||||||
Special Mention | 4,653 | 5,410 | 897 | 2,607 | |||||||||||
Substandard | 5,525 | 5,221 | 299 | 854 | |||||||||||
Total | $ | 76,484 | $ | 214,199 | $ | 73,404 | $ | 107,170 |
Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family first liens | Real Estate: Mortgage, 1 to 4 family junior liens | Real Estate: Mortgage, multi- family | ||||||||||||
September 30, 2017 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 5,102 | $ | 2,064 | $ | 494 | $ | 5,712 | |||||||
Good | 52,634 | 29,490 | 3,569 | 82,368 | |||||||||||
Satisfactory | 105,155 | 681,699 | 124,625 | 188,549 | |||||||||||
Monitor | 34,985 | 77,461 | 4,869 | 52,341 | |||||||||||
Special Mention | 2,434 | 11,136 | 1,328 | — | |||||||||||
Substandard | 8,672 | 21,679 | 2,386 | 6,469 | |||||||||||
Total | $ | 208,982 | $ | 823,529 | $ | 137,271 | $ | 335,439 |
Real Estate: Mortgage, commercial | Loans to individuals | Obligations of state and political subdivisions | Total | ||||||||||||
September 30, 2017 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 18,735 | $ | — | $ | 8,961 | $ | 57,302 | |||||||
Good | 103,662 | 476 | 29,137 | 393,501 | |||||||||||
Satisfactory | 183,140 | 24,962 | 16,186 | 1,569,993 | |||||||||||
Monitor | 44,316 | 349 | 3,577 | 309,613 | |||||||||||
Special Mention | 7,037 | 216 | — | 35,718 | |||||||||||
Substandard | 2,442 | 220 | — | 53,767 | |||||||||||
Total | $ | 359,332 | $ | 26,223 | $ | 57,861 | $ | 2,419,894 |
Agricultural | Commercial and Financial | Real Estate: Construction, 1 to 4 family residential | Real Estate: Construction, land development and commercial | ||||||||||||
December 31, 2016 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 4,205 | $ | 4,241 | $ | — | $ | 244 | |||||||
Good | 13,611 | 43,472 | 1,701 | 25,337 | |||||||||||
Satisfactory | 40,008 | 108,800 | 44,138 | 46,758 | |||||||||||
Monitor | 12,699 | 20,023 | 8,896 | 44,487 | |||||||||||
Special Mention | 8,381 | 11,177 | 972 | 4,250 | |||||||||||
Substandard | 13,967 | 5,282 | 2,157 | 485 | |||||||||||
Total | $ | 92,871 | $ | 192,995 | $ | 57,864 | $ | 121,561 |
Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family first liens | Real Estate: Mortgage, 1 to 4 family junior liens | Real Estate: Mortgage, multi- family | ||||||||||||
December 31, 2016 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 2,916 | $ | 1,196 | $ | 65 | $ | 5,970 | |||||||
Good | 47,569 | 15,725 | 3,002 | 71,822 | |||||||||||
Satisfactory | 105,971 | 647,191 | 113,433 | 180,651 | |||||||||||
Monitor | 29,778 | 66,164 | 4,877 | 40,444 | |||||||||||
Special Mention | 7,004 | 12,914 | 1,566 | 3,636 | |||||||||||
Substandard | 9,102 | 24,279 | 2,457 | 308 | |||||||||||
Total | $ | 202,340 | $ | 767,469 | $ | 125,400 | $ | 302,831 |
Real Estate: Mortgage, commercial | Loans to individuals | Obligations of state and political subdivisions | Total | ||||||||||||
December 31, 2016 | |||||||||||||||
Grade: | |||||||||||||||
Excellent | $ | 15,873 | $ | — | $ | — | $ | 34,710 | |||||||
Good | 89,801 | 65 | 37,539 | 349,644 | |||||||||||
Satisfactory | 185,650 | 24,446 | 16,417 | 1,513,463 | |||||||||||
Monitor | 34,979 | 293 | 506 | 263,146 | |||||||||||
Special Mention | 3,797 | 195 | — | 53,892 | |||||||||||
Substandard | 4,098 | 158 | — | 62,293 | |||||||||||
Total | $ | 334,198 | $ | 25,157 | $ | 54,462 | $ | 2,277,148 |
30 - 59 Days Past Due | 60 - 89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans Receivable | Accruing Loans Past Due 90 Days or More | |||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||
September 30, 2017 | |||||||||||||||||||||||||||
Agricultural | $ | 3 | $ | 23 | $ | 1,367 | $ | 1,393 | $ | 75,091 | $ | 76,484 | $ | 1,121 | |||||||||||||
Commercial and financial | 380 | 262 | 264 | 906 | 213,293 | 214,199 | 200 | ||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Construction, 1 to 4 family residential | — | 22 | — | 22 | 73,382 | 73,404 | — | ||||||||||||||||||||
Construction, land development and commercial | 3,320 | — | — | 3,320 | 103,850 | 107,170 | — | ||||||||||||||||||||
Mortgage, farmland | — | 1,355 | 83 | 1,438 | 207,544 | 208,982 | — | ||||||||||||||||||||
Mortgage, 1 to 4 family first liens | 733 | 1,578 | 2,235 | 4,546 | 818,983 | 823,529 | 412 | ||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 201 | 137 | 62 | 400 | 136,871 | 137,271 | 58 | ||||||||||||||||||||
Mortgage, multi-family | — | — | — | — | 335,439 | 335,439 | — | ||||||||||||||||||||
Mortgage, commercial | 142 | — | 16 | 158 | 359,174 | 359,332 | — | ||||||||||||||||||||
Loans to individuals | 38 | 67 | — | 105 | 26,118 | 26,223 | — | ||||||||||||||||||||
Obligations of state and political subdivisions | — | — | — | — | 57,861 | 57,861 | — | ||||||||||||||||||||
$ | 4,817 | $ | 3,444 | $ | 4,027 | $ | 12,288 | $ | 2,407,606 | $ | 2,419,894 | $ | 1,791 | ||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Agricultural | $ | 56 | $ | — | $ | 302 | $ | 358 | $ | 92,513 | $ | 92,871 | $ | — | |||||||||||||
Commercial and financial | 24 | 121 | 718 | 863 | 192,132 | 192,995 | — | ||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Construction, 1 to 4 family residential | — | — | — | — | 57,864 | 57,864 | — | ||||||||||||||||||||
Construction, land development and commercial | — | 231 | 85 | 316 | $ | 121,245 | 121,561 | — | |||||||||||||||||||
Mortgage, farmland | 319 | — | — | 319 | 202,021 | 202,340 | — | ||||||||||||||||||||
Mortgage, 1 to 4 family first liens | 5,649 | 978 | 1,943 | 8,570 | $ | 758,899 | 767,469 | 192 | |||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 330 | 51 | 579 | 960 | 124,440 | 125,400 | 443 | ||||||||||||||||||||
Mortgage, multi-family | — | — | 40 | 40 | $ | 302,791 | 302,831 | — | |||||||||||||||||||
Mortgage, commercial | 371 | — | 207 | 578 | 333,620 | 334,198 | — | ||||||||||||||||||||
Loans to individuals | 203 | 32 | — | 235 | $ | 24,922 | 25,157 | — | |||||||||||||||||||
Obligations of state and political subdivisions | — | — | — | — | 54,462 | 54,462 | — | ||||||||||||||||||||
$ | 6,952 | $ | 1,413 | $ | 3,874 | $ | 12,239 | $ | 2,264,909 | $ | 2,277,148 | $ | 635 |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Non-accrual loans (1) | Accruing loans past due 90 days or more | TDR loans | Non- accrual loans (1) | Accruing loans past due 90 days or more | TDR loans | ||||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||||||||||||
Agricultural | $ | 1,656 | $ | 1,121 | $ | 2,446 | $ | 1,741 | $ | — | $ | 91 | |||||||||||
Commercial and financial | 947 | 200 | 1,839 | 1,354 | — | 1,057 | |||||||||||||||||
Real estate: | |||||||||||||||||||||||
Construction, 1 to 4 family residential | — | — | — | — | — | 265 | |||||||||||||||||
Construction, land development and commercial | — | — | 341 | 85 | — | 118 | |||||||||||||||||
Mortgage, farmland | 1,454 | — | 1,462 | 1,205 | — | 1,389 | |||||||||||||||||
Mortgage, 1 to 4 family first liens | 4,415 | 412 | 1,399 | 4,097 | 192 | 1,375 | |||||||||||||||||
Mortgage, 1 to 4 family junior liens | 12 | 58 | 26 | 136 | 443 | 26 | |||||||||||||||||
Mortgage, multi-family | 223 | — | — | 243 | — | — | |||||||||||||||||
Mortgage, commercial | 630 | — | 1,057 | 1,077 | — | 1,087 | |||||||||||||||||
$ | 9,337 | $ | 1,791 | $ | 8,570 | $ | 9,938 | $ | 635 | $ | 5,408 |
(1) | There were $3.76 million and $4.23 million of TDR loans included within nonaccrual loans as of September 30, 2017 and December 31, 2016, respectively. |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||
Number of contracts | Recorded investment | Commitments outstanding | Number of contracts | Recorded investment | Commitments outstanding | ||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||||||||||
Agricultural | 9 | $ | 3,762 | $ | 267 | 4 | $ | 1,460 | $ | 167 | |||||||||||
Commercial and financial | 15 | 2,526 | 157 | 14 | 2,053 | 117 | |||||||||||||||
Real estate: | |||||||||||||||||||||
Construction, 1 to 4 family residential | — | — | 193 | 3 | 265 | 1,225 | |||||||||||||||
Construction, land development and commercial | 2 | 341 | 721 | 1 | 118 | 107 | |||||||||||||||
Mortgage, farmland | 7 | 2,834 | — | 7 | 2,594 | — | |||||||||||||||
Mortgage, 1 to 4 family first liens | 13 | 1,486 | — | 12 | 1,471 | — | |||||||||||||||
Mortgage, 1 to 4 family junior liens | 1 | 26 | 54 | 1 | 26 | 65 | |||||||||||||||
Mortgage, multi-family | — | — | — | — | — | — | |||||||||||||||
Mortgage, commercial | 8 | 1,355 | — | 10 | 1,650 | — | |||||||||||||||
Loans to individuals | — | — | — | — | — | — | |||||||||||||||
55 | $ | 12,330 | $ | 1,392 | 52 | $ | 9,637 | $ | 1,681 |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||||||||||||||||
Number of contracts | Pre-modification recorded investment | Post-modification recorded investment | Number of contracts | Pre-modification recorded investment | Post-modification recorded investment | |||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | |||||||||||||||||||
Agricultural | — | $ | — | $ | — | 6 | $ | 10,890 | $ | 10,890 | ||||||||||
Commercial and financial | 3 | 1,451 | 1,451 | 4 | 1,546 | 1,546 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Construction, 1 to 4 family residential | — | — | — | — | — | — | ||||||||||||||
Construction, land development and commercial | — | — | — | 1 | 231 | 231 | ||||||||||||||
Mortgage, farmland | — | — | — | 2 | 598 | 598 | ||||||||||||||
Mortgage, 1 to 4 family first lien | 1 | 106 | 106 | 1 | 106 | 106 | ||||||||||||||
Mortgage, 1 to 4 family junior liens | — | — | — | — | — | — | ||||||||||||||
Mortgage, multi-family | — | — | — | 1 | 249 | 249 | ||||||||||||||
Mortgage, commercial | — | — | — | — | — | — | ||||||||||||||
4 | $ | 1,557 | $ | 1,557 | 15 | $ | 13,620 | $ | 13,620 |
September 30, 2017 | Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||||
With no related allowance recorded: | (Amounts In Thousands) | |||||||||||||||||||||||||
Agricultural | $ | 1,739 | $ | 1,981 | $ | — | $ | 1,778 | $ | 3 | $ | 1,767 | $ | 1 | ||||||||||||
Commercial and financial | 1,333 | 2,047 | — | 1,598 | 17 | 1,375 | 5 | |||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Construction, 1 to 4 family residential | 116 | 151 | — | 116 | 4 | 116 | 1 | |||||||||||||||||||
Construction, land development and commercial | 341 | 374 | — | 345 | 10 | 342 | 3 | |||||||||||||||||||
Mortgage, farmland | 2,598 | 2,925 | — | 2,513 | 42 | 2,603 | 14 | |||||||||||||||||||
Mortgage, 1 to 4 family first liens | 5,268 | 6,640 | — | 5,434 | 37 | 5,336 | 13 | |||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 12 | 485 | — | 25 | — | 13 | — | |||||||||||||||||||
Mortgage, multi-family | 223 | 357 | — | 233 | — | 226 | — | |||||||||||||||||||
Mortgage, commercial | 1,607 | 2,300 | — | 1,727 | 34 | 1,670 | 11 | |||||||||||||||||||
Loans to individuals | — | 14 | — | — | — | — | — | |||||||||||||||||||
$ | 13,237 | $ | 17,274 | $ | — | $ | 13,769 | $ | 147 | $ | 13,448 | $ | 48 | |||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||
Agricultural | $ | 4,442 | $ | 4,503 | $ | 653 | $ | 4,897 | $ | 169 | $ | 4,491 | $ | 53 | ||||||||||||
Commercial and financial | 1,652 | 1,698 | 913 | 1,732 | 62 | 1,743 | 21 | |||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Construction, 1 to 4 family residential | 199 | 199 | 13 | 136 | 5 | 180 | 2 | |||||||||||||||||||
Construction, land development and commercial | 505 | 505 | 33 | 321 | 11 | 354 | 4 | |||||||||||||||||||
Mortgage, farmland | 5,581 | 5,581 | 784 | 5,667 | 183 | 5,584 | 61 | |||||||||||||||||||
Mortgage, 1 to 4 family first liens | 1,734 | 1,861 | 106 | 1,761 | 54 | 1,743 | 17 | |||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 83 | 83 | 4 | 86 | 3 | 83 | 1 | |||||||||||||||||||
Mortgage, multi-family | 6,187 | 6,187 | 407 | 6,251 | 210 | 6,228 | 71 | |||||||||||||||||||
Mortgage, commercial | 80 | 80 | 2 | 81 | 3 | 80 | 1 | |||||||||||||||||||
Loans to individuals | 85 | 85 | 85 | 88 | 7 | 90 | 3 | |||||||||||||||||||
$ | 20,548 | $ | 20,782 | $ | 3,000 | $ | 21,020 | $ | 707 | $ | 20,576 | $ | 234 | |||||||||||||
Total: | ||||||||||||||||||||||||||
