MONTANA | 81-0519541 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
49 Commons Loop, Kalispell, Montana | 59901 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | |
Part I. Financial Information | |
Item 1 – Financial Statements | |
ALCO – Asset Liability Committee |
ALLL or allowance – allowance for loan and lease losses |
ASC – Accounting Standards CodificationTM |
ATM – automated teller machine |
Bank – Glacier Bank |
CDE – Certified Development Entity |
CDFI Fund – Community Development Financial Institutions Fund |
CEO – Chief Executive Officer |
CFO – Chief Financial Officer |
Collegiate – Columbine Capital Corp. and its subsidiary, Collegiate Peaks Bank |
Company – Glacier Bancorp, Inc. |
DDA – demand deposit account |
Dodd-Frank Act – Dodd-Frank Wall Street Reform and Consumer Protection Act |
Fannie Mae – Federal National Mortgage Association |
FASB – Financial Accounting Standards Board |
FDIC – Federal Deposit Insurance Corporation |
FHLB – Federal Home Loan Bank |
Final Rules – final rules implemented by the federal banking agencies that amended regulatory risk-based capital rules |
Foothills – TFB Bancorp, Inc. and its subsidiary, The Foothills Bank |
FRB – Federal Reserve Bank |
Freddie Mac – Federal Home Loan Mortgage Corporation |
FSB – Inter-Mountain Bancorp., Inc. and its subsidiary, First Security Bank |
GAAP – accounting principles generally accepted in the United States of America |
Ginnie Mae – Government National Mortgage Association |
LIBOR – London Interbank Offered Rate |
LIHTC – Low Income Housing Tax Credit |
NMTC – New Markets Tax Credit |
NOW – negotiable order of withdrawal |
NRSRO – Nationally Recognized Statistical Rating Organizations |
OCI – other comprehensive income |
OREO – other real estate owned |
Repurchase agreements – securities sold under agreements to repurchase |
S&P – Standard and Poor’s |
SEC – United States Securities and Exchange Commission |
Tax Act – The Tax Cuts and Jobs Act |
TDR – troubled debt restructuring |
VIE – variable interest entity |
(Dollars in thousands, except per share data) | March 31, 2018 | December 31, 2017 | ||||
Assets | ||||||
Cash on hand and in banks | $ | 140,625 | 139,948 | |||
Federal funds sold | 230 | — | ||||
Interest bearing cash deposits | 310,193 | 60,056 | ||||
Cash and cash equivalents | 451,048 | 200,004 | ||||
Debt securities, available-for-sale | 2,154,845 | 1,778,243 | ||||
Debt securities, held-to-maturity | 634,413 | 648,313 | ||||
Total debt securities | 2,789,258 | 2,426,556 | ||||
Loans held for sale, at fair value | 37,058 | 38,833 | ||||
Loans receivable | 7,670,030 | 6,577,824 | ||||
Allowance for loan and lease losses | (127,608 | ) | (129,568 | ) | ||
Loans receivable, net | 7,542,422 | 6,448,256 | ||||
Premises and equipment, net | 238,491 | 177,348 | ||||
Other real estate owned | 14,132 | 14,269 | ||||
Accrued interest receivable | 54,376 | 44,462 | ||||
Deferred tax asset | 32,929 | 38,344 | ||||
Core deposit intangible, net | 54,456 | 14,184 | ||||
Goodwill | 289,535 | 177,811 | ||||
Non-marketable equity securities | 21,910 | 29,884 | ||||
Bank-owned life insurance | 81,787 | 59,351 | ||||
Other assets | 51,376 | 37,047 | ||||
Total assets | $ | 11,658,778 | 9,706,349 | |||
Liabilities | ||||||
Non-interest bearing deposits | $ | 2,811,469 | 2,311,902 | |||
Interest bearing deposits | 6,607,376 | 5,267,845 | ||||
Securities sold under agreements to repurchase | 395,794 | 362,573 | ||||
Federal Home Loan Bank advances | 155,057 | 353,995 | ||||
Other borrowed funds | 8,204 | 8,224 | ||||
Subordinated debentures | 134,061 | 126,135 | ||||
Accrued interest payable | 3,740 | 3,450 | ||||
Other liabilities | 89,053 | 73,168 | ||||
Total liabilities | 10,204,754 | 8,507,292 | ||||
Stockholders’ Equity | ||||||
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding | — | — | ||||
Common stock, $0.01 par value per share, 117,187,500 shares authorized | 845 | 780 | ||||
Paid-in capital | 1,048,860 | 797,997 | ||||
Retained earnings - substantially restricted | 421,342 | 402,259 | ||||
Accumulated other comprehensive loss | (17,023 | ) | (1,979 | ) | ||
Total stockholders’ equity | 1,454,024 | 1,199,057 | ||||
Total liabilities and stockholders’ equity | $ | 11,658,778 | 9,706,349 | |||
Number of common stock shares issued and outstanding | 84,511,472 | 78,006,956 |
Three Months ended | ||||||
(Dollars in thousands, except per share data) | March 31, 2018 | March 31, 2017 | ||||
Interest Income | ||||||
Investment securities | $ | 20,142 | 21,939 | |||
Residential real estate loans | 8,785 | 7,918 | ||||
Commercial loans | 65,515 | 49,970 | ||||
Consumer and other loans | 8,624 | 7,801 | ||||
Total interest income | 103,066 | 87,628 | ||||
Interest Expense | ||||||
Deposits | 3,916 | 4,440 | ||||
Securities sold under agreements to repurchase | 485 | 382 | ||||
Federal Home Loan Bank advances | 2,089 | 1,510 | ||||
Other borrowed funds | 16 | 15 | ||||
Subordinated debentures | 1,268 | 1,019 | ||||
Total interest expense | 7,774 | 7,366 | ||||
Net Interest Income | 95,292 | 80,262 | ||||
Provision for loan losses | 795 | 1,598 | ||||
Net interest income after provision for loan losses | 94,497 | 78,664 | ||||
Non-Interest Income | ||||||
Service charges and other fees | 16,871 | 15,633 | ||||
Miscellaneous loan fees and charges | 1,477 | 980 | ||||
Gain on sale of loans | 6,097 | 6,358 | ||||
Loss on sale of debt securities | (333 | ) | (100 | ) | ||
Other income | 1,974 | 2,818 | ||||
Total non-interest income | 26,086 | 25,689 | ||||
Non-Interest Expense | ||||||
Compensation and employee benefits | 45,721 | 39,246 | ||||
Occupancy and equipment | 7,274 | 6,646 | ||||
Advertising and promotions | 2,170 | 1,973 | ||||
Data processing | 3,967 | 3,124 | ||||
Other real estate owned | 72 | 273 | ||||
Regulatory assessments and insurance | 1,206 | 1,061 | ||||
Core deposit intangibles amortization | 1,056 | 601 | ||||
Other expenses | 12,161 | 10,420 | ||||
Total non-interest expense | 73,627 | 63,344 | ||||
Income Before Income Taxes | 46,956 | 41,009 | ||||
Federal and state income tax expense | 8,397 | 9,754 | ||||
Net Income | $ | 38,559 | 31,255 | |||
Basic earnings per share | $ | 0.48 | 0.41 | |||
Diluted earnings per share | $ | 0.48 | 0.41 | |||
Dividends declared per share | $ | 0.23 | 0.21 | |||
Average outstanding shares - basic | 80,808,904 | 76,572,116 | ||||
Average outstanding shares - diluted | 80,887,135 | 76,633,283 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Net Income | $ | 38,559 | 31,255 | |||
Other Comprehensive (Loss) Income, Net of Tax | ||||||
Unrealized (losses) gains on available-for-sale debt securities | (25,711 | ) | 3,113 | |||
Reclassification adjustment for losses included in net income | 282 | 139 | ||||
Net unrealized (losses) gains on available-for-sale debt securities | (25,429 | ) | 3,252 | |||
Tax effect | 6,444 | (1,260 | ) | |||
Net of tax amount | (18,985 | ) | 1,992 | |||
Unrealized gains on derivatives used for cash flow hedges | 4,379 | 264 | ||||
Reclassification adjustment for losses included in net income | 900 | 1,332 | ||||
Net unrealized gains on derivatives used for cash flow hedges | 5,279 | 1,596 | ||||
Tax effect | (1,338 | ) | (618 | ) | ||
Net of tax amount | 3,941 | 978 | ||||
Total other comprehensive (loss) income, net of tax | (15,044 | ) | 2,970 | |||
Total Comprehensive Income | $ | 23,515 | 34,225 |
(Dollars in thousands, except per share data) | Common Stock | Paid-in Capital | Retained Earnings Substantially Restricted | Accumulated Other Compre- hensive Loss | ||||||||||||||
Shares | Amount | Total | ||||||||||||||||
Balance at December 31, 2016 | 76,525,402 | $ | 765 | 749,107 | 374,379 | (7,382 | ) | 1,116,869 | ||||||||||
Net income | — | — | — | 31,255 | — | 31,255 | ||||||||||||
Other comprehensive income | — | — | — | — | 2,970 | 2,970 | ||||||||||||
Cash dividends declared ($0.21 per share) | — | — | — | (16,129 | ) | — | (16,129 | ) | ||||||||||
Stock issuances under stock incentive plans | 94,550 | 1 | (1 | ) | — | — | — | |||||||||||
Stock-based compensation and related taxes | — | — | 275 | — | — | 275 | ||||||||||||
Balance at March 31, 2017 | 76,619,952 | $ | 766 | 749,381 | 389,505 | (4,412 | ) | 1,135,240 | ||||||||||
Balance at December 31, 2017 | 78,006,956 | $ | 780 | 797,997 | 402,259 | (1,979 | ) | 1,199,057 | ||||||||||
Net income | — | — | — | 38,559 | — | 38,559 | ||||||||||||
Other comprehensive loss | — | — | — | — | (15,044 | ) | (15,044 | ) | ||||||||||
Cash dividends declared ($0.23 per share) | — | — | — | (19,476 | ) | — | (19,476 | ) | ||||||||||
Stock issued in connection with acquisitions | 6,432,868 | 64 | 250,743 | — | — | 250,807 | ||||||||||||
Stock issuances under stock incentive plans | 71,648 | 1 | (1 | ) | — | — | — | |||||||||||
Stock-based compensation and related taxes | — | — | 121 | — | — | 121 | ||||||||||||
Balance at March 31, 2018 | 84,511,472 | $ | 845 | 1,048,860 | 421,342 | (17,023 | ) | 1,454,024 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Operating Activities | ||||||
Net income | $ | 38,559 | 31,255 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Provision for loan losses | 795 | 1,598 | ||||
Net amortization of debt securities premiums and discounts | 3,465 | 5,830 | ||||
Net amortization (accretion) of purchase accounting adjustments | 1,337 | (1,394 | ) | |||
Amortization of debt modification costs | 412 | — | ||||
Loans held for sale, originated or acquired | (175,506 | ) | (171,110 | ) | ||
Proceeds from sales of loans held for sale | 184,188 | 231,318 | ||||
Gain on sale of loans | (6,097 | ) | (6,358 | ) | ||
Loss on sale of debt securities | 333 | 100 | ||||
Bank-owned life insurance income, net | (424 | ) | (315 | ) | ||
Stock-based compensation, net of tax benefits | 1,189 | 605 | ||||
Depreciation of premises and equipment | 3,722 | 3,720 | ||||
Gain on sale of other real estate owned and write-downs, net | (53 | ) | (928 | ) | ||
Amortization of core deposit intangibles | 1,056 | 601 | ||||
Amortization of investments in variable interest entities | 1,117 | 730 | ||||
Net increase in accrued interest receivable | (2,709 | ) | (2,211 | ) | ||
Net decrease in other assets | 289 | 1,093 | ||||
Net decrease in accrued interest payable | (155 | ) | (117 | ) | ||
Net decrease in other liabilities | (3,582 | ) | (660 | ) | ||
Net cash provided by operating activities | 47,936 | 93,757 | ||||
Investing Activities | ||||||
Sales of available-for-sale debt securities | 219,855 | — | ||||
Maturities, prepayments and calls of available-for-sale debt securities | 72,952 | 110,475 | ||||
Purchases of available-for-sale debt securities | (383,992 | ) | (1,701 | ) | ||
Maturities, prepayments and calls of held-to-maturity debt securities | 13,297 | 7,790 | ||||
Principal collected on loans | 552,922 | 420,744 | ||||
Loans originated or acquired | (678,251 | ) | (620,407 | ) | ||
Net additions to premises and equipment | (5,558 | ) | (2,805 | ) | ||
Proceeds from sale of other real estate owned | 755 | 4,156 | ||||
Proceeds from sale of non-marketable equity securities | 28,986 | 18,206 | ||||
Purchases of non-marketable equity securities | (18,395 | ) | (16,600 | ) | ||
Proceeds from bank-owned life insurance | — | 437 | ||||
Investments in variable interest entities | (16,129 | ) | (3,865 | ) | ||
Net cash received in acquisitions | 101,268 | — | ||||
Net cash used in investing activities | (112,290 | ) | (83,570 | ) |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Financing Activities | ||||||
Net increase in deposits | $ | 524,162 | 107,888 | |||
Net increase in securities sold under agreements to repurchase | 4,041 | 23,537 | ||||
Net decrease in short-term Federal Home Loan Bank advances | (200,000 | ) | (40,000 | ) | ||
Repayments of long-term Federal Home Loan Bank advances | (104 | ) | (114 | ) | ||
Net (decrease) increase in other borrowed funds | (11,562 | ) | 4,454 | |||
Cash dividends paid | (107 | ) | (23,042 | ) | ||
Tax withholding payments for stock-based compensation | (1,032 | ) | (1,447 | ) | ||
Net cash provided by financing activities | 315,398 | 71,276 | ||||
Net increase in cash, cash equivalents and restricted cash | 251,044 | 81,463 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 200,004 | 152,541 | ||||
Cash, cash equivalents and restricted cash at end of period | $ | 451,048 | 234,004 | |||
Supplemental Disclosure of Cash Flow Information | ||||||
Cash paid during the period for interest | $ | 7,930 | 7,483 | |||
Cash paid during the period for income taxes | — | 70 | ||||
Supplemental Disclosure of Non-Cash Investing Activities | ||||||
Sale and refinancing of other real estate owned | $ | — | 345 | |||
Transfer of loans to other real estate owned | 378 | 390 | ||||
Dividends declared but not paid | 19,634 | 16,224 | ||||
Acquisitions | ||||||
Fair value of common stock shares issued | 250,807 | — | ||||
Cash consideration for outstanding shares | 16,265 | — | ||||
Effective settlement of a pre-existing relationship | 10,054 | — | ||||
Fair value of assets acquired | 1,549,158 | — | ||||
Liabilities assumed | 1,383,756 | — |
• | reduction of the stated interest rate for the remaining term of the debt; |
• | extension of the maturity date(s) at a stated rate of interest lower than the current market rate for newly originated debt having similar risk characteristics; and |
• | reduction of the face amount of the debt as stated in the debt agreements. |
• | analysis of global, i.e., aggregate debt service for total debt obligations; |
• | assessment of the value and security protection of collateral pledged using current market conditions and alternative market assumptions across a variety of potential future situations; and |
• | loan structures and related covenants. |
• | changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; |
• | changes in global, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; |
• | changes in the nature and volume of the portfolio and in the terms of loans; |
• | changes in experience, ability, and depth of lending management and other relevant staff; |
• | changes in the volume and severity of past due and nonaccrual loans; |
• | changes in the quality of the Company’s loan review system; |
• | changes in the value of underlying collateral for collateral-dependent loans; |
• | the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and |
• | the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio. |
March 31, 2018 | ||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | ||||||||||
(Dollars in thousands) | Gains | Losses | ||||||||||
Available-for-sale | ||||||||||||
U.S. government and federal agency | $ | 29,605 | 47 | (300 | ) | 29,352 | ||||||
U.S. government sponsored enterprises | 110,461 | 25 | (574 | ) | 109,912 | |||||||
State and local governments | 638,700 | 14,385 | (9,974 | ) | 643,111 | |||||||
Corporate bonds | 319,376 | 724 | (1,244 | ) | 318,856 | |||||||
Residential mortgage-backed securities | 920,134 | 906 | (19,928 | ) | 901,112 | |||||||
Commercial mortgage-backed securities | 155,259 | 7 | (2,764 | ) | 152,502 | |||||||
Total available-for-sale | 2,173,535 | 16,094 | (34,784 | ) | 2,154,845 | |||||||
Held-to-maturity | ||||||||||||
State and local governments | 634,413 | 11,749 | (11,782 | ) | 634,380 | |||||||
Total held-to-maturity | 634,413 | 11,749 | (11,782 | ) | 634,380 | |||||||
Total debt securities | $ | 2,807,948 | 27,843 | (46,566 | ) | 2,789,225 |
December 31, 2017 | ||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | ||||||||||
(Dollars in thousands) | Gains | Losses | ||||||||||
Available-for-sale | ||||||||||||
U.S. government and federal agency | $ | 31,216 | 54 | (143 | ) | 31,127 | ||||||
U.S. government sponsored enterprises | 19,195 | — | (104 | ) | 19,091 | |||||||
State and local governments | 614,366 | 20,299 | (5,164 | ) | 629,501 | |||||||
Corporate bonds | 216,443 | 802 | (483 | ) | 216,762 | |||||||
Residential mortgage-backed securities | 785,960 | 1,253 | (7,930 | ) | 779,283 | |||||||
Commercial mortgage-backed securities | 104,324 | 25 | (1,870 | ) | 102,479 | |||||||
Total available-for-sale | 1,771,504 | 22,433 | (15,694 | ) | 1,778,243 | |||||||
Held-to-maturity | ||||||||||||
State and local governments | 648,313 | 20,346 | (8,573 | ) | 660,086 | |||||||
Total held-to-maturity | 648,313 | 20,346 | (8,573 | ) | 660,086 | |||||||
Total debt securities | $ | 2,419,817 | 42,779 | (24,267 | ) | 2,438,329 |
March 31, 2018 | ||||||||||||
Available-for-Sale | Held-to-Maturity | |||||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||
Due within one year | $ | 114,575 | 114,324 | — | — | |||||||
Due after one year through five years | 381,174 | 380,420 | 2,102 | 2,119 | ||||||||
Due after five years through ten years | 249,144 | 253,301 | 97,453 | 96,877 | ||||||||
Due after ten years | 353,249 | 353,186 | 534,858 | 535,384 | ||||||||
1,098,142 | 1,101,231 | 634,413 | 634,380 | |||||||||
Mortgage-backed securities 1 | 1,075,393 | 1,053,614 | — | — | ||||||||
Total | $ | 2,173,535 | 2,154,845 | 634,413 | 634,380 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Available-for-sale | ||||||
Proceeds from sales and calls of debt securities | $ | 228,681 | 8,491 | |||
Gross realized gains 1 | 6 | 10 | ||||
Gross realized losses 1 | (288 | ) | (149 | ) | ||
Held-to-maturity | ||||||
Proceeds from calls of debt securities | 15,465 | 7,790 | ||||
Gross realized gains 1 | 54 | 81 | ||||
Gross realized losses 1 | (105 | ) | (42 | ) |
March 31, 2018 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||
Available-for-sale | ||||||||||||||||||
U.S. government and federal agency | $ | 13,466 | (132 | ) | 12,602 | (168 | ) | 26,068 | (300 | ) | ||||||||
U.S. government sponsored enterprises | 87,972 | (487 | ) | 3,388 | (87 | ) | 91,360 | (574 | ) | |||||||||
State and local governments | 191,317 | (3,772 | ) | 114,556 | (6,202 | ) | 305,873 | (9,974 | ) | |||||||||
Corporate bonds | 178,229 | (858 | ) | 27,274 | (386 | ) | 205,503 | (1,244 | ) | |||||||||
Residential mortgage-backed securities | 481,369 | (10,416 | ) | 240,810 | (9,512 | ) | 722,179 | (19,928 | ) | |||||||||
Commercial mortgage-backed securities | 72,464 | (904 | ) | 58,173 | (1,860 | ) | 130,637 | (2,764 | ) | |||||||||
Total available-for-sale | $ | 1,024,817 | (16,569 | ) | 456,803 | (18,215 | ) | 1,481,620 | (34,784 | ) | ||||||||
Held-to-maturity | ||||||||||||||||||
State and local governments | $ | 169,956 | (4,092 | ) | 90,783 | (7,690 | ) | 260,739 | (11,782 | ) | ||||||||
Total held-to-maturity | $ | 169,956 | (4,092 | ) | 90,783 | (7,690 | ) | 260,739 | (11,782 | ) |
December 31, 2017 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||
Available-for-sale | ||||||||||||||||||
U.S. government and federal agency | $ | 1,208 | (5 | ) | 13,179 | (138 | ) | 14,387 | (143 | ) | ||||||||
U.S. government sponsored enterprises | 14,926 | (56 | ) | 3,425 | (48 | ) | 18,351 | (104 | ) | |||||||||
State and local governments | 61,126 | (689 | ) | 121,181 | (4,475 | ) | 182,307 | (5,164 | ) | |||||||||
Corporate bonds | 99,636 | (264 | ) | 29,034 | (219 | ) | 128,670 | (483 | ) | |||||||||
Residential mortgage-backed securities | 372,175 | (3,050 | ) | 254,721 | (4,880 | ) | 626,896 | (7,930 | ) | |||||||||
Commercial mortgage-backed securities | 37,650 | (469 | ) | 62,968 | (1,401 | ) | 100,618 | (1,870 | ) | |||||||||
Total available-for-sale | $ | 586,721 | (4,533 | ) | 484,508 | (11,161 | ) | 1,071,229 | (15,694 | ) | ||||||||
Held-to-maturity | ||||||||||||||||||
State and local governments | $ | 21,207 | (186 | ) | 105,486 | (8,387 | ) | 126,693 | (8,573 | ) | ||||||||
Total held-to-maturity | $ | 21,207 | (186 | ) | 105,486 | (8,387 | ) | 126,693 | (8,573 | ) |
At or for the Three Months ended | At or for the Year ended | |||||
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||
Residential real estate loans | $ | 831,021 | 720,728 | |||
Commercial loans | ||||||
Real estate | 4,251,003 | 3,577,139 | ||||
Other commercial | 1,839,293 | 1,579,353 | ||||
Total | 6,090,296 | 5,156,492 | ||||
Consumer and other loans | ||||||
Home equity | 489,879 | 457,918 | ||||
Other consumer | 258,834 | 242,686 | ||||
Total | 748,713 | 700,604 | ||||
Loans receivable | 7,670,030 | 6,577,824 | ||||
Allowance for loan and lease losses | (127,608 | ) | (129,568 | ) | ||
Loans receivable, net | $ | 7,542,422 | 6,448,256 | |||
Net deferred origination (fees) costs included in loans receivable | $ | (4,217 | ) | (2,643 | ) | |
Net purchase accounting (discounts) premiums included in loans receivable | $ | (30,488 | ) | (16,325 | ) | |
Weighted-average interest rate on loans (tax-equivalent) | 4.82 | % | 4.81 | % |
Three Months ended March 31, 2018 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Balance at beginning of period | $ | 129,568 | 10,798 | 68,515 | 39,303 | 6,204 | 4,748 | |||||||||||
Provision for loan losses | 795 | (177 | ) | 245 | (3 | ) | (202 | ) | 932 | |||||||||
Charge-offs | (5,007 | ) | (3 | ) | (1,033 | ) | (1,788 | ) | (12 | ) | (2,171 | ) | ||||||
Recoveries | 2,252 | 16 | 615 | 596 | 50 | 975 | ||||||||||||
Balance at end of period | $ | 127,608 | 10,634 | 68,342 | 38,108 | 6,040 | 4,484 |
Three Months ended March 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Balance at beginning of period | $ | 129,572 | 12,436 | 65,773 | 37,823 | 7,572 | 5,968 | |||||||||||
Provision for loan losses | 1,598 | (926 | ) | (370 | ) | 1,621 | 129 | 1,144 | ||||||||||
Charge-offs | (4,229 | ) | (22 | ) | (888 | ) | (471 | ) | (96 | ) | (2,752 | ) | ||||||
Recoveries | 2,285 | 47 | 238 | 184 | 74 | 1,742 | ||||||||||||
Balance at end of period | $ | 129,226 | 11,535 | 64,753 | 39,157 | 7,679 | 6,102 |
March 31, 2018 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Loans receivable | ||||||||||||||||||
Individually evaluated for impairment | $ | 138,544 | 13,257 | 93,496 | 25,518 | 3,326 | 2,947 | |||||||||||
Collectively evaluated for impairment | 7,531,486 | 817,764 | 4,157,507 | 1,813,775 | 486,553 | 255,887 | ||||||||||||
Total loans receivable | $ | 7,670,030 | 831,021 | 4,251,003 | 1,839,293 | 489,879 | 258,834 | |||||||||||
ALLL | ||||||||||||||||||
Individually evaluated for impairment | $ | 4,468 | 167 | 798 | 3,042 | 27 | 434 | |||||||||||
Collectively evaluated for impairment | 123,140 | 10,467 | 67,544 | 35,066 | 6,013 | 4,050 | ||||||||||||
Total ALLL | $ | 127,608 | 10,634 | 68,342 | 38,108 | 6,040 | 4,484 |
December 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Loans receivable | ||||||||||||||||||
Individually evaluated for impairment | $ | 119,994 | 12,399 | 77,536 | 23,032 | 3,755 | 3,272 | |||||||||||
Collectively evaluated for impairment | 6,457,830 | 708,329 | 3,499,603 | 1,556,321 | 454,163 | 239,414 | ||||||||||||
Total loans receivable | $ | 6,577,824 | 720,728 | 3,577,139 | 1,579,353 | 457,918 | 242,686 | |||||||||||
ALLL | ||||||||||||||||||
Individually evaluated for impairment | $ | 5,223 | 246 | 500 | 3,851 | 56 | 570 | |||||||||||
Collectively evaluated for impairment | 124,345 | 10,552 | 68,015 | 35,452 | 6,148 | 4,178 | ||||||||||||
Total ALLL | $ | 129,568 | 10,798 | 68,515 | 39,303 | 6,204 | 4,748 |
At or for the Three Months ended March 31, 2018 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||
Recorded balance | $ | 24,171 | 3,627 | 8,587 | 10,402 | 65 | 1,490 | |||||||||||
Unpaid principal balance | 24,874 | 3,698 | 8,787 | 10,404 | 79 | 1,906 | ||||||||||||
Specific valuation allowance | 4,468 | 167 | 798 | 3,042 | 27 | 434 | ||||||||||||
Average balance | 20,931 | 3,303 | 6,566 | 9,293 | 126 | 1,643 | ||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||
Recorded balance | 114,373 | 9,630 | 84,909 | 15,116 | 3,261 | 1,457 | ||||||||||||
Unpaid principal balance | 139,033 | 10,757 | 104,008 | 18,934 | 3,795 | 1,539 | ||||||||||||
Average balance | 108,339 | 9,526 | 78,950 | 14,982 | 3,415 | 1,466 | ||||||||||||
Total | ||||||||||||||||||
Recorded balance | 138,544 | 13,257 | 93,496 | 25,518 | 3,326 | 2,947 | ||||||||||||
Unpaid principal balance | 163,907 | 14,455 | 112,795 | 29,338 | 3,874 | 3,445 | ||||||||||||
Specific valuation allowance | 4,468 | 167 | 798 | 3,042 | 27 | 434 | ||||||||||||
Average balance | 129,270 | 12,829 | 85,516 | 24,275 | 3,541 | 3,109 |
At or for the Year ended December 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||
Recorded balance | $ | 17,689 | 2,978 | 4,545 | 8,183 | 186 | 1,797 | |||||||||||
Unpaid principal balance | 18,400 | 3,046 | 4,573 | 8,378 | 199 | 2,204 | ||||||||||||
Specific valuation allowance | 5,223 | 246 | 500 | 3,851 | 56 | 570 | ||||||||||||
Average balance | 18,986 | 2,928 | 5,851 | 8,477 | 359 | 1,371 | ||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||
Recorded balance | 102,305 | 9,421 | 72,991 | 14,849 | 3,569 | 1,475 | ||||||||||||
Unpaid principal balance | 122,833 | 10,380 | 89,839 | 16,931 | 4,098 | 1,585 | ||||||||||||
Average balance | 107,945 | 9,834 | 76,427 | 15,129 | 4,734 | 1,821 | ||||||||||||
Total | ||||||||||||||||||
Recorded balance | 119,994 | 12,399 | 77,536 | 23,032 | 3,755 | 3,272 | ||||||||||||
Unpaid principal balance | 141,233 | 13,426 | 94,412 | 25,309 | 4,297 | 3,789 | ||||||||||||
Specific valuation allowance | 5,223 | 246 | 500 | 3,851 | 56 | 570 | ||||||||||||
Average balance | 126,931 | 12,762 | 82,278 | 23,606 | 5,093 | 3,192 |
March 31, 2018 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Accruing loans 30-59 days past due | $ | 34,506 | 7,812 | 14,016 | 8,676 | 2,197 | 1,805 | |||||||||||
Accruing loans 60-89 days past due | 10,457 | 593 | 5,694 | 3,660 | 43 | 467 | ||||||||||||
Accruing loans 90 days or more past due | 5,402 | 430 | 2,379 | 2,322 | 111 | 160 | ||||||||||||
Non-accrual loans | 54,449 | 7,188 | 34,344 | 9,509 | 2,804 | 604 | ||||||||||||
Total past due and non-accrual loans | 104,814 | 16,023 | 56,433 | 24,167 | 5,155 | 3,036 | ||||||||||||
Current loans receivable | 7,565,216 | 814,998 | 4,194,570 | 1,815,126 | 484,724 | 255,798 | ||||||||||||
Total loans receivable | $ | 7,670,030 | 831,021 | 4,251,003 | 1,839,293 | 489,879 | 258,834 |
December 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
Accruing loans 30-59 days past due | $ | 26,375 | 6,252 | 12,546 | 3,634 | 2,142 | 1,801 | |||||||||||
Accruing loans 60-89 days past due | 11,312 | 794 | 5,367 | 3,502 | 987 | 662 | ||||||||||||
Accruing loans 90 days or more past due | 6,077 | 2,366 | 609 | 2,973 | — | 129 | ||||||||||||
Non-accrual loans | 44,833 | 4,924 | 27,331 | 8,298 | 3,338 | 942 | ||||||||||||
Total past due and non-accrual loans | 88,597 | 14,336 | 45,853 | 18,407 | 6,467 | 3,534 | ||||||||||||
Current loans receivable | 6,489,227 | 706,392 | 3,531,286 | 1,560,946 | 451,451 | 239,152 | ||||||||||||
Total loans receivable | $ | 6,577,824 | 720,728 | 3,577,139 | 1,579,353 | 457,918 | 242,686 |
Three Months ended March 31, 2018 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
TDRs that occurred during the period | ||||||||||||||||||
Number of loans | 12 | 2 | 4 | 6 | — | — | ||||||||||||
Pre-modification recorded balance | $ | 15,997 | 439 | 8,278 | 7,280 | — | — | |||||||||||
Post-modification recorded balance | $ | 15,997 | 439 | 8,278 | 7,280 | — | — | |||||||||||
TDRs that subsequently defaulted | ||||||||||||||||||
Number of loans | 1 | 1 | — | — | — | — | ||||||||||||
Recorded balance | $ | 334 | 334 | — | — | — | — |
Three Months ended March 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Total | Residential Real Estate | Commercial Real Estate | Other Commercial | Home Equity | Other Consumer | ||||||||||||
TDRs that occurred during the period | ||||||||||||||||||
Number of loans | 10 | 2 | 2 | 4 | 1 | 1 | ||||||||||||
Pre-modification recorded balance | $ | 9,555 | 280 | 582 | 8,530 | 153 | 10 | |||||||||||
Post-modification recorded balance | $ | 9,552 | 280 | 582 | 8,530 | 153 | 7 | |||||||||||
TDRs that subsequently defaulted | ||||||||||||||||||
Number of loans | 2 | — | — | 1 | — | 1 | ||||||||||||
Recorded balance | $ | 25 | — | — | 18 | — | 7 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Net carrying value at beginning of period | $ | 177,811 | 147,053 | |||
Acquisitions | 111,724 | — | ||||
Net carrying value at end of period | $ | 289,535 | 147,053 |
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||
Assets | ||||||
Loans receivable | $ | 58,092 | 57,796 | |||
Accrued interest receivable | 94 | 94 | ||||
Other assets | 31,901 | 15,885 | ||||
Total assets | $ | 90,087 | 73,775 | |||
Liabilities | ||||||
Other borrowed funds | $ | 7,964 | 7,964 | |||
Accrued interest payable | 1 | 1 | ||||
Other liabilities | 89 | 98 | ||||
Total liabilities | $ | 8,054 | 8,063 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Amortization expense | $ | 891 | 503 | |||
Tax credits and other tax benefits recognized | 1,240 | 776 |
March 31, 2018 | ||||||||||||
Remaining Contractual Maturity of the Agreements | ||||||||||||
(Dollars in thousands) | Overnight and Continuous | 30 - 90 Days | Greater Than 90 Days | Total | ||||||||
State and local governments | $ | 18,928 | 1,285 | 20,393 | 40,606 | |||||||
Residential mortgage-backed securities | 353,465 | — | — | 353,465 | ||||||||
Commercial mortgage-backed securities | 1,723 | — | — | 1,723 | ||||||||
Total | $ | 374,116 | 1,285 | 20,393 | 395,794 |
December 31, 2017 | ||||||||||||
Remaining Contractual Maturity of the Agreements | ||||||||||||
(Dollars in thousands) | Overnight and Continuous | 30 - 90 Days | Greater Than 90 Days | Total | ||||||||
Residential mortgage-backed securities | $ | 360,751 | — | — | 360,751 | |||||||
Commercial mortgage-backed securities | 1,822 | — | — | 1,822 | ||||||||
Total | $ | 362,573 | — | — | 362,573 |
(Dollars in thousands) | Forecasted Notional Amount | Variable Interest Rate 1 | Fixed Interest Rate 1 | Payment Term | ||||||
Interest rate swap | $ | 160,000 | 3 month LIBOR | 3.378 | % | Oct. 21, 2014 - Oct. 21, 2021 | ||||
Interest rate swap | 100,000 | 3 month LIBOR | 2.498 | % | Nov. 30, 2015 - Nov. 30, 2022 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Interest rate swaps | ||||||
Amount of gain recognized in OCI (effective portion) | $ | 4,379 | 264 | |||
Amount of loss reclassified from OCI to interest expense | (900 | ) | (1,332 | ) | ||
Amount of loss recognized in other non-interest expense (ineffective portion) | — | — |
March 31, 2018 | December 31, 2017 | |||||||||||||||||
(Dollars in thousands) | Gross Amount of Recognized Assets | Gross Amount Offset in the Statements of Financial Position | Net Amounts of Assets Presented in the Statements of Financial Position | Gross Amount of Recognized Assets | Gross Amount Offset in the Statements of Financial Position | Net Amounts of Assets Presented in the Statements of Financial Position | ||||||||||||
Interest rate swaps | $ | 601 | (601 | ) | — | — | — | — |
March 31, 2018 | December 31, 2017 | |||||||||||||||||
(Dollars in thousands) | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Statements of Financial Position | Net Amounts of Liabilities Presented in the Statements of Financial Position | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Statements of Financial Position | Net Amounts of Liabilities Presented in the Statements of Financial Position | ||||||||||||
Interest rate swaps | $ | 4,711 | (601 | ) | 4,110 | 9,389 | — | 9,389 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Mergers and acquisition expenses | $ | 1,836 | 83 | |||
Debit card expenses | 1,640 | 1,718 | ||||
Consulting and outside services | 1,379 | 1,420 | ||||
Telephone | 1,021 | 977 | ||||
Loan expenses | 804 | 891 | ||||
Employee expenses | 791 | 789 | ||||
Postage | 779 | 725 | ||||
Printing and supplies | 691 | 640 | ||||
VIE amortization and other expenses | 474 | 464 | ||||
Business development | 468 | 340 | ||||
Accounting and audit fees | 418 | 490 | ||||
Legal fees | 314 | 279 | ||||
ATM expenses | 289 | 312 | ||||
Checking and operating expenses | 113 | 365 | ||||
Other | 1,144 | 927 | ||||
Total other expenses | $ | 12,161 | 10,420 |
(Dollars in thousands) | Gains (Losses) on Available-For-Sale Debt Securities | Losses on Derivatives Used for Cash Flow Hedges | Total | ||||||
Balance at December 31, 2016 | $ | 1,639 | (9,021 | ) | (7,382 | ) | |||
Other comprehensive income before reclassifications | 1,907 | 162 | 2,069 | ||||||
Reclassification adjustments for losses included in net income | 85 | 816 | 901 | ||||||
Net current period other comprehensive income | 1,992 | 978 | 2,970 | ||||||
Balance at March 31, 2017 | $ | 3,631 | (8,043 | ) | (4,412 | ) | |||
Balance at December 31, 2017 | $ | 5,031 | (7,010 | ) | (1,979 | ) | |||
Other comprehensive (loss) income before reclassifications | (19,196 | ) | 3,269 | (15,927 | ) | ||||
Reclassification adjustments for losses included in net income | 211 | 672 | 883 | ||||||
Net current period other comprehensive (loss) income | (18,985 | ) | 3,941 | (15,044 | ) | ||||
Balance at March 31, 2018 | $ | (13,954 | ) | (3,069 | ) | (17,023 | ) |
Three Months ended | ||||||
(Dollars in thousands, except per share data) | March 31, 2018 | March 31, 2017 | ||||
Net income available to common stockholders, basic and diluted | $ | 38,559 | 31,255 | |||
Average outstanding shares - basic | 80,808,904 | 76,572,116 | ||||
Add: dilutive restricted stock awards and stock options | 78,231 | 61,167 | ||||
Average outstanding shares - diluted | 80,887,135 | 76,633,283 | ||||
Basic earnings per share | $ | 0.48 | 0.41 | |||
Diluted earnings per share | $ | 0.48 | 0.41 |
Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities |
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Fair Value March 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Debt securities, available-for-sale | ||||||||||||
U.S. government and federal agency | $ | 29,352 | — | 29,352 | — | |||||||
U.S. government sponsored enterprises | 109,912 | — | 109,912 | — | ||||||||
State and local governments | 643,111 | — | 643,111 | — | ||||||||
Corporate bonds | 318,856 | — | 318,856 | — | ||||||||
Residential mortgage-backed securities | 901,112 | — | 901,112 | — | ||||||||
Commercial mortgage-backed securities | 152,502 | — | 152,502 | — | ||||||||
Loans held for sale, at fair value | 37,058 | — | 37,058 | — | ||||||||
Total assets measured at fair value on a recurring basis | $ | 2,191,903 | — | 2,191,903 | — | |||||||
Interest rate swaps | $ | 4,110 | — | 4,110 | — | |||||||
Total liabilities measured at fair value on a recurring basis | $ | 4,110 | — | 4,110 | — |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Fair Value December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Debt securities, available-for-sale | ||||||||||||
U.S. government and federal agency | $ | 31,127 | — | 31,127 | — | |||||||
U.S. government sponsored enterprises | 19,091 | — | 19,091 | — | ||||||||
State and local governments | 629,501 | — | 629,501 | — | ||||||||
Corporate bonds | 216,762 | — | 216,762 | — | ||||||||
Residential mortgage-backed securities | 779,283 | — | 779,283 | — | ||||||||
Commercial mortgage-backed securities | 102,479 | — | 102,479 | — | ||||||||
Loans held for sale, at fair value | 38,833 | — | 38,833 | — | ||||||||
Total assets measured at fair value on a recurring basis | $ | 1,817,076 | — | 1,817,076 | — | |||||||
Interest rate swaps | $ | 9,389 | — | 9,389 | — | |||||||
Total liabilities measured at fair value on a recurring basis | $ | 9,389 | — | 9,389 | — |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Fair Value March 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Other real estate owned | $ | 138 | — | — | 138 | |||||||
Collateral-dependent impaired loans, net of ALLL | 11,172 | — | — | 11,172 | ||||||||
Total assets measured at fair value on a non-recurring basis | $ | 11,310 | — | — | 11,310 |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Fair Value December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Other real estate owned | $ | 2,296 | — | — | 2,296 | |||||||
Collateral-dependent impaired loans, net of ALLL | 6,339 | — | — | 6,339 | ||||||||
Total assets measured at fair value on a non-recurring basis | $ | 8,635 | — | — | 8,635 |
Fair Value March 31, 2018 | Quantitative Information about Level 3 Fair Value Measurements | ||||||||
(Dollars in thousands) | Valuation Technique | Unobservable Input | Range (Weighted-Average) 1 | ||||||
Other real estate owned | $ | 138 | Sales comparison approach | Selling costs | 15.0% - 15.0% (15.0%) | ||||
Collateral-dependent impaired loans, net of ALLL | $ | 13 | Cost approach | Selling costs | 20.0% - 20.0% (20.0%) | ||||
4,497 | Sales comparison approach | Selling costs | 8.0% - 10.0% (9.6%) | ||||||
6,662 | Combined approach | Selling costs | 10.0% - 10.0% (10.0%) | ||||||
$ | 11,172 |
Fair Value December 31, 2017 | Quantitative Information about Level 3 Fair Value Measurements | ||||||||
(Dollars in thousands) | Valuation Technique | Unobservable Input | Range (Weighted-Average) 1 | ||||||
Other real estate owned | $ | 2,296 | Sales comparison approach | Selling costs | 0.0% - 10.0% (6.0%) | ||||
Collateral-dependent impaired loans, net of ALLL | $ | 238 | Cost approach | Selling costs | 10.0% - 20.0% (10.6%) | ||||
2,541 | Sales comparison approach | Selling costs | 8.0% - 10.0% (9.4%) | ||||||
3,560 | Combined approach | Selling costs | 10.0% - 10.0% (10.0%) | ||||||
$ | 6,339 |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Carrying Amount March 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Financial assets | ||||||||||||
Cash and cash equivalents | $ | 451,048 | 451,048 | — | — | |||||||
Debt securities, available-for-sale | 2,154,845 | — | 2,154,845 | — | ||||||||
Debt securities, held-to-maturity | 634,413 | — | 634,380 | — | ||||||||
Loans held for sale, at fair value | 37,058 | — | 37,058 | — | ||||||||
Loans receivable, net of ALLL | 7,542,422 | — | — | 7,502,161 | ||||||||
Accrued interest receivable | 54,376 | 54,376 | — | — | ||||||||
Non-marketable equity securities | 21,910 | — | 21,910 | — | ||||||||
Total financial assets | $ | 10,896,072 | 505,424 | 2,848,193 | 7,502,161 | |||||||
Financial liabilities | ||||||||||||
Deposits | $ | 9,418,845 | 8,318,277 | 1,102,380 | — | |||||||
FHLB advances | 155,057 | — | 153,483 | — | ||||||||
Repurchase agreements and other borrowed funds | 403,998 | — | 403,994 | — | ||||||||
Subordinated debentures | 134,061 | — | 112,189 | — | ||||||||
Accrued interest payable | 3,740 | 3,740 | — | — | ||||||||
Interest rate swaps | 4,110 | — | 4,110 | — | ||||||||
Total financial liabilities | $ | 10,119,811 | 8,322,017 | 1,776,156 | — |
Fair Value Measurements At the End of the Reporting Period Using | ||||||||||||
(Dollars in thousands) | Carrying Amount December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Financial assets | ||||||||||||
Cash and cash equivalents | $ | 200,004 | 200,004 | — | — | |||||||
Debt securities, available-for-sale | 1,778,243 | — | 1,778,243 | — | ||||||||
Debt securities, held-to-maturity | 648,313 | — | 660,086 | — | ||||||||
Loans held for sale, at fair value | 38,833 | — | 38,833 | — | ||||||||
Loans receivable, net of ALLL | 6,448,256 | — | 6,219,515 | 114,771 | ||||||||
Accrued interest receivable | 44,462 | 44,462 | — | — | ||||||||
Non-marketable equity securities | 29,884 | — | 29,884 | — | ||||||||
Total financial assets | $ | 9,187,995 | 244,466 | 8,726,561 | 114,771 | |||||||
Financial liabilities | ||||||||||||
Deposits | $ | 7,579,747 | 6,602,445 | 978,803 | — | |||||||
FHLB advances | 353,995 | — | 352,886 | — | ||||||||
Repurchase agreements and other borrowed funds | 370,797 | — | 370,797 | — | ||||||||
Subordinated debentures | 126,135 | — | 98,023 | — | ||||||||
Accrued interest payable | 3,450 | 3,450 | — | — | ||||||||
Interest rate swaps | 9,389 | — | 9,389 | — | ||||||||
