Kentucky
|
61-0862051
|
(State of other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
601 West Market Street, Louisville, Kentucky
|
40202
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer o
|
Accelerated filer þ
|
Non-accelerated filer o
|
Smaller reporting company o
|
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 124,357 | $ | 362,971 | ||||
Securities available for sale
|
582,321 | 645,948 | ||||||
Securities to be held to maturity (fair value of $26,287 in 2012 and $28,342 in 2011)
|
25,769 | 28,074 | ||||||
Mortgage loans held for sale
|
4,093 | 4,392 | ||||||
Loans, net of allowance for loan losses of $22,510 and $24,063 (2012 and 2011)
|
2,417,884 | 2,261,232 | ||||||
Federal Home Loan Bank stock, at cost
|
28,391 | 25,980 | ||||||
Premises and equipment, net
|
32,962 | 34,681 | ||||||
Goodwill
|
10,168 | 10,168 | ||||||
Other assets and accrued interest receivable
|
52,855 | 46,545 | ||||||
TOTAL ASSETS
|
$ | 3,278,800 | $ | 3,419,991 | ||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Non interest-bearing
|
$ | 513,136 | $ | 408,483 | ||||
Interest-bearing
|
1,392,155 | 1,325,495 | ||||||
Total deposits
|
1,905,291 | 1,733,978 | ||||||
Securities sold under agreements to repurchase and other short-term borrowings
|
194,412 | 230,231 | ||||||
Federal Home Loan Bank advances
|
538,555 | 934,630 | ||||||
Subordinated note
|
41,240 | 41,240 | ||||||
Other liabilities and accrued interest payable
|
59,589 | 27,545 | ||||||
Total liabilities
|
2,739,087 | 2,967,624 | ||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred stock, no par value
|
- | - | ||||||
Class A Common Stock and Class B Common Stock, no par value
|
4,948 | 4,947 | ||||||
Additional paid in capital
|
132,491 | 131,482 | ||||||
Retained earnings
|
397,058 | 311,799 | ||||||
Accumulated other comprehensive income
|
5,216 | 4,139 | ||||||
Total stockholders' equity
|
539,713 | 452,367 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 3,278,800 | $ | 3,419,991 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
INTEREST INCOME:
|
||||||||||||||||
Loans, including fees
|
$ | 30,534 | $ | 29,843 | $ | 105,826 | $ | 118,004 | ||||||||
Taxable investment securities
|
2,904 | 4,093 | 6,171 | 7,685 | ||||||||||||
Federal Home Loan Bank stock and other
|
376 | 523 | 1,404 | 1,393 | ||||||||||||
Total interest income
|
33,814 | 34,459 | 113,401 | 127,082 | ||||||||||||
INTEREST EXPENSE:
|
||||||||||||||||
Deposits
|
1,213 | 2,272 | 2,752 | 5,210 | ||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings
|
118 | 173 | 230 | 424 | ||||||||||||
Federal Home Loan Bank advances
|
3,540 | 4,556 | 7,626 | 9,390 | ||||||||||||
Subordinated note
|
631 | 629 | 1,261 | 1,258 | ||||||||||||
Total interest expense
|
5,502 | 7,630 | 11,869 | 16,282 | ||||||||||||
NET INTEREST INCOME
|
28,312 | 26,829 | 101,532 | 110,800 | ||||||||||||
Provision for loan losses
|
466 | (439 | ) | 11,636 | 17,643 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
27,846 | 27,268 | 89,896 | 93,157 | ||||||||||||
NON INTEREST INCOME:
|
||||||||||||||||
Service charges on deposit accounts
|
3,286 | 3,736 | 6,589 | 7,160 | ||||||||||||
Electronic refund check fees
|
6,147 | 6,584 | 77,896 | 87,646 | ||||||||||||
Mortgage banking income
|
1,963 | 924 | 3,317 | 1,740 | ||||||||||||
Debit card interchange fee income
|
1,441 | 1,493 | 2,997 | 2,977 | ||||||||||||
Bargain purchase gain
|
(96 | ) | - | 27,803 | - | |||||||||||
Gain on sale of securities available for sale
|
- | 1,907 | 56 | 1,907 | ||||||||||||
Total impairment losses on investment securities
|
- | - | - | (279 | ) | |||||||||||
Gain recognized in other comprehensive income
|
- | - | - | - | ||||||||||||
Net impairment loss recognized in earnings
|
- | - | - | (279 | ) | |||||||||||
Other
|
1,345 | 724 | 2,237 | 1,529 | ||||||||||||
Total non interest income
|
14,086 | 15,368 | 120,895 | 102,680 | ||||||||||||
NON INTEREST EXPENSES:
|
||||||||||||||||
Salaries and employee benefits
|
14,313 | 13,250 | 31,284 | 30,489 | ||||||||||||
Occupancy and equipment, net
|
5,144 | 5,001 | 11,218 | 11,298 | ||||||||||||
Communication and transportation
|
961 | 878 | 3,622 | 3,387 | ||||||||||||
Marketing and development
|
904 | 868 | 1,842 | 1,772 | ||||||||||||
FDIC insurance expense
|
291 | 1,165 | 721 | 2,800 | ||||||||||||
Bank franchise tax expense
|
703 | 714 | 2,634 | 2,279 | ||||||||||||
Data processing
|
1,195 | 817 | 2,416 | 1,565 | ||||||||||||
Debit card interchange expense
|
660 | 601 | 1,261 | 1,124 | ||||||||||||
Supplies
|
529 | 314 | 1,478 | 1,208 | ||||||||||||
Other real estate owned expense
|
555 | 378 | 1,160 | 859 | ||||||||||||
Charitable contributions
|
200 | 234 | 2,878 | 5,532 | ||||||||||||
Legal expense
|
527 | 979 | 895 | 2,339 | ||||||||||||
FDIC civil money penalty
|
- | 2,000 | - | 2,000 | ||||||||||||
FHLB advance prepayment expense
|
- | - | 2,436 | - | ||||||||||||
Other
|
1,469 | 1,327 | 4,759 | 4,692 | ||||||||||||
Total non interest expenses
|
27,451 | 28,526 | 68,604 | 71,344 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
14,481 | 14,110 | 142,187 | 124,493 | ||||||||||||
INCOME TAX EXPENSE
|
4,903 | 5,447 | 50,137 | 44,418 | ||||||||||||
NET INCOME
|
$ | 9,578 | $ | 8,663 | $ | 92,050 | $ | 80,075 | ||||||||
BASIC EARNINGS PER SHARE:
|
||||||||||||||||
Class A Common Stock
|
$ | 0.46 | $ | 0.42 | $ | 4.40 | $ | 3.83 | ||||||||
Class B Common Stock
|
0.44 | 0.40 | 4.37 | 3.80 | ||||||||||||
DILUTED EARNINGS PER SHARE:
|
||||||||||||||||
Class A Common Stock
|
$ | 0.46 | $ | 0.41 | $ | 4.38 | $ | 3.82 | ||||||||
Class B Common Stock
|
0.44 | 0.40 | 4.35 | 3.79 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income
|
$ | 9,578 | $ | 8,663 | $ | 92,050 | $ | 80,075 | ||||||||
OTHER COMPREHENSIVE INCOME
|
||||||||||||||||
Unrealized gain (loss) on securities available for sale
|
(63 | ) | 1,158 | 1,675 | 1,888 | |||||||||||
Change in unrealized losses on securities available for sale for
|
||||||||||||||||
which a portion of an other-than-temporary impairment has
|
||||||||||||||||
been recognized in earnings
|
58 | 37 | 37 | (218 | ) | |||||||||||
Realized amount on securities sold
|
- | (1,908 | ) | (55 | ) | (1,908 | ) | |||||||||
Reclassification adjustment for gains/losses realized in income
|
- | - | - | (278 | ) | |||||||||||
Net unrealized gains (losses)
|
(5 | ) | (713 | ) | 1,657 | (516 | ) | |||||||||
Tax effect
|
2 | 249 | (580 | ) | 181 | |||||||||||
Net of tax amount
|
(3 | ) | (464 | ) | 1,077 | (335 | ) | |||||||||
COMPREHENSIVE INCOME
|
$ | 9,575 | $ | 8,199 | $ | 93,127 | $ | 79,740 |
Common Stock
|
Accumulated
|
|||||||||||||||||||||||||||
Class A
|
Class B
|
Additional
|
Other
|
Total
|
||||||||||||||||||||||||
Shares
|
Shares
|
Paid In
|
Retained
|
Comprehensive
|
Stockholders'
|
|||||||||||||||||||||||
(in thousands, except per share data)
|
Outstanding
|
Outstanding
|
Amount
|
Capital
|
Earnings
|
Income
|
Equity
|
|||||||||||||||||||||
Balance, January 1, 2012
|
18,652 | 2,300 | $ | 4,947 | $ | 131,482 | $ | 311,799 | $ | 4,139 | $ | 452,367 | ||||||||||||||||
Net income
|
- | - | - | - | 92,050 | - | 92,050 | |||||||||||||||||||||
Net change in accumulated other comprehensive
|
||||||||||||||||||||||||||||
income
|
- | - | - | - | - | 1,077 | 1,077 | |||||||||||||||||||||
Dividend declared Common Stock:
|
||||||||||||||||||||||||||||
Class A ($0.319 per share)
|
- | - | - | - | (5,952 | ) | - | (5,952 | ) | |||||||||||||||||||
Class B ($0.290 per share)
|
- | - | - | - | (666 | ) | - | (666 | ) | |||||||||||||||||||
Stock options exercised, net of shares redeemed
|
8 | - | 2 | 213 | (68 | ) | - | 147 | ||||||||||||||||||||
Repurchase of Class A Common Stock
|
(6 | ) | - | (1 | ) | (41 | ) | (105 | ) | - | (147 | ) | ||||||||||||||||
Conversion of Class B Common Stock to Class A
|
||||||||||||||||||||||||||||
Common Stock
|
1 | (1 | ) | - | - | - | - | - | ||||||||||||||||||||
Notes receivable on Common Stock, net of
|
||||||||||||||||||||||||||||
cash payments
|
- | - | - | 210 | - | - | 210 | |||||||||||||||||||||
Deferred director compensation expense -
|
||||||||||||||||||||||||||||
Company Stock
|