Agricultural | $ | 6,181 | $ | 6,484 | $ | 653 | $ | 6,675 | $ | 172 | $ | 6,258 | $ | 54 | ||||||||||||
Commercial and financial | 2,985 | 3,745 | 913 | 3,330 | 79 | 3,118 | 26 | |||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Construction, 1 to 4 family residential | 315 | 350 | 13 | 252 | 9 | 296 | 3 | |||||||||||||||||||
Construction, land development and commercial | 846 | 879 | 33 | 666 | 21 | 696 | 7 | |||||||||||||||||||
Mortgage, farmland | 8,179 | 8,506 | 784 | 8,180 | 225 | 8,187 | 75 | |||||||||||||||||||
Mortgage, 1 to 4 family first liens | 7,002 | 8,501 | 106 | 7,195 | 91 | 7,079 | 30 | |||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 95 | 568 | 4 | 111 | 3 | 96 | 1 | |||||||||||||||||||
Mortgage, multi-family | 6,410 | 6,544 | 407 | 6,484 | 210 | 6,454 | 71 | |||||||||||||||||||
Mortgage, commercial | 1,687 | 2,380 | 2 | 1,808 | 37 | 1,750 | 12 | |||||||||||||||||||
Loans to individuals | 85 | 99 | 85 | 88 | 7 | 90 | 3 | |||||||||||||||||||
$ | 33,785 | $ | 38,056 | $ | 3,000 | $ | 34,789 | $ | 854 | $ | 34,024 | $ | 282 |
Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||
With no related allowance recorded: | (Amounts In Thousands) | ||||||||||
Agricultural | $ | 800 | $ | 971 | $ | — | |||||
Commercial and financial | 1,540 | 2,175 | — | ||||||||
Real estate: | |||||||||||
Construction, 1 to 4 family residential | 117 | 151 | — | ||||||||
Construction, land development and commercial | 204 | 290 | — | ||||||||
Mortgage, farmland | 2,594 | 2,887 | — | ||||||||
Mortgage, 1 to 4 family first liens | 5,011 | 6,137 | — | ||||||||
Mortgage, 1 to 4 family junior liens | 153 | 646 | — | ||||||||
Mortgage, multi-family | 243 | 362 | — | ||||||||
Mortgage, commercial | 1,901 | 2,727 | — | ||||||||
Loans to individuals | — | 19 | — | ||||||||
$ | 12,563 | $ | 16,365 | $ | — | ||||||
With an allowance recorded: | |||||||||||
Agricultural | $ | 10,920 | $ | 10,978 | $ | 856 | |||||
Commercial and financial | 937 | 955 | 718 | ||||||||
Real estate: | |||||||||||
Construction, 1 to 4 family residential | 815 | 815 | 105 | ||||||||
Construction, land development and commercial | — | — | — | ||||||||
Mortgage, farmland | 5,434 | 5,434 | 390 | ||||||||
Mortgage, 1 to 4 family first liens | 1,266 | 1,374 | 79 | ||||||||
Mortgage, 1 to 4 family junior liens | 612 | 667 | 11 | ||||||||
Mortgage, multi-family | — | — | — | ||||||||
Mortgage, commercial | 967 | 1,004 | 34 | ||||||||
Loans to individuals | 150 | 150 | 150 | ||||||||
$ | 21,101 | $ | 21,377 | $ | 2,343 | ||||||
Total: | |||||||||||
Agricultural | $ | 11,720 | $ | 11,949 | $ | 856 | |||||
Commercial and financial | 2,477 | 3,130 | 718 | ||||||||
Real estate: | |||||||||||
Construction, 1 to 4 family residential | 932 | 966 | 105 | ||||||||
Construction, land development and commercial | 204 | 290 | — | ||||||||
Mortgage, farmland | 8,028 | 8,321 | 390 | ||||||||
Mortgage, 1 to 4 family first liens | 6,277 | 7,511 | 79 | ||||||||
Mortgage, 1 to 4 family junior liens | 765 | 1,313 | 11 | ||||||||
Mortgage, multi-family | 243 | 362 | — | ||||||||
Mortgage, commercial | 2,868 | 3,731 | 34 | ||||||||
Loans to individuals | 150 | 169 | 150 | ||||||||
$ | 33,664 | $ | 37,742 | $ | 2,343 |
Note 6. | Fair Value Measurements |
September 30, 2017 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | |||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||
Financial instrument assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 36,792 | $ | 36,792 | $ | 36,792 | $ | — | $ | — | |||||||||
Investment securities | 271,110 | 271,110 | — | 271,110 | — | ||||||||||||||
Loans held for sale | 6,717 | 6,717 | — | 6,717 | — | ||||||||||||||
Loans | |||||||||||||||||||
Agricultural | 74,022 | 73,954 | — | — | 73,954 | ||||||||||||||
Commercial and financial | 209,458 | 209,387 | — | — | 209,387 | ||||||||||||||
Real estate: | |||||||||||||||||||
Construction, 1 to 4 family residential | 72,141 | 72,151 | — | — | 72,151 | ||||||||||||||
Construction, land development and commercial | 105,417 | 105,340 | — | — | 105,340 | ||||||||||||||
Mortgage, farmland | 204,974 | 205,401 | — | — | 205,401 | ||||||||||||||
Mortgage, 1 to 4 family first liens | 817,072 | 813,125 | — | — | 813,125 | ||||||||||||||
Mortgage, 1 to 4 family junior liens | 136,028 | 140,222 | — | — | 140,222 | ||||||||||||||
Mortgage, multi-family | 332,893 | 330,677 | — | — | 330,677 | ||||||||||||||
Mortgage, commercial | 356,436 | 354,673 | — | — | 354,673 | ||||||||||||||
Loans to individuals | 25,591 | 25,575 | — | — | 25,575 | ||||||||||||||
Obligations of state and political subdivisions | 57,398 | 56,681 | — | — | 56,681 | ||||||||||||||
Accrued interest receivable | 11,484 | 11,484 | — | 11,484 | — | ||||||||||||||
Total financial instrument assets | $ | 2,717,533 | $ | 2,713,289 | $ | 36,792 | $ | 289,311 | $ | 2,387,186 | |||||||||
Financial instrument liabilities | |||||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest-bearing deposits | $ | 349,883 | $ | 349,883 | $ | — | $ | 349,883 | $ | — | |||||||||
Interest-bearing deposits | 1,723,159 | 1,727,433 | — | 1,727,433 | — | ||||||||||||||
Other borrowings | 13,761 | 13,761 | — | 13,761 | — | ||||||||||||||
Federal Home Loan Bank borrowings | 323,000 | 312,026 | — | 312,026 | — | ||||||||||||||
Interest rate swaps | 3,464 | 3,464 | — | 3,464 | — | ||||||||||||||
Accrued interest payable | 1,079 | 1,079 | — | 1,079 | — | ||||||||||||||
Total financial instrument liabilities | $ | 2,414,346 | $ | 2,407,646 | $ | — | $ | 2,407,646 | $ | — | |||||||||
Face Amount | |||||||||||||||||||
Financial instrument with off-balance sheet risk: | |||||||||||||||||||
Loan commitments | $ | 413,805 | $ | — | $ | — | $ | — | $ | — | |||||||||
Letters of credit | 11,398 | — | — | — | — | ||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk | $ | 425,203 | $ | — | $ | — | $ | — | $ | — |
(1) | Considered Level 1 under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). |
(2) | Considered Level 2 under ASC 820. |
(3) | Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. |
December 31, 2016 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | |||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||
Financial instrument assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 38,197 | $ | 38,197 | $ | 38,197 | $ | — | $ | — | |||||||||
Investment securities | 279,950 | 279,950 | — | 279,950 | — | ||||||||||||||
Loans held for sale | 9,806 | 9,806 | — | 9,806 | — | ||||||||||||||
Loans | |||||||||||||||||||
Agricultural | 89,924 | 89,862 | — | — | 89,862 | ||||||||||||||
Commercial and financial | 188,464 | 188,292 | — | — | 188,292 | ||||||||||||||
Real estate: | |||||||||||||||||||
Construction, 1 to 4 family residential | 56,841 | 56,715 | — | — | 56,715 | ||||||||||||||
Construction, land development and commercial | 119,694 | 119,716 | — | — | 119,716 | ||||||||||||||
Mortgage, farmland | 198,923 | 199,043 | — | — | 199,043 | ||||||||||||||
Mortgage, 1 to 4 family first liens | 760,909 | 764,174 | — | — | 764,174 | ||||||||||||||
Mortgage, 1 to 4 family junior liens | 124,283 | 129,339 | — | — | 129,339 | ||||||||||||||
Mortgage, multi-family | 301,162 | 297,646 | — | — | 297,646 | ||||||||||||||
Mortgage, commercial | 331,822 | 328,948 | — | — | 328,948 | ||||||||||||||
Loans to individuals | 24,515 | 24,499 | — | — | 24,499 | ||||||||||||||
Obligations of state and political subdivisions | 54,081 | 52,860 | — | — | 52,860 | ||||||||||||||
Accrued interest receivable | 9,121 | 9,121 | — | 9,121 | — | ||||||||||||||
Total financial instrument assets | $ | 2,587,692 | $ | 2,588,168 | $ | 38,197 | $ | 298,877 | $ | 2,251,094 | |||||||||
Financial instrument liabilities: | |||||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest-bearing deposits | $ | 348,505 | $ | 348,505 | $ | — | $ | 348,505 | $ | — | |||||||||
Interest-bearing deposits | 1,687,807 | 1,691,679 | — | 1,691,679 | — | ||||||||||||||
Other borrowings | 33,489 | 33,489 | — | 33,489 | — | ||||||||||||||
Federal Home Loan Bank borrowings | 235,000 | 231,232 | — | 231,232 | — | ||||||||||||||
Interest rate swaps | 3,938 | 3,938 | 3,938 | ||||||||||||||||
Accrued interest payable | 984 | 984 | — | 984 | — | ||||||||||||||
Total financial instrument liabilities | $ | 2,309,723 | $ | 2,309,827 | $ | — | $ | 2,309,827 | $ | — | |||||||||
Face Amount | |||||||||||||||||||
Financial instrument with off-balance sheet risk: | |||||||||||||||||||
Loan commitments | $ | 388,666 | $ | — | $ | — | $ | — | $ | — | |||||||||
Letters of credit | 9,024 | — | — | — | — | ||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk | $ | 397,690 | $ | — | $ | — | $ | — | $ | — |
(1) | Considered Level 1 under ASC 820. |
(2) | Considered Level 2 under ASC 820. |
(3) | Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. |
Level 1 | Quoted prices in active markets for identical assets or liabilities. |
Level 2 | Observable inputs other than quoted prices included within Level 1. Observable inputs include the quoted prices for similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability. |
Level 3 | Unobservable inputs supported by little or no market activity for financial instruments. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
September 30, 2017 | |||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | ||||||||||||
Securities available for sale | (Amounts In Thousands) | ||||||||||||||
U.S. Treasury | $ | — | $ | 39,894 | $ | — | $ | 39,894 | |||||||
State and political subdivisions | — | 166,331 | — | 166,331 | |||||||||||
Other securities (FHLB, FHLMC and FNMA) | — | 48,759 | — | 48,759 | |||||||||||
Derivative Financial Instruments | |||||||||||||||
Interest rate swaps | $ | — | (3,464 | ) | $ | — | (3,464 | ) | |||||||
Total | $ | — | $ | 251,520 | $ | — | $ | 251,520 |
December 31, 2016 | |||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | ||||||||||||
Securities available for sale | (Amounts In Thousands) | ||||||||||||||
U.S. Treasury | $ | — | $ | 27,482 | $ | — | $ | 27,482 | |||||||
State and political subdivisions | — | 178,395 | — | 178,395 | |||||||||||
Other securities (FHLB, FHLMC and FNMA) | — | 61,660 | — | 61,660 | |||||||||||
Derivative Financial Instruments | |||||||||||||||
Interest rate swaps | — | (3,938 | ) | — | (3,938 | ) | |||||||||
Total | $ | — | $ | 263,599 | $ | — | $ | 263,599 |
(1) | Considered Level 1 under ASC 820. |
(2) | Considered Level 2 under ASC 820. |
(3) | Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. |
September 30, 2017 | Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | Total Losses | Total Losses | |||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||||
Loans (4) | ||||||||||||||||||||||
Agricultural | $ | — | $ | — | $ | 4,350 | $ | 4,350 | $ | — | $ | 23 | ||||||||||
Commercial and financial | — | — | 1,667 | 1,667 | 8 | 135 | ||||||||||||||||
Real Estate: | ||||||||||||||||||||||
Construction, 1 to 4 family residential | — | — | 186 | 186 | — | — | ||||||||||||||||
Construction, land development and commercial | — | — | 697 | 697 | — | — | ||||||||||||||||
Mortgage, farmland | — | — | 6,862 | 6,862 | — | — | ||||||||||||||||
Mortgage, 1 to 4 family first liens | — | — | 6,214 | 6,214 | 31 | 150 | ||||||||||||||||
Mortgage, 1 to 4 family junior liens | — | — | 34 | 34 | 71 | 88 | ||||||||||||||||
Mortgage, multi-family | — | — | 6,003 | 6,003 | — | — | ||||||||||||||||
Mortgage, commercial | — | — | 1,101 | 1,101 | 86 | 111 | ||||||||||||||||
Loans to individuals | — | — | — | — | 10 | 20 | ||||||||||||||||
Foreclosed assets (5) | — | — | — | — | — | — | ||||||||||||||||
Total | $ | — | $ | — | $ | 27,114 | $ | 27,114 | $ | 206 | $ | 527 |
(1) | Considered Level 1 under ASC 820. |
(2) | Considered Level 2 under ASC 820. |
(3) | Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. |
(4) | Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. |
(5) | Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets. |
December 31, 2016 | Year Ended December 31, 2016 | ||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | Total Losses | |||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||
Loans (4) | |||||||||||||||||||