Total financial liabilities | $ | 8,443,513 | 6,605,895 | 1,809,898 | — |
FSB | Collegiate | |||||
(Dollars in thousands) | February 28, 2018 | January 31, 2018 | ||||
Fair value of consideration transferred | ||||||
Fair value of Company shares issued, net of equity issuance costs | $ | 181,043 | 69,764 | |||
Cash consideration for outstanding shares | — | 16,265 | ||||
Effective settlement of a pre-existing relationship | — | 10,054 | ||||
Total fair value of consideration transferred | 181,043 | 96,083 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed | ||||||
Identifiable assets acquired | ||||||
Cash and cash equivalents | 24,397 | 93,136 | ||||
Debt securities | 271,865 | 42,177 | ||||
Loans receivable | 627,767 | 354,252 | ||||
Core deposit intangible 1 | 31,053 | 10,275 | ||||
Accrued income and other assets | 78,325 | 15,911 | ||||
Total identifiable assets acquired | 1,033,407 | 515,751 | ||||
Liabilities assumed | ||||||
Deposits | 877,586 | 437,171 | ||||
Borrowings 2 | 36,880 | 12,509 | ||||
Accrued expenses and other liabilities | 14,175 | 5,435 | ||||
Total liabilities assumed | 928,641 | 455,115 | ||||
Total identifiable net assets | 104,766 | 60,636 | ||||
Goodwill recognized | $ | 76,277 | 35,447 |
Three Months ended | ||||||
(Dollars in thousands) | March 31, 2018 | March 31, 2017 | ||||
Net interest income and non-interest income | $ | 130,068 | 120,646 | |||
Net income | 33,948 | 35,457 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio; |
• | changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability; |
• | changes in the cost and scope of insurance from the Federal Deposit Insurance Corporation (“FDIC”) and other third parties; |
• | legislative or regulatory changes, including increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets; |
• | ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations; |
• | costs or difficulties related to the completion and integration of acquisitions; |
• | the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital; |
• | reduced demand for banking products and services; |
• | the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain (and maintain) customers; |
• | competition among financial institutions in the Company's markets may increase significantly; |
• | the risks presented by continued public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow the Company through acquisitions; |
• | the projected business and profitability of an expansion or the opening of a new branch could be lower than expected; |
• | consolidation in the financial services industry in the Company’s markets resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape; |
• | dependence on the (“CEO”), the senior management team and the Presidents of Glacier Bank (“Bank”) divisions; |
• | material failure, potential interruption or breach in security of the Company’s systems and technological changes which could expose us to new risks (e.g., cybersecurity), fraud or system failures; |
• | natural disasters, including fires, floods, earthquakes, and other unexpected events; |
• | the Company’s success in managing risks involved in the foregoing; and |
• | the effects of any reputational damage to the Company resulting from any of the foregoing. |
Three Months ended December 31, 2017 | |||||||||
(Dollars in thousands, except per share data) | GAAP | Tax Act Adjustment | Non-GAAP | ||||||
Federal and state income tax expense | $ | 31,327 | (19,699 | ) | 11,628 | ||||
Net income | $ | 14,956 | 19,699 | 34,655 | |||||
Basic earnings per share | $ | 0.19 | 0.25 | 0.44 | |||||
Diluted earnings per share | $ | 0.19 | 0.25 | 0.44 | |||||
Return on average assets | 0.61 | % | 0.81 | % | 1.42 | % | |||
Return on average equity | 4.91 | % | 6.47 | % | 11.38 | % | |||
Dividend payout ratio | 110.53 | % | (62.80 | )% | 47.73 | % | |||
Effective tax rate | 67.69 | % | (42.57 | )% | 25.12 | % |
At or for the Three Months ended | |||||||||
(Dollars in thousands, except per share and market data) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | ||||||
Operating results | |||||||||
Net income 1 | $ | 38,559 | 34,655 | 31,255 | |||||
Basic earnings per share 1 | $ | 0.48 | 0.44 | 0.41 | |||||
Diluted earnings per share 1 | $ | 0.48 | 0.44 | 0.41 | |||||
Dividends declared per share | $ | 0.23 | 0.21 | 0.21 | |||||
Market value per share | |||||||||
Closing | $ | 38.38 | 39.39 | 33.93 | |||||
High | $ | 41.24 | 41.23 | 38.17 | |||||
Low | $ | 36.72 | 35.50 | 31.70 | |||||
Selected ratios and other data | |||||||||
Number of common stock shares outstanding | 84,511,472 | 78,006,956 | 76,619,952 | ||||||
Average outstanding shares - basic | 80,808,904 | 78,006,956 | 76,572,116 | ||||||
Average outstanding shares - diluted | 80,887,135 | 78,094,494 | 76,633,283 | ||||||
Return on average assets (annualized) 1 | 1.50 | % | 1.42 | % | 1.35 | % | |||
Return on average equity (annualized) 1 | 11.90 | % | 11.38 | % | 11.19 | % | |||
Efficiency ratio | 57.80 | % | 54.02 | % | 55.57 | % | |||
Dividend payout ratio 1 | 47.92 | % | 47.73 | % | 51.22 | % | |||
Loan to deposit ratio | 81.83 | % | 87.29 | % | 78.91 | % | |||
Number of full time equivalent employees | 2,492 | 2,278 | 2,224 | ||||||
Number of locations | 166 | 145 | 142 | ||||||
Number of ATMs | 222 | 200 | 195 |
FSB | Collegiate | ||||||||
(Dollars in thousands) | February 28, 2018 | January 31, 2018 | Total | ||||||
Total assets | $ | 1,109,684 | 551,198 | 1,660,882 | |||||
Debt securities | 271,865 | 42,177 | 314,042 | ||||||
Loans receivable | 627,767 | 354,252 | 982,019 | ||||||
Non-interest bearing deposits | 301,468 | 170,022 | 471,490 | ||||||
Interest bearing deposits | 576,118 | 267,149 | 843,267 | ||||||
Borrowings | 36,880 | 12,509 | 49,389 |
$ Change from | |||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||
Cash and cash equivalents | $ | 451,048 | 200,004 | 234,004 | 251,044 | 217,044 | |||||||||
Debt securities, available-for-sale | 2,154,845 | 1,778,243 | 2,314,521 | 376,602 | (159,676 | ) | |||||||||
Debt securities, held-to-maturity | 634,413 | 648,313 | 667,388 | (13,900 | ) | (32,975 | ) | ||||||||
Total debt securities | 2,789,258 | 2,426,556 | 2,981,909 | 362,702 | (192,651 | ) | |||||||||
Loans receivable | |||||||||||||||
Residential real estate | 831,021 | 720,728 | 685,458 | 110,293 | 145,563 | ||||||||||
Commercial real estate | 4,251,003 | 3,577,139 | 3,056,372 | 673,864 | 1,194,631 | ||||||||||
Other commercial | 1,839,293 | 1,579,353 | 1,462,110 | 259,940 | 377,183 | ||||||||||
Home equity | 489,879 | 457,918 | 433,554 | 31,961 | 56,325 | ||||||||||
Other consumer | 258,834 | 242,686 | 239,480 | 16,148 | 19,354 | ||||||||||
Loans receivable | 7,670,030 | 6,577,824 | 5,876,974 | 1,092,206 | 1,793,056 | ||||||||||
Allowance for loan and lease losses | (127,608 | ) | (129,568 | ) | (129,226 | ) | 1,960 | 1,618 | |||||||
Loans receivable, net | 7,542,422 | 6,448,256 | 5,747,748 | 1,094,166 | 1,794,674 | ||||||||||
Other assets | 876,050 | 631,533 | 590,247 | 244,517 | 285,803 | ||||||||||
Total assets | $ | 11,658,778 | 9,706,349 | 9,553,908 | 1,952,429 | 2,104,870 |
$ Change from | |||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||
Deposits | |||||||||||||||
Non-interest bearing deposits | $ | 2,811,469 | 2,311,902 | 2,049,476 | 499,567 | 761,993 | |||||||||
NOW and DDA accounts | 2,400,693 | 1,695,246 | 1,596,353 | 705,447 | 804,340 | ||||||||||
Savings accounts | 1,328,047 | 1,082,604 | 1,035,023 | 245,443 | 293,024 | ||||||||||
Money market deposit accounts | 1,778,068 | 1,512,693 | 1,516,731 | 265,375 | 261,337 | ||||||||||
Certificate accounts | 955,105 | 817,259 | 941,628 | 137,846 | 13,477 | ||||||||||
Core deposits, total | 9,273,382 | 7,419,704 | 7,139,211 | 1,853,678 | 2,134,171 | ||||||||||
Wholesale deposits | 145,463 | 160,043 | 340,946 | (14,580 | ) | (195,483 | ) | ||||||||
Deposits, total | 9,418,845 | 7,579,747 | 7,480,157 | 1,839,098 | 1,938,688 | ||||||||||
Securities sold under agreements to repurchase | 395,794 | 362,573 | 497,187 | 33,221 | (101,393 | ) | |||||||||
Federal Home Loan Bank advances | 155,057 | 353,995 | 211,627 | (198,938 | ) | (56,570 | ) | ||||||||
Other borrowed funds | 8,204 | 8,224 | 8,894 | (20 | ) | (690 | ) | ||||||||
Subordinated debentures | 134,061 | 126,135 | 126,027 | 7,926 | 8,034 | ||||||||||
Other liabilities | 92,793 | 76,618 | 94,776 | 16,175 | (1,983 | ) | |||||||||
Total liabilities | $ | 10,204,754 | 8,507,292 | 8,418,668 | 1,697,462 | 1,786,086 |
$ Change from | |||||||||||||||
(Dollars in thousands, except per share data) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||
Common equity | $ | 1,471,047 | 1,201,036 | 1,139,652 | 270,011 | 331,395 | |||||||||
Accumulated other comprehensive loss | (17,023 | ) | (1,979 | ) | (4,412 | ) | (15,044 | ) | (12,611 | ) | |||||
Total stockholders’ equity | 1,454,024 | 1,199,057 | 1,135,240 | 254,967 | 318,784 | ||||||||||
Goodwill and core deposit intangible, net | (343,991 | ) | (191,995 | ) | (158,799 | ) | (151,996 | ) | (185,192 | ) | |||||
Tangible stockholders’ equity | $ | 1,110,033 | 1,007,062 | 976,441 | 102,971 | 133,592 | |||||||||
Stockholders’ equity to total assets | 12.47 | % | 12.35 | % | 11.88 | % | |||||||||
Tangible stockholders’ equity to total tangible assets | 9.81 | % | 10.58 | % | 10.39 | % | |||||||||
Book value per common share | $ | 17.21 | 15.37 | 14.82 | 1.84 | 2.39 | |||||||||
Tangible book value per common share | $ | 13.13 | 12.91 | 12.74 | 0.22 | 0.39 |
Three Months ended | $ Change from | ||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||
Net interest income | |||||||||||||||
Interest income | $ | 103,066 | 96,898 | 87,628 | 6,168 | 15,438 | |||||||||
Interest expense | 7,774 | 7,072 | 7,366 | 702 | 408 | ||||||||||
Total net interest income | 95,292 | 89,826 | 80,262 | 5,466 | 15,030 | ||||||||||
Non-interest income | |||||||||||||||
Service charges and other fees | 16,871 | 17,282 | 15,633 | (411 | ) | 1,238 | |||||||||
Miscellaneous loan fees and charges | 1,477 | 1,077 | 980 | 400 | 497 | ||||||||||
Gain on sale of loans | 6,097 | 7,408 | 6,358 | (1,311 | ) | (261 | ) | ||||||||
Loss on sale of investments | (333 | ) | (115 | ) | (100 | ) | (218 | ) | (233 | ) | |||||
Other income | 1,974 | 2,057 | 2,818 | (83 | ) | (844 | ) | ||||||||
Total non-interest income | 26,086 | 27,709 | 25,689 | (1,623 | ) | 397 | |||||||||
Total income | $ | 121,378 | 117,535 | 105,951 | 3,843 | 15,427 | |||||||||
Net interest margin (tax-equivalent) | 4.10 | % | 4.23 | % | 4.03 | % |
Three Months ended | $ Change from | ||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||
Compensation and employee benefits | $ | 45,721 | 40,465 | 39,246 | 5,256 | 6,475 | |||||||||
Occupancy and equipment | 7,274 | 6,925 | 6,646 | 349 | 628 | ||||||||||
Advertising and promotions | 2,170 | 2,024 | 1,973 | 146 | 197 | ||||||||||
Data processing | 3,967 | 3,970 | 3,124 | (3 | ) | 843 | |||||||||
Other real estate owned | 72 | 377 | 273 | (305 | ) | (201 | ) | ||||||||
Regulatory assessments and insurance | 1,206 | 1,069 | 1,061 | 137 | 145 | ||||||||||
Core deposit intangibles amortization | 1,056 | 614 | 601 | 442 | 455 | ||||||||||
Other expenses | 12,161 | 12,922 | 10,420 | (761 | ) | 1,741 | |||||||||
Total non-interest expense | $ | 73,627 | 68,366 | 63,344 | 5,261 | 10,283 |
(Dollars in thousands) | Provision for Loan Losses | Net Charge-Offs (Recoveries) | Allowance for Loan and Lease Losses as a Percent of Loans | Accruing Loans 30-89 Days Past Due as a Percent of Loans | Non-Performing Assets to Total Sub-sidiary Assets | |||||||||||
First quarter 2018 | $ | 795 | $ | 2,755 | 1.66 | % | 0.59 | % | 0.64 | % | ||||||
Fourth quarter 2017 | 2,886 | 2,894 | 1.97 | % | 0.57 | % | 0.68 | % | ||||||||
Third quarter 2017 | 3,327 | 3,628 | 1.99 | % | 0.45 | % | 0.67 | % | ||||||||
Second quarter 2017 | 3,013 | 2,362 | 2.05 | % | 0.49 | % | 0.70 | % | ||||||||
First quarter 2017 | 1,598 | 1,944 | 2.20 | % | 0.67 | % | 0.75 | % | ||||||||
Fourth quarter 2016 | 1,139 | 4,101 | 2.28 | % | 0.45 | % | 0.76 | % | ||||||||
Third quarter 2016 | 626 | 478 | 2.37 | % | 0.49 | % | 0.84 | % | ||||||||
Second quarter 2016 | — | (2,315 | ) | 2.46 | % | 0.44 | % | 0.82 | % |
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Carrying Amount | Percent | Carrying Amount | Percent | Carrying Amount | Percent | ||||||||||||||
Available-for-sale | ||||||||||||||||||||
U.S. government and federal agency | $ | 29,352 | 1 | % | $ | 31,127 | 1 | % | $ | 37,416 | 1 | % | ||||||||
U.S. government sponsored enterprises | 109,912 | 4 | % | 19,091 | 1 | % | 19,536 | 1 | % | |||||||||||
State and local governments | 643,111 | 23 | % | 629,501 | 26 | % | 762,167 | 26 | % | |||||||||||
Corporate bonds | 318,856 | 11 | % | 216,762 | 9 | % | 443,701 | 15 | % | |||||||||||
Residential mortgage-backed securities | 901,112 | 32 | % | 779,283 | 32 | % | 949,091 | 32 | % | |||||||||||
Commercial mortgage-backed securities | 152,502 | 6 | % | 102,479 | 4 | % | 102,610 | 3 | % | |||||||||||
Total available-for-sale | 2,154,845 | 77 | % | 1,778,243 | 73 | % | 2,314,521 | 78 | % | |||||||||||
Held-to-maturity | ||||||||||||||||||||
State and local governments | 634,413 | 23 | % | 648,313 | 27 | % | 667,388 | 22 | % | |||||||||||
Total held-to-maturity | 634,413 | 23 | % | 648,313 | 27 | % | 667,388 | 22 | % | |||||||||||
Total debt securities | $ | 2,789,258 | 100 | % | $ | 2,426,556 | 100 | % | $ | 2,981,909 | 100 | % |
March 31, 2018 | December 31, 2017 | |||||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||
S&P: AAA / Moody’s: Aaa | $ | 293,020 | 291,006 | 310,040 | 311,759 | |||||||
S&P: AA+, AA, AA- / Moody’s: Aa1, Aa2, Aa3 | 766,982 | 769,658 | 767,306 | 783,795 | ||||||||
S&P: A+, A, A- / Moody’s: A1, A2, A3 | 174,664 | 179,636 | 167,230 | 175,539 | ||||||||
S&P: BBB+, BBB, BBB- / Moody’s: Baa1, Baa2, Baa3 | 5,881 | 6,018 | 2,271 | 2,372 | ||||||||
Not rated by either entity | 31,719 | 30,319 | 14,985 | 15,262 | ||||||||
Below investment grade | 847 | 854 | 847 | 860 | ||||||||
Total | $ | 1,273,113 | 1,277,491 | 1,262,679 | 1,289,587 |
March 31, 2018 | December 31, 2017 | |||||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||
General obligation - unlimited | $ | 722,172 | 725,842 | 717,610 | 735,218 | |||||||
General obligation - limited | 189,328 | 194,081 | 195,278 | 203,643 | ||||||||
Revenue | 333,675 | 329,697 | 322,394 | 323,183 | ||||||||
Certificate of participation | 19,789 | 20,095 | 19,366 | 19,922 | ||||||||
Other | 8,149 | 7,776 | 8,031 | 7,621 | ||||||||
Total | $ | 1,273,113 | 1,277,491 | 1,262,679 | 1,289,587 |
March 31, 2018 | December 31, 2017 | |||||||||||
(Dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||
Washington | $ | 186,191 | 187,395 | 184,491 | 189,932 | |||||||
Texas | 163,327 | 164,503 | 170,786 | 175,217 | ||||||||
Michigan | 157,075 | 160,442 | 157,240 | 163,332 | ||||||||
Montana | 112,984 | 115,022 | 92,733 | 97,234 | ||||||||
California | 69,843 | 68,722 | 69,944 | 69,554 | ||||||||
All other states | 583,693 | 581,407 | 587,485 | 594,318 | ||||||||
Total | $ | 1,273,113 | 1,277,491 | 1,262,679 | 1,289,587 |
One Year or Less | After One through Five Years | After Five through Ten Years | After Ten Years | Mortgage-Backed Securities | Total | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||||||
Available-for-sale | |||||||||||||||||||||||||||||||||||||||||
U.S. government and federal agency | $ | — | — | % | $ | 1,936 | 1.99 | % | $ | 14,190 | 1.83 | % | $ | 13,226 | 2.53 | % | $ | — | — | % | $ | 29,352 | 2.15 | % | |||||||||||||||||
U.S. government sponsored enterprises | — | — | % | 102,357 | 2.53 | % | 7,555 | 6.06 | % | — | — | % | — | — | % | 109,912 | 2.56 | % | |||||||||||||||||||||||
State and local governments | 27,578 | 1.89 | % | 44,017 | 2.30 | % | 231,556 | 3.66 | % | 339,960 | 4.06 | % | — | — | % | 643,111 | 3.70 | % | |||||||||||||||||||||||
Corporate bonds | 86,746 | 2.21 | % | 232,110 | 2.73 | % | — | — | % | — | — | % | — | — | % | 318,856 | 2.59 | % | |||||||||||||||||||||||
Residential mortgage-backed securities | — | — | % | — | — | % | — | — | % | — | — | % | 901,112 | 2.26 | % | 901,112 | 2.26 | % | |||||||||||||||||||||||
Commercial mortgage-backed securities | — | — | % | — | — | % | — | — | % | — | — | % | 152,502 | 2.39 | % | 152,502 | 2.39 | % | |||||||||||||||||||||||
Total available- for-sale | 114,324 | 2.13 | % | 380,420 | 2.62 | % | 253,301 | 3.54 | % | 353,186 | 4.00 | % | 1,053,614 | 2.28 | % | 2,154,845 | 2.76 | % | |||||||||||||||||||||||
Held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
State and local governments | — | — | % | 2,102 | 2.21 | % | 97,453 | 3.14 | % | 534,858 | 4.11 | % | — | — | % | 634,413 | 3.95 | % | |||||||||||||||||||||||
Total held-to-maturity | — | — | % | 2,102 | 2.21 | % | 97,453 | 3.14 | % | 534,858 | 4.11 | % | — | — | % | 634,413 | 3.95 | % | |||||||||||||||||||||||
Total debt securities | $ | 114,324 | 2.13 | % | $ | 382,522 | 2.62 | % | $ | 350,754 | 3.43 | % | $ | 888,044 | 4.07 | % | $ | 1,053,614 | 2.28 | % | $ | 2,789,258 | 3.03 | % |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||
(Dollars in thousands) | Fair Value | Unrealized Loss | Unrealized Loss as a Percent of Fair Value | Fair Value | Unrealized Loss | Unrealized Loss as a Percent of Fair Value | |||||||||||||||
Temporarily impaired securities purchased prior to 2018 | |||||||||||||||||||||
U.S. government and federal agency | $ | 26,068 | $ | (300 | ) | (1 | )% | $ | 27,613 | $ | (104 | ) | — | % | |||||||
U.S. government sponsored enterprises | 18,915 | (298 | ) | (2 | )% | 19,092 | (104 | ) | (1 | )% | |||||||||||
State and local governments | 538,247 | (21,226 | ) | (4 | )% | 551,607 | (8,887 | ) | (2 | )% | |||||||||||
Corporate bonds | 152,554 | (1,222 | ) | (1 | )% | 154,005 | (421 | ) | — | % | |||||||||||
Residential mortgage-backed securities | 657,706 | (19,225 | ) | (3 | )% | 707,286 | (7,587 | ) | (1 | )% | |||||||||||
Commercial mortgage-backed securities | 95,719 | (2,625 | ) | (3 | )% | 102,480 | (1,845 | ) | (2 | )% | |||||||||||
Total | $ | 1,489,209 | $ | (44,896 | ) | (3 | )% | $ | 1,562,083 | $ | (18,948 | ) | (1 | )% | |||||||
Temporarily impaired securities purchased during 2018 | |||||||||||||||||||||
U.S. government sponsored enterprises | $ | 72,445 | $ | (276 | ) | — | % | ||||||||||||||
State and local governments | 28,365 | (530 | ) | (2 | )% | ||||||||||||||||
Corporate bonds | 52,949 | (22 | ) | — | % | ||||||||||||||||
Residential mortgage-backed securities | 64,473 | (703 | ) | (1 | )% | ||||||||||||||||
Commercial mortgage-backed securities | 34,918 | (139 | ) | — | % | ||||||||||||||||
Total | $ | 253,150 | $ | (1,670 | ) | (1 | )% | ||||||||||||||
Temporarily impaired securities | |||||||||||||||||||||
U.S. government and federal agency | $ | 26,068 | $ | (300 | ) | (1 | )% | ||||||||||||||
U.S. government sponsored enterprises | 91,360 | (574 | ) | (1 | )% | ||||||||||||||||
State and local governments | 566,612 | (21,756 | ) | (4 | )% | ||||||||||||||||
Corporate bonds | 205,503 | (1,244 | ) | (1 | )% | ||||||||||||||||
Residential mortgage-backed securities | 722,179 | (19,928 | ) | (3 | )% | ||||||||||||||||
Commercial mortgage-backed securities | 130,637 | (2,764 | ) | (2 | )% | ||||||||||||||||
Total | $ | 1,742,359 | $ | (46,566 | ) | (3 | )% |
(Dollars in thousands) | Number of Debt Securities | Unrealized Loss | ||||
Greater than 10.0% | 16 | $ | (4,355 | ) | ||
5.1% to 10.0% | 111 | (11,906 | ) | |||
0.1% to 5.0% | 896 | (30,305 | ) | |||
Total | 1,023 | $ | (46,566 | ) |
(Dollars in thousands) | Number of Debt Securities | Unrealized Loss for 12 Months Or More | Most Notable Loss | |||||||
U.S. government and federal agency | 16 | $ | (168 | ) | $ | (28 | ) | |||
U.S. government sponsored enterprises | 1 | (87 | ) | (87 | ) | |||||
State and local governments | 183 | (13,892 | ) | (1,412 | ) | |||||
Corporate bonds | 8 | (386 | ) | (83 | ) | |||||
Residential mortgage-backed securities | 74 | (9,512 | ) | (921 | ) | |||||
Commercial mortgage-backed securities | 16 | (1,860 | ) | (319 | ) | |||||
Total | 298 | $ | (25,905 | ) |
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
Residential real estate loans | $ | 831,021 | 11 | % | $ | 720,728 | 11 | % | $ | 685,458 | 12 | % | ||||||||
Commercial loans | ||||||||||||||||||||
Real estate | 4,251,003 | 56 | % | 3,577,139 | 55 | % | 3,056,372 | 53 | % | |||||||||||
Other commercial | 1,839,293 | 24 | % | 1,579,353 | 25 | % | 1,462,110 | 25 | % | |||||||||||
Total | 6,090,296 | 80 | % | 5,156,492 | 80 | % | 4,518,482 | 78 | % | |||||||||||
Consumer and other loans | ||||||||||||||||||||
Home equity | 489,879 | 7 | % | 457,918 | 7 | % | 433,554 | 8 | % | |||||||||||
Other consumer | 258,834 | 4 | % | 242,686 | 4 | % | 239,480 | 4 | % | |||||||||||
Total | 748,713 | 11 | % | 700,604 | 11 | % | 673,034 | 12 | % | |||||||||||
Loans receivable | 7,670,030 | 102 | % | 6,577,824 | 102 | % | 5,876,974 | 102 | % | |||||||||||
ALLL | (127,608 | ) | (2 | )% | (129,568 | ) | (2 | )% | (129,226 | ) | (2 | )% | ||||||||
Loans receivable, net | $ | 7,542,422 | 100 | % | $ | 6,448,256 | 100 | % | $ | 5,747,748 | 100 | % |
At or for the Three Months ended | At or for the Year ended | At or for the Three Months ended | |||||||
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
Other real estate owned | $ | 14,132 | 14,269 | 17,771 | |||||
Accruing loans 90 days or more past due | |||||||||
Residential real estate | 430 | 2,366 | — | ||||||
Commercial | 4,701 | 3,582 | 2,644 | ||||||
Consumer and other | 271 | 129 | 384 | ||||||
Total | 5,402 | 6,077 | 3,028 | ||||||
Non-accrual loans | |||||||||
Residential real estate | 7,188 | 4,924 | 5,949 | ||||||
Commercial | 43,853 | 35,629 | 38,578 | ||||||
Consumer and other | 3,408 | 4,280 | 6,147 | ||||||
Total | 54,449 | 44,833 | 50,674 | ||||||
Total non-performing assets | $ | 73,983 | 65,179 | 71,473 | |||||
Non-performing assets as a percentage of subsidiary assets | 0.64 | % | 0.68 | % | 0.75 | % | |||
ALLL as a percentage of non-performing loans | 213 | % | 255 | % | 241 | % | |||
Accruing loans 30-89 days past due | $ | 44,963 | 37,687 | 39,160 | |||||
Accruing troubled debt restructurings | $ | 41,649 | 38,491 | 38,955 | |||||
Non-accrual troubled debt restructurings | $ | 13,289 | 23,709 | 19,479 | |||||
U.S. government guarantees included in non-performing assets | $ | 4,548 | 2,513 | 1,690 | |||||
Interest income 1 | $ | 646 | 2,162 | 589 |
1 | Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms. |
At or for the Three Months ended | At or for the Year ended | At or for the Three Months ended | |||||||
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
Balance at beginning of period | $ | 14,269 | 20,954 | 20,954 | |||||
Acquisitions | 187 | 96 | — | ||||||
Additions | 378 | 4,466 | 390 | ||||||
Write-downs | (13 | ) | (604 | ) | (21 | ) | |||
Sales | (689 | ) | (10,643 | ) | (3,552 | ) | |||
Balance at end of period | $ | 14,132 | 14,269 | 17,771 |
March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||||
(Dollars in thousands) | ALLL | Percent of ALLL in Category | Percent of Loans in Category | ALLL | Percent of ALLL in Category | Percent of Loans in Category | ALLL | Percent of ALLL in Category | Percent of Loans in Category | ||||||||||||||||||||
Residential real estate | $ | 10,634 | 8 | % | 11 | % | $ | 10,798 | 8 | % | 11 | % | $ | 11,535 | 9 | % | 12 | % | |||||||||||
Commercial real estate | 68,342 | 54 | % | 56 | % | 68,515 | 53 | % | 54 | % | 64,753 | 50 | % | 52 | % | ||||||||||||||
Other commercial | 38,108 | 30 | % | 24 | % | 39,303 | 30 | % | 24 | % | 39,157 | 30 | % | 25 | % | ||||||||||||||
Home equity | 6,040 | 5 | % | 6 | % | 6,204 | 5 | % | 7 | % | 7,679 | 6 | % | 7 | % | ||||||||||||||
Other consumer | 4,484 | 3 | % | 3 | % | 4,748 | 4 | % | 4 | % | 6,102 | 5 | % | 4 | % | ||||||||||||||
Total | $ | 127,608 | 100 | % | 100 | % | $ | 129,568 | 100 | % | 100 | % | $ | 129,226 | 100 | % | 100 | % |
At or for the Three Months ended | At or for the Year ended | At or for the Three Months ended | |||||||
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
Balance at beginning of period | $ | 129,568 | 129,572 | 129,572 | |||||
Provision for loan losses | 795 | 10,824 | 1,598 | ||||||
Charge-offs | |||||||||
Residential real estate | (3 | ) | (199 | ) | (22 | ) | |||
Commercial loans | (2,821 | ) | (9,044 | ) | (1,359 | ) | |||
Consumer and other loans | (2,183 | ) | (10,088 | ) | (2,848 | ) | |||
Total charge-offs | (5,007 | ) | (19,331 | ) | (4,229 | ) | |||
Recoveries | |||||||||
Residential real estate | 16 | 82 | 47 | ||||||
Commercial loans | 1,211 | 3,569 | 422 | ||||||
Consumer and other loans | 1,025 | 4,852 | 1,816 | ||||||
Total recoveries | 2,252 | 8,503 | 2,285 | ||||||
Net charge-offs | (2,755 | ) | (10,828 | ) | (1,944 | ) | |||
Balance at end of period | $ | 127,608 | 129,568 | 129,226 | |||||
ALLL as a percentage of total loans | 1.66 | % | 1.97 | % | 2.20 | % | |||
Net charge-offs as a percentage of total loans | 0.04 | % | 0.17 | % | 0.03 | % |
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
Specific valuation allowance | $ | 4,468 | 5,223 | 6,787 | |||||
General valuation allowance | 123,140 | 124,345 | 122,439 | ||||||
Total ALLL | $ | 127,608 | 129,568 | 129,226 |
Loans Receivable, by Loan Type | % Change from | ||||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||||
Custom and owner occupied construction | $ | 140,440 | $ | 109,555 | $ | 92,835 | 28 | % | 51 | % | |||||||
Pre-sold and spec construction | 100,376 | 72,160 | 68,736 | 39 | % | 46 | % | ||||||||||
Total residential construction | 240,816 | 181,715 | 161,571 | 33 | % | 49 | % | ||||||||||
Land development | 76,528 | 82,398 | 78,042 | (7 | )% | (2 | )% | ||||||||||
Consumer land or lots | 119,469 | 102,289 | 94,840 | 17 | % | 26 | % | ||||||||||
Unimproved land | 68,862 | 65,753 | 66,857 | 5 | % | 3 | % | ||||||||||
Developed lots for operative builders | 13,093 | 14,592 | 13,046 | (10 | )% | — | % | ||||||||||
Commercial lots | 43,232 | 23,770 | 26,639 | 82 | % | 62 | % | ||||||||||
Other construction | 420,632 | 391,835 | 272,184 | 7 | % | 55 | % | ||||||||||
Total land, lot, and other construction | 741,816 | 680,637 | 551,608 | 9 | % | 34 | % | ||||||||||
Owner occupied | 1,292,206 | 1,132,833 | 988,544 | 14 | % | 31 | % | ||||||||||
Non-owner occupied | 1,449,166 | 1,186,066 | 964,913 | 22 | % | 50 | % | ||||||||||
Total commercial real estate | 2,741,372 | 2,318,899 | 1,953,457 | 18 | % | 40 | % | ||||||||||
Commercial and industrial | 865,574 | 751,221 | 739,475 | 15 | % | 17 | % | ||||||||||
Agriculture | 620,342 | 450,616 | 411,094 | 38 | % | 51 | % | ||||||||||
1st lien | 1,014,361 | 877,335 | 839,387 | 16 | % | 21 | % | ||||||||||
Junior lien | 66,288 | 51,155 | 54,801 | 30 | % | 21 | % | ||||||||||
Total 1-4 family | 1,080,649 | 928,490 | 894,188 | 16 | % | 21 | % | ||||||||||
Multifamily residential | 219,310 | 189,342 | 162,636 | 16 | % | 35 | % | ||||||||||
Home equity lines of credit | 481,204 | 440,105 | 405,309 | 9 | % | 19 | % | ||||||||||
Other consumer | 162,171 | 148,247 | 153,159 | 9 | % | 6 | % | ||||||||||
Total consumer | 643,375 | 588,352 | 558,468 | 9 | % | 15 | % | ||||||||||
States and political subdivisions | 421,252 | 383,252 | 329,461 | 10 | % | 28 | % | ||||||||||
Other | 132,582 | 144,133 | 140,665 | (8 | )% | (6 | )% | ||||||||||
Total loans receivable, including loans held for sale | 7,707,088 | 6,616,657 | 5,902,623 | 16 | % | 31 | % | ||||||||||
Less loans held for sale 1 | (37,058 | ) | (38,833 | ) | (25,649 | ) | (5 | )% | 44 | % | |||||||
Total loans receivable | $ | 7,670,030 | $ | 6,577,824 | $ | 5,876,974 | 17 | % | 31 | % |
Non-performing Assets, by Loan Type | Non- Accrual Loans | Accruing Loans 90 Days or More Past Due | Other Real Estate Owned | |||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Mar 31, 2018 | Mar 31, 2018 | Mar 31, 2018 | ||||||||||||
Custom and owner occupied construction | $ | 48 | 48 | — | — | — | 48 | |||||||||||
Pre-sold and spec construction | 492 | 38 | 227 | 492 | — | — | ||||||||||||
Total residential construction | 540 | 86 | 227 | 492 | — | 48 | ||||||||||||
Land development | 7,802 | 7,888 | 8,856 | 775 | — | 7,027 | ||||||||||||
Consumer land or lots | 1,622 | 1,861 | 1,728 | 743 | — | 879 | ||||||||||||
Unimproved land | 10,294 | 10,866 | 12,017 | 8,638 | — | 1,656 | ||||||||||||
Developed lots for operative builders | 83 | 116 | 116 | — | — | 83 | ||||||||||||
Commercial lots | 1,312 | 1,312 | 1,255 | 260 | — | 1,052 | ||||||||||||
Other construction | 319 | 151 | — | 181 | — | 138 | ||||||||||||
Total land, lot and other construction | 21,432 | 22,194 | 23,972 | 10,597 | — | 10,835 | ||||||||||||
Owner occupied | 12,594 | 13,848 | 17,956 | 10,483 | 552 | 1,559 | ||||||||||||
Non-owner occupied | 5,346 | 4,584 | 3,194 | 4,751 | — | 595 | ||||||||||||
Total commercial real estate | 17,940 | 18,432 | 21,150 | 15,234 | 552 | 2,154 | ||||||||||||
Commercial and industrial | 6,313 | 5,294 | 4,466 | 4,956 | 1,312 | 45 | ||||||||||||
Agriculture | 10,476 | 3,931 | 1,878 | 8,481 | 1,995 | — | ||||||||||||
1st lien | 8,717 | 9,261 | 10,047 | 7,706 | 676 | 335 | ||||||||||||
Junior lien | 4,271 | 567 | 1,335 | 3,979 | 242 | 50 | ||||||||||||
Total 1-4 family | 12,988 | 9,828 | 11,382 | 11,685 | 918 | 385 | ||||||||||||
Multifamily residential | 652 | — | 388 | 652 | — | — | ||||||||||||
Home equity lines of credit | 3,312 | 3,292 | 6,008 | 2,207 | 465 | 640 | ||||||||||||
Other consumer | 330 | 322 | 202 | 145 | 160 | 25 | ||||||||||||
Total consumer | 3,642 | 3,614 | 6,210 | 2,352 | 625 | 665 | ||||||||||||
States and political subdivisions | — | 1,800 | 1,800 | — | — | — | ||||||||||||
Total | $ | 73,983 | 65,179 | 71,473 | 54,449 | 5,402 | 14,132 |
Accruing 30-89 Days Delinquent Loans, by Loan Type | % Change from | ||||||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Dec 31, 2017 | Mar 31, 2017 | ||||||||||||
Custom and owner occupied construction | $ | 611 | $ | 300 | $ | 380 | 104 | % | 61 | % | |||||||
Pre-sold and spec construction | 267 | 102 | 488 | 162 | % | (45 | )% | ||||||||||
Total residential construction | 878 | 402 | 868 | 118 | % | 1 | % | ||||||||||
Land development | 585 | — | — | n/m | n/m | ||||||||||||
Consumer land or lots | 485 | 353 | 432 | 37 | % | 12 | % | ||||||||||
Unimproved land | 889 | 662 | 938 | 34 | % | (5 | )% | ||||||||||
Developed lots for operative builders | 464 | 7 | — | 6,529 | % | n/m | |||||||||||
Commercial lots | 194 | 108 | 258 | 80 | % | (25 | )% | ||||||||||
Other construction | 76 | — | 7,125 | n/m | (99 | )% | |||||||||||
Total land, lot and other construction | 2,693 | 1,130 | 8,753 | 138 | % | (69 | )% | ||||||||||
Owner occupied | 13,904 | 4,726 | 6,686 | 194 | % | 108 | % | ||||||||||
Non-owner occupied | 3,842 | 2,399 | 405 | 60 | % | 849 | % | ||||||||||
Total commercial real estate | 17,746 | 7,125 | 7,091 | 149 | % | 150 | % | ||||||||||
Commercial and industrial | 5,746 | 6,472 | 6,796 | (11 | )% | (15 | )% | ||||||||||
Agriculture | 3,845 | 3,205 | 3,567 | 20 | % | 8 | % | ||||||||||
1st lien | 9,597 | 10,865 | 7,132 | (12 | )% | 35 | % | ||||||||||
Junior lien | 240 | 4,348 | 848 | (94 | )% | (72 | )% | ||||||||||
Total 1-4 family | 9,837 | 15,213 | 7,980 | (35 | )% | 23 | % | ||||||||||
Multifamily residential | — | — | 2,028 | n/m | (100 | )% | |||||||||||
Home equity lines of credit | 2,316 | 1,962 | 703 | 18 | % | 229 | % | ||||||||||
Other consumer | 1,849 | 2,109 | 1,317 | (12 | )% | 40 | % | ||||||||||
Total consumer | 4,165 | 4,071 | 2,020 | 2 | % | 106 | % | ||||||||||
Other | 53 | 69 | 57 | (23 | )% | (7 | )% | ||||||||||
Total | $ | 44,963 | $ | 37,687 | $ | 39,160 | 19 | % | 15 | % |
Net Charge-Offs (Recoveries), Year-to-Date Period Ending, By Loan Type | Charge-Offs | Recoveries | |||||||||||||
(Dollars in thousands) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | Mar 31, 2018 | Mar 31, 2018 | ||||||||||
Pre-sold and spec construction | $ | (339 | ) | (23 | ) | (11 | ) | 17 | 356 | ||||||
Total residential construction | (339 | ) | (23 | ) | (11 | ) | 17 | 356 | |||||||
Land development | (5 | ) | (143 | ) | (33 | ) | — | 5 | |||||||
Consumer land or lots | (3 | ) | 222 | (57 | ) | 169 | 172 | ||||||||
Unimproved land | (73 | ) | (304 | ) | (96 | ) | — | 73 | |||||||
Developed lots for operative builders | — | (107 | ) | (5 | ) | — | — | ||||||||
Commercial lots | (2 | ) | (6 | ) | (2 | ) | — | 2 | |||||||
Other construction | — | 389 | — | — | — | ||||||||||
Total land, lot and other construction | (83 | ) | 51 | (193 | ) | 169 | 252 | ||||||||
Owner occupied | 962 | 3,908 | 795 | 1,000 | 38 | ||||||||||
Non-owner occupied | (47 | ) | 368 | (1 | ) | 15 | 62 | ||||||||
Total commercial real estate | 915 | 4,276 | 794 | 1,015 | 100 | ||||||||||
Commercial and industrial | 1,430 | 883 | 344 | 1,539 | 109 | ||||||||||
Agriculture | (2 | ) | 9 | (3 | ) | — | 2 | ||||||||
1st lien | (65 | ) | (23 | ) | (15 | ) | 4 | 69 | |||||||
Junior lien | (29 | ) | 719 | (16 | ) | — | 29 | ||||||||
Total 1-4 family | (94 | ) | 696 | (31 | ) | 4 | 98 | ||||||||
Multifamily residential | (6 | ) | (230 | ) | — | — | 6 | ||||||||
Home equity lines of credit | (32 | ) | 272 | 12 | 12 | 44 | |||||||||
Other consumer | 73 | 505 | (11 | ) | 142 | 69 | |||||||||
Total consumer | 41 | 777 | 1 | 154 | 113 | ||||||||||
Other | 893 | 4,389 | 1,043 | 2,109 | 1,216 | ||||||||||
Total | $ | 2,755 | 10,828 | 1,944 | 5,007 | 2,252 |
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
Non-interest bearing deposits | $ | 2,811,469 | 30 | % | $ | 2,311,902 | 31 | % | $ | 2,049,476 | 27 | % | ||||||||
NOW and DDA accounts | 2,400,693 | 25 | % | 1,695,246 | 22 | % | 1,596,353 | 21 | % | |||||||||||
Savings accounts | 1,328,047 | 14 | % | 1,082,604 | 14 | % | 1,035,023 | 14 | % | |||||||||||
Money market deposit accounts | 1,778,068 | 19 | % | 1,512,693 | 20 | % | 1,516,731 | 20 | % | |||||||||||
Certificate accounts | 955,105 | 10 | % | 817,259 | 11 | % | 941,628 | 13 | % | |||||||||||
Wholesale deposits | 145,463 | 2 | % | 160,043 | 2 | % | 340,946 | 5 | % | |||||||||||
Total interest bearing deposits | 6,607,376 | 70 | % | 5,267,845 | 69 | % | 5,430,681 | 73 | % | |||||||||||
Total deposits | $ | 9,418,845 | 100 | % | $ | 7,579,747 | 100 | % | $ | 7,480,157 | 100 | % |
At or for the Three Months ended | At or for the Year ended | |||||
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||
Repurchase agreements | ||||||
Amount outstanding at end of period | $ | 395,794 | 362,573 | |||
Weighted interest rate on outstanding amount | 0.52 | % | 0.53 | % | ||
Maximum outstanding at any month-end | $ | 395,794 | 497,187 | |||
Average balance | $ | 384,556 | 413,873 | |||
Weighted-average interest rate | 0.51 | % | 0.45 | % |
1. | assessing on an ongoing basis, the current and expected future needs for funds, and ensuring that sufficient funds or access to funds exist to meet those needs at the appropriate time; |
2. | providing for an adequate cushion of liquidity to meet unanticipated cash flow needs that may arise from potential adverse circumstances ranging from high probability/low severity events to low probability/high severity; and |
3. | balancing the benefits between providing for adequate liquidity to mitigate potential adverse events and the cost of that liquidity. |
(Dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||
FHLB advances | ||||||
Borrowing capacity | $ | 1,912,516 | 1,807,787 | |||
Amount utilized | (160,843 | ) | (360,185 | ) | ||
Amount available | $ | 1,751,673 | 1,447,602 | |||
FRB discount window | ||||||
Borrowing capacity | $ | 906,017 | 1,054,103 | |||
Amount utilized | — | — | ||||
Amount available | $ | 906,017 | 1,054,103 | |||
Unsecured lines of credit available | $ | 230,000 | 230,000 | |||
Unencumbered debt securities | ||||||
U.S. government and federal agency | $ | 29,352 | 29,097 | |||
U.S. government sponsored enterprises | 100,848 | 3,358 | ||||
State and local governments | 612,658 | 769,786 | ||||
Corporate bonds | 311,295 | 5,982 | ||||
Residential mortgage-backed securities | 235,196 | 115,527 | ||||
Commercial mortgage-backed securities | 95,657 | 54,998 | ||||
Total unencumbered securities | $ | 1,385,006 | 978,748 |
Total Capital (To Risk-Weighted Assets) | Tier 1 Capital (To Risk-Weighted Assets) | Common Equity Tier 1 (To Risk-Weighted Assets) | Leverage Ratio/ Tier 1 Capital (To Average Assets) | ||||||||
Glacier Bank actual regulatory ratios | 14.62 | % | 13.37 | % | 13.37 | % | 12.24 | % | |||
Minimum capital requirements | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | |||
Well capitalized requirements | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % | |||
Minimum capital requirements, including fully-phased in capital conservation buffer (2019) | 10.50 | % | 8.50 | % | 7.00 | % | N/A |
(Dollars in thousands) | New Markets Tax Credits | Low-Income Housing Tax Credits | Debt Securities Tax Credits | Total | ||||||||
2018 | $ | 2,874 | 4,808 | 908 | 8,590 | |||||||
2019 | 2,974 | 5,070 | 850 | 8,894 | ||||||||
2020 | 3,296 | 4,855 | 791 | 8,942 | ||||||||
2021 | 3,296 | 4,038 | 737 | 8,071 | ||||||||
2022 | 2,528 | 4,010 | 673 | 7,211 | ||||||||
Thereafter | 1,930 | 18,618 | 2,149 | 22,697 | ||||||||
$ | 16,898 | 41,399 | 6,108 | 64,405 |
Three Months ended | Three Months ended | ||||||||||||||||||||
March 31, 2018 | March 31, 2017 | ||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest and Dividends | Average Yield/ Rate | Average Balance | Interest and Dividends | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Residential real estate loans | $ | 783,817 | $ | 8,785 | 4.48 | % | $ | 709,432 | $ | 7,918 | 4.46 | % | |||||||||
Commercial loans 1 | 5,551,619 | 66,474 | 4.86 | % | 4,372,299 | 51,335 | 4.76 | % | |||||||||||||
Consumer and other loans | 719,153 | 8,624 | 4.86 | % | 672,480 | 7,801 | 4.70 | % | |||||||||||||
Total loans 2 | 7,054,589 | 83,883 | 4.82 | % | 5,754,211 | 67,054 | 4.73 | % | |||||||||||||
Tax-exempt investment securities 3 | 1,093,736 | 12,795 | 4.68 | % | 1,245,358 | 17,761 | 5.70 | % | |||||||||||||
Taxable investment securities 4 | 1,654,318 | 10,273 | 2.48 | % | 1,857,335 | 10,575 | 2.28 | % | |||||||||||||
Total earning assets | 9,802,643 | 106,951 | 4.42 | % | 8,856,904 | 95,390 | 4.37 | % | |||||||||||||
Goodwill and intangibles | 219,463 | 159,089 | |||||||||||||||||||
Non-earning assets | 390,857 | 369,274 | |||||||||||||||||||
Total assets | $ | 10,412,963 | $ | 9,385,267 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Non-interest bearing deposits | $ | 2,472,151 | $ | — | — | % | $ | 1,970,654 | $ | — | — | % | |||||||||
NOW and DDA accounts | 2,011,464 | 818 | 0.16 | % | 1,575,928 | 247 | 0.06 | % | |||||||||||||
Savings accounts | 1,184,807 | 193 | 0.07 | % | 1,015,108 | 146 | 0.06 | % | |||||||||||||
Money market deposit accounts | 1,631,863 | 719 | 0.18 | % | 1,490,198 | 565 | 0.15 | % | |||||||||||||
Certificate accounts | 876,425 | 1,319 | 0.61 | % | 953,527 | 1,333 | 0.57 | % | |||||||||||||
Wholesale deposits 5 | 149,577 | 867 | 2.35 | % | 332,255 | 2,149 | 2.62 | % | |||||||||||||
FHLB advances | 224,847 | 2,089 | 3.72 | % | 271,225 | 1,510 | 2.23 | % | |||||||||||||
Repurchase agreements and other borrowed funds | 521,641 | 1,769 | 1.38 | % | 562,628 | 1,416 | 1.02 | % | |||||||||||||
Total interest bearing liabilities | 9,072,775 | 7,774 | 0.35 | % | 8,171,523 | 7,366 | 0.37 | % | |||||||||||||
Other liabilities | 25,973 | 81,419 | |||||||||||||||||||
Total liabilities | 9,098,748 | 8,252,942 | |||||||||||||||||||
Stockholders’ Equity | |||||||||||||||||||||
Common stock | 808 | 766 | |||||||||||||||||||
Paid-in capital | 906,030 | 748,851 | |||||||||||||||||||