3 | - | - | 90 | - | - | 90 | |||||||||||||||||||||
Stock based compensation expense
|
- | - | - | 537 | - | - | 537 | |||||||||||||||||||||
Balance, June 30, 2012
|
18,658 | 2,299 | $ | 4,948 | $ | 132,491 | $ | 397,058 | $ | 5,216 | $ | 539,713 |
2012
|
2011
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 92,050 | $ | 80,075 | ||||
Adjustments to reconcile net income to net cash provided
|
||||||||
by operating activities:
|
||||||||
Depreciation, amortization and accretion, net
|
5,197 | 3,748 | ||||||
Provision for loan losses
|
11,636 | 17,643 | ||||||
Net gain on sale of mortgage loans held for sale
|
(3,722 | ) | (1,465 | ) | ||||
Origination of mortgage loans held for sale
|
(97,132 | ) | (52,558 | ) | ||||
Proceeds from sale of mortgage loans held for sale
|
101,153 | 62,084 | ||||||
Proceeds from loans repurchased by the FDIC
|
17,003 | - | ||||||
Net realized impairment of mortgage servicing rights
|
31 | - | ||||||
Net realized gain on sales, calls and impairment of securities
|
(56 | ) | (1,628 | ) | ||||
Net gain on sale of other real estate owned
|
(419 | ) | (244 | ) | ||||
Writedowns of other real estate owned
|
341 | 227 | ||||||
Deferred director compensation expense - Company Stock
|
90 | 86 | ||||||
Stock based compensation expense
|
537 | 180 | ||||||
Bargain purchase gain on acquisition
|
(27,803 | ) | - | |||||
Net change in other assets and liabilities:
|
||||||||
Accrued interest receivable
|
224 | (163 | ) | |||||
Accrued interest payable
|
(319 | ) | (437 | ) | ||||
Other assets
|
18,327 | 1,479 | ||||||
Other liabilities
|
11,231 | 30,127 | ||||||
Net cash provided by operating activities
|
128,369 | 139,154 | ||||||
INVESTING ACTIVITIES:
|
||||||||
Net cash proceeds received in FDIC-assisted transaction
|
846,390 | - | ||||||
Purchases of securities available for sale
|
(58,552 | ) | (348,236 | ) | ||||
Purchases of Federal Home Loan Bank stock
|
- | (1 | ) | |||||
Proceeds from calls, maturities and paydowns of securities available for sale
|
131,216 | 122,668 | ||||||
Proceeds from calls, maturities and paydowns of securities to be held to maturity
|
2,295 | 2,927 | ||||||
Proceeds from sales of securities available for sale
|
35,225 | 133,813 | ||||||
Proceeds from sale of Federal Home Loan Bank stock
|
48 | 60 | ||||||
Proceeds from sales of other real estate owned
|
14,597 | 6,552 | ||||||
Purchase of commercial real estate loans
|
- | (32,650 | ) | |||||
Net change in loans
|
(122,704 | ) | (49,871 | ) | ||||
Net purchases of premises and equipment
|
(1,078 | ) | (1,780 | ) | ||||
Net cash provided by/(used in) investing activities
|
847,437 | (166,518 | ) | |||||
FINANCING ACTIVITIES:
|
||||||||
Net change in deposits
|
(776,136 | ) | (477,579 | ) | ||||
Net change in securities sold under agreements to repurchase and other short-term borrowings
|
(35,819 | ) | (100,088 | ) | ||||
Payments on Federal Home Loan Bank advances
|
(566,075 | ) | (45,078 | ) | ||||
Proceeds from Federal Home Loan Bank advances
|
170,000 | - | ||||||
Repurchase of Common Stock
|
(147 | ) | (148 | ) | ||||
Net proceeds from Common Stock options exercised
|
147 | 76 | ||||||
Cash dividends paid
|
(6,390 | ) | (5,928 | ) | ||||
Net cash used in financing activities
|
(1,214,420 | ) | (628,745 | ) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(238,614 | ) | (656,109 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
362,971 | 786,371 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 124,357 | $ | 130,262 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 12,188 | $ | 16,719 | ||||
Income taxes
|
24,512 | 22,116 | ||||||
SUPPLEMENTAL NONCASH DISCLOSURES
|
||||||||
Transfers from loans to real estate acquired in settlement of loans
|
$ | 12,078 | $ | 6,574 | ||||
Loans provided for sales of other real estate owned
|
564 | 1,454 |
1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
o
|
Generate a low-cost deposit source;
|
|
o
|
Generate float revenue from the previously mentioned low cost deposit source;
|
|
o
|
Serve as a source of fee income; and
|
|
o
|
Generate debit card interchange revenue.
|
January 27, 2012
|
||||||||||||||||
As Previously Reported
|
As Recasted
|
|||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
ASSETS
|
||||||||||||||||
Cash and cash equivalents
|
$ | 61,943 | $ | (89 | ) | $ | (102 | ) | $ | 61,752 | ||||||
Securities available for sale
|
42,646 | - | - | 42,646 | ||||||||||||
Loans to be repurchased by the FDIC, net of discount
|
19,800 | (2,797 | ) | - | 17,003 | |||||||||||
Loans
|
79,112 | (22,666 | ) | 1,006 | 57,452 | |||||||||||
Federal Home Loan Bank stock, at cost
|
2,491 | - | - | 2,491 | ||||||||||||
Other assets and accrued interest receivable
|
945 | (60 | ) | - | 885 | |||||||||||
Other real estate owned
|
14,189 | (3,359 | ) | (1,000 | ) | 9,830 | ||||||||||
Core deposit intangible
|
- | 64 | - | 64 | ||||||||||||
Discount
|
(56,970 | ) | 56,970 | - | - | |||||||||||
FDIC settlement receivable
|
784,545 | - | - | 784,545 | ||||||||||||
TOTAL ASSETS ACQUIRED
|
$ | 948,701 | $ | 28,063 | $ | (96 | ) | $ | 976,668 | |||||||
LIABILITIES
|
||||||||||||||||
Deposits
|
||||||||||||||||
Non interest-bearing
|
$ | 19,754 | $ | - | $ | - | $ | 19,754 | ||||||||
Interest-bearing
|
927,641 | 54 | - | 927,695 | ||||||||||||
Total deposits
|
947,395 | 54 | - | 947,449 | ||||||||||||
Accrued income taxes payable
|
- | 9,988 | (35 | ) | 9,953 | |||||||||||
Other liabilities and accrued interest payable
|
1,306 | 110 | - | 1,416 | ||||||||||||
TOTAL LIABILITIES ASSUMED
|
$ | 948,701 | $ | 10,152 | $ | (35 | ) | $ | 958,818 | |||||||
EQUITY
|
||||||||||||||||
Bargain purchase gain, net of taxes
|
- | 17,911 | (61 | ) | 17,850 | |||||||||||
Other operating loss, net of taxes
|
- | - | - | - | ||||||||||||
Accumulated other comprehensive loss
|
- | - | - | - | ||||||||||||
TOTAL LIABILITIES ASSUMED AND EQUITY
|
$ | 948,701 | $ | 28,063 | $ | (96 | ) | $ | 976,668 |
January 27, 2012
|
||||||||||||
As Previously
|
Recast
|
As
|
||||||||||
(in thousands)
|
Reported
|
Adjustments
|
Recasted
|
|||||||||
Assets acquired, at contractual amount
|
$ | 221,126 | $ | - | $ | 221,126 | ||||||
Liabilities assumed, at contractual amount
|
(948,701 | ) | - | (948,701 | ) | |||||||
Net liabilities assumed per the P&A Agreement
|
(727,575 | ) | - | (727,575 | ) | |||||||
Contractual Discount
|
(56,970 | ) | - | (56,970 | ) | |||||||
Net receivable from the FDIC
|
$ | (784,545 | ) | $ | - | $ | (784,545 | ) | ||||
Fair value adjustments:
|
||||||||||||
Loans
|
$ | (22,666 | ) | $ | 1,006 | $ | (21,660 | ) | ||||
Discount for loans to be repurchased by the FDIC
|
(2,797 | ) | - | (2,797 | ) | |||||||
Other real estate owned
|
(3,359 | ) | (1,000 | ) | (4,359 | ) | ||||||
Other assets and accrued interest receivable
|
(60 | ) | - | (60 | ) | |||||||
Core deposit intangible
|
64 | - | 64 | |||||||||
Deposits
|
(54 | ) | - | (54 | ) | |||||||
All other
|
(199 | ) | (102 | ) | (301 | ) | ||||||
Total fair value adjustments
|
(29,071 | ) | (96 | ) | (29,167 | ) | ||||||
Discount
|
56,970 | - | 56,970 | |||||||||
Bargain purchase gain, pre-tax
|
$ | 27,899 | $ | (96 | ) | $ | 27,803 |
January 27, 2012
|
||||||||||||||||
As Previously Reported
|
As Recasted
|
|||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
Residential real estate
|
$ | 22,693 | $ | (4,076 | ) | $ | 243 | $ | 18,860 | |||||||
Commercial real estate
|
18,646 | (6,971 | ) | 2,074 | 13,749 | |||||||||||
Real estate construction
|
14,877 | (2,681 | ) | (1,837 | ) | 10,359 | ||||||||||
Commercial
|
13,224 | (6,939 | ) | 418 | 6,703 | |||||||||||
Home equity
|
6,220 | (606 | ) | 8 | 5,622 | |||||||||||
Consumer:
|
||||||||||||||||
Credit cards
|
608 | (22 | ) | - | 586 | |||||||||||
Overdrafts
|
672 | (621 | ) | - | 51 | |||||||||||
Other consumer
|
2,172 | (750 | ) | 100 | 1,522 | |||||||||||
Total loans
|
$ | 79,112 | $ | (22,666 | ) | $ | 1,006 | $ | 57,452 |
|
●
|
ASC Topic 310-20, Non refundable Fees and Other Costs, is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the fair value of the loan at acquisition and the amortized cost of the loan would be amortized or accreted into income using the interest method.