Agricultural | $ | — | $ | — | $ | 10,773 | $ | 10,773 | $ | — | |||||||||
Commercial and financial | — | — | 1,397 | 1,397 | 143 | ||||||||||||||
Real Estate: | |||||||||||||||||||
Construction, 1 to 4 family residential | — | — | 827 | 827 | — | ||||||||||||||
Construction, land development and commercial | — | — | 85 | 85 | — | ||||||||||||||
Mortgage, farmland | — | — | 7,077 | 7,077 | — | ||||||||||||||
Mortgage, 1 to 4 family first liens | — | — | 5,424 | 5,424 | 756 | ||||||||||||||
Mortgage, 1 to 4 family junior liens | — | — | 194 | 194 | — | ||||||||||||||
Mortgage, multi-family | — | — | 244 | 244 | — | ||||||||||||||
Mortgage, commercial | — | — | 1,541 | 1,541 | 65 | ||||||||||||||
Loans to individuals | — | — | — | — | — | ||||||||||||||
Foreclosed assets (5) | — | — | 75 | 75 | 20 | ||||||||||||||
Total | $ | — | $ | — | $ | 27,637 | $ | 27,637 | $ | 984 |
(1) | Considered Level 1 under ASC 820. |
(2) | Considered Level 2 under ASC 820. |
(3) | Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. |
(4) | Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. |
(5) | Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets. |
Note 7. | Stock Repurchase Program |
Note 8. | Commitments and Contingencies |
September 30, 2017 | December 31, 2016 | ||||||
(Amounts In Thousands) | |||||||
Firm loan commitments and unused portion of lines of credit: | |||||||
Home equity loans | $ | 54,200 | $ | 48,785 | |||
Credit cards | 49,107 | 45,738 | |||||
Commercial, real estate and home construction | 138,982 | 113,251 | |||||
Commercial lines and real estate purchase loans | 171,516 | 180,892 | |||||
Outstanding letters of credit | 11,398 | 9,024 |
Note 9. | Income Taxes |
Note 10. | Derivative Financial Instruments |
Notional Amount | Fair Value | Balance Sheet Category | Maturity | ||||||||
(Amounts in Thousands) | |||||||||||
September 30, 2017 | |||||||||||
Interest rate swap | $ | 25,000 | $ | (853 | ) | Other Liabilities | 11/9/2020 | ||||
Interest rate swap | 25,000 | (2,611 | ) | Other Liabilities | 11/7/2023 | ||||||
December 31, 2016 | |||||||||||
Interest rate swap | $ | 25,000 | $ | (1,097 | ) | Other Liabilities | 11/9/2020 | ||||
Interest rate swap | 25,000 | (2,841 | ) | Other Liabilities | 11/7/2023 |
Effective Portion | Ineffective Portion | ||||||||||||||
Recognized in OCI | Reclassifed from AOCI into Income | Recognized in Income on Derivatives | |||||||||||||
Amount of Gain (Loss) | Category | Amount of Gain (Loss) | Category | Amount of Gain (Loss) | |||||||||||
(Amounts in Thousands) | |||||||||||||||
September 30, 2017 | |||||||||||||||
Interest rate swap | $ | 151 | Interest Expense | $ | — | Other Income | $ | — | |||||||
Interest rate swap | 142 | Interest Expense | — | Other Income | — | ||||||||||
December 31, 2016 | |||||||||||||||
Interest rate swap | $ | 250 | Interest Expense | $ | — | Other Income | $ | — | |||||||
Interest rate swap | (101 | ) | Interest Expense | — | Other Income | — |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | The strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of the Company’s assets. |
• | The effects of recent financial market disruptions, and monetary and other governmental actions designed to address such disruptions. |
• | The financial strength of the counterparties with which the Company or the Company’s customers do business and as to which the Company has investment or financial exposure. |
• | The credit quality and credit agency ratings of the securities in the Company’s investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the affected securities and the recognition of an impairment loss. |
• | The effects of, and changes in, laws, regulations and policies affecting banking, securities, insurance and monetary and financial matters as well as any laws otherwise affecting the Company. |
• | The effects of changes in interest rates (including the effects of changes in the rate of prepayments of the Company’s assets) and the policies of the Board of Governors of the Federal Reserve System. |
• | The ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to increases in competitive pressures in the financial services sector. |
• | The ability of the Company to obtain new customers and to retain existing customers. |
• | The timely development and acceptance of products and services, including products and services offered through alternative electronic delivery channels. |
• | Technological changes implemented by the Company and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to the Company and its customers. |
• | The ability of the Company to develop and maintain secure and reliable electronic systems. |
• | The ability of the Company to retain key executives and employees and the difficulty that the Company may experience in replacing key executives and employees in an effective manner. |
• | Consumer spending and saving habits which may change in a manner that affects the Company’s business adversely. |
• | The economic impact of natural disasters, terrorist attacks and military actions. |
• | Business combinations and the integration of acquired businesses and assets which may be more difficult or expensive than expected. |
• | The costs, effects and outcomes of existing or future litigation. |
• | Changes in accounting policies and practices that may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board. |
• | The ability of the Company to manage the risks associated with the foregoing as well as anticipated. |
• | Total assets were $2.784 billion, an increase of $128.00 million since December 31, 2016. |
• | Cash and cash equivalents were $36.79 million, a decrease of $1.41 million since December 31, 2016. |
• | Net loans were $2.398 billion, an increase of $136.90 million since December 31, 2016. Loans held for sale decreased $3.09 million since December 31, 2016. |
• | Deposits increased $36.73 million since December 31, 2016. $74.00 million of deposit growth are temporary public funds. |
• | Federal Home Loan Bank borrowings were $323.00 million, an increase of $88.00 million since December 31, 2016. |
September 30, 2017 | December 31, 2016 | ||||||||||||
Amount | Percent | Amount | Percent | ||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||
Agricultural | $ | 76,484 | 3.16 | % | $ | 92,871 | 4.08 | % | |||||
Commercial and financial | 214,199 | 8.85 | 192,995 | 8.47 | |||||||||
Real estate: | |||||||||||||
Construction, 1 to 4 family residential | 73,404 | 3.03 | 57,864 | 2.54 | |||||||||
Construction, land development and commercial | 107,170 | 4.43 | 121,561 | 5.34 | |||||||||
Mortgage, farmland | 208,982 | 8.64 | 202,340 | 8.89 | |||||||||
Mortgage, 1 to 4 family first liens | 823,529 | 34.04 | 767,469 | 33.70 | |||||||||
Mortgage, 1 to 4 family junior liens | 137,271 | 5.67 | 125,400 | 5.51 | |||||||||
Mortgage, multi-family | 335,439 | 13.86 | 302,831 | 13.30 | |||||||||
Mortgage, commercial | 359,332 | 14.85 | 334,198 | 14.68 | |||||||||
Loans to individuals | 26,223 | 1.08 | 25,157 | 1.10 | |||||||||
Obligations of state and political subdivisions | 57,861 | 2.39 | 54,462 | 2.39 | |||||||||
$ | 2,419,894 | 100.00 | % | $ | 2,277,148 | 100.00 | % | ||||||
Net unamortized fees and costs | 886 | 827 | |||||||||||
$ | 2,420,780 | $ | 2,277,975 | ||||||||||
Less allowance for loan losses | 29,350 | 26,530 | |||||||||||
$ | 2,391,430 | $ | 2,251,445 |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||
Amount | % of Total Allowance | % of Loans to Total Loans | Amount | % of Total Allowance | % of Loans to Total Loans | ||||||||||||||
(In Thousands) | (In Thousands) | ||||||||||||||||||
Agricultural | $ | 2,462 | 8.39 | % | 3.16 | % | $ | 2,947 | 11.11 | % | 4.08 | % | |||||||
Commercial and financial | 4,741 | 16.15 | 8.85 | 4,531 | 17.08 | 8.47 | |||||||||||||
Real estate: | |||||||||||||||||||
Construction, 1 to 4 family residential | 1,263 | 4.30 | 3.03 | 1,023 | 3.86 | 2.54 | |||||||||||||
Construction, land development and commercial | 1,753 | 5.97 | 4.43 | 1,867 | 7.04 | 5.34 | |||||||||||||
Mortgage, farmland | 4,008 | 13.66 | 8.64 | 3,417 | 12.88 | 8.89 | |||||||||||||
Mortgage, 1 to 4 family first liens | 7,343 | 25.02 | 34.04 | 6,560 | 24.72 | 33.70 | |||||||||||||
Mortgage, 1 to 4 family junior liens | 1,243 | 4.24 | 5.67 | 1,117 | 4.21 | 5.51 | |||||||||||||
Mortgage, multi-family | 2,546 | 8.67 | 13.86 | 1,669 | 6.29 | 13.30 | |||||||||||||
Mortgage, commercial | 2,896 | 9.87 | 14.85 | 2,376 | 8.95 | 14.68 | |||||||||||||
Loans to individuals | 632 | 2.15 | 1.08 | 642 | 2.42 | 1.10 | |||||||||||||
Obligations of state and political subdivisions | 463 | 1.58 | 2.39 | 381 | 1.44 | 2.39 | |||||||||||||
$ | 29,350 | 100.00 | % | 100.00 | % | $ | 26,530 | 100.00 | % | 100.00 | % |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||
Amount | Ratio | Ratio | Ratio | |||||||||
As of September 30, 2017: | ||||||||||||
Company: | ||||||||||||
Total risk-based capital | $ | 379,401 | 16.63 | % | 8.000 | % | 10.000 | % | ||||
Tier 1 risk-based capital | 350,876 | 15.38 | 6.000 | 8.000 | ||||||||
Tier 1 common equity | 350,876 | 15.38 | 4.500 | 6.500 | ||||||||
Leverage ratio | 350,876 | 12.76 | 4.000 | 5.000 | ||||||||
Bank: | ||||||||||||
Total risk-based capital | 380,050 | 16.67 | 8.000 | 10.000 | ||||||||
Tier 1 risk-based capital | 351,549 | 15.42 | 6.000 | 8.000 | ||||||||
Tier 1 common equity | 351,549 | 15.42 | 4.500 | 6.500 | ||||||||
Leverage ratio | 351,549 | 12.79 | 4.000 | 5.000 |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||
Amount | Ratio | Ratio | Ratio | |||||||||
As of December 31, 2016: | ||||||||||||
Company: | ||||||||||||
Total risk-based capital | $ | 357,440 | 16.17 | % | 8.00 | % | 10.00 | % | ||||
Tier 1 risk-based capital | 330,910 | 14.97 | 6.00 | 8.00 | ||||||||
Tier 1 common equity | 330,910 | 14.97 | 4.50 | 6.50 | ||||||||
Leverage ratio | 330,910 | 12.63 | 4.00 | 5.00 | ||||||||
Bank: | ||||||||||||
Total risk-based capital | 357,895 | 16.20 | 8.00 | 10.00 | ||||||||
Tier 1 risk-based capital | 331,365 | 15.00 | 6.00 | 8.00 | ||||||||
Tier 1 common equity | 331,365 | 15.00 | 4.50 | 6.50 | ||||||||
Leverage ratio | 331,365 | 12.66 | 4.00 | 5.00 |
• | Net interest income increased by $4.87 million, before provision expense. Total interest income increased by $5.70 million as a result of growth in the volume of earning assets. |
• | The provision for loan losses increased by $3.83 million. |
• | Noninterest income increased by $0.19 million. |
• | Noninterest expenses increased by $3.09 million. |
• | Income tax expense decreased by $0.90 million. |
Increase (Decrease) in Net Interest Income | ||||||||||||||||||
Change in Average Balance | Change in Average Rate | Volume Changes | Rate Changes | Net Change | ||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||
Interest income: | ||||||||||||||||||
Loans, net | $ | 178,712 | (0.01 | )% | $ | 5,544 | $ | (92 | ) | $ | 5,452 | |||||||
Taxable securities | 3,507 | 0.15 | 58 | 99 | 157 | |||||||||||||
Nontaxable securities | 6,405 | (0.10 | ) | 146 | (129 | ) | 17 | |||||||||||
Federal funds sold | (12,386 | ) | 0.45 | (48 | ) | 69 | 21 | |||||||||||
$ | 176,238 | $ | 5,700 | $ | (53 | ) | $ | 5,647 | ||||||||||
Interest expense: | ||||||||||||||||||
Interest-bearing demand deposits | $ | 29,000 | 0.01 | % | $ | (30 | ) | $ | (65 | ) | $ | (95 | ) | |||||
Savings deposits | 80,031 | 0.10 | (131 | ) | (548 | ) | (679 | ) | ||||||||||
Time deposits | 1,080 | 0.07 | 5 | (219 | ) | (214 | ) | |||||||||||
Other borrowings | (1,163 | ) | — | — | — | — | ||||||||||||
FHLB borrowings | 28,718 | (0.52 | ) | (749 | ) | 1,035 | 286 | |||||||||||
Interest-bearing other liabilities | (21,623 | ) | 0.30 | 39 | (61 | ) | (22 | ) | ||||||||||
$ | 116,043 | $ | (866 | ) | $ | 142 | $ | (724 | ) | |||||||||
Change in net interest income | $ | 4,834 | $ | 89 | $ | 4,923 |
(Tax Equivalent Basis) | 2017 | 2016 | ||||
Yield on average interest-earning assets | 4.11 | % | 4.08 | % | ||
Rate on average interest-bearing liabilities | 0.85 | 0.84 | ||||
Net interest spread | 3.26 | % | 3.24 | % | ||