Retained earnings | 420,552 | 389,798 | |||||||||||||||||||
Accumulated other comprehensive loss | (13,175 | ) | (7,090 | ) | |||||||||||||||||
Total stockholders’ equity | 1,314,215 | 1,132,325 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,412,963 | $ | 9,385,267 | |||||||||||||||||
Net interest income (tax-equivalent) | $ | 99,177 | $ | 88,024 | |||||||||||||||||
Net interest spread (tax-equivalent) | 4.07 | % | 4.00 | % | |||||||||||||||||
Net interest margin (tax-equivalent) | 4.10 | % | 4.03 | % |
1 | Includes tax effect of $959 thousand and $1.4 million on tax-exempt municipal loan and lease income for the three months ended March 31, 2018 and 2017, respectively. |
2 | Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period. |
3 | Includes tax effect of $2.6 million and $6.1 million on tax-exempt debt securities income for the three months ended March 31, 2018 and 2017, respectively. |
4 | Includes tax effect of $304 thousand and $338 thousand on federal income tax credits for the three months ended March 31, 2018 and 2017, respectively. |
5 | Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts. |
Year ended March 31, | |||||||||
2018 vs. 2017 | |||||||||
Increase (Decrease) Due to: | |||||||||
(Dollars in thousands) | Volume | Rate | Net | ||||||
Interest income | |||||||||
Residential real estate loans | $ | 830 | 37 | 867 | |||||
Commercial loans (tax-equivalent) | 13,846 | 1,293 | 15,139 | ||||||
Consumer and other loans | 541 | 282 | 823 | ||||||
Investment securities (tax-equivalent) | (3,238 | ) | (2,030 | ) | (5,268 | ) | |||
Total interest income | 11,979 | (418 | ) | 11,561 | |||||
Interest expense | |||||||||
NOW and DDA accounts | 69 | 502 | 571 | ||||||
Savings accounts | 24 | 23 | 47 | ||||||
Money market deposit accounts | 54 | 100 | 154 | ||||||
Certificate accounts | (108 | ) | 94 | (14 | ) | ||||
Wholesale deposits | (1,181 | ) | (101 | ) | (1,282 | ) | |||
FHLB advances | (258 | ) | 837 | 579 | |||||
Repurchase agreements and other borrowed funds | (104 | ) | 457 | 353 | |||||
Total interest expense | (1,504 | ) | 1,912 | 408 | |||||
Net interest income (tax-equivalent) | $ | 13,483 | (2,330 | ) | 11,153 |
Item 3. | Quantitative and Qualitative Disclosure about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(a) | Not Applicable |
(b) | Not Applicable |
(c) | Not Applicable |
Item 3. | Defaults upon Senior Securities |
(a) | Not Applicable |
(b) | Not Applicable |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
(a) | Not Applicable |
(b) | Not Applicable |
Exhibit 10.1 - |
Exhibit 10.2 - |
Exhibit 10.3 - |
Exhibit 31.1 - |
Exhibit 31.2 - |
Exhibit 32 - |
Exhibit 101 - | The following financial information from Glacier Bancorp, Inc's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 is formatted in XBRL: (i) the Unaudited Condensed Consolidated Statements of Financial Condition, (ii) the Unaudited Condensed Consolidated Statements of Operations, (iii) the Unaudited Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements. |
GLACIER BANCORP, INC. | ||
May 1, 2018 | /s/ Randall M. Chesler | |
Randall M. Chesler | ||
President and CEO | ||
May 1, 2018 | /s/ Ron J. Copher | |
Ron J. Copher | ||
Executive Vice President and CFO |
A. | Executive presently serves as the President and Chief Executive Officer of the Company and the Bank. |
B. | The Company and the Bank desire Executive to continue his employment with the Company and the Bank on and after the Effective Date and Executive desires to be so employed by the Company and the Bank, subject to the terms and conditions of this Agreement. |
1. | Employment. The Company and the Bank agree to employ Executive, and Executive accepts employment by the Company and the Bank, subject to the terms of this Agreement. Executive's title will be "President and Chief Executive Officer" of the Company and the Bank. |
2. | Term. The term of this Agreement will begin on March 5, 2018 and continue until March 4, 2020, unless terminated earlier in accordance with this Agreement (the "Term"). If the Company and the Bank expect not to renew Executive's employment following the expiration of the Term, the Company and the Bank will provide Executive with a courtesy notice that Executive's employment will not be renewed at least ninety (90) days before the expiration of the Term. |
3. | Duties. The Company and the Bank will employ Executive as the President and Chief Executive Officer of the Company and the Bank. Executive will faithfully and diligently perform his assigned duties, which include but are not limited to the following: |
(a) | Performance. Executive will be responsible for all aspects of the Company's and the Bank's performance, including without limitation, directing that daily operational and managerial matters are performed in a manner consistent with the Company's and the Bank's policies. |
(b) | Development and Preservation of Business. Executive will be responsible for the development and preservation of banking relationships, investor relationships, and other business development efforts (including appropriate civic and community activities) of the Company and the Bank. |
(c) | Reporting. Executive will report directly to the Company's board of directors and the Bank's board of directors. The Company's board of directors and/or the |
(d) | Serving as a Director. During the Term of this Agreement, Executive will serve as a director on the Bank's board of directors. In addition, the Company will use its best efforts to nominate and recommend Executive for election to the Company's board of directors. If elected by the Company's shareholders, Executive will serve as a director on the Company's board of directors. |
4. | Extent of Services. Executive will devote all of his working time, attention, and skill to the duties and responsibilities set forth in Section 3. To the extent that such activities do not interfere with his duties under Section 3, Executive may participate in other businesses as a passive investor, but (a) Executive may not actively participate in the operation or management of those businesses, and (b) Executive may not, without the Company's or the Bank's prior written consent, make or maintain any investment in a business with which the Bank or the Company (or any of their subsidiaries or divisions) has an existing competitive or commercial relationship. In addition, to the extent that such activities do not interfere with Executive's duties and responsibilities set forth in Section 3, Executive may serve on the board of directors of one or more non-profit organizations or for-profit organizations; provided, however, that Executive shall not serve on the board of directors of any financial institution, bank, bank hold company, or company with which the Company or the Bank (or any of their subsidiaries or divisions) has an existing competitive or commercial relationship. |
5. | Salary. Executive will receive an annualized base salary of $721,350.00 for each calendar year during the Term, except any calendar year during the Term in which Executive works less than the entire twelve (12) months will be prorated accordingly. Executive's salary will be paid in accordance with the Company's regular payroll schedule and practices (including as to withholding). Executive's annual base salary may be adjusted, in the sole discretion of the Company's board of directors and/or the Bank's board of directors, based on performance and additional duties and responsibilities, if any. |
6. | Short Term Incentive Plan. Executive will be eligible to participate in the Company's Short Term Incentive Plan ("STIP"). Executive will be eligible for cash incentives pursuant to the Company's STIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Cash Incentive Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 60% | 90% |
7. | Long Term Incentive Plan. Executive will be eligible to participate in the Company's Stock Incentive Plan (the "LTIP"). Executive will be eligible for equity awards pursuant to the LTIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Equity Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 60% | 90% |
8. | Income Deferral. Executive will be eligible to participate in any program available to the Company's and/or the Bank's senior management for income deferral, for the purpose of deferring receipt of any or all of the compensation Executive may become entitled to under this Agreement. Any such deferrals will be subject to the terms and conditions of the deferral program, as adopted and amended from time to time. |
9. | Paid Time Off ("PTO") and Benefits. |
(a) | PTO and Holidays. Executive will accrue up to one hundred sixty (160) hours of PTO each year, which accrual shall occur ratably over the Company's payroll periods, in addition to all holidays observed by the Company. Accrual of PTO shall be in accordance with the Company's Employee Manual. Executive may carry over, in the aggregate, up to one hundred sixty (160) hours of unused PTO to a subsequent year; provided, however, Executive may not accumulate in excess of one hundred sixty (160) hours of PTO at any given time (the "Cap"). Should Executive's accumulation of PTO reach the Cap of |
(b) | Benefits. Executive will be entitled to participate in any group life insurance, disability, medical, dental, vision, health and accident insurance plans, profit sharing and pension plans, and in other employee fringe benefit programs the Bank or the Company may have in effect from time to time for its similarly situated employees, in accordance with and subject to any policies adopted by the Bank's board of directors or the Company's board of directors with respect to the plans or programs, including without limitation, any incentive or employee stock option plan, deferred compensation plan, 401(k) plan, and Supplemental Executive Retirement Plan (SERP). Neither the Bank nor the Company, through this Agreement, obligates itself to make any particular benefits available to its employees. The Bank's or the Company's change, modification, or termination of any of its benefits during the Term shall not be a breach of this Agreement. |
(c) | Business Expenses. Subject to any applicable Company policies or the rules and regulations of the Internal Revenue Service, the Company will reimburse Executive for ordinary and necessary expenses which are consistent with past practice at the Company and the Bank (including, without limitation, travel, entertainment, and similar expenses) and which are incurred in performing and promoting the Company's and/or the Bank's business. Executive will present from time to time itemized accounts of these expenses. Reimbursement will be made as soon as practicable but no later than the last day of the calendar year following the calendar year in which the expenses were incurred. The amount of expenses eligible for reimbursement in one calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year. |
(d) | Directors and Officers Insurance; Indemnification. Executive will be covered by the Company's and/or the Bank's Directors and Officers liability insurance policy in effect from time to time. To the extent permitted by the Company's Bylaws and the Montana Business Corporation Act, the Company will indemnify Executive in the event Executive is a party (or is threatened to be made a party) to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Executive is or was a director, officer, or employee of the Company or the Bank. |
10. | Termination of Employment. |
(a) | Termination for Cause or without Good Reason. If the Company and the Bank terminate Executive's employment for Cause (defined below) during the Term, or Executive terminates his employment without Good Reason (defined below) |
(b) | Termination without Cause or with Good Reason. If the Company and the Bank terminate Executive's employment without Cause during the Term, or Executive terminates his employment for Good Reason during the Term, then contingent upon (1) Executive's signing and not subsequently revoking a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment, and (2) Executive's compliance with Section 12, the Company will pay Executive an amount equal to the greater of (i) the amount of base salary remaining to be paid during the Term or (ii) the amount Executive would be entitled to receive under the Bank's Severance Plan, in equal monthly installments over a period of three (3) years ("Severance Payments"), beginning within thirty (30) days after Executive's separation from service as defined by Treasury Regulation § 1.409A-1(h) ("Separation from Service"). If the 30-day period spans two (2) calendar years, Severance Payments will not begin until the second calendar year. If Executive fails to comply with or violates the terms of Section 12, Executive agrees that he forfeits the right to retain the Severance Payments previously received and/or to receive any remaining Severance Payments that may be otherwise payable under this Section 10(b). For purposes of Section 409A of the Internal Revenue Code, each installment shall be treated as a separate payment. |
(c) | Termination Related to Death or Disability. This Agreement terminates (i) if Executive dies or (ii) if Executive is unable to perform his duties and obligations under this Agreement (as determined by the Company's and/or the Bank's board of directors in its sole discretion) for a period of ninety (90) consecutive days as a result of a physical or mental disability arising at any time during the Term, unless with reasonable accommodation Executive could continue to perform the essential functions of his position under this Agreement and making these accommodations would not pose an undue hardship on the Company or the Bank. If termination occurs under this Section 10(c), Executive or his estate will be entitled to receive all compensation and benefits earned and expenses reimbursable through the date Executive's employment is terminated. Neither Executive nor his estate will have any right to receive compensation or other benefits for any period after termination under this Section 10(c). |
(d) | Termination Related to a Change in Control. The following provisions shall survive the expiration of the Term and the termination of Executive's employment. |
(i) | Termination by Company. If the Company, or a successor in interest by merger, or a transferee in the event of a purchase in an assumption transaction (for reasons other than Executive's death, disability, or for Cause), terminates Executive's employment without Cause: (A) within two (2) years following a Change in Control (as defined below); or (B) before a Change in Control but on or after the date that any party either announces or is required by law to announce any prospective Change in Control transaction and a Change in Control occurs within six (6) months after the termination, then the Company will provide Executive with the payment described in Section 10(d)(iii), provided that Executive executes and does not revoke a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment. |
(ii) | Termination by Executive. If Executive terminates Executive's employment for Good Reason within two (2) years following a Change in Control, the Company will provide Executive with the payment described in Section 10(d)(iii), provided that Executive executes and does not revoke a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment. |
(iii) | Payments. If Section 10(d)(i)(A) or Section 10(d)(ii) is triggered in accordance with its terms, the Company will: (A) subject to Sections 10(e) and 10(i) below, beginning within thirty (30) days after Executive's Separation from Service, pay Executive in thirty-six (36) substantially equal monthly installments in an overall amount equal to 2.99 times Executive's compensation (as reportable on Executive's IRS W-2 Form) received by Executive from the Company for the most recent calendar year; and (B) subject to Sections 10(e) and 10(i) below, if Section 10(d)(i)(B) is triggered in accordance with its terms, |
(e) | Limitations on Payments Related to Change in Control. The following apply notwithstanding any other provision of this Agreement: |
(i) | Any payments that would otherwise be made pursuant to Section 10(d)(iii) will be reduced by any base salary, cash bonus (including STIP pursuant to Section 6), or Severance Payments (as defined in Section 10(b)) received by Executive from the Bank or its successor after the first to occur of a Change in Control or Executive's termination of employment. |
(ii) | Executive's right to receive the payments described in Section 10(d)(iii) terminates (A) immediately if before the Change in Control transaction closes, Executive terminates his employment without Good Reason, or the Company and the Bank terminate Executive's employment for Cause, or (B) two (2) years after a Change of Control occurs. |
(iii) | Notwithstanding anything to the contrary in this Agreement or any other agreement or plan, to the extent that any payment or distribution of any type to or for the benefit of Executive by the Company (or by any affiliate of the Company, any person or entity who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets within the meaning of Section 280G of the Internal Revenue Code, and the regulations thereunder, or any affiliate of such person or entity), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), is or will be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code (the "Excise Tax"), then the Total Payments shall be reduced (but not below zero) only if and to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state, and local income taxes and the Excise Tax), than if Executive received the entire amount of such Total Payments. Unless Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments that are cash payments, and then by reducing or eliminating the portion of the Total Payments that are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below); provided, however, that in all events, such reductions shall be done in a manner consistent with the requirements of Section 409A of the Internal Revenue Code, to the extent applicable. Any notice given by Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement, or agreement governing Executive's rights and entitlements to any benefits or compensation. |
(f) | Return of Property. If and when Executive ceases, for any reason, to be employed by the Company and the Bank, Executive must return to the Company and the Bank all keys, pass cards, identification cards, cell phones, other smart phones, tablets, electronic storage devices, Bank and Company credit cards, and any other property of the Company or the Bank. At the same time, Executive also must return to the Company and the Bank all originals and copies (whether in hard copy, electronic, or other form) of any documents, drawings, notes, memoranda, designs, devices, electronic storage devices, tapes, manuals, and specifications which constitute proprietary or confidential information or material of the Bank or the Company (or their subsidiaries or divisions). The obligations in this Section 10(f) include, without limitation, the return of documents and other materials which may be in Executive's desk at work, his car, his place of residence, personal electronic or digital devices or cloud-type storage, or in any other location under Executive's control. |
(g) | Cause. "Cause" means any one or more of the following: |
(i) | Willful misfeasance or gross negligence in the performance of Executive's duties; |
(ii) | Conviction of a crime in connection with Executive's duties, conviction of a felony, or conviction of a crime of fraud, theft, conversion, or dishonesty; |
(iii) | Willful material breach of Section 11 of this Agreement or a confidentiality policy of the Company or the Bank; |
(iv) | Conduct demonstrably and significantly harmful to the Company or the Bank, as reasonably determined on the advice of legal counsel of the Company's or the Bank's board of directors; |
(v) | Upon entry of an administrative action by a regulator prohibiting Executive from performing any of his duties or responsibilities. |
(h) | Good Reason. Executive terminates his employment for "Good Reason" if all four (4) of the following criteria are satisfied: |
(i) | Any one or more of the following conditions (each a "Condition") arises without Executive's consent: |
A. | A material reduction of Executive's base salary, unless the reduction or elimination is generally applicable to substantially all similarly situated Company or Bank employees (or employees of a successor or controlling entity of the Company or the Bank) formerly benefited or is otherwise offset economically by increases in other compensation or replacement plans or programs; |
B. | A material diminution in Executive's authority, duties, or responsibilities as set forth in this Agreement from and after the Effective Date; |
C. | A material breach of this Agreement by the Company; or |
D. | A material relocation or transfer of Executive's principal place of employment to a location outside of Flathead County, Montana; and |
(ii) | Executive gives notice to the Company and the Bank of the Condition within ninety (90) days of the initial existence of the Condition; |
(iii) | The Company and the Bank fail to reasonably remedy the Condition within thirty (30) days following receipt of the notice described in paragraph (ii) above; and |
(iv) | Executive terminates his employment within one hundred eighty (180) days following the initial existence of the Condition. |
(i) | Change in Control. "Change in Control" means a change "in the ownership or effective control" or "in the ownership of a substantial portion of the assets" of the Company, within the meaning of Treas. Reg. § 1.409A-3(i)(5). |
(j) | Section 409A Compliance. Notwithstanding anything in this Agreement to the contrary, if any amounts that become due under this Agreement on account of the termination of Executive's employment constitute "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A, payment of such amounts shall not commence until Executive incurs a Separation from Service (as defined in Section 10(b)). If, at the time of |
11. | Confidentiality. |
(a) | Confidential Information. The parties agree that, in the course of Executive's employment with the Company and the Bank, Executive will be provided with, or be provided access to, certain Confidential Information. "Confidential Information" means proprietary nonpublic information that includes but is not limited to marketing, sales, acquisition, and recruiting objectives and strategies, loan files, customer lists, proprietary technology, information regarding existing customer preferences, habits and needs, proprietary information regarding prospective customers, details of past, pending, and contemplated transactions, pricing structure, investment management practices, sales data, accounts, training materials, information developed about the Bank or the Company, competitors, systems, strategies, designs, processes, procedures, forecasting data, recruiting data, market data, know-how, compilations of technical and non-technical data, advertising and promotional plans and strategies, and financial and other projections relating to financial industry, which are not generally known to or readily ascertainable through legitimate means by the public or by the Bank's or the Company's competitors. Executive further recognizes, acknowledges, and agrees that the Confidential Information remains the property of the Bank and the Company and, in sharing that Confidential Information with Executive, the Bank and the Company do not grant Executive any license or other interest in the Bank's and the Company's Confidential Information. |
(b) | Non-Disclosure. Executive shall at all times take reasonable steps to maintain the confidentiality of Confidential Information, and shall hold the Bank's and the Company's Confidential Information in secret. Executive agrees that he will not, after the date this Agreement was signed, including during and after its Term, use for his own purposes or directly or indirectly communicate, disseminate, distribute, or disclose to any other person or entity any Confidential Information concerning the Bank or the Company to any person |
(c) | Defend Trade Secrets Act. Executive will be immune from criminal or civil liability for disclosure of a trade secret under these limited circumstances: (i) the disclosure is made in confidence to a government official or an attorney solely for the purpose of reporting or investigating a suspected violation of law; or (ii) the disclosure is made to Executive’s attorney or in a sealed court filing in connection with a lawsuit or other proceeding, including if filed under seal in a lawsuit or proceeding involving the Company or the Bank, or if made pursuant to a court order. |
12. | Restrictive Covenants. |
(a) | Competitive Activities. During the Term and for the applicable Post-Termination Period (defined below), Executive will not as a founder, shareholder, director, officer, employee, partner, agent, consultant, or in any other capacity, directly or indirectly provide management, supervisory, business development, marketing, or strategic planning services to a bank or a financial services company involved in commercial or consumer lending in any county in which the Company or the Bank (or any of their subsidiaries or divisions) has a branch or office ("Applicable Counties"). This restriction shall not limit the activities of the Executive at a permanent location outside of the Applicable Counties as long as Executive's efforts are not primarily directed to customers in the Applicable Counties, and Executive at all time maintains compliance with Sections 12(b) and 12(c) below. "Post-Termination Period" means the greater of the remaining Term or three (3) |
(b) | Non-solicitation of Employees or Vendors. During the Term and for three (3) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, recruit, or entice, or attempt to solicit, recruit, or entice (i) any employee of the Bank or the Company to terminate his or her employment with the Bank or the Company, or (ii) any person or entity to terminate, cancel, rescind, or revoke its business or contractual relationships with the Bank or the Company. To indirectly solicit or recruit an employee includes, without limitation, to divulge information about an employee to another person that would assist or help that person to solicit or recruit the employee. |
(c) | Non-solicitation of Customers. During the Term and for three (3) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, divert, or take away, or attempt to solicit, divert, or take away from the Bank or the Company any person or entity who within the twenty-four (24) months immediately preceding termination of the Executive’s employment was both (i) a customer of the Bank or the Company and (ii) to whom Executive, directly or indirectly, provided services, contracted with, or solicited business on behalf of the Bank or the Company. |
(d) | Effect of Breach. If Executive breaches any provision of this Section 12 during the Post-Termination Period, Executive agrees that he forfeits any right to retain any Severance Payments previously received and will no longer be entitled to and forfeits any remaining Severance Payments. Executive agrees that this Section 12(d) shall not be construed to limit or exclude any remedies otherwise available to the Bank and/or the Company for any such breach. |
13. | Enforcement. |
(a) | Reasonableness of Restrictions. Executive, the Company, and the Bank stipulate that, in light of all of the facts and circumstances of the relationship between Executive, the Company, and the Bank, the agreements referred to in Section 11 and Section 12 (including without limitation their scope, duration, and geographic extent) are fair and reasonably necessary for the protection of the Bank's and the Company's Confidential Information, goodwill, and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive, the Company, and the Bank request the court to reform these provisions to restrict Executive's use of Confidential Information and Executive's ability to compete with the Bank and the Company in time, scope of activities, and geography to the maximum extent the court finds enforceable. |
(b) | Injunctive Relief. Executive acknowledges the Bank and the Company will suffer immediate and irreparable harm that will not be compensable by monetary damages alone if Executive repudiates or breaches any of the provisions of Section 11 or Section 12 or threatens or attempts to do so. For this reason, the Company and/or the Bank, in addition to and without limitation of any other rights, remedies, or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary, and permanent injunctions to prevent or restrain the breach, and neither the Company nor the Bank will be required to post a bond as a condition for the granting of this relief. |
(c) | Tolling. The restrictive time periods referred to in Section 12 shall be tolled and extended for any time during which Executive is in violation of the restrictions. If the Bank or the Company initiates legal action to enforce the restrictions and obtains an injunction against Executive, then the appropriate restrictive time period(s) will begin to run on the date that the injunction is entered. Executive agrees that such extension under the circumstances described is necessary and appropriate to provide the Bank and the Company with the bargained-for protection of their legitimate business interests. |
14. | Effect of Covenants. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 11 and 12 and that the Bank and the Company are entitled to require Executive to comply with such Sections. Sections 11 through 18 will survive termination of this Agreement. Executive represents that if Executive's employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that the Bank's or the Company's enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. |
15. | Arbitration. |
(a) | Arbitration. At a party's request, the parties must submit any dispute, controversy, or claim arising out of or in connection with, or relating to, Executive’s employment or termination of employment with the Company and the Bank, this Agreement, or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration Association's rules then in effect (or under any other form of arbitration mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the arbitration. If the parties cannot agree on a single arbitrator, each party must select one arbitrator and those two arbitrators will select a third arbitrator. This third arbitrator will hear the dispute. The arbitrator's decision is final (except as otherwise specifically provided by law) and binds the parties, and a party may request any court having jurisdiction under Section 18(h) to enter a judgment and to enforce the arbitrator's decision. The arbitrator will provide the parties with a written decision naming the substantially prevailing party in the action. This prevailing party is entitled to reimbursement from the other party for its costs |
(b) | Governing Law. All arbitration proceedings under this Section 15 will be held at a place designated by the arbitrator in Kalispell, Montana. The arbitrator, in rendering a decision as to any state law claims, will apply Montana law. |
(c) | Exception to Arbitration. Notwithstanding the above, for disputes involving alleged violations of Section 11 or Section 12, or for any disputes involving a request for injunctive relief, the parties will have the right to initiate the court proceedings described in Section 13(b), in lieu of an arbitration proceeding under this Section 15, and may do so in the courts specified in Section 18(h). |
16. | Regulatory Limitations; Clawbacks. Notwithstanding any other provision in this Agreement to the contrary, no payment shall be required to be made to or for the benefit of the Executive under this Agreement to the extent such payment is prohibited by applicable law, regulation, or order issued by a bank regulatory agency or a court of competent jurisdiction. Further, any compensation paid to Executive under this Agreement or otherwise is subject to limitation, recoupment, or clawback under any applicable clawback or recoupment policy that is generally applicable to the Company's and/or the Bank's executives, as may be in effect from time to time, or as required by law, regulation, or regulatory action. |
17. | Jury Waiver. THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND/OR ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). |
18. | Miscellaneous Provisions. |
(a) | Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties concerning its subject matter and supersedes all prior agreements, correspondence, representations, or understandings between the parties relating to its subject matter. |
(b) | Binding Effect. This Agreement will bind and inure to the benefit of the Company and the Bank and their successors and assigns. Subject to the limitation on assignment set forth in Section 18(e), this Agreement will bind |
(c) | Litigation Expenses. In the event of any dispute or legal or equitable action arising from this Agreement, the prevailing party shall be entitled to all of its out-of-pocket expenses and costs including, without limitation, reasonable attorneys' fees and costs. |
(d) | Waiver. The failure of any party to insist upon strict performance of any of the terms and provisions of this Agreement shall not be construed as a waiver or relinquishment of any such terms or conditions or of any other term or condition and the same shall be and remain in full force and effect. Any waiver by a party of its rights under this Agreement must be written and signed by the party waiving its rights. A party's waiver of the other party's breach of any provision of this Agreement will not operate as a waiver of any other breach by the breaching party. |
(e) | Assignment. The services to be rendered by Executive under this Agreement are unique and personal. Accordingly, Executive may not assign any of his rights or duties under this Agreement. Any such assignment or attempted assignment shall be void. |
(f) | Amendment. This Agreement may be modified only through a written instrument signed by all parties to this Agreement. |
(g) | Severability. The provisions of this Agreement are severable. The invalidity of any provision will not affect the validity of other provisions of this Agreement. |
(h) | Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Montana, except to the extent certain matters may be governed by federal law. Subject to the arbitration terms set forth in Section 15, the parties must bring any legal proceeding arising out of this Agreement in the state courts situated in Kalispell, Montana or the federal district courts of the Missoula Division for the State of Montana. Each party consents to and submits to the jurisdiction of any such court. |
(i) | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together will constitute one and the same instrument. The parties agree that facsimile or electronic signatures shall have the same force and effect as original signatures. |
(j) | Attorney Representation. Executive acknowledges that he has had the opportunity to consult with independent counsel with respect to the negotiation, preparation, and execution of this Agreement. |
EXECUTIVE: | THE BANK: | ||
Glacier Bank | |||
/s/ Randall M. Chesler | /s/ Dallas I. Herron | ||
Randall M. Chesler | By: | Dallas I. Herron | |
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Ron J. Copher | |||
By: | Ron J. Copher | ||
Its: | Secretary | ||
THE COMPANY: | |||
Glacier Bancorp, Inc. | |||
/s/ Dallas I. Herron | |||
By: | Dallas I. Herron | ||
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Ron J. Copher | |||
By: | Ron J. Copher | ||
Its: | Secretary |
A. | Executive presently serves as the Executive Vice President and Chief Financial Officer of the Company and the Bank. |
B. | The Company and the Bank desire Executive to continue his employment with the Company and the Bank on and after the Effective Date and Executive desires to be so employed by the Company and the Bank, subject to the terms and conditions of this Agreement. |
1. | Employment. The Company and the Bank agree to employ Executive, and Executive accepts employment by the Company and the Bank, subject to the terms of this Agreement. Executive's title will be "Executive Vice President and Chief Financial Officer" of the Company and the Bank. |
2. | Term. The term of this Agreement will begin on March 5, 2018 and continue until March 4, 2020, unless terminated earlier in accordance with this Agreement (the "Term"). If the Company and the Bank expect not to renew Executive's employment following the expiration of the Term, the Company and the Bank will provide Executive with a courtesy notice that Executive's employment will not be renewed at least ninety (90) days before the expiration of the Term. |
3. | Duties. The Company and the Bank will employ Executive as the Executive Vice President and Chief Financial Officer of the Company and the Bank. Executive will faithfully and diligently perform his assigned duties, which include but are not limited to the following: |
(a) | Chief Financial Officer. Executive will have such duties and responsibilities as assigned by the Company's President and Chief Executive Officer, which will be customary for Chief Financial Officers of comparable publicly reporting companies. |
(b) | Reporting. Executive will report directly to the Company's President and Chief Executive Officer. The Company's board of directors and the President and Chief Executive Officer of the Company may, from time to time, modify Executive's title or add, delete, or modify Executive's performance responsibilities to accommodate management succession, as well as any other management objectives of the Company or the Bank. Executive agrees to assume any additional positions, duties, and responsibilities as may reasonably |
4. | Extent of Services. Executive will devote all of his working time, attention, and skill to the duties and responsibilities set forth in Section 3. To the extent that such activities do not interfere with his duties under Section 3, Executive may participate in other businesses as a passive investor, but (a) Executive may not actively participate in the operation or management of those businesses, and (b) Executive may not, without the Company's or the Bank's prior written consent, make or maintain any investment in a business with which the Bank or the Company (or any of their subsidiaries or divisions) has an existing competitive or commercial relationship. |
5. | Salary. Executive will receive an annualized base salary of $407,357.00 for each calendar year during the Term, except any calendar year during the Term in which Executive works less than the entire twelve (12) months will be prorated accordingly. Executive's salary will be paid in accordance with the Company's regular payroll schedule and practices (including as to withholding). Executive's annual base salary may be adjusted, in the sole discretion of the Company's board of directors and/or the Bank's board of directors, based on performance and additional duties and responsibilities, if any. |
6. | Short Term Incentive Plan. Executive will be eligible to participate in the Company's Short Term Incentive Plan ("STIP"). Executive will be eligible for cash incentives pursuant to the Company's STIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Cash Incentive Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 40% | 60% |