|
|
●
|
ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, is used to value loans with post origination credit quality deterioration. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan (fair value) represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans.
|
January 27, 2012
|
June 30, 2012
|
|||||||||||
As Previously
|
Recast
|
As
|
||||||||||
(in thousands)
|
Reported
|
Adjustments
|
Recasted
|
|||||||||
Contractually-required principal and interest payments
|
$ | 52,278 | $ | - | $ | 52,278 | ||||||
Non-accretable difference
|
(21,308 | ) | 903 | (20,405 | ) | |||||||
Accretable yield
|
(425 | ) | (105 | ) | (530 | ) | ||||||
Fair value of loans
|
$ | 30,545 | $ | 798 | $ | 31,343 |
January 27, 2012
|
||||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
Non Interest Bearing
|
$ | 19,754 | $ | - | $ | - | $ | 19,754 | ||||||||
Demand (NOW)
|
3,190 | - | - | 3,190 | ||||||||||||
Money market accounts
|
11,338 | - | - | 11,338 | ||||||||||||
Savings
|
91,859 | - | - | 91,859 | ||||||||||||
Individual retirement accounts*
|
33,063 | - | - | 33,063 | ||||||||||||
Certificates of deposit*
|
369,251 | 14 | - | 369,265 | ||||||||||||
Brokered deposits*
|
418,940 | 40 | - | 418,980 | ||||||||||||
Total deposits
|
$ | 947,395 | $ | 54 | $ | - | $ | 947,449 | ||||||||
_________________
|
||||||||||||||||
* - denotes a time deposit
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30,
|
June 30,
|
|||||||
(in thousands)
|
2012
|
2012
|
||||||
INTEREST INCOME:
|
||||||||
Loans, including fees
|
$ | 885 | $ | 1,643 | ||||
Taxable investment securities
|
194 | 443 | ||||||
Total interest income
|
1,079 | 2,086 | ||||||
INTEREST EXPENSE:
|
||||||||
Deposits
|
12 | 47 | ||||||
Total interest expense
|
12 | 47 | ||||||
NET INTEREST INCOME
|
1,067 | 2,039 | ||||||
Provision for loan losses
|
- | - | ||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
1,067 | 2,039 | ||||||
NON INTEREST INCOME:
|
||||||||
Service charges on deposit accounts
|
10 | 24 | ||||||
Bargain purchase gain
|
(96 | ) | 27,803 | |||||
Gain on sale of securities available for sale
|
- | 56 | ||||||
Other
|
471 | 626 | ||||||
Total non interest income
|
385 | 28,509 | ||||||
NON INTEREST EXPENSES:
|
||||||||
Salaries and employee benefits
|
1,015 | 2,009 | ||||||
Occupancy and equipment, net
|
378 | 586 | ||||||
Communication and transportation
|
95 | 160 | ||||||
Marketing and development
|
18 | 19 | ||||||
FDIC insurance expense
|
15 | 52 | ||||||
Data processing
|
301 | 607 | ||||||
Supplies
|
10 | 21 | ||||||
Other real estate owned expense
|
82 | 103 | ||||||
Other
|
338 | 780 | ||||||
Total non interest expenses
|
2,252 | 4,337 | ||||||
INCOME BEFORE INCOME TAX EXPENSE
|
$ | (800 | ) | $ | 26,211 |
Gross
|
Gross
|
Gross
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
June 30, 2012 (in thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 96,526 | $ | 864 | $ | - | $ | 97,390 | ||||||||
Private label mortgage backed security
|
5,818 | - | (1,239 | ) | 4,579 | |||||||||||
Mortgage backed securities - residential
|
247,791 | 7,199 | - | 254,990 | ||||||||||||
Collateralized mortgage obligations
|
224,161 | 1,201 | - | 225,362 | ||||||||||||
Total securities available for sale
|
$ | 574,296 | $ | 9,264 | $ | (1,239 | ) | $ | 582,321 | |||||||
Gross
|
Gross
|
Gross
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December 31, 2011 (in thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 152,085 | $ | 814 | $ | (225 | ) | $ | 152,674 | |||||||
Private label mortgage backed security
|
5,818 | - | (1,276 | ) | 4,542 | |||||||||||
Mortgage backed securities - residential
|
287,013 | 6,343 | (27 | ) | 293,329 | |||||||||||
Collateralized mortgage obligations
|
194,663 | 1,281 | (541 | ) | 195,403 | |||||||||||
Total securities available for sale
|
$ | 639,579 | $ | 8,438 | $ | (2,069 | ) | $ | 645,948 |
Gross
|
Gross
|
|||||||||||||||
Carrying
|
Unrecognized
|
Unrecognized
|
Fair
|
|||||||||||||
June 30, 2012 (in thousands)
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 4,223 | $ | 8 | $ | - | $ | 4,231 | ||||||||
Mortgage backed securities - residential
|
1,134 | 92 | - | 1,226 | ||||||||||||
Collateralized mortgage obligations
|
20,412 | 418 | - | 20,830 | ||||||||||||
Total securities to be held to maturity
|
$ | 25,769 | $ | 518 | $ | - | $ | 26,287 | ||||||||
Gross
|
Gross
|
|||||||||||||||
Carrying
|
Unrecognized
|
Unrecognized
|
Fair
|
|||||||||||||
December 31, 2011 (in thousands)
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 4,233 | $ | 18 | $ | (10 | ) | $ | 4,241 | |||||||
Mortgage backed securities - residential
|
1,376 | 101 | - | 1,477 | ||||||||||||
Collateralized mortgage obligations
|
22,465 | 159 | - | 22,624 | ||||||||||||
Total securities to be held to maturity
|
$ | 28,074 | $ | 278 | $ | (10 | ) | $ | 28,342 |
|
●
|
The Bank sold six available for sale securities acquired in the TCB acquisition with an amortized cost of $35 million, resulting in a pre-tax gain of $53,000 during the first quarter of 2012.
|
|
●
|
The Bank realized $3,000 in pre-tax gains related to unamortized discount accretion on $10 million of callable U.S. Government agencies that were called during the first quarter of 2012 before their maturity.
|
|
●
|
There were no sales of securities available for sale during the second quarter of 2012.
|
|
●
|
During the second quarter of 2011, the Bank sold available for sale mortgage backed securities with an amortized cost of $132 million, resulting in a pre-tax gain of $1.9 million.
|
Securities
|
Securities
|
|||||||||||||||
available for sale
|
held to maturity
|
|||||||||||||||
Amortized
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
June 30, 2012 (in thousands)
|
Cost
|
Value
|
Value
|
Value
|
||||||||||||
Due in one year or less
|
$ | - | $ | - | $ | 3,187 | $ | 3,188 | ||||||||
Due from one year to five years
|
96,526 | 97,390 | 1,036 | 1,043 | ||||||||||||
Due from five years to ten years
|
- | - | - | - | ||||||||||||
Due beyond ten years
|
- | - | - | - | ||||||||||||
Private label mortgage backed security
|
5,818 | 4,579 | - | - | ||||||||||||
Mortgage backed securities - residential
|
247,791 | 254,990 | 1,134 | 1,226 | ||||||||||||
Collateralized mortgage obligations
|
224,161 | 225,362 | 20,412 | 20,830 | ||||||||||||
Total securities
|
$ | 574,296 | $ | 582,321 | $ | 25,769 | $ | 26,287 |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
June 30, 2012 (in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Treasury securities and
|
||||||||||||||||||||||||
U.S. Government agencies
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Private label mortgage backed security
|
- | - | 4,579 | (1,239 | ) | 4,579 | (1,239 | ) | ||||||||||||||||
Mortgage backed securities - residential,
|
||||||||||||||||||||||||
including Collateralized mortgage obligations
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | - | $ | - | $ | 4,579 | $ | (1,239 | ) | $ | 4,579 | $ | (1,239 | ) | ||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
December 31, 2011 (in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Treasury securities and
|
||||||||||||||||||||||||
U.S. Government agencies
|
$ | 60,547 | $ | (235 | ) | $ | - | $ | - | $ | 60,547 | $ | (235 | ) | ||||||||||
Private label mortgage backed security
|
- | - | 4,542 | (1,276 | ) | 4,542 | (1,276 | ) | ||||||||||||||||
Mortgage backed securities - residential,
|
||||||||||||||||||||||||
including Collateralized mortgage obligations
|
136,775 | (568 | ) | - | - | 136,775 | (568 | ) | ||||||||||||||||
Total
|
$ | 197,322 | $ | (803 | ) | $ | 4,542 | $ | (1,276 | ) | $ | 201,864 | $ | (2,079 | ) |
●
|
The length of time and the extent to which fair value has been less than the amortized cost basis;
|
|
●
|
The Bank’s intent to hold until maturity or sell the debt security prior to maturity;
|
|
●
|
An analysis of whether it is more likely than not that the Bank will be required to sell the debt security before its anticipated recovery;
|
|
●
|
Adverse conditions specifically related to the security, an industry, or a geographic area;
|
|
●
|
The historical and implied volatility of the fair value of the security;
|
|
●
|
The payment structure of the security and the likelihood of the issuer being able to make payments;
|
|
●
|
Failure of the issuer to make scheduled interest or principal payments;
|
|
●
|
Any rating changes by a rating agency; and
|
|
●
|
Recoveries or additional decline in fair value subsequent to the balance sheet date.