Effect of noninterest-bearing funds | 0.20 | 0.18 | ||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets) | 3.46 | % | 3.42 | % |
Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(Amounts in thousands) | ||||||||||||||
Net gain on sale of loans | $ | 1,119 | $ | 1,437 | $ | (318 | ) | (22.13 | )% | |||||
Trust fees | 5,883 | 5,185 | 698 | 13.46 | ||||||||||
Service charges and fees | 6,557 | 6,516 | 41 | 0.63 | ||||||||||
Net gain on sale of other real estate owned and other repossessed assets | 89 | 376 | (287 | ) | (76.33 | ) | ||||||||
Other noninterest income | 1,599 | 1,541 | 58 | 3.76 | ||||||||||
$ | 15,247 | $ | 15,055 | $ | 192 | 1.28 |
Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(Amounts in thousands) | ||||||||||||||
Salaries and employee benefits | $ | 24,707 | $ | 22,617 | $ | 2,090 | 9.24 | % | ||||||
Occupancy | 3,148 | 3,001 | 147 | 4.90 | ||||||||||
Furniture and equipment | 4,356 | 4,111 | 245 | 5.96 | ||||||||||
Office supplies and postage | 1,487 | 1,282 | 205 | 15.99 | ||||||||||
Advertising and business development | 2,123 | 2,426 | (303 | ) | (12.49 | ) | ||||||||
Outside services | 5,943 | 5,386 | 557 | 10.34 | ||||||||||
FDIC insurance assessment | 636 | 938 | (302 | ) | (32.20 | ) | ||||||||
Other noninterest expense | 2,033 | 1,585 | 448 | 28.26 | ||||||||||
$ | 44,433 | $ | 41,346 | $ | 3,087 | 7.47 |
Increase (Decrease) in Net Interest Income | ||||||||||||||||||
Change in Average Balance | Change in Average Rate | Volume Changes | Rate Changes | Net Change | ||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||
Interest income: | ||||||||||||||||||
Loans, net | $ | 190,297 | — | % | $ | 2,056 | $ | (16 | ) | $ | 2,040 | |||||||
Taxable securities | 5,589 | 0.20 | 35 | 40 | 75 | |||||||||||||
Nontaxable securities | 4,163 | (0.09 | ) | 32 | (35 | ) | (3 | ) | ||||||||||
Federal funds sold | (12,386 | ) | 0.12 | (2 | ) | 5 | 3 | |||||||||||
$ | 187,663 | $ | 2,121 | $ | (6 | ) | $ | 2,115 | ||||||||||
Interest expense: | ||||||||||||||||||
Interest-bearing demand deposits | $ | 41,015 | 0.02 | % | $ | (14 | ) | $ | (32 | ) | $ | (46 | ) | |||||
Savings deposits | 35,918 | 0.10 | (16 | ) | (190 | ) | (206 | ) | ||||||||||
Time deposits | 15,780 | 0.09 | (49 | ) | (99 | ) | (148 | ) | ||||||||||
Other borrowings | — | — | — | — | — | |||||||||||||
FHLB borrowings | 86,774 | (0.60 | ) | (767 | ) | 469 | (298 | ) | ||||||||||
Interest-bearing other liabilities | (31,851 | ) | 0.62 | 22 | (52 | ) | (30 | ) | ||||||||||
$ | 147,636 | $ | (824 | ) | $ | 96 | $ | (728 | ) | |||||||||
Change in net interest income | $ | 1,297 | $ | 90 | $ | 1,387 |
(Tax Equivalent Basis) | 2017 | 2016 | ||||
Yield on average interest-earning assets | 4.13 | % | 4.12 | % | ||
Rate on average interest-bearing liabilities | 0.90 | 0.82 | ||||
Net interest spread | 3.23 | % | 3.30 | % | ||
Effect of noninterest-bearing funds | 0.21 | 0.19 | ||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets) | 3.44 | % | 3.49 | % |
Three Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(Amounts in thousands) | ||||||||||||||
Net gain on sale of loans | $ | 423 | $ | 602 | $ | (179 | ) | (29.73 | )% | |||||
Trust fees | 1,980 | 1,731 | 249 | 14.38 | ||||||||||
Service charges and fees | 2,197 | 2,243 | (46 | ) | (2.05 | ) | ||||||||
Net gain on sale of other real estate owned and other repossessed assets | 33 | 342 | (309 | ) | — | |||||||||
Other noninterest income | 372 | 396 | (24 | ) | (6.06 | ) | ||||||||
$ | 5,005 | $ | 5,314 | $ | (309 | ) | (5.81 | ) |
Three Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(Amounts in thousands) | ||||||||||||||
Salaries and employee benefits | $ | 8,134 | $ | 8,158 | $ | (24 | ) | (0.29 | )% | |||||
Occupancy | 1,087 | 1,017 | 70 | 6.88 | ||||||||||
Furniture and equipment | 1,491 | 1,350 | 141 | 10.44 | ||||||||||
Office supplies and postage | 516 | 436 | 80 | 18 | ||||||||||
Advertising and business development | 628 | 800 | (172 | ) | (21.50 | ) | ||||||||
Outside services | 2,077 | 1,845 | 232 | 12.57 | ||||||||||
FDIC insurance assessment | 217 | 315 | (98 | ) | (31.11 | ) | ||||||||
Other noninterest expense | 671 | 510 | 161 | 31.57 | ||||||||||
$ | 14,821 | $ | 14,431 | $ | 390 | 2.70 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs (1) | |||||
July 1 to July 31 | 5,543 | $ | 52.50 | 5,543 | 505,779 | ||||
August 1 to August 31 | 4,123 | 52.97 | 4,123 | 501,656 | |||||
September 1 to September 30 | 4,872 | 53.00 | 4,872 | 496,784 | |||||
Total | 14,538 | $ | 52.80 | 14,538 | 496,784 |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosure |
Item 5. | Other Information |
Item 6. | Exhibits |
3.1 | Restated Articles of Incorporation, incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q Filed with the Commission on May 6, 2015. |
3.2 | Amended and Restated Bylaws, incorporated by reference to Exhibit 3.2 to the Company's Form 10-K Filed with the Commission on March 11, 2015. |
31 | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002 |
32 | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | XBRL Instance Document (1) |
101.SCH | XBRL Taxonomy Extension Schema Document (1) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (1) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (1) |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (1) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (1) |
(1) | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, and are otherwise not subject to liability under these sections. |
HILLS BANCORPORATION | |||
Date: | November 7, 2017 | By: /s/ Dwight O. Seegmiller | |
Dwight O. Seegmiller, Director, President and Chief Executive Officer | |||
Date: | November 7, 2017 | By: /s/ Shari DeMaris | |
Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer |
Exhibit Number | Description | Page Number In The Sequential Numbering System September 30, 2017 Form 10-Q | |
58-59 | |||
60 |
1. | I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 7, 2017 | By: /s/ Dwight O. Seegmiller | |
Dwight O. Seegmiller, Director, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 7, 2017 | By: /s/ Shari DeMaris | |
Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer |
Date: | November 7, 2017 | By: /s/ Dwight O. Seegmiller | |
Dwight O. Seegmiller, Director, President and Chief Executive Officer |
Date: | November 7, 2017 | By: /s/ Shari DeMaris | |
Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 31, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HILLS BANCORPORATION | |
Entity Central Index Key | 0000732417 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Season Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 9,339,712 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
ASSETS | ||
Investment securities available for sale, amortized cost | $ 253,689 | $ 269,039 |
Loans, allowance for loan losses | $ 29,350 | $ 26,530 |
STOCKHOLDERS' EQUITY | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 10,318,906 | 10,227,178 |
Treasury stock at cost (in shares) | 1,000,774 | 962,951 |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Interest income: | ||||
Loans, including fees | $ 25,643 | $ 23,626 | $ 74,378 | $ 68,974 |
Investment securities: | ||||
Taxable | 437 | 362 | 1,237 | 1,080 |
Nontaxable | 783 | 786 | 2,425 | 2,414 |
Federal funds sold | 9 | 6 | 145 | 124 |
Total interest income | 26,872 | 24,780 | 78,185 | 72,592 |
Interest expense: | ||||
Deposits | 2,319 | 1,917 | 6,730 | 5,742 |
Short-term borrowings | 100 | 70 | 149 | 127 |
FHLB borrowings | 2,233 | 1,935 | 5,938 | 6,224 |
Total interest expense | 4,652 | 3,922 | 12,817 | 12,093 |
Net interest income | 22,220 | 20,858 | 65,368 | 60,499 |
Provision for loan losses | 130 | (1,832) | 1,827 | (2,004) |
Net interest income after provision for loan losses | 22,090 | 22,690 | 63,541 | 62,503 |
Noninterest income: | ||||
Net gain on sale of loans | 423 | 602 | 1,119 | 1,437 |
Trust fees | 1,980 | 1,731 | 5,883 | 5,185 |
Service charges and fees | 2,197 | 2,243 | 6,557 | 6,516 |
Net gain on sale of other real estate owned and other repossessed assets | 33 | 342 | 89 | 376 |
Other noninterest income | 372 | 396 | 1,599 | 1,541 |
Noninterest income | 5,005 | 5,314 | 15,247 | 15,055 |
Noninterest expenses: | ||||
Salaries and employee benefits | 8,134 | 8,158 | 24,707 | 22,617 |
Occupancy | 1,087 | 1,017 | 3,148 | 3,001 |
Furniture and equipment | 1,491 | 1,350 | 4,356 | 4,111 |
Office supplies and postage | 516 | 436 | 1,487 | 1,282 |
Advertising and business development | 628 | 800 | 2,123 | 2,426 |
Outside services | 2,077 | 1,845 | 5,943 | 5,386 |
FDIC insurance assessment | 217 | 315 | 636 | 938 |
Other noninterest expense | 671 | 510 | 2,033 | 1,585 |
Noninterest expenses | 14,821 | 14,431 | 44,433 | 41,346 |
Income before income taxes | 12,274 | 13,573 | 34,355 | 36,212 |
Income taxes | 3,722 | 4,397 | 10,472 | 11,369 |
Net income | $ 8,552 | $ 9,176 | $ 23,883 | $ 24,843 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.92 | $ 0.99 | $ 2.56 | $ 2.67 |
Diluted (in dollars per share) | $ 0.92 | $ 0.99 | $ 2.56 | $ 2.67 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 8,552 | $ 9,176 | $ 23,883 | $ 24,843 |
Securities: | ||||
Net change in unrealized (loss) gain on securities available for sale | (302) | (1,090) | 2,797 | 1,104 |
Reclassification adjustment for net gains realized in net income | 0 | 0 | 0 | 0 |
Income taxes | 116 | 417 | (1,070) | (423) |
Other comprehensive (loss) income on securities available for sale | (186) | (673) | 1,727 | 681 |
Derivatives used in cash flow hedging relationships: | ||||
Net change in unrealized gain (loss) on derivatives | 259 | 500 | 474 | (1,931) |
Income taxes | (99) | (192) | (181) | 738 |
Other comprehensive income (loss) on cash flow hedges | 160 | 308 | 293 | (1,193) |
Other comprehensive (loss) income, net of tax | (26) | (365) | 2,020 | (512) |
Comprehensive income | $ 8,526 | $ 8,811 | $ 25,903 | $ 24,331 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common stock (in shares) | 92,621 | 7,646 |
Issuance of common stock purchased under the employee stock purchase plan (in shares) | 4,483 | 3,482 |
Forfeiture of common stock (in shares) | 2,934 | 1,264 |
Cash dividends (in dollars per share) | $ 0.70 | $ 0.65 |
Purchase of common stock (in shares) | 40,265 | 62,266 |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company considers that it operates as one business segment, a commercial bank. Operating results for the nine month period ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Form 10-K Annual Report of Hills Bancorporation and subsidiary (the “Company”) for the year ended December 31, 2016 filed with the Securities Exchange Commission on March 3, 2017. The consolidated balance sheet as of December 31, 2016, has been derived from the audited consolidated financial statements for that period. The Company evaluated subsequent events through the filing date of its quarterly report on Form 10-Q with the SEC. Effect of New Financial Accounting Standards: In May 2014, The FASB and International Accounting Standards Board (IASB) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of ASU 2014-09 is that a company should recognize revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. For financial institutions, significant changes are not expected given that most financial instruments are not in the scope of the accounting standard update. ASU 2014-09 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. In August 2015, FASB issued ASU 2015-14 deferring the effective date for annual periods and interim periods within those annual periods after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has evaluated all of its noninterest income streams and contracts to determine potential impact. The adoption of ASU 2014-09 by the Company will not have a material impact. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 created Subtopic 321-10, Investments-Equity Securities which is applicable to all entities except those in industries that account for substantially all investments at fair value through earnings or the change in net assets. Under this new subtopic, equity securities are generally required to be measured at fair value with unrealized holding gains and losses reflected in net income. ASU 2016-01 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The adoption of ASU 2016-01 by the Company is not expected to have a material impact. In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases. The ASU provides guidance requiring lessees to recognize right-of-use assets and lease liabilities for all leases other than those that meet the definition of short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which these assets and liabilities are not recognized and lease payments are generally recognized over the lease term on a straight-line basis. Under this new ASU, lessees will recognize right-of use assets and lease liabilities for most leases currently accounted for as operating leases under generally accepted accounting principles. For public companies, ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is in the process of analyzing a comprehensive list of lease agreements. The adoption of ASU 2016-02 by the Company is not expected to have a material impact. In March 2016, the FASB issued ASU No. 2016-04, Liabilities - Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products. ASU 2016-04 applies to all entities that offer certain prepaid stored - value products. The ASU provides guidance for the derecognition of financial liabilities related to the issuance of these products and aligns the recognition of breakage to current authoritative guidance. For public companies, ASU 2016-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of ASU 2016-04 by the Company is not expected to have a material impact. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU simplifies several aspects of the accounting for share-based payment transaction, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public companies, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted ASU 2016-09 for the period ending March 31, 2017. There was no material impact on the financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (CECL). The ASU changes the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Under the CECL model, we will be required to present certain financial assets carried at amortized cost, such as loans held for investment and held-to-maturity debt securities, at the net amount expected to be collected. The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement will take place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the "incurred loss" model required under current GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, we expect that the adoption of the CECL model will materially affect how we determine our allowance for loan losses and could require us to significantly increase our allowance. For public companies, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, early adoption is permitted for the fiscal year beginning after December 15, 2018. The Company is in the process of implementing a software solution to assist in the analysis of historical loan data to determine the CECL model that will be implemented. We expect to recognize a one-time cumulative-effect adjustment to our allowance for loan losses as of the beginning of the first reporting period in which the new standard is adopted. The amount of the one-time cumulative-effect adjustment has not yet been determined. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323), Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. This ASU adds an SEC paragraph and amends other Topics pursuant to an SEC staff Announcement made at the September 22, 2016 Emerging Issues Task Force (EITF) meeting. The SEC paragraph applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU provides that a company should evaluate ASUs that have not yet been adopted to determine the appropriate financial statement disclosures about the potential material effects of those ASUs on the financial statements when adopted. If the company does not know or cannot reasonably estimate the impact that adoption of the ASUs referenced in this announcement is expected to have on the financial statements, then in addition to making a statement to that effect, the company should consider additional qualitative financial statement disclosures to assist the reader in assessing the significance of the impact that the standard will have on the financial statements of the company when adopted. Additional qualitative disclosures should include a description of the effect of the accounting policies that the company expects to apply and a comparison to the company's current accounting policies. Also, the company should describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 250), Simplifying the Test for Goodwill Impairment. The ASU simplifies the goodwill impairment test by requiring a company to perform its annual or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized when the carrying amount exceeds fair value. For public companies, ASU 2017-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The adoption of ASU No. 2017-04 by the Company is not expected to have a material impact. In March 2017, the FASB issued ASU No. 2017-08, Receivable - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. This ASU shortens the amortization period for certain callable debt securities held at a premium. The premium will be amortized to the earliest call date. For public companies, ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. The Company adopted ASU 2017-08 for the period ending March 31, 2017. There was no material impact on the financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. This ASU requires companies to change the recognition and presentation of the effects of hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness and requiring companies to present all of the elements of hedge accounting that affect earnings in the same income statement line as the hedged item. Furthermore, the standard eases the requirements for effectiveness testing, hedge documentation and applying the critical terms match method and introduces new alternatives that will permit companies to reduce the risk of material error corrections if they misapply the shortcut method. For public companies, ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. The adoption of ASU 2017-12 by the Company is not expected to have a material impact. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is computed using the weighted average number of actual common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur from the exercise of common stock options outstanding. ESOP shares are considered outstanding for this calculation unless unearned. The computation of basic and diluted earnings per share for the periods presented is as follows:
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Other Comprehensive Income (Loss) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table summarizes the balances of each component of accumulated other comprehensive income (AOCI), included in stockholders’ equity, at September 30, 2017 and December 31, 2016:
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The carrying values of investment securities at September 30, 2017 and December 31, 2016 are summarized in the following table (dollars in thousands):
Investment securities have been classified in the consolidated balance sheets according to management’s intent. Available-for-sale securities consist of debt securities not classified as trading or held to maturity. Available-for-sale securities are stated at fair value, and unrealized holding gains and losses, net of the related deferred tax effect, are reported as a separate component of stockholders' equity. There were no trading or held to maturity securities as of September 30, 2017 or December 31, 2016. The carrying amount of available-for-sale securities and their approximate fair values were as follows as of September 30, 2017 and December 31, 2016 (in thousands):
The amortized cost and estimated fair value of available-for-sale securities classified according to their contractual maturities at September 30, 2017, were as follows (in thousands):
As of September 30, 2017 investment securities with a carrying value of $30.46 million were pledged to collateralize repurchase agreements, derivative financial instruments, and other borrowings. The following table shows the fair value, gross unrealized losses and the percentage of fair value represented by gross unrealized losses of applicable investment securities owned by the Company, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2017 and December 31, 2016 (in thousands):
The Company considered the following information in reaching the conclusion that the impairments disclosed in the table above are temporary and not other-than-temporary impairments. None of the unrealized losses in the above table was due to the deterioration in the credit quality of any of the issues that might result in the non-collection of contractual principal and interest. The unrealized losses are due to changes in interest rates. The Company has not recognized any unrealized loss in income because management does not have the intent to sell the securities included in the previous table. Management has concluded that it is more likely than not that the Company will not be required to sell these securities prior to recovery of the amortized cost basis. |
Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans Classes of loans are as follows:
Changes in the allowance for loan losses, the allowance for loan losses applicable to impaired loans and the related loan balance of impaired loans for the three and nine months ended September 30, 2017 were as follows:
Changes in the allowance for loan losses for the three and nine months ended September 30, 2016 were as follows:
The following table presents the credit quality indicators by type of loans in each category as of September 30, 2017 and December 31, 2016, respectively (amounts in thousands):
The below are descriptions of the credit quality indicators: Excellent – Excellent rated loans are prime quality loans covered by highly liquid collateral with generous margins or supported by superior current financial conditions reflecting substantial net worth, relative to total credit extended, and based on assets of a stable and non-speculative nature whose values can be readily verified. Identified repayment source or cash flow is abundant and assured. Good – Good rated loans are adequately secured by readily marketable collateral or good financial condition characterized by liquidity, flexibility and sound net worth. Loans are supported by sound primary and secondary payment sources and timely and accurate financial information. Satisfactory – Satisfactory rated loans are loans to borrowers of average financial means not especially vulnerable to changes in economic or other circumstances, where the major support for the extension is sufficient collateral of a marketable nature, and the primary source of repayment is seen to be clear and adequate. Monitor – Monitor rated loans are identified by management as warranting special attention for a variety of reasons that may bear on ultimate collectability. This may be due to adverse trends, a particular industry, loan structure, or repayment that is dependent on projections, or a one-time occurrence. Special Mention – Special mention rated loans are supported by a marginal payment capacity and are marginally protected by collateral. There are identified weaknesses that if not monitored and corrected may adversely affect the Company’s credit position. A special mention credit would typically have a weakness in one of the general categories (cash flow, collateral position or payment history) but not in all categories. Substandard – Substandard loans are not adequately supported by the paying capacity of the borrower and may be inadequately collateralized. These loans have a well-defined weakness or weaknesses. For these loans, it is more probable than not that the Company could sustain some loss if the deficiency(ies) is not corrected. Past due loans as of September 30, 2017 and December 31, 2016 were as follows:
The Company does not have a material amount of loans that are past due less than 90 days where there are serious doubts as to the ability of the borrowers to comply with the loan repayment terms. Certain impaired loan information by loan type at September 30, 2017 and December 31, 2016, was as follows:
Loans 90 days or more past due that are still accruing interest increased $1.16 million from December 31, 2016 to September 30, 2017 due to an increase in the number of loans past due greater than 90 days including a $1.12 agricultural relationship. As of September 30, 2017 there were 10 accruing loans past due 90 days or more. The average balance of accruing loans past due as of September 30, 2017 are $0.18 million. There were 6 accruing loans past due 90 days or more as of December 31, 2016 and the average loan balance was $0.11 million. The accruing loans past due 90 days or more balances are believed to be adequately collateralized and the Company expects to collect all principal and interest as contractually due under these loans. The Company may modify the terms of a loan to maximize the collection of amounts due. Such a modification is considered a troubled debt restructuring (“TDR”). In most cases, the modification is either a reduction in interest rate, conversion to interest only payments or an extension of the maturity date. The borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term, so a concessionary modification is granted to the borrower that would otherwise not be considered. TDR loans accrue interest as long as the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. Below is a summary of information for TDR loans as of September 30, 2017 and December 31, 2016:
The following is a summary of TDR loans that were modified during the three and nine months ended September 30, 2017:
The Company had commitments to lend $1.39 million in additional borrowings to restructured loan customers as of September 30, 2017. The Company had commitments to lend $1.68 million in additional borrowings to restructured loan customers as of December 31, 2016. These commitments were in the normal course of business. The additional borrowings were not used to facilitate payments on these loans. There were no TDR loans that were in payment default (defined as past due 90 days or more) during the period ended September 30, 2017 and year ended December 31, 2016. Information regarding impaired loans as of and for the three and nine months ended September 30, 2017 is as follows:
Information regarding impaired loans as of December 31, 2016 is as follows:
Impaired loans increased $0.12 million from December 31, 2016 to September 30, 2017. Impaired loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and TDR loans. Impaired loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Impaired loans were 1.40% of loans held for investment as of September 30, 2017 and 1.48% as of December 31, 2016. The increase in impaired loans is due mainly to an increase in TDR loans of $3.16 million and an increase in accruing loans past due 90 days or more of $1.16 million from December 31, 2016 to September 30, 2017, and is offset by a decrease in nonaccrual loans of $0.60 million, and a decrease of $3.60 million in relationships with a specific allowance for losses. The Company regularly reviews a substantial portion of the loans in the portfolio and assesses whether the loans are impaired in accordance with ASC 310. If the loans are impaired, the Company determines if a specific allowance is appropriate. In addition, the Company's management also reviews and, where determined necessary, provides allowances for particular loans based upon (1) reviews of specific borrowers and (2) management’s assessment of areas that management considers are of higher credit risk, including loans that have been restructured. Loans that are determined not to be impaired and for which there are no specific allowances are classified into one or more risk categories. Based upon the risk category assigned, the Company allocates a percentage, as determined by management, for a required allowance needed. The determination of the appropriate percentage begins with historical loss experience factors, which are then adjusted for levels and trends in past due loans, levels and trends in charged-off and recovered loans, trends in volume growth, trends in problem and watch loans, trends in restructured loans, local economic trends and conditions, industry and other conditions, and effects of changing interest rates. Specific allowances for losses on impaired loans are established if the loan balances exceed the net present value of the relevant future cash flows or the fair value of the relevant collateral based on updated appraisals and/or updated collateral analysis for the properties if the loan is collateral dependent. The Company may recognize a charge off or record a specific allowance related to an impaired loan if there is a collateral shortfall or it is unlikely the borrower can make all principal and interest payments as contractually due. For loans that are collateral dependent, losses are evaluated based on the portion of a loan that exceeds the fair market value of the collateral. In general, this is the amount that the carrying value of the loan exceeds the related appraised value less estimated costs to sell the collateral. Generally, it is the Company’s policy not to rely on appraisals that are older than one year prior to the date the impairment is being measured. The most recent appraisal values may be adjusted if, in the Company’s judgment, experience and other market data indicate that the property’s value, use, condition, exit market or other variable affecting its value may have changed since the appraisal was performed, consistent with the December 2006 joint interagency guidance on the allowance for loan losses. The charge off or loss adjustment supported by an appraisal is considered the minimum charge off. Any adjustments made to the appraised value are to provide an additional charge off or specific reserve based on the applicable facts and circumstances. In instances where there is an estimated decline in value, a specific reserve may be provided or a charge off taken pending confirmation of the amount of the loss from an updated appraisal. Upon receipt of the new appraisals, an additional specific reserve may be provided or charge off taken based on the appraised value of the collateral. On average, appraisals are obtained within one month of order. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The carrying value and estimated fair values of the Company's financial instruments as of September 30, 2017 are as follows:
The carrying value and estimated fair values of the Company's financial instruments as of December 31, 2016 are as follows:
Fair value of financial instruments: FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) provides a single definition for fair value, a framework for measuring fair value and expanded disclosures concerning fair value. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an 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. The Company determines the fair market value of its financial instruments based on the fair value hierarchy established in ASC 820. There are three levels of inputs that may be used to measure fair value as follows:
It is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. The Company is required to use observable inputs, to the extent available, in the fair value estimation process unless that data results from forced liquidations or distressed sales. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for assets or liabilities not recorded at fair value. ASSETS Cash and cash equivalents: The carrying amounts reported in the consolidated balance sheets for cash and short-term instruments approximate their fair values (Level 1). Investment securities available for sale: Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If a quoted price is not available, the fair value is obtained from benchmarking the security against similar securities. All of the Company’s securities are considered Level 2. The pricing for investment securities is obtained from an independent source. There are no level 1 or level 3 investment securities owned by the Company. The Company obtains an understanding of the independent source’s valuation methodologies used to determine fair value by level of security. The Company validates assigned fair values on a sample basis using an additional third-party provider pricing service to determine if the fair value measurement is reasonable. Due to the nature of our investment portfolio, we do not expect significant and unusual fluctuations as fair value changes primarily relate to interest rate changes. No unusual fluctuations were identified during the nine months ended September 30, 2017. If a fluctuation requiring investigation was identified, the Company would research the change with the independent source or other available information. Loans held for sale: Loans held for sale are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the short time between origination of the loan and its sale on the secondary market (Level 2). The market is active for these loans and as a result prices for similar assets are available. Loans: The Company does not record loans at fair value on a recurring basis. For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values (Level 3). The fair values for other loans are determined using estimated future cash flows, discounted at the interest rates currently being offered for loans with similar terms to borrowers with similar credit quality utilizing an entrance price concept (Level 3). The Company does record nonrecurring fair value adjustments to loans to reflect (1) partial write-downs that are based on the observable market price or appraised value of the collateral or (2) the full charge-off of the loan carrying value (Level 3). These loans are considered Level 3 as the instruments used to determine fair market value require significant management judgment and estimation. Foreclosed assets: The Company does not record foreclosed assets at fair value on a recurring basis. Foreclosed assets consist mainly of other real estate owned but may include other types of assets repossessed by the Company. Foreclosed assets are adjusted to the lower of carrying value or fair value less the cost of disposal. Fair value is generally based upon independent market prices or appraised values of the collateral, and may include a marketability discount as deemed necessary by management based on its experience with similar types of real estate. The value of foreclosed assets is evaluated periodically as a nonrecurring fair value adjustment. Foreclosed assets are classified as Level 3. Off-balance sheet instruments: Fair values for outstanding letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of the outstanding letters of credit is not significant. Unfunded loan commitments are not valued since the loans are generally priced at market at the time of funding (Level 2). Accrued interest receivable: The fair value of accrued interest receivable equals the amount receivable due to the current nature of the amounts receivable (Level 2). Non-marketable equity investments: Non-marketable equity investments are recorded under the cost or equity method of accounting. There are generally restrictions on the sale and/or liquidation of these investments, including stock of the Federal Home Loan Bank. The carrying value of stock of the Federal Home Loan Bank approximates fair value (Level 2). LIABILITIES Deposit liabilities: Deposit liabilities are carried at historical cost. The fair value of demand deposits, savings accounts and certain money market account deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. If the fair value of the fixed maturity certificates of deposit is calculated at less than the carrying amount, the carrying value of these deposits is reported as the fair value (Level 2). Deposit liabilities are classified as Level 2 due to available prices for similar liabilities in the market. Other borrowings: Other borrowings are carried at historical cost and include federal funds purchased and securities sold under agreements to repurchase. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the liability and its expected realization (Level 2). Other borrowings are classified as Level 2 due to available prices for similar liabilities in the market. Federal Home Loan Bank borrowings: Federal Home Loan Bank borrowings are recorded at historical cost. The fair values of the Company’s Federal Home Loan Bank borrowings are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2). Federal Home Loan Bank borrowings are classified as Level 2 due to available prices for similar liabilities in the market. Interest Rate Swap Agreements: The fair value is estimated using forward-looking interest rate curves and is calculated using discounted cash flows that are observable or that can be corroborated by observable market data (Level 2). Accrued interest payable: The fair value of accrued interest payable equals the amount payable due to the current nature of the amounts payable (Level 2). Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below represents the balances of assets and liabilities measured at fair value on a recurring basis:
There were no transfers between Levels 1, 2 or 3 during the nine months ended September 30, 2017 and the year ended December 31, 2016. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company is required to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The valuation methodologies used to measure these fair value adjustments are described above. The following tables present the Company’s assets that are measured at fair value on a nonrecurring basis.
Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (continued)
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Stock Repurchase Program |
9 Months Ended |
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Sep. 30, 2017 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program On July 26, 2005, the Company’s Board of Directors authorized a program to repurchase up to a total of 1,500,000 shares of the Company’s common stock (the “2005 Stock Repurchase Program”). The Company’s Board of Directors has authorized the 2005 Stock Repurchase Program through December 31, 2018. The Company expects the purchases pursuant to the 2005 Stock Repurchase Program to be made from time to time in private transactions at a price equal to the most recent quarterly independent appraisal of the shares of the Company’s common stock and with the Board reviewing the overall results of the 2005 Stock Repurchase Program on a quarterly basis. All purchases made pursuant to the 2005 Stock Repurchase Program since its inception have been made on that basis. The amount and timing of stock repurchases will be based on various factors, such as the Board’s assessment of the Company’s capital structure and liquidity, the amount of interest shown by shareholders in selling shares of stock to the Company at their appraised value, and applicable regulatory, legal and accounting factors. The Company has purchased 1,003,216 shares of its common stock in privately negotiated transactions from August 1, 2005 through September 30, 2017. Of these 1,003,216 shares, 14,538 shares were purchased during the quarter ended September 30, 2017, at an average price per share of $52.80. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Concentrations of credit risk: The Bank’s loans, commitments to extend credit, unused lines of credit and outstanding letters of credit have been granted to customers within the Bank's market area. Investments in securities issued by state and political subdivisions within the state of Iowa totaled approximately $68.95 million. The concentrations of credit by type of loan are set forth in Note 5 to the Consolidated Financial Statements. Outstanding letters of credit were granted primarily to commercial borrowers. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent upon the economic conditions in Johnson, Linn and Washington Counties, Iowa. Contingencies: In the normal course of business, the Company and Bank are involved in various legal proceedings. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management believes at this time that the outcome of such litigation will not have a material adverse effect on the Company's business, financial condition or results of operations. Financial instruments with off-balance sheet risk: The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, credit card participations and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, credit card participations and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Bank’s commitments at September 30, 2017 and December 31, 2016 is as follows:
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Income Taxes |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Federal income tax expense for the nine months ended September 30, 2017 and 2016 was computed using the consolidated effective federal tax rate. The Company also recognized income tax expense pertaining to state franchise taxes payable individually by the subsidiary bank. The Company files a consolidated tax return for federal purposes and separate tax returns for State of Iowa purposes. The tax years ended December 31, 2016, 2015, and 2014 remain subject to examination by the Internal Revenue Service. For state tax purposes, the tax years ended December 31, 2016, 2015, and 2014 remain open for examination. There were no material unrecognized tax benefits at September 30, 2017 and December 31, 2016 and therefore no interest or penalties on unrecognized tax benefits has been recorded. As of September 30, 2017, the Company does not anticipate any significant increase in unrecognized tax benefits during the twelve-month period ending September 30, 2018. Income taxes as a percentage of income before taxes were 30.48% for the nine months ended September 30, 2017 and 31.40% for the same period in 2016. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments In the normal course of business, the Bank may use derivative financial instruments to manage its interest rate risk. These instruments carry varying degrees of credit, interest rate and market or liquidity risks. Derivative instruments are recognized as either assets or liabilities in the accompanying financial statement and are measured at fair value. The Bank’s objectives are to add stability to its net interest margin and to manage its exposure to movements in interest rates. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amount to be exchanged between the counterparties. The Bank is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. The Bank minimizes this risk by entering into derivative contracts with large, stable financial institutions. The Bank has not experienced any losses from nonperformance by counterparties. The Bank monitors counterparty risk in accordance with the provisions of ASC 815. In addition, the Bank’s interest rate-related derivative instruments contain language outlining collateral pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits which are determined by credit ratings of each counterparty. The Bank was required to pledge $3.46 million of collateral as of September 30, 2017. Cash Flow Hedges: The Bank executed two forward-starting interest rate swap transactions on November 7, 2013. One of the interest rate swap transactions had an effective date of November 9, 2015, and an expiration date of November 9, 2020, effectively converting $25.00 million of variable rate debt to fixed rate debt. The other interest rate swap transaction had an effective date of November 7, 2016 and an expiration date of November 7, 2023, effectively converting $25.00 million of variable rate debt to fixed rate debt. For accounting purposes, these swap transactions are designated as a cash flow hedge of the changes in cash flows attributable to changes in three-month LIBOR, the benchmark interest rate being hedged, associated with the interest payments made on an amount of the Bank’s debt principal equal to the then-outstanding swap notional amount. At inception, the Bank asserted that the underlying principal balance would remain outstanding throughout the hedge transaction making it probable that sufficient LIBOR-based interest payments would exist through the maturity date of the swaps. The table below identifies the balance sheet category and fair values of the Bank’s derivative instruments designated as cash flow hedges as of September 30, 2017 and December 31, 2016:
The table below identifies the gains and losses recognized on the Bank’s derivative instruments designated as cash flow hedges for the nine months ended September 30, 2017 and the year ended December 31, 2016:
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company considers that it operates as one business segment, a commercial bank. |
Effect of New Financial Accounting Standards | Effect of New Financial Accounting Standards: In May 2014, The FASB and International Accounting Standards Board (IASB) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of ASU 2014-09 is that a company should recognize revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. For financial institutions, significant changes are not expected given that most financial instruments are not in the scope of the accounting standard update. ASU 2014-09 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. In August 2015, FASB issued ASU 2015-14 deferring the effective date for annual periods and interim periods within those annual periods after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has evaluated all of its noninterest income streams and contracts to determine potential impact. The adoption of ASU 2014-09 by the Company will not have a material impact. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 created Subtopic 321-10, Investments-Equity Securities which is applicable to all entities except those in industries that account for substantially all investments at fair value through earnings or the change in net assets. Under this new subtopic, equity securities are generally required to be measured at fair value with unrealized holding gains and losses reflected in net income. ASU 2016-01 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The adoption of ASU 2016-01 by the Company is not expected to have a material impact. In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases. The ASU provides guidance requiring lessees to recognize right-of-use assets and lease liabilities for all leases other than those that meet the definition of short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which these assets and liabilities are not recognized and lease payments are generally recognized over the lease term on a straight-line basis. Under this new ASU, lessees will recognize right-of use assets and lease liabilities for most leases currently accounted for as operating leases under generally accepted accounting principles. For public companies, ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is in the process of analyzing a comprehensive list of lease agreements. The adoption of ASU 2016-02 by the Company is not expected to have a material impact. In March 2016, the FASB issued ASU No. 2016-04, Liabilities - Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products. ASU 2016-04 applies to all entities that offer certain prepaid stored - value products. The ASU provides guidance for the derecognition of financial liabilities related to the issuance of these products and aligns the recognition of breakage to current authoritative guidance. For public companies, ASU 2016-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of ASU 2016-04 by the Company is not expected to have a material impact. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU simplifies several aspects of the accounting for share-based payment transaction, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public companies, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted ASU 2016-09 for the period ending March 31, 2017. There was no material impact on the financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (CECL). The ASU changes the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Under the CECL model, we will be required to present certain financial assets carried at amortized cost, such as loans held for investment and held-to-maturity debt securities, at the net amount expected to be collected. The measurement of expected credit losses is to be based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement will take place at the time the financial asset is first added to the balance sheet and periodically thereafter. This differs significantly from the "incurred loss" model required under current GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, we expect that the adoption of the CECL model will materially affect how we determine our allowance for loan losses and could require us to significantly increase our allowance. For public companies, ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, early adoption is permitted for the fiscal year beginning after December 15, 2018. The Company is in the process of implementing a software solution to assist in the analysis of historical loan data to determine the CECL model that will be implemented. We expect to recognize a one-time cumulative-effect adjustment to our allowance for loan losses as of the beginning of the first reporting period in which the new standard is adopted. The amount of the one-time cumulative-effect adjustment has not yet been determined. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323), Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. This ASU adds an SEC paragraph and amends other Topics pursuant to an SEC staff Announcement made at the September 22, 2016 Emerging Issues Task Force (EITF) meeting. The SEC paragraph applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU provides that a company should evaluate ASUs that have not yet been adopted to determine the appropriate financial statement disclosures about the potential material effects of those ASUs on the financial statements when adopted. If the company does not know or cannot reasonably estimate the impact that adoption of the ASUs referenced in this announcement is expected to have on the financial statements, then in addition to making a statement to that effect, the company should consider additional qualitative financial statement disclosures to assist the reader in assessing the significance of the impact that the standard will have on the financial statements of the company when adopted. Additional qualitative disclosures should include a description of the effect of the accounting policies that the company expects to apply and a comparison to the company's current accounting policies. Also, the company should describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 250), Simplifying the Test for Goodwill Impairment. The ASU simplifies the goodwill impairment test by requiring a company to perform its annual or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized when the carrying amount exceeds fair value. For public companies, ASU 2017-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The adoption of ASU No. 2017-04 by the Company is not expected to have a material impact. In March 2017, the FASB issued ASU No. 2017-08, Receivable - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. This ASU shortens the amortization period for certain callable debt securities held at a premium. The premium will be amortized to the earliest call date. For public companies, ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. The Company adopted ASU 2017-08 for the period ending March 31, 2017. There was no material impact on the financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. This ASU requires companies to change the recognition and presentation of the effects of hedge accounting by eliminating the requirement to separately measure and report hedge ineffectiveness and requiring companies to present all of the elements of hedge accounting that affect earnings in the same income statement line as the hedged item. Furthermore, the standard eases the requirements for effectiveness testing, hedge documentation and applying the critical terms match method and introduces new alternatives that will permit companies to reduce the risk of material error corrections if they misapply the shortcut method. For public companies, ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. The adoption of ASU 2017-12 by the Company is not expected to have a material impact. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed using the weighted average number of actual common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur from the exercise of common stock options outstanding. ESOP shares are considered outstanding for this calculation unless unearned. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per share | The computation of basic and diluted earnings per share for the periods presented is as follows:
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Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive income (AOCI) | The following table summarizes the balances of each component of accumulated other comprehensive income (AOCI), included in stockholders’ equity, at September 30, 2017 and December 31, 2016:
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying values of investment securities | The carrying values of investment securities at September 30, 2017 and December 31, 2016 are summarized in the following table (dollars in thousands):
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Carrying amount of available-for-sale securities and approximate fair values | The carrying amount of available-for-sale securities and their approximate fair values were as follows as of September 30, 2017 and December 31, 2016 (in thousands):
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Available-for-sale securities classified as per contractual maturities | The amortized cost and estimated fair value of available-for-sale securities classified according to their contractual maturities at September 30, 2017, were as follows (in thousands):
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Available-for-sale securities, continuous unrealized loss position, fair value | The following table shows the fair value, gross unrealized losses and the percentage of fair value represented by gross unrealized losses of applicable investment securities owned by the Company, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2017 and December 31, 2016 (in thousands):
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Loans (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of classes of loans | Classes of loans are as follows:
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Schedule of changes in allowance for loan losses | Changes in the allowance for loan losses, the allowance for loan losses applicable to impaired loans and the related loan balance of impaired loans for the three and nine months ended September 30, 2017 were as follows:
Changes in the allowance for loan losses for the three and nine months ended September 30, 2016 were as follows:
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Schedule of credit quality indicators by type of loans | The following table presents the credit quality indicators by type of loans in each category as of September 30, 2017 and December 31, 2016, respectively (amounts in thousands):
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Schedule of past due loans | Past due loans as of September 30, 2017 and December 31, 2016 were as follows:
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Schedule of impaired loan information | Certain impaired loan information by loan type at September 30, 2017 and December 31, 2016, was as follows:
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Schedule of information for TDR loans | Below is a summary of information for TDR loans as of September 30, 2017 and December 31, 2016:
The following is a summary of TDR loans that were modified during the three and nine months ended September 30, 2017:
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Schedule of impaired loans | Information regarding impaired loans as of and for the three and nine months ended September 30, 2017 is as follows:
Information regarding impaired loans as of December 31, 2016 is as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying value and estimated fair values of entity's financial instruments | The carrying value and estimated fair values of the Company's financial instruments as of September 30, 2017 are as follows:
The carrying value and estimated fair values of the Company's financial instruments as of December 31, 2016 are as follows:
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Schedule of assets and liabilities measured at fair value on a recurring basis | The table below represents the balances of assets and liabilities measured at fair value on a recurring basis:
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Schedule of assets measured at fair value on a nonrecurring basis | The following tables present the Company’s assets that are measured at fair value on a nonrecurring basis.
Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (continued)
|
Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of banks commitments | A summary of the Bank’s commitments at September 30, 2017 and December 31, 2016 is as follows:
|
Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identification of the balance sheet category and fair values of the derivative instruments designated as cash flow hedges | The table below identifies the balance sheet category and fair values of the Bank’s derivative instruments designated as cash flow hedges as of September 30, 2017 and December 31, 2016:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identification of the gains and losses recognized on the derivative instruments designated as cash flow hedges | The table below identifies the gains and losses recognized on the Bank’s derivative instruments designated as cash flow hedges for the nine months ended September 30, 2017 and the year ended December 31, 2016:
|
Summary of Significant Accounting Policies (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Tax effect | $ 830 | $ 2,081 |
Net-of-tax amount | (1,339) | (3,359) |
Net unrealized loss on available-for-sale securities [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Net unrealized gain (loss) | 1,295 | (1,502) |
Net unrealized loss on derivatives used for cash flow hedges [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Net unrealized gain (loss) | $ (3,464) | $ (3,938) |
Stock Repurchase Program (Details) - $ / shares |
3 Months Ended | 9 Months Ended | 146 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Jul. 26, 2005 |
|
Equity [Abstract] | |||||
Maximum number of share authorized to repurchase under the program (in shares) | 1,500,000 | ||||
Common stock purchased during the period (in shares) | 14,538 | 40,265 | 62,266 | 1,003,216 | |
Average price per share (in dollars per share) | $ 52.80 |
Income Taxes (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Examination [Line Items] | ||
Effective tax rate | 30.48% | 31.40% |
Internal Revenue Service (IRS) [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, years under examination | December 31, 2016, 2015, and 2014 | |
State and Local Jurisdiction [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, years under examination | December 31, 2016, 2015, and 2014 |
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