7. | Long Term Incentive Plan. Executive will be eligible to participate in the Company's Stock Incentive Plan (the "LTIP"). Executive will be eligible for equity awards pursuant to the LTIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Equity Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 40% | 60% |
8. | Income Deferral. Executive will be eligible to participate in any program available to the Company's and/or the Bank's senior management for income deferral, for the purpose of deferring receipt of any or all of the compensation Executive may become entitled to under this Agreement. Any such deferrals will be subject to the terms and conditions of the deferral program, as adopted and amended from time to time. |
9. | Paid Time Off ("PTO") and Benefits. |
(a) | PTO and Holidays. Executive will accrue up to one hundred sixty (160) hours of PTO each year, which accrual shall occur ratably over the Company's payroll periods, in addition to all holidays observed by the Company. Accrual of PTO shall be in accordance with the Company's Employee Manual. Executive may carry over, in the aggregate, up to one hundred sixty (160) hours of unused PTO to a subsequent year; provided, however, Executive may not accumulate in excess of one hundred sixty (160) hours of PTO at any given time (the "Cap"). Should Executive's accumulation of PTO reach the Cap of one hundred sixty (160) hours, Executive will no longer accrue additional PTO until Executive uses some of Executive's accumulated PTO and Executive's accumulated PTO balance drops below the Cap. For purposes of PTO usage, Executive shall be considered to work eight (8) hours a day. Each calendar year Executive shall take at least five (5) consecutive days of PTO. |
(b) | Benefits. Executive will be entitled to participate in any group life insurance, disability, medical, dental, vision, health and accident insurance plans, profit sharing and pension plans, and in other employee fringe benefit programs the Bank or the Company may have in effect from time to time for its similarly situated employees, in accordance with and subject to any policies adopted by the Bank's board of directors or the Company's board of directors with respect to the plans or programs, including without limitation, any incentive or employee stock option plan, deferred compensation plan, 401(k) plan, and Supplemental Executive Retirement Plan (SERP). Neither the Bank nor the Company, through this Agreement, obligates itself to make any particular benefits available to its employees. The Bank's or the Company's change, |
(c) | Business Expenses. Subject to any applicable Company policies or the rules and regulations of the Internal Revenue Service, the Company will reimburse Executive for ordinary and necessary expenses which are consistent with past practice at the Company and the Bank (including, without limitation, travel, entertainment, and similar expenses) and which are incurred in performing and promoting the Company's and/or the Bank's business. Executive will present from time to time itemized accounts of these expenses. Reimbursement will be made as soon as practicable but no later than the last day of the calendar year following the calendar year in which the expenses were incurred. The amount of expenses eligible for reimbursement in one calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year. |
(d) | Directors and Officers Insurance; Indemnification. Executive will be covered by the Company's and/or the Bank's Directors and Officers liability insurance policy in effect from time to time. To the extent permitted by the Company's Bylaws and the Montana Business Corporation Act, the Company will indemnify Executive in the event Executive is a party (or is threatened to be made a party) to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Executive is or was a director, officer, or employee of the Company or the Bank. |
10. | Termination of Employment. |
(a) | Termination for Cause or without Good Reason. If the Company and the Bank terminate Executive's employment for Cause (defined below) during the Term, or Executive terminates his employment without Good Reason (defined below) during the Term, the Company will pay Executive the annualized base salary earned and expenses reimbursable under this Agreement incurred through the date of his termination. Executive will have no right to receive any other compensation or benefits for any period before or after termination under this Section 10(a). |
(b) | Termination without Cause or with Good Reason. If the Company and the Bank terminate Executive's employment without Cause during the Term, or Executive terminates his employment for Good Reason during the Term, then contingent upon (1) Executive's signing and not subsequently revoking a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment, and (2) Executive's compliance with Section 12, the Company will pay Executive an amount equal to the greater of (i) the amount of base salary remaining to be paid during the Term or (ii) the amount Executive would be |
(c) | Termination Related to Death or Disability. This Agreement terminates (i) if Executive dies or (ii) if Executive is unable to perform his duties and obligations under this Agreement (as determined by the Company's and/or the Bank's board of directors in its sole discretion) for a period of ninety (90) consecutive days as a result of a physical or mental disability arising at any time during the Term, unless with reasonable accommodation Executive could continue to perform the essential functions of his position under this Agreement and making these accommodations would not pose an undue hardship on the Company or the Bank. If termination occurs under this Section 10(c), Executive or his estate will be entitled to receive all compensation and benefits earned and expenses reimbursable through the date Executive's employment is terminated. Neither Executive nor his estate will have any right to receive compensation or other benefits for any period after termination under this Section 10(c). |
(d) | Termination Related to a Change in Control. The following provisions shall survive the expiration of the Term and the termination of Executive's employment. |
(i) | Termination by Company. If the Company, or a successor in interest by merger, or a transferee in the event of a purchase in an assumption transaction (for reasons other than Executive's death, disability, or for Cause), terminates Executive's employment without Cause: (A) within two (2) years following a Change in Control (as defined below); or (B) before a Change in Control but on or after the date that any party either announces or is required by law to announce any prospective Change in Control transaction and a Change in Control occurs within |
(ii) | Termination by Executive. If Executive terminates Executive's employment for Good Reason within two (2) years following a Change in Control, the Company will provide Executive with the payment described in Section 10(d)(iii), provided that Executive executes and does not revoke a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment. |
(iii) | Payments. If Section 10(d)(i)(A) or Section 10(d)(ii) is triggered in accordance with its terms, the Company will: (A) subject to Sections 10(e) and 10(i) below, beginning within thirty (30) days after Executive's separation from service as defined by Treasury Regulation § 1.409A-1(h) ("Separation from Service"), pay Executive in twenty-four (24) substantially equal monthly installments in an overall amount equal to two (2) times Executive's compensation (as reportable on Executive's IRS W-2 Form) received by Executive from the Company for the most recent calendar year; and (B) subject to Sections 10(e) and 10(i) below, if Section 10(d)(i)(B) is triggered in accordance with its terms, beginning within thirty (30) days after a Change in Control, the Company will pay Executive in twenty-four (24) substantially equal monthly installments in an overall amount equal to two (2) times Executive's compensation (as reportable on Executive's IRS W-2 Form) received by Executive from the Company for the most recent calendar year. In either case, if the 30-day period spans two (2) calendar years, payments will not begin until the second calendar year. For purposes of Section 409A of the Internal Revenue Code, each installment shall be treated as a separate payment. |
(e) | Limitations on Payments Related to Change in Control. The following apply notwithstanding any other provision of this Agreement: |
(i) | Any payments that would otherwise be made pursuant to Section 10(d)(d)(iii) will be reduced by any base salary, cash bonus (including STIP pursuant to Section 6), or Severance Payments (as defined in Section 10(b)) received by Executive from the Company or its successor after the first to occur of a Change in Control or Executive's termination of employment. |
(ii) | Executive's right to receive the payments described in Section 10(d)(iii) terminates (A) immediately if before the Change in Control transaction closes, Executive terminates his employment without Good Reason, or the Company and the Bank terminate Executive's employment for Cause, or (B) two (2) years after a Change of Control occurs. |
(iii) | Notwithstanding anything to the contrary in this Agreement or any other agreement or plan, to the extent that any payment or distribution of any type to or for the benefit of Executive by the Company (or by any affiliate of the Company, any person or entity who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets within the meaning of Section 280G of the Internal Revenue Code, and the regulations thereunder, or any affiliate of such person or entity), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), is or will be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code (the "Excise Tax"), then the Total Payments shall be reduced (but not below zero) only if and to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state, and local income taxes and the Excise Tax), than if Executive received the entire amount of such Total Payments. Unless Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments that are cash payments, and then by reducing or eliminating the portion of the Total Payments that are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below); provided, however, that in all events, such reductions shall be done in a manner consistent with the requirements of Section 409A of the Internal Revenue Code, to the extent applicable. Any notice given by Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement, or agreement governing Executive's rights and entitlements to any benefits or compensation. |
(f) | Return of Property. If and when Executive ceases, for any reason, to be employed by the Company and the Bank, Executive must return to the Company and the Bank all keys, pass cards, identification cards, cell phones, other smart phones, tablets, electronic storage devices, Bank and Company credit cards, and any other property of the Company or the Bank. At the same time, Executive also must return to the Company and the Bank all originals and copies (whether in hard copy, electronic, or other form) of any documents, drawings, notes, memoranda, designs, devices, electronic storage devices, tapes, manuals, and specifications which constitute proprietary or confidential information or material of the Bank or the Company (or their subsidiaries or divisions). The obligations in this Section 10(f) include, without limitation, the return of documents and other materials which may be in Executive's desk at work, his car, his place of residence, personal electronic or digital devices or cloud-type storage, or in any other location under Executive's control. |
(g) | Cause. "Cause" means any one or more of the following: |
(i) | Willful misfeasance or gross negligence in the performance of Executive's duties; |
(ii) | Conviction of a crime in connection with Executive's duties, conviction of a felony, or conviction of a crime of fraud, theft, conversion, or dishonesty; |
(iii) | Willful material breach of Section 11 of this Agreement or a confidentiality policy of the Company or the Bank; |
(iv) | Conduct demonstrably and significantly harmful to the Company or the Bank, as reasonably determined on the advice of legal counsel of the Company's or the Bank's board of directors; |
(v) | Upon entry of an administrative action by a regulator prohibiting Executive from performing any of his duties or responsibilities. |
(h) | Good Reason. Executive terminates his employment for "Good Reason" if all four (4) of the following criteria are satisfied: |
(i) | Any one or more of the following conditions (each a "Condition") arises without Executive's consent: |
A. | A material reduction of Executive's base salary, unless the reduction or elimination is generally applicable to substantially all similarly situated Company or Bank employees (or employees of a successor or controlling entity of the Company or the Bank) formerly benefited or is otherwise offset economically by increases in other compensation or replacement plans or programs; |
B. | A material diminution in Executive's authority, duties, or responsibilities as set forth in this Agreement from and after the Effective Date; |
C. | A material breach of this Agreement by the Company; or |
D. | A material relocation or transfer of Executive's principal place of employment to a location outside of Flathead County, Montana; and |
(ii) | Executive gives notice to the Company and the Bank of the Condition within ninety (90) days of the initial existence of the Condition; |
(iii) | The Company and the Bank fail to reasonably remedy the Condition within thirty (30) days following receipt of the notice described in paragraph (ii) above; and |
(iv) | Executive terminates his employment within one hundred eighty (180) days following the initial existence of the Condition. |
(i) | Change in Control. "Change in Control" means a change "in the ownership or effective control" or "in the ownership of a substantial portion of the assets" of the Company, within the meaning of Treas. Reg. § 1.409A-3(i)(5). |
(j) | Section 409A Compliance. Notwithstanding anything in this Agreement to the contrary, if any amounts that become due under this Agreement on account of the termination of Executive's employment constitute "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A, payment of such amounts shall not commence until Executive incurs a Separation from Service (as defined in Section 10(d)(iii)). If, at the time of Executive's Separation from Service under this Agreement, Executive is a "specified employee" (under Internal Revenue Code Section 409A), any amount that constitutes "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A that becomes payable to Executive on account of Executive's Separation from Service (including any amounts payable pursuant to the preceding sentence) will not be paid until after the end of the sixth (6th) calendar month beginning after Executive's Separation from Service (the "409A Suspension Period"). Within fourteen (14) calendar days after the end of the 409A Suspension Period, Executive shall be paid a |
11. | Confidentiality. |
(a) | Confidential Information. The parties agree that, in the course of Executive's employment with the Company and the Bank, Executive will be provided with, or be provided access to, certain Confidential Information. "Confidential Information" means proprietary nonpublic information that includes but is not limited to marketing, sales, acquisition, and recruiting objectives and strategies, loan files, customer lists, proprietary technology, information regarding existing customer preferences, habits and needs, proprietary information regarding prospective customers, details of past, pending, and contemplated transactions, pricing structure, investment management practices, sales data, accounts, training materials, information developed about the Bank or the Company, competitors, systems, strategies, designs, processes, procedures, forecasting data, recruiting data, market data, know-how, compilations of technical and non-technical data, advertising and promotional plans and strategies, and financial and other projections relating to financial industry, which are not generally known to or readily ascertainable through legitimate means by the public or by the Bank's or the Company's competitors. Executive further recognizes, acknowledges, and agrees that the Confidential Information remains the property of the Bank and the Company and, in sharing that Confidential Information with Executive, the Bank and the Company do not grant Executive any license or other interest in the Bank's and the Company's Confidential Information. |
(b) | Non-Disclosure. Executive shall at all times take reasonable steps to maintain the confidentiality of Confidential Information, and shall hold the Bank's and the Company's Confidential Information in secret. Executive agrees that he will not, after the date this Agreement was signed, including during and after its Term, use for his own purposes or directly or indirectly communicate, disseminate, distribute, or disclose to any other person or entity any Confidential Information concerning the Bank or the Company to any person or entity other than the Bank or the Company or their agents or employees in the course and scope of employment, unless (i) the Bank or the Company consents in writing to the use or disclosure of their respective Confidential Information; (ii) the use or disclosure is consistent with Executive's duties under this Agreement; (iii) disclosure is required by law or court order; or (iv) the information is made or otherwise becomes public other than as a result of a disclosure by Executive in violation of this Agreement or other obligation of confidentiality. In the event disclosure of Confidential Information is required by law or court order and Executive is making such disclosure, Executive shall |
(c) | Defend Trade Secrets Act. Executive will be immune from criminal or civil liability for disclosure of a trade secret under these limited circumstances: (i) the disclosure is made in confidence to a government official or an attorney solely for the purpose of reporting or investigating a suspected violation of law; or (ii) the disclosure is made to Executive’s attorney or in a sealed court filing in connection with a lawsuit or other proceeding, including if filed under seal in a lawsuit or proceeding involving the Company or the Bank, or if made pursuant to a court order. |
12. | Restrictive Covenants. |
(a) | Competitive Activities. During the Term and for the applicable Post-Termination Period (defined below), Executive will not as a founder, shareholder, director, officer, employee, partner, agent, consultant, or in any other capacity, directly or indirectly provide management, supervisory, business development, marketing, or strategic planning services to a bank or a financial services company involved in commercial or consumer lending in any county in which the Company or the Bank (or any of their subsidiaries or divisions) has a branch or office ("Applicable Counties"). This restriction shall not limit the activities of the Executive at a permanent location outside of the Applicable Counties as long as Executive's efforts are not primarily directed to customers in the Applicable Counties, and Executive at all time maintains compliance with Sections 12(b) and 12(c) below. "Post-Termination Period" means the greater of the remaining Term or two (2) years after Executive's employment with the Company and the Bank has terminated for any reason. |
(b) | Non-solicitation of Employees or Vendors. During the Term and for two (2) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, recruit, or entice, or attempt to solicit, recruit, or entice (i) any employee of the Bank or the Company to terminate his or her employment with the Bank or the Company, or (ii) any person or entity to terminate, cancel, rescind, or revoke |
(c) | Non-solicitation of Customers. During the Term and for two (2) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, divert, or take away, or attempt to solicit, divert, or take away from the Bank or the Company any person or entity who within the twenty-four (24) months immediately preceding termination of the Executive’s employment was both (i) a customer of the Bank or the Company and (ii) to whom Executive, directly or indirectly, provided services, contracted with, or solicited business on behalf of the Bank or the Company. |
(d) | Effect of Breach. If Executive breaches any provision of this Section 12 during the Post-Termination Period, Executive agrees that he forfeits any right to retain any Severance Payments previously received and will no longer be entitled to and forfeits any remaining Severance Payments. Executive agrees that this Section 12(d) shall not be construed to limit or exclude any remedies otherwise available to the Bank and/or the Company for any such breach. |
13. | Enforcement. |
(a) | Reasonableness of Restrictions. Executive, the Company, and the Bank stipulate that, in light of all of the facts and circumstances of the relationship between Executive, the Company, and the Bank, the agreements referred to in Section 11 and Section 12 (including without limitation their scope, duration, and geographic extent) are fair and reasonably necessary for the protection of the Bank's and the Company's Confidential Information, goodwill, and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive, the Company, and the Bank request the court to reform these provisions to restrict Executive's use of Confidential Information and Executive's ability to compete with the Bank and the Company in time, scope of activities, and geography to the maximum extent the court finds enforceable. |
(b) | Injunctive Relief. Executive acknowledges the Bank and the Company will suffer immediate and irreparable harm that will not be compensable by monetary damages alone if Executive repudiates or breaches any of the provisions of Section 11 or Section 12 or threatens or attempts to do so. For this reason, the Company and/or the Bank, in addition to and without limitation of any other rights, remedies, or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary, and permanent injunctions to prevent or restrain the breach, and neither the Company nor the Bank will be required to post a bond as a condition for the granting of this relief. |
(c) | Tolling. The restrictive time periods referred to in Section 12 shall be tolled and extended for any time during which Executive is in violation of the restrictions. If the Bank or the Company initiates legal action to enforce the restrictions and obtains an injunction against Executive, then the appropriate restrictive time period(s) will begin to run on the date that the injunction is entered. Executive agrees that such extension under the circumstances described is necessary and appropriate to provide the Bank and the Company with the bargained-for protection of their legitimate business interests. |
14. | Effect of Covenants. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 11 and 12 and that the Bank and the Company are entitled to require Executive to comply with such Sections. Sections 11 through 18 will survive termination of this Agreement. Executive represents that if Executive's employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that the Bank's or the Company's enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. |
15. | Arbitration. |
(a) | Arbitration. At a party's request, the parties must submit any dispute, controversy, or claim arising out of or in connection with, or relating to, Executive’s employment or termination of employment with the Company and the Bank, this Agreement, or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration Association's rules then in effect (or under any other form of arbitration mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the arbitration. If the parties cannot agree on a single arbitrator, each party must select one arbitrator and those two arbitrators will select a third arbitrator. This third arbitrator will hear the dispute. The arbitrator's decision is final (except as otherwise specifically provided by law) and binds the parties, and a party may request any court having jurisdiction under Section 18(h) to enter a judgment and to enforce the arbitrator's decision. The arbitrator will provide the parties with a written decision naming the substantially prevailing party in the action. This prevailing party is entitled to reimbursement from the other party for its costs and expenses, including reasonable attorneys' fees, unless otherwise prohibited by law. |
(b) | Governing Law. All arbitration proceedings under this Section 15 will be held at a place designated by the arbitrator in Kalispell, Montana. The arbitrator, in rendering a decision as to any state law claims, will apply Montana law. |
(c) | Exception to Arbitration. Notwithstanding the above, for disputes involving alleged violations of Section 11 or Section 12, or for any disputes involving a request for injunctive relief, the parties will have the right to initiate the court |
16. | Regulatory Limitations; Clawbacks. Notwithstanding any other provision in this Agreement to the contrary, no payment shall be required to be made to or for the benefit of the Executive under this Agreement to the extent such payment is prohibited by applicable law, regulation, or order issued by a bank regulatory agency or a court of competent jurisdiction. Further, any compensation paid to Executive under this Agreement or otherwise is subject to limitation, recoupment, or clawback under any applicable clawback or recoupment policy that is generally applicable to the Company's and/or the Bank's executives, as may be in effect from time to time, or as required by law, regulation, or regulatory action. |
17. | Jury Waiver. THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND/OR ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). |
18. | Miscellaneous Provisions. |
(a) | Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties concerning its subject matter and supersedes all prior agreements, correspondence, representations, or understandings between the parties relating to its subject matter. |
(b) | Binding Effect. This Agreement will bind and inure to the benefit of the Company and the Bank and their successors and assigns. Subject to the limitation on assignment set forth in Section 18(e), this Agreement will bind and inure to the benefit of Executive and Executive's heirs, legal representatives, successors, and assigns. |
(c) | Litigation Expenses. In the event of any dispute or legal or equitable action arising from this Agreement, the prevailing party shall be entitled to all of its out-of-pocket expenses and costs including, without limitation, reasonable attorneys' fees and costs. |
(d) | Waiver. The failure of any party to insist upon strict performance of any of the terms and provisions of this Agreement shall not be construed as a waiver or relinquishment of any such terms or conditions or of any other term or |
(e) | Assignment. The services to be rendered by Executive under this Agreement are unique and personal. Accordingly, Executive may not assign any of his rights or duties under this Agreement. Any such assignment or attempted assignment shall be void. |
(f) | Amendment. This Agreement may be modified only through a written instrument signed by all parties to this Agreement. |
(g) | Severability. The provisions of this Agreement are severable. The invalidity of any provision will not affect the validity of other provisions of this Agreement. |
(h) | Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Montana, except to the extent certain matters may be governed by federal law. Subject to the arbitration terms set forth in Section 15, the parties must bring any legal proceeding arising out of this Agreement in the state courts situated in Kalispell, Montana or the federal district courts of the Missoula Division for the State of Montana. Each party consents to and submits to the jurisdiction of any such court. |
(i) | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together will constitute one and the same instrument. The parties agree that facsimile or electronic signatures shall have the same force and effect as original signatures. |
(j) | Attorney Representation. Executive acknowledges that he has had the opportunity to consult with independent counsel with respect to the negotiation, preparation, and execution of this Agreement. |
EXECUTIVE: | THE BANK: | ||
Glacier Bank | |||
/s/ Ron J. Copher | /s/ Dallas I. Herron | ||
Ron J. Copher | By: | Dallas I. Herron | |
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Randall M. Chesler | |||
By: | Randall M. Chesler | ||
Its: | President & CEO | ||
THE COMPANY: | |||
Glacier Bancorp, Inc. | |||
/s/ Dallas I. Herron | |||
By: | Dallas I. Herron | ||
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Randall M. Chesler | |||
By: | Randall M. Chesler | ||
Its: | President & CEO |
A. | Executive presently serves as the Executive Vice President and Chief Administrative Officer of the Company and the Bank. |
B. | The Company and the Bank desire Executive to continue his employment with the Company and the Bank on and after the Effective Date and Executive desires to be so employed by the Company and the Bank, subject to the terms and conditions of this Agreement. |
1. | Employment. The Company and the Bank agree to employ Executive, and Executive accepts employment by the Company and the Bank, subject to the terms of this Agreement. Executive's title will be "Executive Vice President and Chief Administrative Officer" of the Company and the Bank. |
2. | Term. The term of this Agreement will begin on March 5, 2018 and continue until March 4, 2020, unless terminated earlier in accordance with this Agreement (the "Term"). If the Company and the Bank expect not to renew Executive's employment following the expiration of the Term, the Company and the Bank will provide Executive with a courtesy notice that Executive's employment will not be renewed at least ninety (90) days before the expiration of the Term. |
3. | Duties. The Company and the Bank will employ Executive as the Executive Vice President and Chief Administrative Officer of the Company and the Bank. Executive will faithfully and diligently perform his assigned duties, which include but are not limited to the following: |
(a) | Chief Administrative Officer. Executive will have such duties and responsibilities as assigned by the Company's President and Chief Executive Officer, which will be customary for Chief Administrative Officers of comparable publicly reporting companies. |
(b) | Reporting. Executive will report directly to the Company's President and Chief Executive Officer. The Company's board of directors and the President and Chief Executive Officer of the Company may, from time to time, modify Executive's title or add, delete, or modify Executive's performance responsibilities to accommodate management succession, as well as any other management objectives of the Company or the Bank. Executive agrees to assume any additional positions, duties, and responsibilities as may reasonably |
4. | Extent of Services. Executive will devote all of his working time, attention, and skill to the duties and responsibilities set forth in Section 3. To the extent that such activities do not interfere with his duties under Section 3, Executive may participate in other businesses as a passive investor, but (a) Executive may not actively participate in the operation or management of those businesses, and (b) Executive may not, without the Company's or the Bank's prior written consent, make or maintain any investment in a business with which the Bank or the Company (or any of their subsidiaries or divisions) has an existing competitive or commercial relationship. |
5. | Salary. Executive will receive an annualized base salary of $337,135.00 for each calendar year during the Term, except any calendar year during the Term in which Executive works less than the entire twelve (12) months will be prorated accordingly. Executive's salary will be paid in accordance with the Company's regular payroll schedule and practices (including as to withholding). Executive's annual base salary may be adjusted, in the sole discretion of the Company's board of directors and/or the Bank's board of directors, based on performance and additional duties and responsibilities, if any. |
6. | Short Term Incentive Plan. Executive will be eligible to participate in the Company's Short Term Incentive Plan ("STIP"). Executive will be eligible for cash incentives pursuant to the Company's STIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Cash Incentive Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 40% | 60% |
7. | Long Term Incentive Plan. Executive will be eligible to participate in the Company's Stock Incentive Plan (the "LTIP"). Executive will be eligible for equity awards pursuant to the LTIP based on the Company meeting certain financial goals (i.e., acceptable, target, and max) set by the Company's board of directors at the following levels for 2018: |
Equity Opportunity as a Percentage of Salary | ||
Acceptable | Target | Max |
0% | 40% | 60% |
8. | Income Deferral. Executive will be eligible to participate in any program available to the Company's and/or the Bank's senior management for income deferral, for the purpose of deferring receipt of any or all of the compensation Executive may become entitled to under this Agreement. Any such deferrals will be subject to the terms and conditions of the deferral program, as adopted and amended from time to time. |
9. | Paid Time Off ("PTO") and Benefits. |
(a) | PTO and Holidays. Executive will accrue up to one hundred sixty (160) hours of PTO each year, which accrual shall occur ratably over the Company's payroll periods, in addition to all holidays observed by the Company. Accrual of PTO shall be in accordance with the Company's Employee Manual. Executive may carry over, in the aggregate, up to one hundred sixty (160) hours of unused PTO to a subsequent year; provided, however, Executive may not accumulate in excess of one hundred sixty (160) hours of PTO at any given time (the "Cap"). Should Executive's accumulation of PTO reach the Cap of one hundred sixty (160) hours, Executive will no longer accrue additional PTO until Executive uses some of Executive's accumulated PTO and Executive's accumulated PTO balance drops below the Cap. For purposes of PTO usage, Executive shall be considered to work eight (8) hours a day. Each calendar year Executive shall take at least five (5) consecutive days of PTO. |
(b) | Benefits. Executive will be entitled to participate in any group life insurance, disability, medical, dental, vision, health and accident insurance plans, profit sharing and pension plans, and in other employee fringe benefit programs the Bank or the Company may have in effect from time to time for its similarly situated employees, in accordance with and subject to any policies adopted by the Bank's board of directors or the Company's board of directors with respect to the plans or programs, including without limitation, any incentive or employee stock option plan, deferred compensation plan, 401(k) plan, and Supplemental Executive Retirement Plan (SERP). Neither the Bank nor the Company, through this Agreement, obligates itself to make any particular benefits available to its employees. The Bank's or the Company's change, |
(c) | Business Expenses. Subject to any applicable Company policies or the rules and regulations of the Internal Revenue Service, the Company will reimburse Executive for ordinary and necessary expenses which are consistent with past practice at the Company and the Bank (including, without limitation, travel, entertainment, and similar expenses) and which are incurred in performing and promoting the Company's and/or the Bank's business. Executive will present from time to time itemized accounts of these expenses. Reimbursement will be made as soon as practicable but no later than the last day of the calendar year following the calendar year in which the expenses were incurred. The amount of expenses eligible for reimbursement in one calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year. |
(d) | Directors and Officers Insurance; Indemnification. Executive will be covered by the Company's and/or the Bank's Directors and Officers liability insurance policy in effect from time to time. To the extent permitted by the Company's Bylaws and the Montana Business Corporation Act, the Company will indemnify Executive in the event Executive is a party (or is threatened to be made a party) to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Executive is or was a director, officer, or employee of the Company or the Bank. |
10. | Termination of Employment. |
(a) | Termination for Cause or without Good Reason. If the Company and the Bank terminate Executive's employment for Cause (defined below) during the Term, or Executive terminates his employment without Good Reason (defined below) during the Term, the Company will pay Executive the annualized base salary earned and expenses reimbursable under this Agreement incurred through the date of his termination. Executive will have no right to receive any other compensation or benefits for any period before or after termination under this Section 10(a). |
(b) | Termination without Cause or with Good Reason. If the Company and the Bank terminate Executive's employment without Cause during the Term, or Executive terminates his employment for Good Reason during the Term, then contingent upon (1) Executive's signing and not subsequently revoking a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment, and (2) Executive's compliance with Section 12, the Company will pay Executive an amount equal to the greater of (i) the amount of base salary remaining to be paid during the Term or (ii) the amount Executive would be |
(c) | Termination Related to Death or Disability. This Agreement terminates (i) if Executive dies or (ii) if Executive is unable to perform his duties and obligations under this Agreement (as determined by the Company's and/or the Bank's board of directors in its sole discretion) for a period of ninety (90) consecutive days as a result of a physical or mental disability arising at any time during the Term, unless with reasonable accommodation Executive could continue to perform the essential functions of his position under this Agreement and making these accommodations would not pose an undue hardship on the Company or the Bank. If termination occurs under this Section 10(c), Executive or his estate will be entitled to receive all compensation and benefits earned and expenses reimbursable through the date Executive's employment is terminated. Neither Executive nor his estate will have any right to receive compensation or other benefits for any period after termination under this Section 10(c). |
(d) | Termination Related to a Change in Control. The following provisions shall survive the expiration of the Term and the termination of Executive's employment. |