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Carrying amount
|
$ | 494,246 | $ | 613,927 | ||||
Fair value
|
503,361 | 620,922 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 1,096,352 | $ | 985,735 | ||||
Non owner occupied
|
86,864 | 99,161 | ||||||
Commercial real estate
|
647,431 | 639,966 | ||||||
Commercial real estate - purchased whole loans
|
33,222 | 32,741 | ||||||
Real estate construction
|
75,691 | 67,406 | ||||||
Commercial
|
128,207 | 119,117 | ||||||
Warehouse lines of credit
|
89,206 | 41,496 | ||||||
Home equity
|
260,371 | 280,235 | ||||||
Consumer:
|
||||||||
Credit cards
|
8,405 | 8,580 | ||||||
Overdrafts
|
623 | 950 | ||||||
Other consumer
|
14,022 | 9,908 | ||||||
Total loans
|
2,440,394 | 2,285,295 | ||||||
Less: Allowance for loan losses
|
22,510 | 24,063 | ||||||
Total loans, net
|
$ | 2,417,884 | $ | 2,261,232 |
(in thousands)
|
June 30, 2012
|
|||
Residential real estate
|
$ | 14,670 | ||
Commercial real estate
|
8,682 | |||
Real estate construction
|
5,798 | |||
Commercial
|
2,811 | |||
Home equity
|
4,996 | |||
Consumer:
|
||||
Credit cards
|
515 | |||
Overdrafts
|
2 | |||
Other consumer
|
1,069 | |||
Total loans
|
$ | 38,543 |
|
●
|
For new and renewed commercial and commercial real estate loans, the Bank’s Commercial Credit Administration Department (“CCAD”), which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for new commercial and commercial real estate loans with an aggregate credit exposure of $1.5 million or greater are validated by the Senior Loan Committee (“SLC”). Loan grades for renewed commercial and commercial real estate loans with an aggregate credit exposure of $2 million or greater, are also validated by the SLC.
|
|
●
|
The SLC is chaired by the Chief Operating Officer of Commercial Banking (“COO”) and includes the Bank’s Chief Commercial Credit Officer (“CCCO”) and is attended by the Bank’s Chief Risk Management Officer (“CRMO”).
|
|
●
|
Commercial loan officers are responsible for reviewing their loan portfolios and reporting any adverse material changes to the CCCO. When circumstances warrant a review and possible change in the credit quality grade, loan officers are required to notify the Bank’s CCAD.
|
|
●
|
The COO meets monthly with commercial loan officers to discuss the status of past due loans and possible classified loans. These meetings are also designed to give the loan officers an opportunity to identify an existing loan that should be downgraded.
|
|
●
|
Monthly, members of senior management along with managers of Commercial Lending, CCAD, Special Assets and Retail Collections attend a Special Asset Committee (“SAC”) meeting. The SAC reviews all commercial and commercial real estate past due, classified, and impaired loans in excess of $100,000 and discusses the relative trends and current status of these assets. In addition, the SAC reviews all retail residential real estate loans exceeding $750,000 and all home equity loans exceeding $100,000 that are 80-days or more past due or that are on non-accrual status. SAC also reviews the actions taken by management regarding foreclosure mitigation, loan extensions, troubled debt restructures and collateral repossessions. Based on the information reviewed in this meeting, the SAC approves all specific loan loss allocations to be recognized by the Bank within its Allowance for Loan Loss analysis.
|
|
●
|
At inception, the loan was properly underwritten, did not possess an unwarranted level of credit risk, and the loan met the above criteria for a risk grade of Excellent, Good, or Satisfactory;
|
|
●
|
At inception, the loan was secured with collateral possessing a loan value within Loan Policy guidelines to protect the Bank from loss.
|
|
●
|
The loan has exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance.
|
|
●
|
During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the borrower is in an industry known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted.
|
|
●
|
Loans that possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss.
|
|
●
|
Loans are inadequately protected by the current net worth and paying capacity of the obligor.
|
|
●
|
The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees.
|
|
●
|
Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.
|
|
●
|
Unusual courses of action are needed to maintain a high probability of repayment.
|
|
●
|
The borrower is not generating enough cash flow to repay loan principal, however, it continues to make interest payments.
|
|
●
|
The Bank is forced into a subordinated or unsecured position due to flaws in documentation.
|
|
●
|
Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms.
|
|
●
|
The Bank is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.
|
|
●
|
There is significant deterioration in market conditions to which the borrower is highly vulnerable.
|
|
●
|
Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable.
|
|
●
|
The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.
|
|
●
|
The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known.
|
Special
|
Total
|
|||||||||||||||||||
Mention /
|
Doubtful /
|
Rated
|
||||||||||||||||||
June 30, 2012 (in thousands)
|
Pass
|
Watch
|
Substandard
|
Loss
|
Loans
|
|||||||||||||||
Residential real estate:
|
||||||||||||||||||||
Owner occupied
|
$ | - | $ | 6,421 | $ | 11,291 | $ | 110 | $ | 17,822 | ||||||||||
Non owner occupied
|
- | 6,414 | 2,525 | - | 8,939 | |||||||||||||||
Commercial real estate
|
595,117 | 34,991 | 17,323 | - | 647,431 | |||||||||||||||
Commercial real estate -
|
||||||||||||||||||||
Purchased whole loans
|
33,222 | - | - | - | 33,222 | |||||||||||||||
Real estate construction
|
69,867 | 975 | 4,849 | - | 75,691 | |||||||||||||||
Commercial
|
124,653 | 3,112 | 442 | - | 128,207 | |||||||||||||||
Warehouse lines of credit
|
89,206 | - | - | - | 89,206 | |||||||||||||||
Home equity
|
- | 204 | 3,011 | 121 | 3,336 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Overdrafts
|
- | - | - | - | - | |||||||||||||||
Other consumer
|
- | 255 | 57 | - | 312 | |||||||||||||||
Total
|
$ | 912,065 | $ | 52,372 | $ | 39,498 | $ | 231 | $ | 1,004,166 |
Special
|
Total
|
|||||||||||||||||||
Mention /
|
Doubtful /
|
Rated
|
||||||||||||||||||
December 31, 2011 (in thousands)
|
Pass
|
Watch
|
Substandard
|
Loss
|
Loans
|
|||||||||||||||
Residential real estate:
|
||||||||||||||||||||
Owner occupied
|
$ | - | $ | 1,180 | $ | 14,002 | $ | - | $ | 15,182 | ||||||||||
Non owner occupied
|
- | 2,470 | 2,295 | - | 4,765 | |||||||||||||||
Commercial real estate
|
600,338 | 27,158 | 12,470 | - | 639,966 | |||||||||||||||
Commercial real estate -
|
||||||||||||||||||||
Purchased whole loans
|
32,741 | - | - | - | 32,741 | |||||||||||||||
Real estate construction
|
54,963 | 2,353 | 10,090 | - | 67,406 | |||||||||||||||
Commercial
|
116,450 | 2,294 | 373 | - | 119,117 | |||||||||||||||
Warehouse lines of credit
|
41,496 | - | - | - | 41,496 | |||||||||||||||
Home equity
|
- | - | 3,856 | - | 3,856 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Overdrafts
|
- | - | - | - | - | |||||||||||||||
Other consumer
|
- | - | 2 | - | 2 | |||||||||||||||
Total
|
$ | 845,988 | $ | 35,455 | $ | 43,088 | $ | - | $ | 924,531 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Allowance for loan losses at beginning of period
|
$ | 23,732 | $ | 29,144 | $ | 24,063 | $ | 23,079 | ||||||||
Charge offs - Traditional Banking
|
(1,957 | ) | (1,493 | ) | (6,224 | ) | (3,167 | ) | ||||||||
Charge offs - Refund Anticipation Loans
|
(343 | ) | (2,037 | ) | (11,097 | ) | (15,478 | ) | ||||||||
Total charge offs
|
(2,300 | ) | (3,530 | ) | (17,321 | ) | (18,645 | ) | ||||||||
Recoveries - Traditional Banking
|
274 | 566 | 709 | 1,112 | ||||||||||||
Recoveries - Refund Anticipation Loans
|
338 | 190 | 3,423 | 2,742 | ||||||||||||
Total recoveries
|
612 | 756 | 4,132 | 3,854 | ||||||||||||
Net loan charge offs - Traditional Banking
|
(1,683 | ) | (927 | ) | (5,515 | ) | (2,055 | ) | ||||||||
Net loan charge offs - Refund Anticipation Loans
|
(5 | ) | (1,847 | ) | (7,674 | ) | (12,736 | ) | ||||||||
Net loan charge offs
|
(1,688 | ) | (2,774 | ) | (13,189 | ) | (14,791 | ) | ||||||||
Provision for loan losses - Traditional Banking
|
831 | 585 | 3,962 | 4,907 | ||||||||||||
Provision for loan losses - Refund Anticipation Loans
|
(365 | ) | (1,024 | ) | 7,674 | 12,736 | ||||||||||
Total provision for loan losses
|
466 | (439 | ) | 11,636 | 17,643 | |||||||||||
Allowance for loan losses at end of period
|
$ | 22,510 | $ | 25,931 | $ | 22,510 | $ | 25,931 |
|
●
|
Concentrations of credit;
|
|
●
|
Nature, volume and seasoning of particular loan portfolios;
|
|
●
|
Experience, ability and depth of lending staff;
|
|
●
|
Effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures and practices;
|
|
●
|
Trends that could impact collateral values;
|
|
●
|
Expectations regarding business cycles;
|
|
●
|
Credit quality trends (including trends in classified, past due and nonperforming loans);
|
|
●
|
Competition, legal and regulatory requirements;
|
|
●
|
General national and local economic and business conditions;
|
|
●
|
Offering of new loan products; and
|
|
●
|
Expansion into new markets
|
|
●
|
Residential real estate – Owner Occupied
|
|
●
|
Residential real estate – Non Owner Occupied
|
|
●
|
Home Equity
|
|
●
|
Consumer
|
|
●
|
Overdrafts
|
|
●
|
Credit Cards
|
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Six Months Ended
|
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
||||||||||||||||||||||
June 30, 2012 (in thousands)
|
Occupied
|
Occupied
|
Real Estate
|
Whole Loans
|
Construction
|
Commercial
|
Credit
|
|||||||||||||||||||||
Beginning balance
|
$ | 5,212 | $ | 1,142 | $ | 7,724 | $ | - | $ | 3,042 | $ | 1,025 | $ | 104 | ||||||||||||||
Allocation of previously
|
||||||||||||||||||||||||||||
unallocated allowance
|
1,117 | 146 | 47 | - | - | - | - | |||||||||||||||||||||
Provision for loan losses
|
2,046 | (367 | ) | 770 | 40 | 1,796 | (433 | ) | 119 | |||||||||||||||||||
Loans charged off
|
(2,074 | ) | (298 | ) | (316 | ) | - | (1,796 | ) | (7 | ) | - | ||||||||||||||||
Recoveries
|
151 | 12 | 46 | - | 55 | 18 | - | |||||||||||||||||||||
Ending balance
|
$ | 6,452 | $ | 635 | $ | 8,271 | $ | 40 | $ | 3,097 | $ | 603 | $ | 223 | ||||||||||||||
(continued)
|
Refund
|
Consumer
|
||||||||||||||||||||||||||
Home
|
Anticipation
|
Credit
|
Other
|
|||||||||||||||||||||||||
Equity
|
Loans
|
Cards
|
Overdrafts
|
Consumer
|
Unallocated
|
Total
|
||||||||||||||||||||||
Beginning balance
|
$ | 2,984 | $ | - | $ | 503 | $ | 135 | $ | 227 | $ | 1,965 | $ | 24,063 | ||||||||||||||
Allocation of previously
|
||||||||||||||||||||||||||||
unallocated allowance
|
536 | - | 47 | 17 | 55 | (1,965 | ) | - | ||||||||||||||||||||
Provision for loan losses
|
424 | 7,674 | (304 | ) | (40 | ) | (89 | ) | - | 11,636 | ||||||||||||||||||
Loans charged off
|
(1,314 | ) | (11,097 | ) | (78 | ) | (218 | ) | (123 | ) | - | (17,321 | ) | |||||||||||||||
Recoveries
|
61 | 3,423 | 24 | 231 | 111 | - | 4,132 | |||||||||||||||||||||
Ending balance
|
$ | 2,691 | $ | - | $ | 192 | $ | 125 | $ | 181 | $ | - | $ | 22,510 | ||||||||||||||
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Six Months Ended
|
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
||||||||||||||||||||||
June 30, 2011 (in thousands)
|
Occupied
|
Occupied
|
Real Estate
|
Whole Loans
|
Construction
|
Commercial
|
Credit
|
|||||||||||||||||||||
Beginning balance
|
$ | 3,775 | $ | 1,507 | $ | 7,214 | $ | - | $ | 2,612 | $ | 1,347 | $ | - | ||||||||||||||
Provision for loan losses
|
2,303 | (127 | ) | 1,716 | - | 1,239 | (226 | ) | 15 | |||||||||||||||||||
Loans charged off
|
(1,079 | ) | (55 | ) | (719 | ) | - | (53 | ) | (100 | ) | - | ||||||||||||||||
Recoveries
|
114 | 3 | 242 | - | 105 | 119 | - | |||||||||||||||||||||
Ending balance
|
$ | 5,113 | $ | 1,328 | $ | 8,453 | $ | - | $ | 3,903 | $ | 1,140 | $ | 15 | ||||||||||||||
(continued)
|
Refund
|
Consumer
|
||||||||||||||||||||||||||
Home
|
Anticipation
|
Credit
|
Other
|
|||||||||||||||||||||||||
Equity
|
Loans
|
Cards
|
Overdrafts
|
Consumer
|
Unallocated
|
Total
|
||||||||||||||||||||||
Beginning balance
|
$ | 3,581 | $ | - | $ | 492 | $ | 125 | $ | 461 | $ | 1,965 | $ | 23,079 | ||||||||||||||
Provision for loan losses
|
29 | 12,736 | 65 | 72 | (179 | ) | - | 17,643 | ||||||||||||||||||||
Loans charged off
|
(624 | ) | (15,478 | ) | (103 | ) | (288 | ) | (146 | ) | - | (18,645 | ) | |||||||||||||||
Recoveries
|
76 | 2,742 | 17 | 298 | 138 | - | 3,854 | |||||||||||||||||||||
Ending balance
|
$ | 3,062 | $ | - | $ | 471 | $ | 207 | $ | 274 | $ | 1,965 | $ | 25,931 | ||||||||||||||
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Loans on non-accrual status(1)
|
$ | 22,578 | $ | 23,306 | ||||
Loans past due 90 days or more and still on accrual
|
- | - | ||||||
Total non-performing loans
|
22,578 | 23,306 | ||||||
Other real estate owned
|
18,345 | 10,956 | ||||||
Total non-performing assets
|
$ | 40,923 | $ | 34,262 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.93 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.66 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.25 | % | 1.00 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.93 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.66 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.26 | % | 1.10 | % |
Loans Past Due 90 Days or More
|
||||||||||||||||
Non-Accrual Loans
|
and Still Accruing Interest
|
|||||||||||||||
in thousands)
|
June 30, 2012
|
December 31, 2011
|
June 30, 2012
|
December 31, 2011
|
||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | 12,398 | $ | 12,183 | $ | - | $ | - | ||||||||
Non owner occupied
|
864 | 1,565 | - | - | ||||||||||||
Commercial real estate
|
2,284 | 3,032 | - | - | ||||||||||||
Commercial real estate -
|
||||||||||||||||
purchased whole loans
|
- | - | - | - | ||||||||||||
Real estate construction
|
3,912 | 2,521 | - | - | ||||||||||||
Commercial
|
351 | 373 | - | - | ||||||||||||
Warehouse lines of credit
|
- | - | - | - | ||||||||||||
Home equity
|
2,677 | 3,603 | - | - | ||||||||||||
Consumer:
|
||||||||||||||||
Credit cards
|
- | - | - | - | ||||||||||||
Overdrafts
|
- | - | - | - | ||||||||||||
Other consumer
|
92 | 29 | - | - | ||||||||||||
Total
|
$ | 22,578 | $ | 23,306 | $ | - | $ | - |
30 - 59 | 60 - 89 |
Greater than
|
Total
|
Total
|
||||||||||||||||||||
Days
|
Days
|
90 Days
|
Loans
|
Loans Not
|
Total
|
|||||||||||||||||||
June 30, 2012 (in thousands)
|
Past Due
|
Past Due
|
Past Due *
|
Past Due
|
Past Due
|
Loans
|
||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
$ | 2,397 | $ | 685 | $ | 6,459 | $ | 9,541 | $ | 1,086,811 | $ | 1,096,352 | ||||||||||||
Non owner occupied
|
360 | 137 | 569 | 1,066 | 85,798 | 86,864 | ||||||||||||||||||
Commercial real estate
|
708 | 111 | 1,655 | 2,474 | 644,957 | 647,431 | ||||||||||||||||||
Commercial real estate - purchased
|
||||||||||||||||||||||||
whole loans
|
- | - | - | - | 33,222 | 33,222 | ||||||||||||||||||
Real estate construction
|
- | - | 1,688 | 1,688 | 74,003 | 75,691 | ||||||||||||||||||
Commercial
|
- | 18 | 77 | 95 | 128,112 | 128,207 | ||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | 89,206 | 89,206 | ||||||||||||||||||
Home equity
|
909 | 135 | 1,802 | 2,846 | 257,525 | 260,371 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Credit cards
|
98 | 16 | - | 114 | 8,291 | 8,405 | ||||||||||||||||||
Overdrafts
|
86 | - | - | 86 | 537 | 623 | ||||||||||||||||||
Other consumer
|
160 | 50 | - | 210 | 13,812 | 14,022 | ||||||||||||||||||
Total past due loans
|
$ | 4,718 | $ | 1,152 | $ | 12,250 | $ | 18,120 | $ | 2,422,274 | $ | 2,440,394 |
30 - 59 | 60 - 89 |
Greater than
|
Total
|
Total
|
||||||||||||||||||||
Days
|
Days
|
90 Days
|
Loans
|
Loans Not
|
Total
|
|||||||||||||||||||
December 31, 2011 (in thousands)
|
Past Due
|
Past Due
|
Past Due *
|
Past Due
|
Past Due
|
Loans
|
||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
$ | 4,275 | $ | 1,850 | $ | 7,083 | $ | 13,208 | $ | 972,527 | $ | 985,735 | ||||||||||||
Non owner occupied
|
51 | 71 | 969 | 1,091 | 98,070 | 99,161 | ||||||||||||||||||
Commercial real estate
|
2,094 | - | 3,032 | 5,126 | 634,840 | 639,966 | ||||||||||||||||||
Commercial real estate - purchased
|
||||||||||||||||||||||||
whole loans
|
- | - | - | - | 32,741 | 32,741 | ||||||||||||||||||
Real estate construction
|
- | - | 541 | 541 | 66,865 | 67,406 | ||||||||||||||||||
Commercial
|
- | 16 | 89 | 105 | 119,012 | 119,117 | ||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | 41,496 | 41,496 | ||||||||||||||||||
Home equity
|
582 | 773 | 2,686 | 4,041 | 276,194 | 280,235 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Credit cards
|
40 | 13 | - | 53 | 8,527 | 8,580 | ||||||||||||||||||
Overdrafts
|
129 | - | - | 129 | 821 | 950 | ||||||||||||||||||
Other consumer
|
60 | 79 | - | 139 | 9,769 | 9,908 | ||||||||||||||||||
Total past due loans
|
$ | 7,231 | $ | 2,802 | $ | 14,400 | $ | 24,433 | $ | 2,260,862 | $ | 2,285,295 |
|
●
|
All loans internally classified as “Substandard,” “Doubtful” or “Loss;”
|
|
●
|
All loans internally classified as “Special Mention/Watch” on non-accrual status,
|
|
●
|
All retail and commercial TDRs;
|
|
●
|
Purchased credit impaired loans whereby current projected cash flows have deteriorated since acquisition, or cash flows cannot be reasonably estimated in terms of timing and amounts; and
|
|
●
|
Any other situation where the collection of total amount due for a loan is improbable or otherwise meets the definition of impaired.