(i) | Termination by Company. If the Company, or a successor in interest by merger, or a transferee in the event of a purchase in an assumption transaction (for reasons other than Executive's death, disability, or for Cause), terminates Executive's employment without Cause: (A) within two (2) years following a Change in Control (as defined below); or (B) before a Change in Control but on or after the date that any party either announces or is required by law to announce any prospective Change in Control transaction and a Change in Control occurs within |
(ii) | Termination by Executive. If Executive terminates Executive's employment for Good Reason within two (2) years following a Change in Control, the Company will provide Executive with the payment described in Section 10(d)(iii), provided that Executive executes and does not revoke a release of any and all claims which Executive could assert against the Company and the Bank relating to Executive's employment or the termination of Executive's employment in a form acceptable to the Company and the Bank within thirty (30) days following the termination of Executive's employment. |
(iii) | Payments. If Section 10(d)(i)(A) or Section 10(d)(ii) is triggered in accordance with its terms, the Company will: (A) subject to Sections 10(e) and 10(i) below, beginning within thirty (30) days after Executive's separation from service as defined by Treasury Regulation § 1.409A-1(h) ("Separation from Service"), pay Executive in twenty-four (24) substantially equal monthly installments in an overall amount equal to two (2) times Executive's compensation (as reportable on Executive's IRS W-2 Form) received by Executive from the Company for the most recent calendar year; and (B) subject to Sections 10(e) and 10(i) below, if Section 10(d)(i)(B) is triggered in accordance with its terms, beginning within thirty (30) days after a Change in Control, the Company will pay Executive in twenty-four (24) substantially equal monthly installments in an overall amount equal to two (2) times Executive's compensation (as reportable on Executive's IRS W-2 Form) received by Executive from the Company for the most recent calendar year. In either case, if the 30-day period spans two (2) calendar years, payments will not begin until the second calendar year. For purposes of Section 409A of the Internal Revenue Code, each installment shall be treated as a separate payment. |
(e) | Limitations on Payments Related to Change in Control. The following apply notwithstanding any other provision of this Agreement: |
(i) | Any payments that would otherwise be made pursuant to Section 10(d)(d)(iii) will be reduced by any base salary, cash bonus (including STIP pursuant to Section 6), or Severance Payments (as defined in Section 10(b)) received by Executive from the Company or its successor after the first to occur of a Change in Control or Executive's termination of employment. |
(ii) | Executive's right to receive the payments described in Section 10(d)(iii) terminates (A) immediately if before the Change in Control transaction closes, Executive terminates his employment without Good Reason, or the Company and the Bank terminate Executive's employment for Cause, or (B) two (2) years after a Change of Control occurs. |
(iii) | Notwithstanding anything to the contrary in this Agreement or any other agreement or plan, to the extent that any payment or distribution of any type to or for the benefit of Executive by the Company (or by any affiliate of the Company, any person or entity who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets within the meaning of Section 280G of the Internal Revenue Code, and the regulations thereunder, or any affiliate of such person or entity), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), is or will be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code (the "Excise Tax"), then the Total Payments shall be reduced (but not below zero) only if and to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state, and local income taxes and the Excise Tax), than if Executive received the entire amount of such Total Payments. Unless Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments that are cash payments, and then by reducing or eliminating the portion of the Total Payments that are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below); provided, however, that in all events, such reductions shall be done in a manner consistent with the requirements of Section 409A of the Internal Revenue Code, to the extent applicable. Any notice given by Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement, or agreement governing Executive's rights and entitlements to any benefits or compensation. |
(f) | Return of Property. If and when Executive ceases, for any reason, to be employed by the Company and the Bank, Executive must return to the Company and the Bank all keys, pass cards, identification cards, cell phones, other smart phones, tablets, electronic storage devices, Bank and Company credit cards, and any other property of the Company or the Bank. At the same time, Executive also must return to the Company and the Bank all originals and copies (whether in hard copy, electronic, or other form) of any documents, drawings, notes, memoranda, designs, devices, electronic storage devices, tapes, manuals, and specifications which constitute proprietary or confidential information or material of the Bank or the Company (or their subsidiaries or divisions). The obligations in this Section 10(f) include, without limitation, the return of documents and other materials which may be in Executive's desk at work, his car, his place of residence, personal electronic or digital devices or cloud-type storage, or in any other location under Executive's control. |
(g) | Cause. "Cause" means any one or more of the following: |
(i) | Willful misfeasance or gross negligence in the performance of Executive's duties; |
(ii) | Conviction of a crime in connection with Executive's duties, conviction of a felony, or conviction of a crime of fraud, theft, conversion, or dishonesty; |
(iii) | Willful material breach of Section 11 of this Agreement or a confidentiality policy of the Company or the Bank; |
(iv) | Conduct demonstrably and significantly harmful to the Company or the Bank, as reasonably determined on the advice of legal counsel of the Company's or the Bank's board of directors; |
(v) | Upon entry of an administrative action by a regulator prohibiting Executive from performing any of his duties or responsibilities. |
(h) | Good Reason. Executive terminates his employment for "Good Reason" if all four (4) of the following criteria are satisfied: |
(i) | Any one or more of the following conditions (each a "Condition") arises without Executive's consent: |
A. | A material reduction of Executive's base salary, unless the reduction or elimination is generally applicable to substantially all similarly situated Company or Bank employees (or employees of a successor or controlling entity of the Company or the Bank) formerly benefited or is otherwise offset economically by increases in other compensation or replacement plans or programs; |
B. | A material diminution in Executive's authority, duties, or responsibilities as set forth in this Agreement from and after the Effective Date; |
C. | A material breach of this Agreement by the Company; or |
D. | A material relocation or transfer of Executive's principal place of employment to a location outside of Flathead County, Montana; and |
(ii) | Executive gives notice to the Company and the Bank of the Condition within ninety (90) days of the initial existence of the Condition; |
(iii) | The Company and the Bank fail to reasonably remedy the Condition within thirty (30) days following receipt of the notice described in paragraph (ii) above; and |
(iv) | Executive terminates his employment within one hundred eighty (180) days following the initial existence of the Condition. |
(i) | Change in Control. "Change in Control" means a change "in the ownership or effective control" or "in the ownership of a substantial portion of the assets" of the Company, within the meaning of Treas. Reg. § 1.409A-3(i)(5). |
(j) | Section 409A Compliance. Notwithstanding anything in this Agreement to the contrary, if any amounts that become due under this Agreement on account of the termination of Executive's employment constitute "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A, payment of such amounts shall not commence until Executive incurs a Separation from Service (as defined in Section 10(d)(iii)). If, at the time of Executive's Separation from Service under this Agreement, Executive is a "specified employee" (under Internal Revenue Code Section 409A), any amount that constitutes "nonqualified deferred compensation" within the meaning of Internal Revenue Code Section 409A that becomes payable to Executive on account of Executive's Separation from Service (including any amounts payable pursuant to the preceding sentence) will not be paid until after the end of the sixth (6th) calendar month beginning after Executive's Separation from Service (the "409A Suspension Period"). Within fourteen (14) calendar days after the end of the 409A Suspension Period, Executive shall be paid a |
11. | Confidentiality. |
(a) | Confidential Information. The parties agree that, in the course of Executive's employment with the Company and the Bank, Executive will be provided with, or be provided access to, certain Confidential Information. "Confidential Information" means proprietary nonpublic information that includes but is not limited to marketing, sales, acquisition, and recruiting objectives and strategies, loan files, customer lists, proprietary technology, information regarding existing customer preferences, habits and needs, proprietary information regarding prospective customers, details of past, pending, and contemplated transactions, pricing structure, investment management practices, sales data, accounts, training materials, information developed about the Bank or the Company, competitors, systems, strategies, designs, processes, procedures, forecasting data, recruiting data, market data, know-how, compilations of technical and non-technical data, advertising and promotional plans and strategies, and financial and other projections relating to financial industry, which are not generally known to or readily ascertainable through legitimate means by the public or by the Bank's or the Company's competitors. Executive further recognizes, acknowledges, and agrees that the Confidential Information remains the property of the Bank and the Company and, in sharing that Confidential Information with Executive, the Bank and the Company do not grant Executive any license or other interest in the Bank's and the Company's Confidential Information. |
(b) | Non-Disclosure. Executive shall at all times take reasonable steps to maintain the confidentiality of Confidential Information, and shall hold the Bank's and the Company's Confidential Information in secret. Executive agrees that he will not, after the date this Agreement was signed, including during and after its Term, use for his own purposes or directly or indirectly communicate, disseminate, distribute, or disclose to any other person or entity any Confidential Information concerning the Bank or the Company to any person or entity other than the Bank or the Company or their agents or employees in the course and scope of employment, unless (i) the Bank or the Company consents in writing to the use or disclosure of their respective Confidential Information; (ii) the use or disclosure is consistent with Executive's duties under this Agreement; (iii) disclosure is required by law or court order; or (iv) the information is made or otherwise becomes public other than as a result of a disclosure by Executive in violation of this Agreement or other obligation of confidentiality. In the event disclosure of Confidential Information is required by law or court order and Executive is making such disclosure, Executive shall |
(c) | Defend Trade Secrets Act. Executive will be immune from criminal or civil liability for disclosure of a trade secret under these limited circumstances: (i) the disclosure is made in confidence to a government official or an attorney solely for the purpose of reporting or investigating a suspected violation of law; or (ii) the disclosure is made to Executive’s attorney or in a sealed court filing in connection with a lawsuit or other proceeding, including if filed under seal in a lawsuit or proceeding involving the Company or the Bank, or if made pursuant to a court order. |
12. | Restrictive Covenants. |
(a) | Competitive Activities. During the Term and for the applicable Post-Termination Period (defined below), Executive will not as a founder, shareholder, director, officer, employee, partner, agent, consultant, or in any other capacity, directly or indirectly provide management, supervisory, business development, marketing, or strategic planning services to a bank or a financial services company involved in commercial or consumer lending in any county in which the Company or the Bank (or any of their subsidiaries or divisions) has a branch or office ("Applicable Counties"). This restriction shall not limit the activities of the Executive at a permanent location outside of the Applicable Counties as long as Executive's efforts are not primarily directed to customers in the Applicable Counties, and Executive at all time maintains compliance with Sections 12(b) and 12(c) below. "Post-Termination Period" means the greater of the remaining Term or two (2) years after Executive's employment with the Company and the Bank has terminated for any reason. |
(b) | Non-solicitation of Employees or Vendors. During the Term and for two (2) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, recruit, or entice, or attempt to solicit, recruit, or entice (i) any employee of the Bank or the Company to terminate his or her employment with the Bank or the Company, or (ii) any person or entity to terminate, cancel, rescind, or revoke |
(c) | Non-solicitation of Customers. During the Term and for two (2) years after Executive's employment with the Company and the Bank has ended for any reason, Executive will not, directly or indirectly, solicit, divert, or take away, or attempt to solicit, divert, or take away from the Bank or the Company any person or entity who within the twenty-four (24) months immediately preceding termination of the Executive’s employment was both (i) a customer of the Bank or the Company and (ii) to whom Executive, directly or indirectly, provided services, contracted with, or solicited business on behalf of the Bank or the Company. |
(d) | Effect of Breach. If Executive breaches any provision of this Section 12 during the Post-Termination Period, Executive agrees that he forfeits any right to retain any Severance Payments previously received and will no longer be entitled to and forfeits any remaining Severance Payments. Executive agrees that this Section 12(d) shall not be construed to limit or exclude any remedies otherwise available to the Bank and/or the Company for any such breach. |
13. | Enforcement. |
(a) | Reasonableness of Restrictions. Executive, the Company, and the Bank stipulate that, in light of all of the facts and circumstances of the relationship between Executive, the Company, and the Bank, the agreements referred to in Section 11 and Section 12 (including without limitation their scope, duration, and geographic extent) are fair and reasonably necessary for the protection of the Bank's and the Company's Confidential Information, goodwill, and other protectable interests. If a court of competent jurisdiction should decline to enforce any of those covenants and agreements, Executive, the Company, and the Bank request the court to reform these provisions to restrict Executive's use of Confidential Information and Executive's ability to compete with the Bank and the Company in time, scope of activities, and geography to the maximum extent the court finds enforceable. |
(b) | Injunctive Relief. Executive acknowledges the Bank and the Company will suffer immediate and irreparable harm that will not be compensable by monetary damages alone if Executive repudiates or breaches any of the provisions of Section 11 or Section 12 or threatens or attempts to do so. For this reason, the Company and/or the Bank, in addition to and without limitation of any other rights, remedies, or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary, and permanent injunctions to prevent or restrain the breach, and neither the Company nor the Bank will be required to post a bond as a condition for the granting of this relief. |
(c) | Tolling. The restrictive time periods referred to in Section 12 shall be tolled and extended for any time during which Executive is in violation of the restrictions. If the Bank or the Company initiates legal action to enforce the restrictions and obtains an injunction against Executive, then the appropriate restrictive time period(s) will begin to run on the date that the injunction is entered. Executive agrees that such extension under the circumstances described is necessary and appropriate to provide the Bank and the Company with the bargained-for protection of their legitimate business interests. |
14. | Effect of Covenants. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in Sections 11 and 12 and that the Bank and the Company are entitled to require Executive to comply with such Sections. Sections 11 through 18 will survive termination of this Agreement. Executive represents that if Executive's employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enable Executive to obtain employment in areas which do not violate this Agreement and that the Bank's or the Company's enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. |
15. | Arbitration. |
(a) | Arbitration. At a party's request, the parties must submit any dispute, controversy, or claim arising out of or in connection with, or relating to, Executive’s employment or termination of employment with the Company and the Bank, this Agreement, or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration Association's rules then in effect (or under any other form of arbitration mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the arbitration. If the parties cannot agree on a single arbitrator, each party must select one arbitrator and those two arbitrators will select a third arbitrator. This third arbitrator will hear the dispute. The arbitrator's decision is final (except as otherwise specifically provided by law) and binds the parties, and a party may request any court having jurisdiction under Section 18(h) to enter a judgment and to enforce the arbitrator's decision. The arbitrator will provide the parties with a written decision naming the substantially prevailing party in the action. This prevailing party is entitled to reimbursement from the other party for its costs and expenses, including reasonable attorneys' fees, unless otherwise prohibited by law. |
(b) | Governing Law. All arbitration proceedings under this Section 15 will be held at a place designated by the arbitrator in Kalispell, Montana. The arbitrator, in rendering a decision as to any state law claims, will apply Montana law. |
(c) | Exception to Arbitration. Notwithstanding the above, for disputes involving alleged violations of Section 11 or Section 12, or for any disputes involving a request for injunctive relief, the parties will have the right to initiate the court |
16. | Regulatory Limitations; Clawbacks. Notwithstanding any other provision in this Agreement to the contrary, no payment shall be required to be made to or for the benefit of the Executive under this Agreement to the extent such payment is prohibited by applicable law, regulation, or order issued by a bank regulatory agency or a court of competent jurisdiction. Further, any compensation paid to Executive under this Agreement or otherwise is subject to limitation, recoupment, or clawback under any applicable clawback or recoupment policy that is generally applicable to the Company's and/or the Bank's executives, as may be in effect from time to time, or as required by law, regulation, or regulatory action. |
17. | Jury Waiver. THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND/OR ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). |
18. | Miscellaneous Provisions. |
(a) | Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties concerning its subject matter and supersedes all prior agreements, correspondence, representations, or understandings between the parties relating to its subject matter. |
(b) | Binding Effect. This Agreement will bind and inure to the benefit of the Company and the Bank and their successors and assigns. Subject to the limitation on assignment set forth in Section 18(e), this Agreement will bind and inure to the benefit of Executive and Executive's heirs, legal representatives, successors, and assigns. |
(c) | Litigation Expenses. In the event of any dispute or legal or equitable action arising from this Agreement, the prevailing party shall be entitled to all of its out-of-pocket expenses and costs including, without limitation, reasonable attorneys' fees and costs. |
(d) | Waiver. The failure of any party to insist upon strict performance of any of the terms and provisions of this Agreement shall not be construed as a waiver or relinquishment of any such terms or conditions or of any other term or |
(e) | Assignment. The services to be rendered by Executive under this Agreement are unique and personal. Accordingly, Executive may not assign any of his rights or duties under this Agreement. Any such assignment or attempted assignment shall be void. |
(f) | Amendment. This Agreement may be modified only through a written instrument signed by all parties to this Agreement. |
(g) | Severability. The provisions of this Agreement are severable. The invalidity of any provision will not affect the validity of other provisions of this Agreement. |
(h) | Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Montana, except to the extent certain matters may be governed by federal law. Subject to the arbitration terms set forth in Section 15, the parties must bring any legal proceeding arising out of this Agreement in the state courts situated in Kalispell, Montana or the federal district courts of the Missoula Division for the State of Montana. Each party consents to and submits to the jurisdiction of any such court. |
(i) | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together will constitute one and the same instrument. The parties agree that facsimile or electronic signatures shall have the same force and effect as original signatures. |
(j) | Attorney Representation. Executive acknowledges that he has had the opportunity to consult with independent counsel with respect to the negotiation, preparation, and execution of this Agreement. |
EXECUTIVE: | THE BANK: | ||
Glacier Bank | |||
/s/ Don J. Chery | /s/ Dallas I. Herron | ||
Don J. Chery | By: | Dallas I. Herron | |
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Ron J. Copher | |||
By: | Ron J. Copher | ||
Its: | Secretary | ||
THE COMPANY: | |||
Glacier Bancorp, Inc. | |||
/s/ Dallas I. Herron | |||
By: | Dallas I. Herron | ||
Its: | Chairman of the Board of Directors | ||
Attested to: | |||
/s/ Ron J. Copher | |||
By: | Ron J. Copher | ||
Its: | Secretary |
1. | I have reviewed this Quarterly Report on Form 10-Q of Glacier Bancorp, Inc. |
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. |
May 1, 2018 | /s/ Randall M. Chesler | |
Randall M. Chesler | ||
President/CEO |
1. | I have reviewed this Quarterly Report on Form 10-Q of Glacier Bancorp, Inc. |
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. |
May 1, 2018 | /s/ Ron J. Copher | |
Ron J. Copher | ||
Executive Vice President/CFO |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
May 1, 2018 | /s/ Randall M. Chesler | |
Randall M. Chesler | ||
President/CEO | ||
May 1, 2018 | /s/ Ron J. Copher | |
Ron J. Copher | ||
Executive Vice President/CFO |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2018 |
Apr. 13, 2018 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | GLACIER BANCORP INC | |
Trading Symbol | GBCI | |
Entity Central Index Key | 0000868671 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 84,511,472 |
Unaudited Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, authorized | 1,000,000 | 1,000,000 |
Preferred shares, issued | 0 | 0 |
Preferred shares, outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 117,187,500 | 117,187,500 |
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 38,559 | $ 31,255 |
Other Comprehensive (Loss) Income, Net of Tax | ||
Unrealized (losses) gains on available-for-sale debt securities | (25,711) | 3,113 |
Reclassification adjustment for losses included in net income | 282 | 139 |
Net unrealized (losses) gains on available-for-sale debt securities | (25,429) | 3,252 |
Tax effect | 6,444 | (1,260) |
Net of tax amount | (18,985) | 1,992 |
Unrealized gains on derivatives used for cash flow hedges | 4,379 | 264 |
Reclassification adjustment for losses included in net income | 900 | 1,332 |
Net unrealized gains on derivatives used for cash flow hedges | 5,279 | 1,596 |
Tax effect | (1,338) | (618) |
Net of tax amount | 3,941 | 978 |
Total other comprehensive (loss) income, net of tax | (15,044) | 2,970 |
Total Comprehensive Income | $ 23,515 | $ 34,225 |
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Cash dividends declared per share | $ 0.23 | $ 0.21 |
Retained Earnings Substantially Restricted | ||
Cash dividends declared per share | $ 0.23 | $ 0.21 |
Nature of Operations and Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies General Glacier Bancorp, Inc. (“Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individuals and businesses in Montana, Idaho, Utah, Washington, Wyoming, Colorado and Arizona through its wholly-owned bank subsidiary, Glacier Bank (“Bank”). The Company offers a wide range of banking products and services, including: 1) retail banking; 2) business banking; 3) real estate, commercial, agriculture and consumer loans; and 4) mortgage origination services. The Company serves individuals, small to medium-sized businesses, community organizations and public entities. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of March 31, 2018, the results of operations and comprehensive income for the three month periods ended March 31, 2018 and 2017, and changes in stockholders’ equity and cash flows for the three month periods ended March 31, 2018 and 2017. The condensed consolidated statement of financial condition of the Company as of December 31, 2017 has been derived from the audited consolidated statements of the Company as of that date. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results anticipated for the year ending December 31, 2018. The Company is a defendant in legal proceedings arising in the normal course of business. In the opinion of management, the disposition of pending litigation will not have a material affect on the Company’s consolidated financial position, results of operations or liquidity. Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”); 2) the valuation of debt securities; 3) the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans; and 4) the evaluation of goodwill impairment. For the determination of the ALLL and real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investment valuations are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on internal calculations using significant independent party inputs. Principles of Consolidation The consolidated financial statements of the Company include the parent holding company and the Bank. The Bank consists of fourteen bank divisions, a treasury division, an information technology division and a centralized mortgage division. The treasury division includes the Bank’s investment portfolio and wholesale borrowings, the information technology division includes the Bank’s internal data processing, and the centralized mortgage division includes mortgage loan servicing and secondary market sales. The Bank divisions operate under separate names, management teams and advisory directors. The Company considers the Bank to be its sole operating segment as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses; 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (“CEO”) (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank; and 3) financial information is available for the Bank. All significant inter-company transactions have been eliminated in consolidation. The Bank has subsidiary interests in variable interest entities (“VIE”) for which the Bank has both the power to direct the VIE’s significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. These subsidiary interests are included in the Company’s consolidated financial statements. The Bank also has subsidiary interests in VIEs for which the Bank does not have a controlling financial interest and is not the primary beneficiary. These subsidiary interests are not included in the Company’s consolidated financial statements. The parent holding company owns non-bank subsidiaries that have issued trust preferred securities as Tier 1 capital instruments. The trust subsidiaries are not included in the Company’s consolidated financial statements. The Company's investments in the trust subsidiaries are included in non-marketable equity securities on the Company's statements of financial condition. In February 2018, the Company completed its acquisition of Inter-Mountain Bancorp., Inc. and its wholly-owned subsidiary, First Security Bank, a community bank based in Bozeman, Montana (collectively, “FSB”). In January 2018, the Company completed its acquisition of Columbine Capital Corp., and its wholly-owned subsidiary, Collegiate Peaks Bank, a community bank based in Buena Vista, Colorado (collectively, “Collegiate”). The transactions were accounted for using the acquisition method, and their results of operations have been included in the Company’s consolidated financial statements as of the acquisition dates. For additional information relating to recent mergers and acquisitions, see Note 12. Loans Receivable Loans that are intended to be held-to-maturity are reported at the unpaid principal balance less net charge-offs and adjusted for deferred fees and costs on originated loans and unamortized premiums or discounts on acquired loans. Fees and costs on originated loans and premiums or discounts on acquired loans are deferred and subsequently amortized or accreted as a yield adjustment over the expected life of the loan utilizing the interest method. The objective of the interest method is to calculate periodic interest income at a constant effective yield. When a loan is paid off prior to maturity, the remaining fees and costs on originated loans and premiums or discounts on acquired loans are immediately recognized into interest income. The Company’s loan segments, which are based on the purpose of the loan, include residential real estate, commercial, and consumer loans. The Company’s loan classes, a further disaggregation of segments, include residential real estate loans (residential real estate segment), commercial real estate and other commercial loans (commercial segment), and home equity and other consumer loans (consumer segment). Loans that are thirty days or more past due based on payments received and applied to the loan are considered delinquent. Loans are designated non-accrual and the accrual of interest is discontinued when the collection of the contractual principal or interest is unlikely. A loan is typically placed on non-accrual when principal or interest is due and has remained unpaid for ninety days or more. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current period interest income. Subsequent payments on non-accrual loans are applied to the outstanding principal balance if doubt remains as to the ultimate collectability of the loan. Interest accruals are not resumed on partially charged-off impaired loans. For other loans on nonaccrual, interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. The Company considers impaired loans to be the primary credit quality indicator for monitoring the credit quality of the loan portfolio. Loans are designated impaired when, based upon current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement and, therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring). Interest income on accruing impaired loans is recognized using the interest method. The Company measures impairment on a loan-by-loan basis in the same manner for each class within the loan portfolio. An insignificant delay or shortfall in the amounts of payments would not cause a loan or lease to be considered impaired. The Company determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the facts and circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest due. A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company periodically enters into restructure agreements with borrowers whereby the loans were previously identified as TDRs. When such circumstances occur, the Company carefully evaluates the facts of the subsequent restructure to determine the appropriate accounting and under certain circumstances it may be acceptable not to account for the subsequently restructured loan as a TDR. When assessing whether a concession has been granted by the Company, any prior forgiveness on a cumulative basis is considered a continuing concession. A TDR loan is considered an impaired loan and a specific valuation allowance is established when the fair value of the collateral-dependent loan or present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate based on the original contractual rate) is lower than the carrying value of the impaired loan. The Company has made the following types of loan modifications, some of which were considered a TDR:
The Company recognizes that while borrowers may experience deterioration in their financial condition, many continue to be creditworthy customers who have the willingness and capacity for debt repayment. In determining whether non-restructured or unimpaired loans issued to a single or related party group of borrowers should continue to accrue interest when the borrower has other loans that are impaired or are TDRs, the Company on a quarterly or more frequent basis performs an updated and comprehensive assessment of the willingness and capacity of the borrowers to timely and ultimately repay their total debt obligations, including contingent obligations. Such analysis takes into account current financial information about the borrowers and financially responsible guarantors, if any, including for example:
For additional information relating to loans, see Note 3. Allowance for Loan and Lease Losses Based upon management’s analysis of the Company’s loan portfolio, the balance of the ALLL is an estimate of probable credit losses known and inherent within the Bank’s loan portfolio as of the date of the consolidated financial statements. The ALLL is analyzed at the loan class level and is maintained within a range of estimated losses. Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The determination of the ALLL and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about known relevant internal and external environmental factors that affect loan losses. The balance of the ALLL is highly dependent upon management’s evaluations of borrowers’ current and prospective performance, appraisals and other variables affecting the quality of the loan portfolio. Individually significant loans and major lending areas are reviewed periodically to determine potential problems at an early date. Changes in management’s estimates and assumptions are reasonably possible and may have a material impact upon the Company’s consolidated financial statements, results of operations or capital. Risk characteristics considered in the ALLL analysis applicable to each loan class within the Company's loan portfolio are as follows: Residential Real Estate. Residential real estate loans are secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the property securing the loans and affect the borrowers' personal incomes. Mitigating risk factors for this loan class include a large number of borrowers, geographic dispersion of market areas and the loans are originated for relatively smaller amounts. Commercial Real Estate. Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operation of the property securing the loan and/or the business conducted on the property securing the loan. Credit risk in these loans is impacted by the creditworthiness of a borrower, valuation of the property securing the loan and conditions within the local economies in the Company’s diverse, geographic market areas. Commercial. Commercial loans consist of loans to commercial customers for use in financing working capital needs, equipment purchases and business expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations across the Company’s diverse, geographic market areas. Home Equity. Home equity loans consist of junior lien mortgages and first and junior lien lines of credit (revolving open-end and amortizing closed-end) secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the residential property securing the loans and affect the borrowers' personal incomes. Mitigating risk factors for this loan class are a large number of borrowers, geographic dispersion of market areas and the loans are originated for terms that range from 10 to 15 years. Other Consumer. The other consumer loan portfolio consists of various short-term loans such as automobile loans and loans for other personal purposes. Repayment of these loans is primarily dependent on the personal income of the borrowers. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s diverse, geographic market area) and the creditworthiness of a borrower. The ALLL consists of a specific valuation allowance component and a general valuation allowance component. The specific component relates to loans that are determined to be impaired and individually evaluated for impairment. The Company measures impairment on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except when it is determined that repayment of the loan is expected to be provided solely by the underlying collateral. For impairment based on expected future cash flows, the Company considers all information available as of a measurement date, including past events, current conditions, potential prepayments, and estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. For alternative ranges of cash flows, the likelihood of the possible outcomes is considered in determining the best estimate of expected future cash flows. The effective interest rate for a loan restructured in a TDR is based on the original contractual rate. For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation of the underlying real property value. The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors. The historical loss experience is based on the previous twelve quarters loss experience by loan class adjusted for risk characteristics in the existing loan portfolio. The same trends and conditions are evaluated for each class within the loan portfolio; however, the risk characteristics are weighted separately at the individual class level based on the Company’s judgment and experience. The changes in trends and conditions evaluated for each class within the loan portfolio include the following:
The ALLL is increased by provisions for loan losses which are charged to expense. The portions of loan and overdraft balances determined by management to be uncollectible are charged off as a reduction of the ALLL and recoveries of amounts previously charged off are credited as an increase to the ALLL. The Company’s charge-off policy is consistent with bank regulatory standards. Consumer loans generally are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned (“OREO”) until such time as it is sold. At acquisition date, the assets and liabilities of acquired banks are recorded at their estimated fair values which results in no ALLL carried over from acquired banks. Subsequent to acquisition, an allowance will be recorded on the acquired loan portfolios for further credit deterioration, if any. Revenue Recognition The Company recognizes revenue when services or products are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Company’s principal source of revenue is interest income from debt securities and loans. Revenue from contracts with customers within the scope of Accounting Standards Codification™ (“ASC”) Topic 606 was $17,291,000 and $16,270,000 for the three months ended March 31, 2018 and 2017, respectively, and largely consisted of revenue from service charges and other fees from deposits (e.g., overdraft fees, ATM fees, debit card fees). Due to the short-term nature of the Company’s contracts with customers, an insignificant amount of receivables related to such revenue was recorded at March 31, 2018 and December 31, 2017 and there were no impairment losses recognized. Policies specific to revenue from contracts with customers include the following: Service Charges. Revenue from service charges consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds and, when applicable, pay interest on deposits. Service charges on deposit accounts may be transactional or non-transactional in nature. Transactional service charges occur in the form of a service or penalty and are charged upon the occurrence of an event (e.g., overdraft fees, ATM fees, wire transfer fees). Transactional service charges are recognized as services are delivered to and consumed by the customer, or as penalty fees are charged. Non-transactional service charges are charges that are based on a broader service, such as account maintenance fees and dormancy fees, and are recognized on a monthly basis. Debit Card Fees. Revenue from debit card fees includes interchange fee income from debit cards processed through card association networks. Interchange fees represent a portion of a transaction amount that the Company and other involved parties retain to compensate themselves for giving the cardholder immediate access to funds. Interchange rates are generally set by the card association networks and are based on purchase volumes and other factors. The Company records interchange fees as services are provided. Accounting Guidance Adopted in 2018 The ASC is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. The following paragraphs provide descriptions of recently adopted accounting standards that may have had a material effect on the Company’s financial position or results of operations. Financial Instruments. In January 2016, FASB amended ASC Topic 825 to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments were effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2017. Amendments were to be applied by means of a cumulative-effect adjustment to the Company’s statements of financial condition as of the beginning of the reporting year of adoption. The amendments impacted the Company as follows: 1) equity investments (with certain exclusions) are to be measured at fair value with the changes recognized in net income; 2) an exit price must be utilized when measuring the fair value of financial instruments; and 3) additional disclosures are required relating to other comprehensive income (“OCI”), the evaluation of a valuation allowance on a deferred tax asset related to available-for-sale debt securities in combination with the entity’s other deferred tax assets, and other disclosures. The Company adopted the amendments effective January 1, 2018 and determined that the impact of these amendments did not have a significant impact on the Company’s equity securities, fair value disclosures, financial position or results of operations. The amendments changed the method utilized to disclose the fair value of the loan portfolio to an exit price notion when measuring fair value. The Company developed processes to comply with the disclosure requirements of such amendments and accounting policies and procedures were updated accordingly. For additional information on fair value of assets and liabilities, see Note 11. Revenue Recognition. In May 2014, FASB amended ASC Topic 606 to clarify the principles for recognizing revenue and develop a common revenue standard among industries. The new guidance established the following core principle: recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for goods or services. Five steps were provided for a company or organization to follow to achieve such core principle. The new guidance also included a cohesive set of disclosure requirements that provided users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new revenue recognition guidance effective January 1, 2018 and determined the majority of the Company’s revenue sources, such as interest income from debt securities and loans, fee income from loans and gain on sale of loans, were not within the scope of Topic 606. The Company evaluated the revenue sources determined to be in scope of Topic 606, including service charges and fee income on deposits and gain or loss on sale of OREO and determined the adoption of the guidance did not have a significant impact to the Company’s financial position or results of operations; however, OREO policies and procedures were updated and implemented and new disclosures about the Company’s revenue have been incorporated into the notes to the financial statements. Accounting Guidance Pending Adoption at March 31, 2018 The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations. Derivatives and Hedging. In August 2017, FASB amended ASC Topic 815 to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments made targeted improvements to simplify the application of the hedge accounting guidance. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the full impact of the amendments on its existing interest rate swaps and whether it will early adopt. The Company does not expect there to be an impact to the Company’s financial position and results of operations, although, there may be additional financial statement disclosures. The accounting policies and procedures will be modified after the Company has fully evaluated the standard, although significant changes are not expected. For additional information on derivatives, see Note 7. Receivables - Nonrefundable Fees and Other Costs. In March 2017, FASB amended ASC Subtopic 310-20 to shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted and if adopted in an interim period, any adjustments should be reflected as of the beginning of the year that includes the interim period. The entity should apply the amendments on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has premiums on debt securities that are currently being amortized to the maturity date, primarily in the state and local governments category. If the Company were to adopt these amendments as of April 1, 2018, the Company estimates that $22,129,000 of the premium associated with debt securities would be adjusted to retained earnings. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date, including accounting policies and procedures, and doesn’t expect to early adopt. Goodwill and Other Intangibles. In January 2017, FASB amended ASC Topic 350 to simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has goodwill from prior business combinations and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the third quarter of 2017, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company’s goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company’s financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. For additional information regarding goodwill impairment testing, see Note 4. Financial Instruments. In June 2016, FASB amended ASC Topic 326 to replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The ALLL is a material estimate of the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALLL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company will also develop new procedures for determining an allowance for credit losses relating to held-to-maturity debt securities. In addition, the current accounting policy and procedures for other-than-temporary impairment on available-for-sale debt securities will be replaced with an allowance approach. The Company has formed a project team and is actively reviewing the standard for developing and implementing processes and procedures during the next two years to ensure it is fully compliant with the amendments at adoption date. For additional information on the ALLL, see Note 3. Leases. In February 2016, FASB amended ASC Topic 842 to address several aspects of lease accounting with the significant change being the recognition of lease assets and lease liabilities for leases previously classified as operating leases. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and doesn’t expect to early adopt. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements. The Company is currently in the process of fully evaluating the amendments and will subsequently implement new processes, which are not expected to significantly change, since the Company already has processes for certain lease agreements that recognize the lease assets and lease liabilities. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Debt Securities The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s debt securities:
The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity at March 31, 2018. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.
______________________________ 1 Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. Proceeds from sales and calls of debt securities and the associated gains and losses that have been included in earnings are listed below:
______________________________ 1 The gain or loss on the sale or call of each debt security is determined by the specific identification method. Debt securities with an unrealized loss position are summarized as follows:
Based on an analysis of its debt securities with unrealized losses as of March 31, 2018 and December 31, 2017, the Company determined that none of such securities had other-than-temporary impairment and the unrealized losses were primarily the result of interest rate changes and market spreads subsequent to acquisition. The fair value of the debt securities is expected to recover as payments are received and the securities approach maturity. At March 31, 2018, management determined that it did not intend to sell debt securities with unrealized losses, and there was no expected requirement to sell any of its debt securities with unrealized losses before recovery of their amortized cost. |
Loans Receivable, Net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable, Net | Loans Receivable, Net The Company’s loan portfolio is comprised of three segments: residential real estate, commercial, and consumer and other loans. The loan segments are further disaggregated into the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following table presents loans receivable for each portfolio class of loans:
The following tables summarize the activity in the ALLL by loan class:
The following tables disclose the recorded investment in loans and the balance in the ALLL by loan class:
Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas. The following tables disclose information related to impaired loans by loan class:
Interest income recognized on impaired loans for the three months ended March 31, 2018 and 2017 was not significant. The following tables present an aging analysis of the recorded investment in loans by loan class:
The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:
The modifications for the TDRs that occurred during the three months ended March 31, 2018 and 2017 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount. In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $431,000 and $514,000 for the three months ended March 31, 2018 and 2017, respectively, for which OREO was received in full or partial satisfaction of the loans. The majority of such TDRs were in commercial real estate for the three months ended March 31, 2018 and 2017. At March 31, 2018 and December 31, 2017, the Company had $1,885,000 and $743,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At March 31, 2018 and December 31, 2017, the Company had $1,025,000 and $893,000, respectively, of OREO secured by residential real estate properties. |
Goodwill |
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill The following schedule discloses the changes in the carrying value of goodwill:
The Company performed its annual goodwill impairment test during the third quarter of 2017 and determined the fair value of the aggregated reporting units exceeded the carrying value, such that the Company’s goodwill was not considered impaired. In recognition, there were no events or circumstances that occurred during the first quarter of 2018 that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value, the Company did not perform interim testing at March 31, 2018. Changes in the economic environment, operations of the aggregated reporting units, or other factors could result in the decline in the fair value of the aggregated reporting units which could result in a goodwill impairment in the future. Accumulated impairment charges were $40,159,000 as of March 31, 2018 and December 31, 2017. For additional information on goodwill related to acquisitions, see Note 12. |
Variable Interest Entities |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities A VIE is a partnership, limited liability company, trust or other legal entity that meets one of the following criteria: 1) the entity’s equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties; 2) the holders of the equity investment at risk, as a group, lack the characteristics of a controlling financial interest; and 3) the voting rights of some holders of the equity investment at risk are disproportionate to their obligation to absorb losses or receive returns, and substantially all of the activities are conducted on behalf of the holder of equity investment at risk with disproportionately few voting rights. A VIE must be consolidated by the Company if it is deemed to be the primary beneficiary, which is the party involved with the VIE that has both: 1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and 2) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s VIEs are regularly monitored to determine if any reconsideration events have occurred that could cause the primary beneficiary status to change. A previously unconsolidated VIE is consolidated when the Company becomes the primary beneficiary. A previously consolidated VIE is deconsolidated when the Company ceases to be the primary beneficiary or the entity is no longer a VIE. Consolidated Variable Interest Entities The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The NMTC program provides federal tax incentives to investors to make investments in distressed communities and promotes economic improvements through the development of successful businesses in these communities. The NMTC is available to investors over a seven-year period and is subject to recapture if certain events occur during such period. The maximum exposure to loss in the CDEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each CDE (NMTC) investment and determined the Company does not individually meet the characteristics of a primary beneficiary; however, the related-party group does meet the criteria as a group and substantially all of the activities of the CDEs either involve or are conducted on behalf of the Company. As a result, the Company is the primary beneficiary of the CDEs and their assets, liabilities, and results of operations are included in the Company’s consolidated financial statements. The primary activities of the CDEs are recognized in commercial loans interest income and other borrowed funds interest expense on the Company’s statements of operations and the federal income tax credit allocations from the investments are recognized in the Company’s statements of operations as a component of income tax expense. Such related cash flows are recognized in loans originated, principal collected on loans and change in other borrowed funds. The following table summarizes the carrying amounts of the consolidated VIEs’ assets and liabilities included in the Company’s statements of financial condition and are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.
Unconsolidated Variable Interest Entities The Company has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships with carrying values of $24,407,000 and $9,169,000 as of March 31, 2018 and December 31, 2017, respectively. The LIHTCs are indirect federal subsidies to finance low-income housing and are used in connection with both newly constructed and renovated residential rental buildings. Once a project is placed in service, it is generally eligible for the tax credit for ten consecutive years. To continue generating the tax credit and to avoid tax credit recapture, a LIHTC building must satisfy specific low-income housing compliance rules for a full fifteen-year period. The maximum exposure to loss in the VIEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each LIHTC investment and determined that the Company does not have controlling financial interests in such investments, and is not the primary beneficiary. The Company reports the investments in the unconsolidated LIHTCs as other assets on the Company’s statements of financial condition. Total unfunded contingent commitments related to the Company’s LIHTC investments totaled $11,702,000 at March 31, 2018, and the Company expects to fulfill these commitments during 2018. There were no impairment losses on the Company’s LIHTC investments during the three months ended March 31, 2018 and 2017. The Company has elected to use the proportional amortization method, and more specifically the practical expedient method, for the amortization of all eligible LIHTC investments and amortization expense is recognized as a component of income tax expense. The following table summarizes the amortization expense and the amount of tax credits and other tax benefits recognized for qualified affordable housing project investments during the periods presented.
The Company also owns the following trust subsidiaries, each of which issued trust preferred securities as Tier 1 capital instruments: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001, and First Company Statutory Trust 2003. The trust subsidiaries have no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the securities held by third parties. The trust subsidiaries are not included in the Company’s consolidated financial statements because the sole asset of each trust subsidiary is a receivable from the Company, even though the Company owns all of the voting equity shares of the trust subsidiaries, has fully guaranteed the obligations of the trust subsidiaries and may have the right to redeem the third party securities under certain circumstances. The Company reports the trust preferred securities issued to the trust subsidiaries as subordinated debentures on the Company’s statements of financial condition. |
Securities Sold Under Agreements to Repurchase |
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Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Sold Under Agreements to Repurchase | Securities Sold Under Agreements to Repurchase The Company’s securities sold under agreements to repurchase (“repurchase agreements”) totaled $395,794,000 and $362,573,000 at March 31, 2018 and December 31, 2017, respectively, and are secured by debt securities with carrying values of $536,296,000 and $475,601,000, respectively. Securities are pledged to customers at the time of the transaction in an amount at least equal to the outstanding balance and are held in custody accounts by third parties. The fair value of collateral is continually monitored and additional collateral is provided as deemed appropriate. The following tables summarize the carrying value of the Company’s repurchase agreements by remaining contractual maturity and category of collateral:
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities Interest Rate Swap Derivatives As of March 31, 2018, the Company’s interest rate swap derivative financial instruments were designated as cash flow hedges and are summarized as follows:
______________________________ 1 The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate. The hedging strategy converts the LIBOR-based variable interest rate on borrowings to a fixed interest rate, thereby protecting the Company from interest rate variability. The interest rate swaps with the $160,000,000 and $100,000,000 notional amounts began their payment terms in October 2014 and November 2015, respectively. The Company designated wholesale deposits and Federal Home Loan Bank (“FHLB”) advances as the cash flow hedge and these hedged items were determined to be fully effective during current and prior periods. As such, no amount of ineffectiveness has been included in the Company’s statements of operations for the three months ended March 31, 2018 and 2017. Therefore, the aggregate fair value of the interest rate swaps was recorded in other liabilities with changes recorded in OCI. The Company expects the hedges to remain highly effective during the remaining terms of the interest rate swaps. Interest expense recorded on the interest rate swaps totaled $1,976,000 for the three months ended March 31, 2018 and 2017, and is reported as a component of interest expense on deposits and FHLB advances. Unless the interest rate swaps are terminated during the next year, the Company expects $3,127,000 of the unrealized loss reported in OCI at March 31, 2018 to be reclassified to interest expense during the next twelve months. The following table presents the pre-tax gains or losses recorded in OCI and the Company’s statements of operations relating to the interest rate swap derivative financial instruments:
The following table discloses the offsetting of financial assets and interest rate swap derivative assets.
The following table discloses the offsetting of financial liabilities and interest rate swap derivative liabilities.
Pursuant to the interest rate swap agreements, the Company pledged collateral to the counterparty in the form of debt securities totaling $5,603,000 at March 31, 2018. There was $0 collateral pledged from the counterparty to the Company as of March 31, 2018. There is the possibility that the Company may need to pledge additional collateral in the future if there were declines in the fair value of the interest rate swap derivative financial instruments versus the collateral pledged. Residential Real Estate Derivatives At March 31, 2018 and December 31, 2017, the Company had residential real estate derivatives for 1) commitments to fund certain residential real estate loans (interest rate locks) of $96,523,000 and $67,861,000, respectively, to be sold into the secondary market; and 2) forward commitments for the future delivery of residential real estate loans to third party investors on a best efforts basis. It is the Company’s practice to enter into forward commitments for the future delivery of residential real estate loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These derivatives are not designated in hedge relationships. Such derivatives are short-term in nature and changes in the fair values of these derivatives are not recorded as gains on sale of loans because the changes were not significant. |
Other Expenses |
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Other Expenses | Other Expenses Other expenses consists of the following:
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table illustrates the activity within accumulated other comprehensive loss by component, net of tax:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period presented. Diluted earnings per share is computed by including the net increase in shares as if dilutive outstanding restricted stock awards were vested and stock options were exercised, using the treasury stock method. Basic and diluted earnings per share has been computed based on the following:
There were 0 and 39,348 restricted stock awards and stock options excluded from the diluted average outstanding share calculation for the three months ended March 31, 2018 and 2017, respectively. Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock award or the exercise price of a stock option exceeds the market price of the Company’s stock. |
Fair Value of Assets and Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows: Level 1 Quoted prices in active markets for identical assets or liabilities
Transfers in and out of Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs) and Level 3 (significant unobservable inputs) are recognized on the actual transfer date. There were no transfers between fair value hierarchy levels during the three month periods ended March 31, 2018 and 2017. Recurring Measurements The following is a description of the inputs and valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2018. Debt securities, available-for-sale: fair value for available-for-sale debt securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including but not limited to, yield curves, interest rates, volatilities, market spreads, prepayments, defaults, recoveries, cumulative loss projections, and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. Where Level 1 or Level 2 inputs are not available, such securities are classified as Level 3 within the hierarchy. Fair value determinations of available-for-sale debt securities are the responsibility of the Company’s corporate accounting and treasury departments. The Company obtains fair value estimates from independent third party vendors on a monthly basis. The vendors’ pricing system methodologies, procedures and system controls are reviewed to ensure they are appropriately designed and operating effectively. The Company reviews the vendors’ inputs for fair value estimates and the recommended assignments of levels within the fair value hierarchy. The review includes the extent to which markets for debt securities are determined to have limited or no activity, or are judged to be active markets. The Company reviews the extent to which observable and unobservable inputs are used as well as the appropriateness of the underlying assumptions about risk that a market participant would use in active markets, with adjustments for limited or inactive markets. In considering the inputs to the fair value estimates, the Company places less reliance on quotes that are judged to not reflect orderly transactions, or are non-binding indications. In assessing credit risk, the Company reviews payment performance, collateral adequacy, third party research and analyses, credit rating histories and issuers’ financial statements. For those markets determined to be inactive or limited, the valuation techniques used are models for which management has verified that discount rates are appropriately adjusted to reflect illiquidity and credit risk. Loans held for sale, at fair value: loans held for sale measured at fair value, for which an active secondary market and readily available market prices exist, are initially valued at the transaction price and are subsequently valued by using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors. Loans held for sale measured at fair value are classified within Level 2. Included in gain on sale of loans were net losses of $108,000 and $0 for the three month periods ended March 31, 2018 and 2017, respectively, from the changes in fair value of these loans held for sale measured at fair value. Electing to measure loans held for sale at fair value reduces certain timing differences and better matches changes in fair value of these assets with changes in the value of the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting. Interest rate swap derivative financial instruments: fair values for interest rate swap derivative financial instruments are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data and, therefore, are classified within Level 2 of the valuation hierarchy. The inputs used to determine fair value include the 3 month LIBOR forward curve to estimate variable rate cash inflows and the Fed Funds Effective Swap Rate to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps. The Company also obtains and compares the reasonableness of the pricing from an independent third party. The following tables disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:
Non-recurring Measurements The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a non-recurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2018. Other real estate owned: OREO is carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell. Estimated fair value of OREO is based on appraisals or evaluations (new or updated). OREO is classified within Level 3 of the fair value hierarchy. Collateral-dependent impaired loans, net of ALLL: loans included in the Company’s loan portfolio for which it is probable that the Company will not collect all principal and interest due according to contractual terms are considered impaired. Estimated fair value of collateral-dependent impaired loans is based on the fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy. The Company’s credit department reviews appraisals for OREO and collateral-dependent loans, giving consideration to the highest and best use of the collateral. The appraisal or evaluation (new or updated) is considered the starting point for determining fair value. The valuation techniques used in preparing appraisals or evaluations (new or updated) include the cost approach, income approach, sales comparison approach, or a combination of the preceding valuation techniques. The key inputs used to determine the fair value of the collateral-dependent loans and OREO include selling costs, discounted cash flow rate or capitalization rate, and adjustment to comparables. Valuations and significant inputs obtained by independent sources are reviewed by the Company for accuracy and reasonableness. The Company also considers other factors and events in the environment that may affect the fair value. The appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to the impaired loan or OREO may occur. The Company generally obtains appraisals or evaluations (new or updated) annually. The following tables disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:
Non-recurring Measurements Using Significant Unobservable Inputs (Level 3) The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
______________________________ 1 The range for selling costs and adjustments to comparables indicate reductions to the fair value. Fair Value of Financial Instruments The following is a description of the methods used to estimate the fair value of all other assets and liabilities recognized at amounts other than fair value. Cash and cash equivalents: fair value is estimated at book value. Debt securities, held-to-maturity: fair value for held-to-maturity debt securities is estimated in the same manner as available-for-sale debt securities, which is described above. Loans receivable, net of ALLL: The Company adopted the amendments to ASC Topic 825 relating to the loan portfolio for the quarter ended March 31, 2018 and an exit price income approach was used to determine the fair value. The loans were valued on an individual basis, with consideration given to the loans' underlying characteristics, including account types, remaining terms (in months), annual interest rates or coupons, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan to value ratios (LTV), loss exposures, and remaining balances. The model utilizes a discounted cash flow approach to estimate the fair value of the loans using assumptions for the coupon rates, remaining maturities, prepayment speeds, projected default probabilities, losses given defaults, and estimates of prevailing discount rates. The discounted cash flow approach models the credit losses directly in the projected cash flows. The model applies various assumptions regarding credit, interest, and prepayment risks for the loans based on loan types, payment types and fixed or variable classifications. As of December 31, 2017, the fair value was estimated by discounting the future cash flows using the rates at which similar notes would be written for the same remaining maturities or an entry price income approach. The market rates used were based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with non-performance, illiquidity, and the structure and term of the loans along with local economic and market conditions. For all periods presented, the estimated fair value of impaired loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All impaired loans are classified as Level 3 and all other loans are classified as Level 2 within the valuation hierarchy. Accrued interest receivable: fair value is estimated at book value. Non-marketable equity securities: fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities. Deposits: fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from an independent third party and reviewed by the Company. The rates were the average of current rates offered by the Company’s local competitors. The estimated fair value of demand deposits such as NOW, DDA, savings, and money market deposit accounts is the book value since rates are regularly adjusted to market rates and transactions are executed at book value daily. Therefore, such deposits are classified in Level 1 of the valuation hierarchy. Certificate accounts and wholesale deposits are classified as Level 2 within the hierarchy. Federal Home Loan Bank advances: fair value of non-callable FHLB advances is estimated by discounting the future cash flows using rates of similar advances with similar maturities. Such rates were obtained from current rates offered by FHLB. The estimated fair value of callable FHLB advances was obtained from FHLB and the model was reviewed by the Company. Securities sold under agreements to repurchase and other borrowed funds: fair value of term repurchase agreements and other term borrowings is estimated based on current repurchase rates and borrowing rates currently available to the Company for repurchases and borrowings with similar terms and maturities. The estimated fair value for overnight repurchase agreements and other borrowings is book value. Subordinated debentures: fair value of the subordinated debt is estimated by discounting the estimated future cash flows using current estimated market rates. The market rates used were averages of currently traded trust preferred securities with similar characteristics to the Company’s issuances and obtained from an independent third party. Accrued interest payable: fair value is estimated at book value. Off-balance sheet financial instruments: unused lines of credit and letters of credit represent the principal categories of off-balance sheet financial instruments. The fair value of commitments is 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 unused lines of credit and letters of credit is not material; therefore, such commitments are not included in the following tables. The following tables present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:
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Mergers and Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers and Acquisitions | Mergers and Acquisitions On February 28, 2018, the Company acquired 100 percent of the outstanding common stock of Inter-Mountain Bancorp., Inc. and its wholly-owned subsidiary, First Security Bank, a community bank based in Bozeman, Montana. FSB provides banking services to individuals and businesses throughout Montana with banking offices located in Bozeman, Belgrade, Big Sky, Choteau, Fairfield, Fort Benton, Three Forks, Vaughn and West Yellowstone. The acquisition expands the Company’s presence in the Bozeman and Golden Triangle markets in Montana and further diversifies the Company’s loan, customer and deposit base. FSB merged into the Bank and became a new bank division headquartered in Bozeman and the Bank’s existing Bozeman-based division, Big Sky Western Bank, combined with the new FSB division. The agriculture-focused northern branches of FSB combined with the Bank’s First Bank of Montana division. The preliminary value of the FSB acquisition was $181,043,000 and resulted in the Company issuing 4,654,091 shares of its common stock. The fair value of the Company shares issued was determined on the basis of the closing market price of the Company’s common stock on the February 28, 2018 acquisition date. The excess of the preliminary fair value of consideration transferred over total identifiable net assets was recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and FSB. None of the goodwill is deductible for income tax purposes as the acquisition was accounted for as a tax-free exchange. On January 31, 2018, the Company acquired 100 percent of the outstanding common stock of Columbine Capital Corp. and its wholly-owned subsidiary, Collegiate Peaks Bank, a community bank based in Buena Vista, Colorado. Collegiate provides banking services to businesses and individuals in the Mountain and Front Range communities of Colorado, with banking offices located in Aurora, Buena Vista, Denver and Salida. The acquisition expands the Company’s presence in Colorado to the mountains and along the Front Range and further diversifies the Company’s loan, customer and deposit base. Collegiate merged into the Bank and operates as a separate Bank division under its existing name and management team. The preliminary value of the Collegiate acquisition was $96,083,000 and resulted in the Company issuing 1,778,777 shares of its common stock and paying $16,265,000 in cash in exchange for all of Collegiate’s outstanding common stock shares and $10,054,000 due to an effective settlement of pre-existing receivable from Columbine Capital Corp. The fair value of the Company shares issued was determined on the basis of the closing market price of the Company’s common stock on the January 31, 2018 acquisition date. The excess of the preliminary fair value of consideration transferred over total identifiable net assets was recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Collegiate. None of the goodwill is deductible for income tax purposes as the acquisition was accounted for as a tax-free exchange. The assets and liabilities of FSB and Collegiate were recorded on the Company’s consolidated statements of financial condition at their preliminary estimated fair values as of the February 28, 2018 and January 31, 2018 acquisition dates, respectively, and their results of operations have been included in the Company’s consolidated statements of operations since those dates. The following table discloses the preliminary fair value estimates of the consideration transferred, the total identifiable net assets acquired and the resulting goodwill arising from the FSB and Collegiate acquisitions. Due to the timing of the acquisitions, the Company is continuing to obtain information to determine the fair values of the acquired assets and liabilities.