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Loans with no allocated allowance for loan losses
|
$ | 45,874 | $ | 32,171 | ||||
Loans with allocated allowance for loan losses
|
46,335 | 45,022 | ||||||
Total impaired loans
|
$ | 92,209 | $ | 77,193 | ||||
Amount of the allowance for loan losses allocated
|
$ | 5,842 | $ | 7,086 |
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
|||||||||||||||||||||||
June 30, 2012 (in thousands)
|
Occupied
|
Occupied
|
Real Estate
|
Whole Loans
|
Construction
|
Commercial
|
Credit
|
|||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance
|
||||||||||||||||||||||||||||
attributable to loans:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$ | 1,022 | $ | 341 | $ | 2,144 | $ | - | $ | 1,629 | $ | 277 | $ | - | ||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
5,430 | 294 | 6,127 | 40 | 1,468 | 326 | 223 | |||||||||||||||||||||
Acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 6,452 | $ | 635 | $ | 8,271 | $ | 40 | $ | 3,097 | $ | 603 | $ | 223 | ||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 32,358 | $ | 3,461 | $ | 39,184 | $ | - | $ | 9,625 | $ | 4,663 | $ | - | ||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
1,063,994 | 83,403 | 608,247 | 33,222 | 66,066 | 123,544 | 89,206 | |||||||||||||||||||||
Loans acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total ending loan balance
|
$ | 1,096,352 | $ | 86,864 | $ | 647,431 | $ | 33,222 | $ | 75,691 | $ | 128,207 | $ | 89,206 | ||||||||||||||
(continued)
|
Consumer
|
|||||||||||||||||||||||||||
Home
|
Credit
|
Other
|
||||||||||||||||||||||||||
Equity
|
Cards
|
Overdrafts
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance
|
||||||||||||||||||||||||||||
attributable to loans:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$ | 429 | $ | - | $ | - | $ | - | $ | 5,842 | ||||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
2,262 | 192 | 125 | 181 | 16,668 | |||||||||||||||||||||||
Acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | |||||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 2,691 | $ | 192 | $ | 125 | $ | 181 | $ | 22,510 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 2,857 | $ | - | $ | - | $ | 61 | $ | 92,209 | ||||||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
257,514 | 8,405 | 623 | 13,961 | 2,348,185 | |||||||||||||||||||||||
Loans acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | |||||||||||||||||||||||
Total ending loan balance
|
$ | 260,371 | $ | 8,405 | $ | 623 | $ | 14,022 | $ | 2,440,394 | ||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
|||||||||||||||||||||||
December 31, 2011 (in thousands)
|
Occupied
|
Occupied
|
Real Estate
|
Whole Loans
|
Construction
|
Commercial
|
Credit
|
|||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance
|
||||||||||||||||||||||||||||
attributable to loans:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$ | 1,350 | $ | 437 | $ | 1,782 | $ | - | $ | 2,298 | $ | 237 | $ | - | ||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
3,862 | 705 | 5,942 | - | 744 | 788 | 104 | |||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 5,212 | $ | 1,142 | $ | 7,724 | $ | - | $ | 3,042 | $ | 1,025 | $ | 104 | ||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 25,803 | $ | 2,777 | $ | 28,046 | $ | - | $ | 12,968 | $ | 4,492 | $ | - | ||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
959,932 | 96,384 | 611,920 | 32,741 | 54,438 | 114,625 | 41,496 | |||||||||||||||||||||
Total ending loan balance
|
$ | 985,735 | $ | 99,161 | $ | 639,966 | $ | 32,741 | $ | 67,406 | $ | 119,117 | $ | 41,496 | ||||||||||||||
(continued)
|
Consumer
|
|||||||||||||||||||||||||||
Home
|
Credit
|
Other
|
||||||||||||||||||||||||||
Equity
|
Cards
|
Overdrafts
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance
|
||||||||||||||||||||||||||||
attributable to loans:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$ | 982 | $ | - | $ | - | $ | - | $ | - | $ | 7,086 | ||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
2,002 | 503 | 135 | 227 | 1,965 | 16,977 | ||||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 2,984 | $ | 503 | $ | 135 | $ | 227 | $ | 1,965 | $ | 24,063 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 3,107 | $ | - | $ | - | $ | - | $ | - | $ | 77,193 | ||||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
277,128 | 8,580 | 950 | 9,908 | - | 2,208,102 | ||||||||||||||||||||||
Total ending loan balance
|
$ | 280,235 | $ | 8,580 | $ | 950 | $ | 9,908 | $ | - | $ | 2,285,295 | ||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||||||
June 30, 2012
|
June 30, 2012
|
|||||||||||||||||||||||||||
Unpaid
|
Allowance for
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||||||
Principal
|
Recorded
|
Loan Losses
|
Recorded
|
Income
|
Recorded
|
Income
|
||||||||||||||||||||||
June 30, 2012 (in thousands)
|
Balance
|
Investment
|
Allocated
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||||
Impaired loans with no related allowance recorded:
|
||||||||||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||||||
Owner occupied
|
$ | 25,621 | $ | 25,618 | $ | - | $ | 24,800 | $ | 23 | $ | 21,775 | $ | 23 | ||||||||||||||
Non owner occupied
|
1,636 | 1,636 | - | 1,636 | 37 | 967 | 37 | |||||||||||||||||||||
Commercial real estate
|
11,575 | 11,575 | - | 10,486 | 545 | 6,854 | 574 | |||||||||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Real estate construction
|
3,480 | 3,480 | - | 3,827 | 72 | 2,746 | 72 | |||||||||||||||||||||
Commercial
|
2,109 | 2,109 | - | 2,208 | 69 | 1,910 | 69 | |||||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Home equity
|
1,395 | 1,395 | - | 859 | 4 | 726 | 4 | |||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
Credit cards
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Overdrafts
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other consumer
|
61 | 61 | - | 63 | - | 31 | - | |||||||||||||||||||||
Impaired loans with an allowance recorded:
|
||||||||||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||||||
Owner occupied
|
6,804 | 6,740 | 1,022 | 5,829 | 43 | 4,805 | 244 | |||||||||||||||||||||
Non owner occupied
|
1,828 | 1,825 | 341 | 1,916 | 35 | 2,040 | 49 | |||||||||||||||||||||
Commercial real estate
|
28,017 | 27,609 | 2,144 | 27,610 | 217 | 23,497 | 318 | |||||||||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Real estate construction
|
7,711 | 6,145 | 1,629 | 4,953 | - | 7,496 | - | |||||||||||||||||||||
Commercial
|
2,554 | 2,554 | 277 | 2,494 | 22 | 2,619 | 45 | |||||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Home equity
|
1,462 | 1,462 | 429 | 1,582 | 11 | 1,898 | 11 | |||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
Credit cards
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Overdrafts
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other consumer
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total impaired loans
|
94,253 | 92,209 | 5,842 | 88,263 | 1,078 | 77,364 | 1,446 |
Twelve Months Ended
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
Unpaid
|
Allowance for
|
Average
|
Interest
|
|||||||||||||||||
Principal
|
Recorded
|
Loan Losses
|
Recorded
|
Income
|
||||||||||||||||
December 31, 2011 (in thousands)
|
Balance
|
Investment
|
Allocated
|
Investment
|
Recognized
|
|||||||||||||||
Impaired loans with no related allowance recorded:
|
||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||
Owner occupied
|
$ | 21,033 | $ | 21,033 | $ | - | $ | 15,272 | $ | 296 | ||||||||||
Non owner occupied
|
757 | 329 | - | 312 | - | |||||||||||||||
Commercial real estate
|
5,468 | 5,468 | - | 3,735 | 84 | |||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | |||||||||||||||
Real estate construction
|
2,824 | 2,625 | - | 1,589 | 72 | |||||||||||||||
Commercial
|
2,011 | 2,011 | - | 1,413 | 4 | |||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | |||||||||||||||
Home equity
|
841 | 705 | - | 492 | 16 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Overdrafts
|
- | - | - | - | - | |||||||||||||||
Other consumer
|
- | - | - | - | - | |||||||||||||||
Impaired loans with an allowance recorded:
|
||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||
Owner occupied
|
4,864 | 4,770 | 1,350 | 3,137 | 22 | |||||||||||||||
Non owner occupied
|
2,451 | 2,448 | 437 | 1,983 | 52 | |||||||||||||||
Commercial real estate
|
23,052 | 22,578 | 1,782 | 17,916 | 723 | |||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | |||||||||||||||
Real estate construction
|
11,323 | 10,343 | 2,298 | 9,291 | 179 | |||||||||||||||
Commercial
|
2,481 | 2,481 | 237 | 3,137 | 16 | |||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | |||||||||||||||
Home equity
|
2,402 | 2,402 | 982 | 1,434 | - | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Credit cards
|
- | - | - | - | - | |||||||||||||||
Overdrafts
|
- | - | - | - | - | |||||||||||||||
Other consumer
|
- | - | - | - | - | |||||||||||||||
Total impaired loans
|
79,507 | 77,193 | 7,086 | 59,711 | 1,464 |
Troubled Debt
|
Troubled Debt
|
Total
|
||||||||||
Restructurings on
|
Restructurings on
|
Troubled Debt
|
||||||||||
June 30, 2012 (in thousands)
|
Non-Accrual Status
|
Accrual Status
|
Restructurings
|
|||||||||
Residential real estate
|
$ | 4,934 | $ | 26,513 | $ | 31,447 | ||||||
Commercial real estate
|
2,172 | 33,278 | 35,450 | |||||||||
Real estate construction
|
3,449 | 3,689 | 7,138 | |||||||||
Commercial
|
249 | 4,396 | 4,645 | |||||||||
Total troubled debt restructurings
|
$ | 10,804 | $ | 67,876 | $ | 78,680 |
Troubled Debt
|
Troubled Debt
|
Total
|
||||||||||
Restructurings on
|
Restructurings on
|
Troubled Debt
|
||||||||||
December 31, 2011 (in thousands)
|
Non-Accrual Status
|
Accrual Status
|
Restructurings
|
|||||||||
Residential real estate
|
$ | 2,573 | $ | 24,557 | $ | 27,130 | ||||||
Commercial real estate
|
1,294 | 22,246 | 23,540 | |||||||||
Real estate construction
|
2,521 | 9,598 | 12,119 | |||||||||
Commercial
|
- | 4,233 | 4,233 | |||||||||
Total troubled debt restructurings
|
$ | 6,388 | $ | 60,634 | $ | 67,022 |
Troubled Debt
|
Troubled Debt
|
|||||||||||
Restructurings
|
Restructurings
|
Total
|
||||||||||
Performing to
|
Not Performing to
|
Troubled Debt
|
||||||||||
June 30, 2012 (in thousands)
|
Modified Terms
|
Modified Terms
|
Restructurings
|
|||||||||
Residential real estate loans (including
|
||||||||||||
home equity loans):
|
||||||||||||
Interest only payments for 6-24 months
|
$ | 1,751 | $ | 1,103 | $ | 2,854 | ||||||
Rate reduction
|
18,846 | 1,009 | 19,855 | |||||||||
Forbearance for 3-6 months
|
2,377 | 342 | 2,719 | |||||||||
First modification extension
|
1,151 | - | 1,151 | |||||||||
Subsequent modification extension
|
4,396 | 472 | 4,868 | |||||||||
Total residential TDRs
|
28,521 | 2,926 | 31,447 | |||||||||
Commercial related and construction loans:
|
||||||||||||
Interest only payments for 6-24 months
|
9,936 | 1,415 | 11,351 | |||||||||
Rate reduction
|
7,796 | - | 7,796 | |||||||||
Forbearance for 3-6 months
|
752 | 271 | 1,023 | |||||||||
First modification extension
|
12,785 | 855 | 13,640 | |||||||||
Subsequent modification extension
|
11,903 | 1,520 | 13,423 | |||||||||
Total commercial TDRs
|
43,172 | 4,061 | 47,233 | |||||||||
Total troubled debt restructurings
|
$ | 71,693 | $ | 6,987 | $ | 78,680 |
Troubled Debt
|
Troubled Debt
|
|||||||||||
Restructurings
|
Restructurings
|
Total
|
||||||||||
Performing to
|
Not Performing to
|
Troubled Debt
|
||||||||||
December 31, 2011 (in thousands)
|
Modified Terms
|
Modified Terms
|
Restructurings
|
|||||||||
Residential real estate loans (including
|
||||||||||||
home equity loans):
|
||||||||||||
Interest only payments for 6-24 months
|
$ | 5,990 | $ | 373 | $ | 6,363 | ||||||
Rate reduction
|
13,037 | 2,690 | 15,727 | |||||||||
Forbearance for 3-6 months
|
- | - | - | |||||||||
First modification extension
|
849 | 728 | 1,577 | |||||||||
Subsequent modification extension
|
3,358 | 105 | 3,463 | |||||||||
Total residential TDRs
|
23,234 | 3,896 | 27,130 | |||||||||
Commercial related and construction loans:
|
||||||||||||
Interest only payments for 6-24 months
|
9,643 | 1,752 | 11,395 | |||||||||
Rate reduction
|
1,221 | 624 | 1,845 | |||||||||
Forbearance for 3-6 months
|
160 | 855 | 1,015 | |||||||||
First modification extension
|
15,526 | 541 | 16,067 | |||||||||
Subsequent modification extension
|
9,535 | 35 | 9,570 | |||||||||
Total commercial TDRs
|
36,085 | 3,807 | 39,892 | |||||||||
Total troubled debt restructurings
|
$ | 59,319 | $ | 7,703 | $ | 67,022 |
Troubled Debt
|
Troubled Debt
|
|||||||||||
Restructurings
|
Restructurings
|
Total
|
||||||||||
Performing to
|
Not Performing to
|
Troubled Debt
|
||||||||||
June 30, 2012 (in thousands)
|
Modified Terms
|
Modified Terms
|
Restructurings
|
|||||||||
Residential real estate loans (including
|
||||||||||||
home equity loans):
|
||||||||||||
Interest only payments for 6-24 months
|
$ | 624 | $ | - | $ | 624 | ||||||
Rate reduction
|
5,267 | 82 | 5,349 | |||||||||
Forbearance for 3-6 months
|
2,377 | 342 | 2,719 | |||||||||
First modification extension
|
427 | - | 427 | |||||||||
Subsequent modification extension
|
1,081 | 472 | 1,553 | |||||||||
Total residential TDRs
|
9,776 | 896 | 10,672 | |||||||||
Commercial related and construction loans:
|
||||||||||||
Interest only payments for 6 - 12 months
|
4,125 | 886 | 5,011 | |||||||||
Rate reduction
|
2,519 | - | 2,519 | |||||||||
Forbearance for 3-6 months
|
596 | - | 596 | |||||||||
First modification extension
|
10,563 | 1,146 | 11,709 | |||||||||
Subsequent modification extension
|
7,327 | - | 7,327 | |||||||||
Total commercial TDRs
|
25,130 | 2,032 | 27,162 | |||||||||
Total troubled debt restructurings
|
$ | 34,906 | $ | 2,928 | $ | 37,834 |
Troubled Debt Restructurings
|
||||||||
That Subsequently Defaulted:
|
Number of
|
Recorded
|
||||||
($'s in thousands)
|
Loans
|
Investment
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
10 | $ | 1,943 | |||||
Non owner occupied
|
2 | 256 | ||||||
Commercial real estate
|
5 | 1,686 | ||||||
Commercial real estate -
|
||||||||
purchased whole loans
|
- | - | ||||||
Real estate construction
|
- | - | ||||||
Commercial
|
- | - | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
1 | 41 | ||||||
Consumer:
|
||||||||
Credit cards
|
- | - | ||||||
Overdrafts
|
- | - | ||||||
Other consumer
|
- | - | ||||||
Total
|
18 | $ | 3,926 |
5.