______________________________ 1 The core deposit intangible for each acquisition was determined to have an estimated life of 10 years. 2 Borrowings assumed with the FSB acquisition include Tier 2 subordinated debentures of $7,903,000. The preliminary fair values of the FSB and Collegiate assets acquired include loans with preliminary fair values of $627,767,000 and $354,252,000, respectively. The gross principal and contractual interest due under the FSB and Collegiate contracts was $632,370,000 and $355,364,000, respectively. The Company evaluated the principal and contractual interest due at each of the acquisition dates and determined that insignificant amounts were not expected to be collectible. The Company incurred $1,239,000 and $590,000 of third-party acquisition-related costs in connection with the FSB and Collegiate acquisitions, respectively, during the three ended March 31, 2018. The expenses are included in other expense in the Company's consolidated statements of operations. Total income consisting of net interest income and non-interest income of the acquired operations of FSB was approximately $4,234,000 and net income was approximately $998,000 from February 28, 2018 to March 31, 2018. Total income consisting of net interest income and non-interest income of the acquired operations of Collegiate was approximately $3,792,000 and net income was approximately $1,212,000 from January 31, 2018 to March 31, 2018. The following unaudited pro forma summary presents consolidated information of the Company as if the FSB and Collegiate acquisitions had occurred on January 1, 2017:
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Nature of Operations and Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
General | General Glacier Bancorp, Inc. (“Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individuals and businesses in Montana, Idaho, Utah, Washington, Wyoming, Colorado and Arizona through its wholly-owned bank subsidiary, Glacier Bank (“Bank”). The Company offers a wide range of banking products and services, including: 1) retail banking; 2) business banking; 3) real estate, commercial, agriculture and consumer loans; and 4) mortgage origination services. The Company serves individuals, small to medium-sized businesses, community organizations and public entities. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of March 31, 2018, the results of operations and comprehensive income for the three month periods ended March 31, 2018 and 2017, and changes in stockholders’ equity and cash flows for the three month periods ended March 31, 2018 and 2017. The condensed consolidated statement of financial condition of the Company as of December 31, 2017 has been derived from the audited consolidated statements of the Company as of that date. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results anticipated for the year ending December 31, 2018. The Company is a defendant in legal proceedings arising in the normal course of business. In the opinion of management, the disposition of pending litigation will not have a material affect on the Company’s consolidated financial position, results of operations or liquidity. Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”); 2) the valuation of debt securities; 3) the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans; and 4) the evaluation of goodwill impairment. For the determination of the ALLL and real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investment valuations are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on internal calculations using significant independent party inputs. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the parent holding company and the Bank. The Bank consists of fourteen bank divisions, a treasury division, an information technology division and a centralized mortgage division. The treasury division includes the Bank’s investment portfolio and wholesale borrowings, the information technology division includes the Bank’s internal data processing, and the centralized mortgage division includes mortgage loan servicing and secondary market sales. The Bank divisions operate under separate names, management teams and advisory directors. The Company considers the Bank to be its sole operating segment as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses; 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (“CEO”) (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank; and 3) financial information is available for the Bank. All significant inter-company transactions have been eliminated in consolidation. The Bank has subsidiary interests in variable interest entities (“VIE”) for which the Bank has both the power to direct the VIE’s significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. These subsidiary interests are included in the Company’s consolidated financial statements. The Bank also has subsidiary interests in VIEs for which the Bank does not have a controlling financial interest and is not the primary beneficiary. These subsidiary interests are not included in the Company’s consolidated financial statements. The parent holding company owns non-bank subsidiaries that have issued trust preferred securities as Tier 1 capital instruments. The trust subsidiaries are not included in the Company’s consolidated financial statements. The Company's investments in the trust subsidiaries are included in non-marketable equity securities on the Company's statements of financial condition. In February 2018, the Company completed its acquisition of Inter-Mountain Bancorp., Inc. and its wholly-owned subsidiary, First Security Bank, a community bank based in Bozeman, Montana (collectively, “FSB”). In January 2018, the Company completed its acquisition of Columbine Capital Corp., and its wholly-owned subsidiary, Collegiate Peaks Bank, a community bank based in Buena Vista, Colorado (collectively, “Collegiate”). The transactions were accounted for using the acquisition method, and their results of operations have been included in the Company’s consolidated financial statements as of the acquisition dates. For additional information relating to recent mergers and acquisitions, see Note 12. |
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Loans Receivable | Loans Receivable Loans that are intended to be held-to-maturity are reported at the unpaid principal balance less net charge-offs and adjusted for deferred fees and costs on originated loans and unamortized premiums or discounts on acquired loans. Fees and costs on originated loans and premiums or discounts on acquired loans are deferred and subsequently amortized or accreted as a yield adjustment over the expected life of the loan utilizing the interest method. The objective of the interest method is to calculate periodic interest income at a constant effective yield. When a loan is paid off prior to maturity, the remaining fees and costs on originated loans and premiums or discounts on acquired loans are immediately recognized into interest income. The Company’s loan segments, which are based on the purpose of the loan, include residential real estate, commercial, and consumer loans. The Company’s loan classes, a further disaggregation of segments, include residential real estate loans (residential real estate segment), commercial real estate and other commercial loans (commercial segment), and home equity and other consumer loans (consumer segment). Loans that are thirty days or more past due based on payments received and applied to the loan are considered delinquent. Loans are designated non-accrual and the accrual of interest is discontinued when the collection of the contractual principal or interest is unlikely. A loan is typically placed on non-accrual when principal or interest is due and has remained unpaid for ninety days or more. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current period interest income. Subsequent payments on non-accrual loans are applied to the outstanding principal balance if doubt remains as to the ultimate collectability of the loan. Interest accruals are not resumed on partially charged-off impaired loans. For other loans on nonaccrual, interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. The Company considers impaired loans to be the primary credit quality indicator for monitoring the credit quality of the loan portfolio. Loans are designated impaired when, based upon current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement and, therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring). Interest income on accruing impaired loans is recognized using the interest method. The Company measures impairment on a loan-by-loan basis in the same manner for each class within the loan portfolio. An insignificant delay or shortfall in the amounts of payments would not cause a loan or lease to be considered impaired. The Company determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the facts and circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest due. A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company periodically enters into restructure agreements with borrowers whereby the loans were previously identified as TDRs. When such circumstances occur, the Company carefully evaluates the facts of the subsequent restructure to determine the appropriate accounting and under certain circumstances it may be acceptable not to account for the subsequently restructured loan as a TDR. When assessing whether a concession has been granted by the Company, any prior forgiveness on a cumulative basis is considered a continuing concession. A TDR loan is considered an impaired loan and a specific valuation allowance is established when the fair value of the collateral-dependent loan or present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate based on the original contractual rate) is lower than the carrying value of the impaired loan. The Company has made the following types of loan modifications, some of which were considered a TDR:
The Company recognizes that while borrowers may experience deterioration in their financial condition, many continue to be creditworthy customers who have the willingness and capacity for debt repayment. In determining whether non-restructured or unimpaired loans issued to a single or related party group of borrowers should continue to accrue interest when the borrower has other loans that are impaired or are TDRs, the Company on a quarterly or more frequent basis performs an updated and comprehensive assessment of the willingness and capacity of the borrowers to timely and ultimately repay their total debt obligations, including contingent obligations. Such analysis takes into account current financial information about the borrowers and financially responsible guarantors, if any, including for example:
For additional information relating to loans, see Note 3. |
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Allowance for Loan and Lease Losses | Allowance for Loan and Lease Losses Based upon management’s analysis of the Company’s loan portfolio, the balance of the ALLL is an estimate of probable credit losses known and inherent within the Bank’s loan portfolio as of the date of the consolidated financial statements. The ALLL is analyzed at the loan class level and is maintained within a range of estimated losses. Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The determination of the ALLL and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about known relevant internal and external environmental factors that affect loan losses. The balance of the ALLL is highly dependent upon management’s evaluations of borrowers’ current and prospective performance, appraisals and other variables affecting the quality of the loan portfolio. Individually significant loans and major lending areas are reviewed periodically to determine potential problems at an early date. Changes in management’s estimates and assumptions are reasonably possible and may have a material impact upon the Company’s consolidated financial statements, results of operations or capital. Risk characteristics considered in the ALLL analysis applicable to each loan class within the Company's loan portfolio are as follows: Residential Real Estate. Residential real estate loans are secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the property securing the loans and affect the borrowers' personal incomes. Mitigating risk factors for this loan class include a large number of borrowers, geographic dispersion of market areas and the loans are originated for relatively smaller amounts. Commercial Real Estate. Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operation of the property securing the loan and/or the business conducted on the property securing the loan. Credit risk in these loans is impacted by the creditworthiness of a borrower, valuation of the property securing the loan and conditions within the local economies in the Company’s diverse, geographic market areas. Commercial. Commercial loans consist of loans to commercial customers for use in financing working capital needs, equipment purchases and business expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations across the Company’s diverse, geographic market areas. Home Equity. Home equity loans consist of junior lien mortgages and first and junior lien lines of credit (revolving open-end and amortizing closed-end) secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the residential property securing the loans and affect the borrowers' personal incomes. Mitigating risk factors for this loan class are a large number of borrowers, geographic dispersion of market areas and the loans are originated for terms that range from 10 to 15 years. Other Consumer. The other consumer loan portfolio consists of various short-term loans such as automobile loans and loans for other personal purposes. Repayment of these loans is primarily dependent on the personal income of the borrowers. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s diverse, geographic market area) and the creditworthiness of a borrower. The ALLL consists of a specific valuation allowance component and a general valuation allowance component. The specific component relates to loans that are determined to be impaired and individually evaluated for impairment. The Company measures impairment on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except when it is determined that repayment of the loan is expected to be provided solely by the underlying collateral. For impairment based on expected future cash flows, the Company considers all information available as of a measurement date, including past events, current conditions, potential prepayments, and estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. For alternative ranges of cash flows, the likelihood of the possible outcomes is considered in determining the best estimate of expected future cash flows. The effective interest rate for a loan restructured in a TDR is based on the original contractual rate. For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation of the underlying real property value. The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors. The historical loss experience is based on the previous twelve quarters loss experience by loan class adjusted for risk characteristics in the existing loan portfolio. The same trends and conditions are evaluated for each class within the loan portfolio; however, the risk characteristics are weighted separately at the individual class level based on the Company’s judgment and experience. The changes in trends and conditions evaluated for each class within the loan portfolio include the following:
The ALLL is increased by provisions for loan losses which are charged to expense. The portions of loan and overdraft balances determined by management to be uncollectible are charged off as a reduction of the ALLL and recoveries of amounts previously charged off are credited as an increase to the ALLL. The Company’s charge-off policy is consistent with bank regulatory standards. Consumer loans generally are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned (“OREO”) until such time as it is sold. At acquisition date, the assets and liabilities of acquired banks are recorded at their estimated fair values which results in no ALLL carried over from acquired banks. Subsequent to acquisition, an allowance will be recorded on the acquired loan portfolios for further credit deterioration, if any. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when services or products are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Company’s principal source of revenue is interest income from debt securities and loans. Revenue from contracts with customers within the scope of Accounting Standards Codification™ (“ASC”) Topic 606 was $17,291,000 and $16,270,000 for the three months ended March 31, 2018 and 2017, respectively, and largely consisted of revenue from service charges and other fees from deposits (e.g., overdraft fees, ATM fees, debit card fees). Due to the short-term nature of the Company’s contracts with customers, an insignificant amount of receivables related to such revenue was recorded at March 31, 2018 and December 31, 2017 and there were no impairment losses recognized. Policies specific to revenue from contracts with customers include the following: Service Charges. Revenue from service charges consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds and, when applicable, pay interest on deposits. Service charges on deposit accounts may be transactional or non-transactional in nature. Transactional service charges occur in the form of a service or penalty and are charged upon the occurrence of an event (e.g., overdraft fees, ATM fees, wire transfer fees). Transactional service charges are recognized as services are delivered to and consumed by the customer, or as penalty fees are charged. Non-transactional service charges are charges that are based on a broader service, such as account maintenance fees and dormancy fees, and are recognized on a monthly basis. Debit Card Fees. Revenue from debit card fees includes interchange fee income from debit cards processed through card association networks. Interchange fees represent a portion of a transaction amount that the Company and other involved parties retain to compensate themselves for giving the cardholder immediate access to funds. Interchange rates are generally set by the card association networks and are based on purchase volumes and other factors. The Company records interchange fees as services are provided. |
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Accounting Guidance Adopted in 2018 and Pending Adoption at March 31, 2018 | Accounting Guidance Adopted in 2018 The ASC is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. The following paragraphs provide descriptions of recently adopted accounting standards that may have had a material effect on the Company’s financial position or results of operations. Financial Instruments. In January 2016, FASB amended ASC Topic 825 to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments were effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2017. Amendments were to be applied by means of a cumulative-effect adjustment to the Company’s statements of financial condition as of the beginning of the reporting year of adoption. The amendments impacted the Company as follows: 1) equity investments (with certain exclusions) are to be measured at fair value with the changes recognized in net income; 2) an exit price must be utilized when measuring the fair value of financial instruments; and 3) additional disclosures are required relating to other comprehensive income (“OCI”), the evaluation of a valuation allowance on a deferred tax asset related to available-for-sale debt securities in combination with the entity’s other deferred tax assets, and other disclosures. The Company adopted the amendments effective January 1, 2018 and determined that the impact of these amendments did not have a significant impact on the Company’s equity securities, fair value disclosures, financial position or results of operations. The amendments changed the method utilized to disclose the fair value of the loan portfolio to an exit price notion when measuring fair value. The Company developed processes to comply with the disclosure requirements of such amendments and accounting policies and procedures were updated accordingly. For additional information on fair value of assets and liabilities, see Note 11. Revenue Recognition. In May 2014, FASB amended ASC Topic 606 to clarify the principles for recognizing revenue and develop a common revenue standard among industries. The new guidance established the following core principle: recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for goods or services. Five steps were provided for a company or organization to follow to achieve such core principle. The new guidance also included a cohesive set of disclosure requirements that provided users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new revenue recognition guidance effective January 1, 2018 and determined the majority of the Company’s revenue sources, such as interest income from debt securities and loans, fee income from loans and gain on sale of loans, were not within the scope of Topic 606. The Company evaluated the revenue sources determined to be in scope of Topic 606, including service charges and fee income on deposits and gain or loss on sale of OREO and determined the adoption of the guidance did not have a significant impact to the Company’s financial position or results of operations; however, OREO policies and procedures were updated and implemented and new disclosures about the Company’s revenue have been incorporated into the notes to the financial statements. Accounting Guidance Pending Adoption at March 31, 2018 The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations. Derivatives and Hedging. In August 2017, FASB amended ASC Topic 815 to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments made targeted improvements to simplify the application of the hedge accounting guidance. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the full impact of the amendments on its existing interest rate swaps and whether it will early adopt. The Company does not expect there to be an impact to the Company’s financial position and results of operations, although, there may be additional financial statement disclosures. The accounting policies and procedures will be modified after the Company has fully evaluated the standard, although significant changes are not expected. For additional information on derivatives, see Note 7. Receivables - Nonrefundable Fees and Other Costs. In March 2017, FASB amended ASC Subtopic 310-20 to shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted and if adopted in an interim period, any adjustments should be reflected as of the beginning of the year that includes the interim period. The entity should apply the amendments on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has premiums on debt securities that are currently being amortized to the maturity date, primarily in the state and local governments category. If the Company were to adopt these amendments as of April 1, 2018, the Company estimates that $22,129,000 of the premium associated with debt securities would be adjusted to retained earnings. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date, including accounting policies and procedures, and doesn’t expect to early adopt. Goodwill and Other Intangibles. In January 2017, FASB amended ASC Topic 350 to simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has goodwill from prior business combinations and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the third quarter of 2017, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company’s goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company’s financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. For additional information regarding goodwill impairment testing, see Note 4. Financial Instruments. In June 2016, FASB amended ASC Topic 326 to replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The ALLL is a material estimate of the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALLL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company will also develop new procedures for determining an allowance for credit losses relating to held-to-maturity debt securities. In addition, the current accounting policy and procedures for other-than-temporary impairment on available-for-sale debt securities will be replaced with an allowance approach. The Company has formed a project team and is actively reviewing the standard for developing and implementing processes and procedures during the next two years to ensure it is fully compliant with the amendments at adoption date. For additional information on the ALLL, see Note 3. Leases. In February 2016, FASB amended ASC Topic 842 to address several aspects of lease accounting with the significant change being the recognition of lease assets and lease liabilities for leases previously classified as operating leases. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and doesn’t expect to early adopt. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements. The Company is currently in the process of fully evaluating the amendments and will subsequently implement new processes, which are not expected to significantly change, since the Company already has processes for certain lease agreements that recognize the lease assets and lease liabilities. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above. |
Debt Securities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost, gross unrealized gains and losses and fair value of debt securities | The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s debt securities:
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Amortized cost and fair value of securities by contractual maturity | The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity at March 31, 2018. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.
______________________________ 1 Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. |
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Proceeds from sales and calls of debt securities and the associated gains and losses | Proceeds from sales and calls of debt securities and the associated gains and losses that have been included in earnings are listed below:
______________________________ 1 The gain or loss on the sale or call of each debt security is determined by the specific identification method. |
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Summary of debt securities with an unrealized loss position | Debt securities with an unrealized loss position are summarized as follows:
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Loans Receivable, Net (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of loans receivable | The following table presents loans receivable for each portfolio class of loans:
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Summary of the activity in the ALLL | The following tables summarize the activity in the ALLL by loan class:
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Summary of ALLL and loans receivable | The following tables disclose the recorded investment in loans and the balance in the ALLL by loan class:
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Summary of impaired loans | The following tables disclose information related to impaired loans by loan class:
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Loan portfolio aging analysis | The following tables present an aging analysis of the recorded investment in loans by loan class:
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Summary of TDRs | The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:
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Goodwill (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the carrying value of goodwill | The following schedule discloses the changes in the carrying value of goodwill:
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Variable Interest Entities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amounts of consolidated VIEs' assets and liabilities | The following table summarizes the carrying amounts of the consolidated VIEs’ assets and liabilities included in the Company’s statements of financial condition and are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.
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Amortization expense and tax credits and other tax benefits recognized for qualified affordable housing project investments | The following table summarizes the amortization expense and the amount of tax credits and other tax benefits recognized for qualified affordable housing project investments during the periods presented.
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Securities Sold Under Agreements to Repurchase (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value of Repurchase Agreements | The following tables summarize the carrying value of the Company’s repurchase agreements by remaining contractual maturity and category of collateral:
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Derivatives and Hedging Activities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of interest rate swap derivative financial instruments | As of March 31, 2018, the Company’s interest rate swap derivative financial instruments were designated as cash flow hedges and are summarized as follows:
______________________________ 1 The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate. |
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Summary of Pre-Tax Gains or Losses | The following table presents the pre-tax gains or losses recorded in OCI and the Company’s statements of operations relating to the interest rate swap derivative financial instruments:
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Offsetting assets | The following table discloses the offsetting of financial assets and interest rate swap derivative assets.
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Offsetting liabilities | The following table discloses the offsetting of financial liabilities and interest rate swap derivative liabilities.
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Other Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Expenses | Other expenses consists of the following:
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Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity within Accumulated Other Comprehensive Loss, Net of Tax | The following table illustrates the activity within accumulated other comprehensive loss by component, net of tax:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted earnings per share | Basic and diluted earnings per share has been computed based on the following:
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Fair Value of Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement of assets and liabilities measured at fair value on a recurring basis | The following tables disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:
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Fair value measurement of assets measured at fair value on a non-recurring basis | The following tables disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:
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Quantitative information about assets measured at fair value on a non-recurring basis for which Level 3 inputs were used | The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
______________________________ 1 The range for selling costs and adjustments to comparables indicate reductions to the fair value. |
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Carrying amounts and estimated fair values of financial instruments | The following tables present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:
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Mergers and Acquisitions (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consideration transferred, identifiable net assets acquired and resulting goodwill | The following table discloses the preliminary fair value estimates of the consideration transferred, the total identifiable net assets acquired and the resulting goodwill arising from the FSB and Collegiate acquisitions. Due to the timing of the acquisitions, the Company is continuing to obtain information to determine the fair values of the acquired assets and liabilities.
______________________________ 1 The core deposit intangible for each acquisition was determined to have an estimated life of 10 years. 2 Borrowings assumed with the FSB acquisition include Tier 2 subordinated debentures of $7,903,000. |
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Unaudited Pro Forma Summary of the Company as if the Acquisitions had Occurred at the Beginning of the Period | The following unaudited pro forma summary presents consolidated information of the Company as if the FSB and Collegiate acquisitions had occurred on January 1, 2017:
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Proceeds From Sales and Calls of Debt Securities and Associates Gains or Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Available-for-sale | |||||
Proceeds from sales and calls of debt securities | $ 228,681 | $ 8,491 | |||
Gross realized gains | [1] | 6 | 10 | ||
Gross realized losses | [1] | (288) | (149) | ||
Held-to-maturity | |||||
Proceeds from calls of debt securities | 15,465 | 7,790 | |||
Gross realized gains | [1] | 54 | 81 | ||
Gross realized losses | [1] | $ (105) | $ (42) | ||
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Debt Securities with an Unrealized Loss Position (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Available-for-sale, Fair Value | ||
Less than 12 Months | $ 1,024,817 | $ 586,721 |
12 Months or More | 456,803 | 484,508 |
Total | 1,481,620 | 1,071,229 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (16,569) | (4,533) |
12 Months or More | (18,215) | (11,161) |
Total | (34,784) | (15,694) |
Held-to-maturity, Fair Value | ||
Less than 12 Months | 169,956 | 21,207 |
12 Months or More | 90,783 | 105,486 |
Total | 260,739 | 126,693 |
Held-to-maturity, Unrealized Loss | ||
Less than 12 Months | (4,092) | (186) |
12 Months or More | (7,690) | (8,387) |
Total | (11,782) | (8,573) |
U.S. government and federal agency | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 13,466 | 1,208 |
12 Months or More | 12,602 | 13,179 |
Total | 26,068 | 14,387 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (132) | (5) |
12 Months or More | (168) | (138) |
Total | (300) | (143) |
U.S. government sponsored enterprises | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 87,972 | 14,926 |
12 Months or More | 3,388 | 3,425 |
Total | 91,360 | 18,351 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (487) | (56) |
12 Months or More | (87) | (48) |
Total | (574) | (104) |
State and local governments | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 191,317 | 61,126 |
12 Months or More | 114,556 | 121,181 |
Total | 305,873 | 182,307 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (3,772) | (689) |
12 Months or More | (6,202) | (4,475) |
Total | (9,974) | (5,164) |
Held-to-maturity, Fair Value | ||
Less than 12 Months | 169,956 | 21,207 |
12 Months or More | 90,783 | 105,486 |
Total | 260,739 | 126,693 |
Held-to-maturity, Unrealized Loss | ||
Less than 12 Months | (4,092) | (186) |
12 Months or More | (7,690) | (8,387) |
Total | (11,782) | (8,573) |
Corporate bonds | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 178,229 | 99,636 |
12 Months or More | 27,274 | 29,034 |
Total | 205,503 | 128,670 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (858) | (264) |
12 Months or More | (386) | (219) |
Total | (1,244) | (483) |
Residential mortgage-backed securities | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 481,369 | 372,175 |
12 Months or More | 240,810 | 254,721 |
Total | 722,179 | 626,896 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (10,416) | (3,050) |
12 Months or More | (9,512) | (4,880) |
Total | (19,928) | (7,930) |
Commercial mortgage-backed securities | ||
Available-for-sale, Fair Value | ||
Less than 12 Months | 72,464 | 37,650 |
12 Months or More | 58,173 | 62,968 |
Total | 130,637 | 100,618 |
Available-for-sale, Unrealized Loss | ||
Less than 12 Months | (904) | (469) |
12 Months or More | (1,860) | (1,401) |
Total | $ (2,764) | $ (1,870) |
Debt Securities (Details Textual) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
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Investments, Debt and Equity Securities [Abstract] | ||
Other-than-temporary impairment on debt securities | $ 0 | $ 0 |
Loans Receivable, Net Summary of Loans Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
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Summary of Loans Receivable | ||
Loans receivable | $ 7,670,030 | $ 6,577,824 |
Allowance for loan and lease losses | (127,608) | (129,568) |
Loans receivable, net | 7,542,422 | 6,448,256 |
Net deferred origination (fees) costs included in loans receivable | (4,217) | (2,643) |
Net purchase accounting (discounts) premiums included in loans receivable | $ (30,488) | $ (16,325) |
Weighted-average interest rate on loans (tax-equivalent) | 4.82% | 4.81% |
Residential Real Estate | Residential Real Estate | ||
Summary of Loans Receivable | ||
Loans receivable | $ 831,021 | $ 720,728 |
Allowance for loan and lease losses | (10,634) | (10,798) |
Commercial | ||
Summary of Loans Receivable | ||
Loans receivable | 6,090,296 | 5,156,492 |
Commercial | Commercial Real Estate | ||
Summary of Loans Receivable | ||
Loans receivable | 4,251,003 | 3,577,139 |
Allowance for loan and lease losses | (68,342) | (68,515) |
Commercial | Other Commercial | ||
Summary of Loans Receivable | ||
Loans receivable | 1,839,293 | 1,579,353 |
Allowance for loan and lease losses | (38,108) | (39,303) |
Consumer and Other | ||
Summary of Loans Receivable | ||
Loans receivable | 748,713 | 700,604 |
Consumer and Other | Home Equity | ||
Summary of Loans Receivable | ||
Loans receivable | 489,879 | 457,918 |
Allowance for loan and lease losses | (6,040) | (6,204) |
Consumer and Other | Other Consumer | ||
Summary of Loans Receivable | ||
Loans receivable | 258,834 | 242,686 |
Allowance for loan and lease losses | $ (4,484) | $ (4,748) |
ALLL Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Allowance for loan and lease losses | ||
Balance at beginning of period | $ 129,568 | $ 129,572 |
Provision for loan losses | 795 | 1,598 |
Charge-offs | (5,007) | (4,229) |
Recoveries | 2,252 | 2,285 |
Balance at end of period | 127,608 | 129,226 |
Residential Real Estate | Residential Real Estate | ||
Allowance for loan and lease losses | ||
Balance at beginning of period | 10,798 | 12,436 |
Provision for loan losses | (177) | (926) |
Charge-offs | (3) | (22) |
Recoveries | 16 | 47 |
Balance at end of period | 10,634 | 11,535 |
Commercial | Commercial Real Estate | ||
Allowance for loan and lease losses | ||
Balance at beginning of period | 68,515 | 65,773 |
Provision for loan losses | 245 | (370) |
Charge-offs | (1,033) | (888) |
Recoveries | 615 | 238 |
Balance at end of period | 68,342 | 64,753 |
Commercial | Other Commercial | ||
Allowance for loan and lease losses | ||
Balance at beginning of period | 39,303 | 37,823 |
Provision for loan losses | (3) | 1,621 |
Charge-offs | (1,788) | (471) |
Recoveries | 596 | 184 |
Balance at end of period | 38,108 | 39,157 |
Consumer and Other | Home Equity | ||
Allowance for loan and lease losses | ||
Balance at beginning of period | 6,204 | 7,572 |
Provision for loan losses | (202) | 129 |
Charge-offs | (12) | (96) |
Recoveries | 50 | 74 |
Balance at end of period | 6,040 | 7,679 |
Consumer and Other | Other Consumer | ||
Allowance for loan and lease losses | ||
Balance at beginning of period | 4,748 | 5,968 |
Provision for loan losses | 932 | 1,144 |
Charge-offs | (2,171) | (2,752) |
Recoveries | 975 | 1,742 |
Balance at end of period | $ 4,484 | $ 6,102 |
ALLL and Loans Receivable Summary (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | $ 138,544 | $ 119,994 |
Collectively evaluated for impairment | 7,531,486 | 6,457,830 |
Total loans receivable | 7,670,030 | 6,577,824 |
Individually evaluated for impairment | 4,468 | 5,223 |
Collectively evaluated for impairment | 123,140 | 124,345 |
Total allowance for loan and lease losses | 127,608 | 129,568 |
Residential Real Estate | Residential Real Estate | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | 13,257 | 12,399 |
Collectively evaluated for impairment | 817,764 | 708,329 |
Total loans receivable | 831,021 | 720,728 |
Individually evaluated for impairment | 167 | 246 |
Collectively evaluated for impairment | 10,467 | 10,552 |
Total allowance for loan and lease losses | 10,634 | 10,798 |
Commercial | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Total loans receivable | 6,090,296 | 5,156,492 |
Commercial | Commercial Real Estate | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | 93,496 | 77,536 |
Collectively evaluated for impairment | 4,157,507 | 3,499,603 |
Total loans receivable | 4,251,003 | 3,577,139 |
Individually evaluated for impairment | 798 | 500 |
Collectively evaluated for impairment | 67,544 | 68,015 |
Total allowance for loan and lease losses | 68,342 | 68,515 |
Commercial | Other Commercial | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | 25,518 | 23,032 |
Collectively evaluated for impairment | 1,813,775 | 1,556,321 |
Total loans receivable | 1,839,293 | 1,579,353 |
Individually evaluated for impairment | 3,042 | 3,851 |
Collectively evaluated for impairment | 35,066 | 35,452 |
Total allowance for loan and lease losses | 38,108 | 39,303 |
Consumer and Other | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Total loans receivable | 748,713 | 700,604 |
Consumer and Other | Home Equity | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | 3,326 | 3,755 |
Collectively evaluated for impairment | 486,553 | 454,163 |
Total loans receivable | 489,879 | 457,918 |
Individually evaluated for impairment | 27 | 56 |
Collectively evaluated for impairment | 6,013 | 6,148 |
Total allowance for loan and lease losses | 6,040 | 6,204 |
Consumer and Other | Other Consumer | ||
Allowance for Loan and Lease Losses and Loans Receivable | ||
Individually evaluated for impairment | 2,947 | 3,272 |
Collectively evaluated for impairment | 255,887 | 239,414 |
Total loans receivable | 258,834 | 242,686 |
Individually evaluated for impairment | 434 | 570 |
Collectively evaluated for impairment | 4,050 | 4,178 |
Total allowance for loan and lease losses | $ 4,484 | $ 4,748 |
Impaired Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | $ 24,171 | $ 17,689 |
Loans with a specific valuation allowance, Unpaid principal balance | 24,874 | 18,400 |
Specific valuation allowance | 4,468 | 5,223 |
Loans with a specific valuation allowance, Average balance | 20,931 | 18,986 |
Loans without a specific valuation allowance, Recorded balance | 114,373 | 102,305 |
Loans without a specific valuation allowance, Unpaid principal balance | 139,033 | 122,833 |
Loans without a specific valuation allowance, Average balance | 108,339 | 107,945 |
Recorded balance | 138,544 | 119,994 |
Unpaid principal balance | 163,907 | 141,233 |
Average balance | 129,270 | 126,931 |
Residential Real Estate | Residential Real Estate | ||
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | 3,627 | 2,978 |
Loans with a specific valuation allowance, Unpaid principal balance | 3,698 | 3,046 |
Specific valuation allowance | 167 | 246 |
Loans with a specific valuation allowance, Average balance | 3,303 | 2,928 |
Loans without a specific valuation allowance, Recorded balance | 9,630 | 9,421 |
Loans without a specific valuation allowance, Unpaid principal balance | 10,757 | 10,380 |
Loans without a specific valuation allowance, Average balance | 9,526 | 9,834 |
Recorded balance | 13,257 | 12,399 |
Unpaid principal balance | 14,455 | 13,426 |
Average balance | 12,829 | 12,762 |
Commercial | Commercial Real Estate | ||
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | 8,587 | 4,545 |
Loans with a specific valuation allowance, Unpaid principal balance | 8,787 | 4,573 |
Specific valuation allowance | 798 | 500 |
Loans with a specific valuation allowance, Average balance | 6,566 | 5,851 |
Loans without a specific valuation allowance, Recorded balance | 84,909 | 72,991 |
Loans without a specific valuation allowance, Unpaid principal balance | 104,008 | 89,839 |
Loans without a specific valuation allowance, Average balance | 78,950 | 76,427 |
Recorded balance | 93,496 | 77,536 |
Unpaid principal balance | 112,795 | 94,412 |
Average balance | 85,516 | 82,278 |
Commercial | Other Commercial | ||
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | 10,402 | 8,183 |
Loans with a specific valuation allowance, Unpaid principal balance | 10,404 | 8,378 |
Specific valuation allowance | 3,042 | 3,851 |
Loans with a specific valuation allowance, Average balance | 9,293 | 8,477 |
Loans without a specific valuation allowance, Recorded balance | 15,116 | 14,849 |
Loans without a specific valuation allowance, Unpaid principal balance | 18,934 | 16,931 |
Loans without a specific valuation allowance, Average balance | 14,982 | 15,129 |
Recorded balance | 25,518 | 23,032 |
Unpaid principal balance | 29,338 | 25,309 |
Average balance | 24,275 | 23,606 |
Consumer and Other | Home Equity | ||
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | 65 | 186 |
Loans with a specific valuation allowance, Unpaid principal balance | 79 | 199 |
Specific valuation allowance | 27 | 56 |
Loans with a specific valuation allowance, Average balance | 126 | 359 |
Loans without a specific valuation allowance, Recorded balance | 3,261 | 3,569 |
Loans without a specific valuation allowance, Unpaid principal balance | 3,795 | 4,098 |
Loans without a specific valuation allowance, Average balance | 3,415 | 4,734 |
Recorded balance | 3,326 | 3,755 |
Unpaid principal balance | 3,874 | 4,297 |
Average balance | 3,541 | 5,093 |
Consumer and Other | Other Consumer | ||
Summary of the impaired loans by portfolio class of loans | ||
Loans with a specific valuation allowance, Recorded balance | 1,490 | 1,797 |
Loans with a specific valuation allowance, Unpaid principal balance | 1,906 | 2,204 |
Specific valuation allowance | 434 | 570 |
Loans with a specific valuation allowance, Average balance | 1,643 | 1,371 |
Loans without a specific valuation allowance, Recorded balance | 1,457 | 1,475 |
Loans without a specific valuation allowance, Unpaid principal balance | 1,539 | 1,585 |
Loans without a specific valuation allowance, Average balance | 1,466 | 1,821 |
Recorded balance | 2,947 | 3,272 |
Unpaid principal balance | 3,445 | 3,789 |
Average balance | $ 3,109 | $ 3,192 |
Loans Receivable Aging Analysis (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loan portfolio aging analysis | ||
Non-accrual loans | $ 54,449 | $ 44,833 |
Total past due and non-accrual loans | 104,814 | 88,597 |
Current loans receivable | 7,565,216 | 6,489,227 |
Total loans receivable | 7,670,030 | 6,577,824 |
Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 34,506 | 26,375 |
Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 10,457 | 11,312 |
Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | 5,402 | 6,077 |
Residential Real Estate | Residential Real Estate | ||
Loan portfolio aging analysis | ||
Non-accrual loans | 7,188 | 4,924 |
Total past due and non-accrual loans | 16,023 | 14,336 |
Current loans receivable | 814,998 | 706,392 |
Total loans receivable | 831,021 | 720,728 |
Residential Real Estate | Residential Real Estate | Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 7,812 | 6,252 |
Residential Real Estate | Residential Real Estate | Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 593 | 794 |
Residential Real Estate | Residential Real Estate | Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | 430 | 2,366 |
Commercial | ||
Loan portfolio aging analysis | ||
Total loans receivable | 6,090,296 | 5,156,492 |
Commercial | Commercial Real Estate | ||
Loan portfolio aging analysis | ||
Non-accrual loans | 34,344 | 27,331 |
Total past due and non-accrual loans | 56,433 | 45,853 |
Current loans receivable | 4,194,570 | 3,531,286 |
Total loans receivable | 4,251,003 | 3,577,139 |
Commercial | Commercial Real Estate | Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 14,016 | 12,546 |
Commercial | Commercial Real Estate | Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 5,694 | 5,367 |
Commercial | Commercial Real Estate | Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | 2,379 | 609 |
Commercial | Other Commercial | ||
Loan portfolio aging analysis | ||
Non-accrual loans | 9,509 | 8,298 |
Total past due and non-accrual loans | 24,167 | 18,407 |
Current loans receivable | 1,815,126 | 1,560,946 |
Total loans receivable | 1,839,293 | 1,579,353 |
Commercial | Other Commercial | Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 8,676 | 3,634 |
Commercial | Other Commercial | Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 3,660 | 3,502 |
Commercial | Other Commercial | Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | 2,322 | 2,973 |
Consumer and Other | ||
Loan portfolio aging analysis | ||
Total loans receivable | 748,713 | 700,604 |
Consumer and Other | Home Equity | ||
Loan portfolio aging analysis | ||
Non-accrual loans | 2,804 | 3,338 |
Total past due and non-accrual loans | 5,155 | 6,467 |
Current loans receivable | 484,724 | 451,451 |
Total loans receivable | 489,879 | 457,918 |
Consumer and Other | Home Equity | Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 2,197 | 2,142 |
Consumer and Other | Home Equity | Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 43 | 987 |
Consumer and Other | Home Equity | Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | 111 | 0 |
Consumer and Other | Other Consumer | ||
Loan portfolio aging analysis | ||
Non-accrual loans | 604 | 942 |
Total past due and non-accrual loans | 3,036 | 3,534 |
Current loans receivable | 255,798 | 239,152 |
Total loans receivable | 258,834 | 242,686 |
Consumer and Other | Other Consumer | Accruing loans 30 to 59 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 1,805 | 1,801 |
Consumer and Other | Other Consumer | Accruing loans 60 to 89 days past due | ||
Loan portfolio aging analysis | ||
Past due loans | 467 | 662 |
Consumer and Other | Other Consumer | Accruing loans 90 days or more past due | ||
Loan portfolio aging analysis | ||
Past due loans | $ 160 | $ 129 |
Troubled Debt Restructurings (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
Loan
|
Mar. 31, 2017
USD ($)
Loan
|
|
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 12 | 10 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 15,997 | $ 9,555 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 15,997 | $ 9,552 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 1 | 2 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 334 | $ 25 |
Residential Real Estate | Residential Real Estate | ||
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 2 | 2 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 439 | $ 280 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 439 | $ 280 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 1 | 0 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 334 | $ 0 |
Commercial | Commercial Real Estate | ||
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 4 | 2 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 8,278 | $ 582 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 8,278 | $ 582 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 0 | 0 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 0 | $ 0 |
Commercial | Other Commercial | ||
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 6 | 4 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 7,280 | $ 8,530 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 7,280 | $ 8,530 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 0 | 1 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 0 | $ 18 |
Consumer and Other | Home Equity | ||
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 0 | 1 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 0 | $ 153 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 0 | $ 153 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 0 | 0 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 0 | $ 0 |
Consumer and Other | Other Consumer | ||
Troubled Debt Restructurings | ||
TDRs that Occurred During the Period, Number of Loans | Loan | 0 | 1 |
TDRs that Occurred During the Period, Pre-modification recorded balance | $ 0 | $ 10 |
TDRs that Occurred During the Period, Post-modification recorded balance | $ 0 | $ 7 |
TDRs that Subsequently Defaulted, Number of Loans | Loan | 0 | 1 |
TDRs that Subsequently Defaulted, Recorded Balance | $ 0 | $ 7 |
Loans Receivable, Net (Details Textual) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018
USD ($)
portfolio_segment
|
Dec. 31, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
|
Loans and Leases Receivable Disclosure | |||
Number of segments in the Company's loan portfolio | portfolio_segment | 3 | ||
TDR With Pre Modification Loan Balance for Which Oreo Was Received | $ 431,000 | $ 514,000 | |
Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process | 1,885,000 | $ 743,000 | |
OREO Secured by Residential Real Estate | $ 1,025,000 | $ 893,000 |
Goodwill Changes in the Carrying Value of Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Goodwill Roll Forward | ||
Net carrying value at beginning of period | $ 177,811 | $ 147,053 |
Acquisitions | 111,724 | 0 |
Net carrying value at end of period | $ 289,535 | $ 147,053 |
Goodwill (Details Textual) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated impairment charge | $ 40,159,000 | $ 40,159,000 |
Variable Interest Entities VIE Carrying Amounts Included in Financial Statements (Details) - Consolidated VIEs - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Consolidated VIEs | ||
Assets | $ 90,087 | $ 73,775 |
Liabilities | 8,054 | 8,063 |
Loans Receivable | ||
Consolidated VIEs | ||
Assets | 58,092 | 57,796 |
Accrued Interest Receivable | ||
Consolidated VIEs | ||
Assets | 94 | 94 |
Other assets | ||
Consolidated VIEs | ||
Assets | 31,901 | 15,885 |
Other borrowed funds | ||
Consolidated VIEs | ||
Liabilities | 7,964 | 7,964 |
Accrued interest payable | ||
Consolidated VIEs | ||
Liabilities | 1 | 1 |
Other liabilities | ||
Consolidated VIEs | ||
Liabilities | $ 89 | $ 98 |
Variable Interest Entities Amortization Expense and Tax Credits and Other Tax Benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Investments in Qualified Affordable Housing Projects | ||
Amortization expense | $ 891 | $ 503 |
Tax credits and other tax benefits recognized | $ 1,240 | $ 776 |
Variable Interest Entities (Details Textual) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Variable Interest Entities | |||
Unfunded contingent commitments | $ 11,702,000 | ||
Unfunded contingent commitments expected to be fulfilled in 2018 | 2018 | ||
Impairment losses | $ 0 | $ 0 | |
Other assets | |||
Variable Interest Entities | |||
Carrying value of equity investments in LIHTCs | $ 24,407,000 | $ 9,169,000 | |
CDE | |||
Variable Interest Entities | |||
Tax credit period | 7 years | ||
LIHTC | |||
Variable Interest Entities | |||
Tax credit period | 10 years | ||
Tax credit compliance period | 15 years |
Carrying Value of Repurchase Agreements (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | $ 395,794 | $ 362,573 |
Overnight and Continuous | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 374,116 | 362,573 |
30 - 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 1,285 | 0 |
Greater Than 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 20,393 | 0 |
State and local governments | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 40,606 | |
State and local governments | Overnight and Continuous | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 18,928 | |
State and local governments | 30 - 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 1,285 | |
State and local governments | Greater Than 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 20,393 | |
Residential mortgage-backed securities | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 353,465 | 360,751 |
Residential mortgage-backed securities | Overnight and Continuous | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 353,465 | 360,751 |
Residential mortgage-backed securities | 30 - 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 0 | 0 |
Residential mortgage-backed securities | Greater Than 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 0 | 0 |
Commercial mortgage-backed securities | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 1,723 | 1,822 |
Commercial mortgage-backed securities | Overnight and Continuous | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 1,723 | 1,822 |
Commercial mortgage-backed securities | 30 - 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | 0 | 0 |
Commercial mortgage-backed securities | Greater Than 90 Days | ||
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | $ 0 | $ 0 |
Securities Sold Under Agreements to Repurchase Securities Sold Under Agreements to Repurchase (Details Textual) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Securities Sold Under Agreements to Repurchase | ||
Repurchase Agreements | $ 395,794,000 | $ 362,573,000 |
Securities Pledged for Repurchase Agreements | $ 536,296,000 | $ 475,601,000 |
Interest Rate Swap Summary (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018
USD ($)
| ||||
Interest Rate Swap One | ||||
Interest rate swap derivative financial instruments | ||||
Forecasted Notional Amount | $ 160,000 | |||
Variable Interest Rate | 3 month LIBOR | [1] | ||
Fixed Interest Rate | 3.378% | [1] | ||
Payment Term, Effective Date | Oct. 21, 2014 | |||
Payment Term, Maturity Date | Oct. 21, 2021 | |||
Interest Rate Swap Two | ||||
Interest rate swap derivative financial instruments | ||||
Forecasted Notional Amount | $ 100,000 | |||
Variable Interest Rate | 3 month LIBOR | [1] | ||
Fixed Interest Rate | 2.498% | [1] | ||
Payment Term, Effective Date | Nov. 30, 2015 | |||
Payment Term, Maturity Date | Nov. 30, 2022 | |||
|
Derivatives and Hedging Activities Interest Rate Swap Gains or Losses (Details) - Interest Rate Swap - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Interest Expense | ||
Pre-Tax Gains or Losses | ||
Amount of loss reclassified from OCI to interest expense | $ (900) | $ (1,332) |
Other Non-Interest Expense | ||
Pre-Tax Gains or Losses | ||
Amount of loss recognized in other non-interest expense (ineffective portion) | 0 | 0 |
Other Comprehensive Income | ||
Pre-Tax Gains or Losses | ||
Amount of gain recognized in OCI (effective portion) | $ 4,379 | $ 264 |
Derivatives and Hedging Activities Offsetting Assets (Details) - Interest Rate Swap - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Offsetting Derivative Assets | ||
Gross Amounts of Recognized Assets | $ 601 | $ 0 |
Gross Amounts Offset in the Statements of Financial Position | (601) | 0 |
Net Amounts of Assets Presented in the Statements of Financial Position | $ 0 | $ 0 |
Derivatives and Hedging Activities Offsetting Liabilities (Details) - Interest Rate Swap - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Offsetting Derivative Liabilities | ||
Gross Amounts of Recognized Liabilities | $ 4,711 | $ 9,389 |
Gross Amounts Offset in the Statements of Financial Position | (601) | 0 |
Net Amounts of Liabilities Presented in the Statements of Financial Position | $ 4,110 | $ 9,389 |
Derivatives and Hedging Activities (Details Textual) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Interest Rate Lock Commitments | |||
Interest rate swap derivative financial instruments | |||
Off-balance Sheet Commitments | $ 96,523,000 | $ 67,861,000 | |
Interest Rate Swap One | |||
Interest rate swap derivative financial instruments | |||
Forecasted Notional Amount | 160,000,000 | ||
Interest Rate Swap Two | |||
Interest rate swap derivative financial instruments | |||
Forecasted Notional Amount | 100,000,000 | ||
Interest Rate Swap | |||
Interest rate swap derivative financial instruments | |||
Interest expense recorded on interest rate swap | 1,976,000 | $ 1,976,000 | |
Unrealized loss to be reclassified within twelve months | 3,127,000 | ||
Investment securities pledged as collateral | 5,603,000 | ||
Collateral pledged from the counterparties to the Company | $ 0 |
Other Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Other Expenses | ||
Mergers and acquisition expenses | $ 1,836 | $ 83 |
Debit card expenses | 1,640 | 1,718 |
Consulting and outside services | 1,379 | 1,420 |
Telephone | 1,021 | 977 |
Loan expenses | 804 | 891 |
Employee expenses | 791 | 789 |
Postage | 779 | 725 |
Printing and supplies | 691 | 640 |
VIE amortization and other expenses | 474 | 464 |
Business development | 468 | 340 |
Accounting and audit fees | 418 | 490 |
Legal fees | 314 | 279 |
ATM expenses | 289 | 312 |
Checking and operating expenses | 113 | 365 |
Other | 1,144 | 927 |
Total other expenses | $ 12,161 | $ 10,420 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Accumulated Other Comprehensive Loss | ||
Balance, beginning | $ (1,979) | $ (7,382) |
Other comprehensive income (loss) before reclassification | (15,927) | 2,069 |
Reclassification adjustments for losses included in net income | 883 | 901 |
Net current period other comprehensive income (loss) | (15,044) | 2,970 |
Balance, end | (17,023) | (4,412) |
Available-For-Sale Debt Securities | ||
Accumulated Other Comprehensive Loss | ||
Balance, beginning | 5,031 | 1,639 |
Other comprehensive income (loss) before reclassification | (19,196) | 1,907 |
Reclassification adjustments for losses included in net income | 211 | 85 |
Net current period other comprehensive income (loss) | (18,985) | 1,992 |
Balance, end | (13,954) | 3,631 |
Derivatives Used for Cash Flow Hedges | ||
Accumulated Other Comprehensive Loss | ||
Balance, beginning | (7,010) | (9,021) |
Other comprehensive income (loss) before reclassification | 3,269 | 162 |
Reclassification adjustments for losses included in net income | 672 | 816 |
Net current period other comprehensive income (loss) | 3,941 | 978 |
Balance, end | $ (3,069) | $ (8,043) |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Basic and Diluted Earnings Per Share | ||
Net income available to common stockholders, basic and diluted | $ 38,559 | $ 31,255 |
Average outstanding shares - basic | 80,808,904 | 76,572,116 |
Add: dilutive restricted stock awards and stock options | 78,231 | 61,167 |
Average outstanding shares - diluted | 80,887,135 | 76,633,283 |
Basic earnings per share | $ 0.48 | $ 0.41 |
Diluted earnings per share | $ 0.48 | $ 0.41 |
Earnings Per Share | ||
Restricted stock awards and stock options excluded from the diluted average outstanding share calculation | 0 | 39,348 |
Fair Value Measurements on a Recurring Basis (Details) - Recurring Measurements - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Financial Assets | ||
Loans held for sale, at fair value | $ 37,058 | $ 38,833 |
Total assets measured at fair value on a recurring basis | 2,191,903 | 1,817,076 |
Financial Liabilities | ||
Total liabilities measured at fair value on a recurring basis | 4,110 | 9,389 |
Interest rate swaps | ||
Financial Liabilities | ||
Interest rate swaps | 4,110 | 9,389 |
U.S. government and federal agency | ||
Financial Assets | ||
Investment securities, available-for-sale | 29,352 | 31,127 |
U.S. government sponsored enterprises | ||
Financial Assets | ||
Investment securities, available-for-sale | 109,912 | 19,091 |
State and local governments | ||
Financial Assets | ||
Investment securities, available-for-sale | 643,111 | 629,501 |
Corporate bonds | ||
Financial Assets | ||
Investment securities, available-for-sale | 318,856 | 216,762 |
Residential mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 901,112 | 779,283 |
Commercial mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 152,502 | 102,479 |
Level 1 | ||
Financial Assets | ||
Loans held for sale, at fair value | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Financial Liabilities | ||
Total liabilities measured at fair value on a recurring basis | 0 | 0 |
Level 1 | Interest rate swaps | ||
Financial Liabilities | ||
Interest rate swaps | 0 | 0 |
Level 1 | U.S. government and federal agency | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 1 | U.S. government sponsored enterprises | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 1 | State and local governments | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 1 | Corporate bonds | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 1 | Residential mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 1 | Commercial mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 2 | ||
Financial Assets | ||
Loans held for sale, at fair value | 37,058 | 38,833 |
Total assets measured at fair value on a recurring basis | 2,191,903 | 1,817,076 |
Financial Liabilities | ||
Total liabilities measured at fair value on a recurring basis | 4,110 | 9,389 |
Level 2 | Interest rate swaps | ||
Financial Liabilities | ||
Interest rate swaps | 4,110 | 9,389 |
Level 2 | U.S. government and federal agency | ||
Financial Assets | ||
Investment securities, available-for-sale | 29,352 | 31,127 |
Level 2 | U.S. government sponsored enterprises | ||
Financial Assets | ||
Investment securities, available-for-sale | 109,912 | 19,091 |
Level 2 | State and local governments | ||
Financial Assets | ||
Investment securities, available-for-sale | 643,111 | 629,501 |
Level 2 | Corporate bonds | ||
Financial Assets | ||
Investment securities, available-for-sale | 318,856 | 216,762 |
Level 2 | Residential mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 901,112 | 779,283 |
Level 2 | Commercial mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 152,502 | 102,479 |
Level 3 | ||
Financial Assets | ||
Loans held for sale, at fair value | 0 | 0 |
Total assets measured at fair value on a recurring basis | 0 | 0 |
Financial Liabilities | ||
Total liabilities measured at fair value on a recurring basis | 0 | 0 |
Level 3 | Interest rate swaps | ||
Financial Liabilities | ||
Interest rate swaps | 0 | 0 |
Level 3 | U.S. government and federal agency | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 3 | U.S. government sponsored enterprises | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 3 | State and local governments | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 3 | Corporate bonds | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 3 | Residential mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | 0 | 0 |
Level 3 | Commercial mortgage-backed securities | ||
Financial Assets | ||
Investment securities, available-for-sale | $ 0 | $ 0 |
Fair Value Measurements on a Non-Recurring Basis (Details) - Non-Recurring Measurements - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis | ||
Other real estate owned | $ 138 | $ 2,296 |
Collateral-dependent impaired loans, net of ALLL | 11,172 | 6,339 |
Total assets measured at fair value on a non-recurring basis | 11,310 | 8,635 |
Level 1 | ||
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis | ||
Other real estate owned | 0 | 0 |
Collateral-dependent impaired loans, net of ALLL | 0 | 0 |
Total assets measured at fair value on a non-recurring basis | 0 | 0 |
Level 2 | ||
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis | ||
Other real estate owned | 0 | 0 |
Collateral-dependent impaired loans, net of ALLL | 0 | 0 |
Total assets measured at fair value on a non-recurring basis | 0 | 0 |
Level 3 | ||
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis | ||
Other real estate owned | 138 | 2,296 |
Collateral-dependent impaired loans, net of ALLL | 11,172 | 6,339 |
Total assets measured at fair value on a non-recurring basis | $ 11,310 | $ 8,635 |
Quantitative Information about Level 3 Fair Value Measurements (Details) - Non-Recurring Measurements - USD ($) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | $ 11,310 | $ 8,635 | ||||
Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | 11,310 | 8,635 | ||||
Other real estate owned | Sales Comparison Approach | Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | $ 138 | 2,296 | ||||
Other real estate owned | Minimum Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 15.00% | 0.00% | |||
Other real estate owned | Maximum Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 15.00% | 10.00% | |||
Other real estate owned | Weighted Average Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 15.00% | 6.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | $ 11,172 | 6,339 | ||||
Collateral-dependent Impaired Loans, Net of ALLL | Sales Comparison Approach | Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | 4,497 | 2,541 | ||||
Collateral-dependent Impaired Loans, Net of ALLL | Cost Approach | Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | 13 | 238 | ||||
Collateral-dependent Impaired Loans, Net of ALLL | Combined Approach | Level 3 | ||||||
Quantitative Information About Level 3 Fair Value Measurements | ||||||
Fair Value | $ 6,662 | $ 3,560 | ||||
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 8.00% | 8.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Cost Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 20.00% | 10.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Combined Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 10.00% | 10.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 10.00% | 10.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Cost Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 20.00% | 20.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Combined Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 10.00% | 10.00% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Sales Comparison Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 9.60% | 9.40% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Cost Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 20.00% | 10.60% | |||
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Combined Approach | Level 3 | ||||||
Unobservable Inputs | ||||||
Selling Costs | [1] | 10.00% | 10.00% | |||
|
Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Amount | ||
Financial assets | ||
Cash and cash equivalents | $ 451,048 | $ 200,004 |
Investment securities, available-for-sale | 2,154,845 | 1,778,243 |
Investment securities, held-to-maturity | 634,413 | 648,313 |
Loans held for sale, at fair value | 37,058 | 38,833 |
Loans receivable, net of ALLL | 7,542,422 | 6,448,256 |
Accrued interest receivable | 54,376 | 44,462 |
Non-marketable equity securities | 21,910 | 29,884 |
Total financial assets | 10,896,072 | 9,187,995 |
Financial liabilities | ||
Deposits | 9,418,845 | 7,579,747 |
FHLB advances | 155,057 | 353,995 |
Repurchase agreements and other borrowed funds | 403,998 | 370,797 |
Subordinated debentures | 134,061 | 126,135 |
Accrued interest payable | 3,740 | 3,450 |
Interest rate swaps | 4,110 | 9,389 |
Total financial liabilities | 10,119,811 | 8,443,513 |
Estimated Fair Value | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 451,048 | 200,004 |
Investment securities, available-for-sale | 0 | 0 |
Investment securities, held-to-maturity | 0 | 0 |
Loans held for sale, at fair value | 0 | 0 |
Loans receivable, net of ALLL | 0 | 0 |
Accrued interest receivable | 54,376 | 44,462 |
Non-marketable equity securities | 0 | 0 |
Total financial assets | 505,424 | 244,466 |
Financial liabilities | ||
Deposits | 8,318,277 | 6,602,445 |
FHLB advances | 0 | 0 |
Repurchase agreements and other borrowed funds | 0 | 0 |
Subordinated debentures | 0 | 0 |
Accrued interest payable | 3,740 | 3,450 |
Interest rate swaps | 0 | 0 |
Total financial liabilities | 8,322,017 | 6,605,895 |
Estimated Fair Value | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities, available-for-sale | 2,154,845 | 1,778,243 |
Investment securities, held-to-maturity | 634,380 | 660,086 |
Loans held for sale, at fair value | 37,058 | 38,833 |
Loans receivable, net of ALLL | 0 | 6,219,515 |
Accrued interest receivable | 0 | 0 |
Non-marketable equity securities | 21,910 | 29,884 |
Total financial assets | 2,848,193 | 8,726,561 |
Financial liabilities | ||
Deposits | 1,102,380 | 978,803 |
FHLB advances | 153,483 | 352,886 |
Repurchase agreements and other borrowed funds | 403,994 | 370,797 |
Subordinated debentures | 112,189 | 98,023 |
Accrued interest payable | 0 | 0 |
Interest rate swaps | 4,110 | 9,389 |
Total financial liabilities | 1,776,156 | 1,809,898 |
Estimated Fair Value | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities, available-for-sale | 0 | 0 |
Investment securities, held-to-maturity | 0 | 0 |
Loans held for sale, at fair value | 0 | 0 |
Loans receivable, net of ALLL | 7,502,161 | 114,771 |
Accrued interest receivable | 0 | 0 |
Non-marketable equity securities | 0 | 0 |
Total financial assets | 7,502,161 | 114,771 |
Financial liabilities | ||
Deposits | 0 | 0 |
FHLB advances | 0 | 0 |
Repurchase agreements and other borrowed funds | 0 | 0 |
Subordinated debentures | 0 | 0 |
Accrued interest payable | 0 | 0 |
Interest rate swaps | 0 | 0 |
Total financial liabilities | $ 0 | $ 0 |
Fair Value Measurements (Details Textual) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Fair Value Disclosures [Abstract] | ||
Fair value measurement transfers from one level to another | $ 0 | $ 0 |
Fair Value, Option, Changes in Fair Value, Gain (Loss) | $ 108,000 | $ 0 |
Mergers and Acquisitions Consideration Transferred, Identifiable Net Assets Acquired and Goodwill Recognized (Details) - USD ($) |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||||
Fair value of consideration transferred | |||||||
Effective settlement of a pre-existing relationship | $ 10,054,000 | $ 0 | |||||
Liabilities assumed | |||||||
Goodwill recognized | 111,724,000 | $ 0 | |||||
First Security Bank | |||||||
Fair value of consideration transferred | |||||||
Fair value of Company shares issued, net of equity issuance costs | 181,043,000 | ||||||
Cash consideration for outstanding shares | 0 | ||||||
Effective settlement of a pre-existing relationship | 0 | ||||||
Total fair value of consideration transferred | 181,043,000 | ||||||
Identifiable assets acquired | |||||||
Cash and cash equivalents | 24,397,000 | ||||||
Debt securities | 271,865,000 | ||||||
Loans receivable | 627,767,000 | ||||||
Core deposit intangible | [1] | 31,053,000 | |||||
Accrued income and other assets | 78,325,000 | ||||||
Total identifiable assets acquired | 1,033,407,000 | ||||||
Liabilities assumed | |||||||
Deposits | 877,586,000 | ||||||
Borrowings | [2] | 36,880,000 | |||||
Accrued expenses and other liabilities | 14,175,000 | ||||||
Total liabilities assumed | 928,641,000 | ||||||
Total identifiable net assets | 104,766,000 | ||||||
Goodwill recognized | $ 76,277,000 | ||||||
Core Deposit Intangible, Weighted Average Useful Life | 10 years | ||||||
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Subordinated Debentures | $ 7,903,000 | ||||||
Collegiate Peaks Bank | |||||||
Fair value of consideration transferred | |||||||
Fair value of Company shares issued, net of equity issuance costs | 69,764,000 | ||||||
Cash consideration for outstanding shares | 16,265,000 | ||||||
Effective settlement of a pre-existing relationship | 10,054,000 | ||||||
Total fair value of consideration transferred | 96,083,000 | ||||||
Identifiable assets acquired | |||||||
Cash and cash equivalents | 93,136,000 | ||||||
Debt securities | 42,177,000 | ||||||
Loans receivable | 354,252,000 | ||||||
Core deposit intangible | [1] | 10,275,000 | |||||
Accrued income and other assets | 15,911,000 | ||||||
Total identifiable assets acquired | 515,751,000 | ||||||
Liabilities assumed | |||||||
Deposits | 437,171,000 | ||||||
Borrowings | 12,509,000 | ||||||
Accrued expenses and other liabilities | 5,435,000 | ||||||
Total liabilities assumed | 455,115,000 | ||||||
Total identifiable net assets | 60,636,000 | ||||||
Goodwill recognized | $ 35,447,000 | ||||||
Core Deposit Intangible, Weighted Average Useful Life | 10 years | ||||||
|
Mergers and Acquisitions Pro Forma Summary (Details) - 2018 acquisitions - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Pro Forma Information | ||
Net interest income and non-interest income | $ 130,068 | $ 120,646 |
Net income | $ 33,948 | $ 35,457 |
Mergers and Acquisitions (Details Textual) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Business Acquisition | ||
Effective settlement of a pre-existing relationship | $ 10,054,000 | $ 0 |
First Security Bank | ||
Business Acquisition | ||
Business Acquisition, Effective Date of Acquisition | Feb. 28, 2018 | |
Percentage of Outstanding Common Stock Acquired | 100.00% | |
Business Combination, Consideration Transferred | $ 181,043,000 | |
Number of Shares Issued for Aquisition | 4,654,091 | |
Cash consideration for outstanding shares | $ 0 | |
Effective settlement of a pre-existing relationship | 0 | |
Loans receivable | 627,767,000 | |
Loans Receivable Acquired, Gross Principal and Contractual Interest Due | 632,370,000 | |
Third-party Acquisition Related Costs | 1,239,000 | |
Net interest income and non-interest income | 4,234,000 | |
Net income | $ 998,000 | |
Collegiate Peaks Bank | ||
Business Acquisition | ||
Business Acquisition, Effective Date of Acquisition | Jan. 31, 2018 | |
Percentage of Outstanding Common Stock Acquired | 100.00% | |
Business Combination, Consideration Transferred | $ 96,083,000 | |
Number of Shares Issued for Aquisition | 1,778,777 | |
Cash consideration for outstanding shares | $ 16,265,000 | |
Effective settlement of a pre-existing relationship | 10,054,000 | |
Loans receivable | 354,252,000 | |
Loans Receivable Acquired, Gross Principal and Contractual Interest Due | 355,364,000 | |
Third-party Acquisition Related Costs | 590,000 | |
Net interest income and non-interest income | 3,792,000 | |
Net income | $ 1,212,000 |
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