|
DEPOSITS
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Demand
|
$ | 538,183 | $ | 523,708 | ||||
Money market accounts
|
465,158 | 433,508 | ||||||
Brokered money market accounts
|
14,386 | 18,121 | ||||||
Savings
|
65,820 | 44,472 | ||||||
Individual retirement accounts*
|
32,594 | 31,201 | ||||||
Time deposits, $100,000 and over*
|
67,567 | 82,970 | ||||||
Other certificates of deposit*
|
114,659 | 103,230 | ||||||
Brokered certificates of deposit*
|
93,788 | 88,285 | ||||||
Total interest-bearing deposits
|
1,392,155 | 1,325,495 | ||||||
Total non interest-bearing deposits
|
513,136 | 408,483 | ||||||
Total deposits
|
$ | 1,905,291 | $ | 1,733,978 |
(in thousands)
|
June 30, 2012
|
|||
Non Interest Bearing
|
$ | 14,645 | ||
Demand
|
1,862 | |||
Money market accounts
|
2,499 | |||
Savings
|
14,456 | |||
Individual retirement accounts*
|
2,199 | |||
Certificates of deposit*
|
27,534 | |||
Brokered deposits*
|
11,396 | |||
Total deposits
|
$ | 74,591 | ||
_________________
|
||||
(*) - Represents a time deposit
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Overnight FHLB borrowings
|
$ | 30,000 | $ | 145,000 | ||||
Fixed interest rate advances with a weighted average
|
||||||||
interest rate of 2.38% due through 2035
|
388,555 | 669,630 | ||||||
Putable fixed interest rate advances with a weighted average
|
||||||||
interest rate of 4.36% due through 2017(1)
|
120,000 | 120,000 | ||||||
Total FHLB advances
|
$ | 538,555 | $ | 934,630 |
Year
|
(in thousands)
|
|||
2012
|
$ | 50,000 | ||
2013
|
35,000 | |||
2014
|
178,000 | |||
2015
|
25,000 | |||
2016
|
72,000 | |||
Thereafter
|
178,555 | |||
Total
|
$ | 538,555 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
First lien, single family residential real estate
|
$ | 782,959 | $ | 670,819 | ||||
Home equity lines of credit
|
51,681 | 60,211 | ||||||
Multi-family commercial real estate
|
6,864 | 14,697 |
Fair Value Measurements at
|
||||||||||||||||
June 30, 2012 Using:
|
||||||||||||||||
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(in thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | - | $ | 97,390 | $ | - | $ | 97,390 | ||||||||
Private label mortgage backed security
|
- | - | 4,579 | 4,579 | ||||||||||||
Mortgage backed securities - residential
|
- | 254,990 | - | 254,990 | ||||||||||||
Collateralized mortgage obligations
|
- | 225,362 | - | 225,362 | ||||||||||||
Total securities available for sale
|
$ | - | $ | 577,742 | $ | 4,579 | $ | 582,321 | ||||||||
Mandatory forward contracts
|
$ | - | $ | 30,379 | $ | - | $ | 30,379 | ||||||||
Rate lock loan commitments
|
- | 27,782 | - | 27,782 | ||||||||||||
Mortgage loans held for sale
|
- | 4,093 | - | 4,093 |
Fair Value Measurements at
|
||||||||||||||||
December 31, 2011 Using:
|
||||||||||||||||
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(in thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | - | $ | 152,674 | $ | - | $ | 152,674 | ||||||||
Private label mortgage backed security
|
- | - | 4,542 | 4,542 | ||||||||||||
Mortgage backed securities - residential
|
- | 293,329 | - | 293,329 | ||||||||||||
Collateralized mortgage obligations
|
- | 195,403 | - | 195,403 | ||||||||||||
Total securities available for sale
|
$ | - | $ | 641,406 | $ | 4,542 | $ | 645,948 | ||||||||
Mandatory forward contracts
|
$ | - | $ | 20,394 | $ | - | $ | 20,394 | ||||||||
Rate lock loan commitments
|
- | 15,639 | - | 15,639 | ||||||||||||
Mortgage loans held for sale
|
- | 4,392 | - | 4,392 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Balance, beginning of period
|
$ | 4,520 | $ | 4,874 | $ | 4,542 | $ | 5,124 | ||||||||
Total gains or losses included in earnings:
|
||||||||||||||||
Net impairment loss recognized in earnings
|
- | - | - | (279 | ) | |||||||||||
Net change in unrealized gain/(loss)
|
59 | 1,194 | 37 | 1,967 | ||||||||||||
Realized pass through of actual losses
|
- | (1,506 | ) | - | (2,052 | ) | ||||||||||
Principal paydowns
|
- | (160 | ) | - | (358 | ) | ||||||||||
Balance, end of period
|
$ | 4,579 | $ | 4,402 | $ | 4,579 | $ | 4,402 |
Fair
|
||||||||||
Value
|
Valuation
|
Unobservable
|
||||||||
(in thousands)
|
Technique
|
Inputs
|
Range
|
|||||||
Private label mortgage backed security
|
$ | 4,579 |
Discounted cash flow
|
(1) Constant prepayment rate
|
2% - 6 | % | ||||
(2) Probability of default
|
5% - 41.25 | % | ||||||||
(2) Loss severity
|
60% - 70 | % |
Fair Value Measurements at
|
||||||||||||||||
June 30, 2012 Using:
|
||||||||||||||||
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(in thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
Impaired loans:
|
||||||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | - | $ | - | $ | 908 | $ | 908 | ||||||||
Non owner occupied
|
- | - | 258 | 258 | ||||||||||||
Commercial real estate
|
- | - | 2,369 | 2,369 | ||||||||||||
Real estate construction
|
- | - | 431 | 431 | ||||||||||||
Commercial
|
- | - | - | - | ||||||||||||
Home equity
|
- | - | 1,711 | 1,711 | ||||||||||||
Total impaired loans *
|
$ | - | $ | - | $ | 5,677 | $ | 5,677 | ||||||||
Other real estate owned:
|
||||||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | - | $ | - | $ | 1,034 | $ | 1,034 | ||||||||
Non owner occupied
|
- | - | 133 | 133 | ||||||||||||
Commercial real estate
|
- | - | 855 | 855 | ||||||||||||
Real estate construction
|
- | - | 1,141 | 1,141 | ||||||||||||
Total other real estate owned
|
$ | - | $ | - | $ | 3,163 | $ | 3,163 | ||||||||
Mortgage servicing rights
|
$ | - | $ | - | $ | 1,954 | $ | 1,954 |
Fair Value Measurements at
|
||||||||||||||||
December 31, 2011 Using:
|
||||||||||||||||
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
Fair
|
|||||||||||||
(in thousands)
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Value
|
||||||||||||
Impaired loans:
|
||||||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | - | $ | - | $ | 885 | $ | 885 | ||||||||
Non owner occupied
|
- | - | 545 | 545 | ||||||||||||
Commercial real estate
|
- | - | 4,520 | 4,520 | ||||||||||||
Real estate construction
|
- | - | 285 | 285 | ||||||||||||
Commercial
|
- | - | 60 | 60 | ||||||||||||
Home equity
|
- | - | 1,721 | 1,721 | ||||||||||||
Total impaired loans *
|
$ | - | $ | - | $ | 8,016 | $ | 8,016 | ||||||||
Other real estate owned:
|
||||||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | - | $ | - | $ | 3,477 | $ | 3,477 | ||||||||
Non owner occupied
|
- | - | 417 | 417 | ||||||||||||
Commercial real estate
|
- | - | 1,418 | 1,418 | ||||||||||||
Real estate construction
|
- | - | 1,000 | 1,000 | ||||||||||||
Total other real estate owned
|
$ | - | $ | - | $ | 6,312 | $ | 6,312 | ||||||||
Mortgage servicing rights
|
$ | - | $ | - | $ | 3,412 | $ | 3,412 |
Fair
|
Range
|
|||||||
Value
|
Valuation
|
Unobservable
|
(Weighted
|
|||||
(in thousands)
|
Technique
|
Inputs
|
Average)
|
|||||
Impaired loans - commercial real estate
|
$ | 1,041 |
(1) Sales comparison approach
|
(1) Adjustments determined by
|
13% - 19% (17%) | |||
Management for differences
|
||||||||
between the comparable sales
|
||||||||
$ | 1,846 |
(2) Income approach
|
(2) Adjustments for differences
|
6% - 6% (6%) | ||||
between net operating income
|
||||||||
expectations
|
||||||||
Impaired loans - residential real estate
|
$ | 2,790 |
Sales comparison approach
|
Adjustments determined by
|
3% - 48% (15%) | |||
Management for differences
|
||||||||
between the comparable sales
|
||||||||
Other real estate owned - residential
|
$ | 1,167 |
Sales comparison approach
|
Adjustments determined by
|
10% - 50% (12%) | |||
Management for differences
|
||||||||
between the comparable sales
|
||||||||
Other real estate owned - commercial
|
||||||||
real estate
|
$ | 1,996 |
Sales comparison approach
|
Adjustments determined by
|
6% - 50% (40%) | |||
Management for differences
|
||||||||
between the comparable sales
|
||||||||
Mortgage servicing rights
|
$ | 1,954 |
Third party valuation pricing
|
Prepayment speeds, default rate
|
0.01% - 0.10% | |||
and discount rate
|
(0.04%) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net impairment loss recognized in earnings
|
$ | - | $ | - | $ | - | $ | 279 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Carrying amount of loans with a valuation allowance
|
$ | 3,574 | $ | 5,391 | ||||
Valuation allowance
|
693 | 1,717 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Other real estate owned write-downs
|
$ | 115 | $ | 41 | $ | 341 | $ | 227 |
Fair Value Measurements at
|
||||||||||||||||||||
June 30, 2012 Using:
|
||||||||||||||||||||
Total
|
||||||||||||||||||||
Carrying
|
Fair
|
|||||||||||||||||||
(in thousands)
|
Value
|
Level 1
|
Level 2
|
Level 3
|
Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 124,357 | $ | 124,357 | $ | - | $ | - | $ | 124,357 | ||||||||||
Securities available for sale
|
582,321 | - | 577,742 | 4,579 | 582,321 | |||||||||||||||
Securities to be held to maturity
|
25,769 | - | 26,287 | - | 26,287 | |||||||||||||||
Mortgage loans held for sale
|
4,093 | - | 4,093 | - | 4,093 | |||||||||||||||
Loans, net
|
2,417,884 | - | - | 2,563,013 | 2,563,013 | |||||||||||||||
Federal Home Loan Bank stock
|
28,391 | - | - | - | N/A | |||||||||||||||
Accrued interest receivable
|
9,455 | - | 9,455 | - | 9,455 | |||||||||||||||
Liabilities:
|
||||||||||||||||||||
Non interest-bearing deposits
|
513,136 | 513,136 | - | - | 513,136 | |||||||||||||||
Transaction deposits
|
1,083,547 | 1,083,547 | - | - | 1,083,547 | |||||||||||||||
Time deposits
|
308,608 | - | 314,037 | - | 314,037 | |||||||||||||||
Securities sold under agreements
|
||||||||||||||||||||
to repurchase and other short-term
|
||||||||||||||||||||
borrowings
|
194,412 | - | 194,412 | - | 194,412 | |||||||||||||||
Federal Home Loan Bank advances
|
538,555 | - | 560,871 | - | 560,871 | |||||||||||||||
Subordinated note
|
41,240 | - | 41,160 | - | 41,160 | |||||||||||||||
Accrued interest payable
|
1,405 | - | 1,405 | - | 1,405 |
December 31, 2011
|
||||||||
Carrying
|
Fair
|
|||||||
(in thousands)
|
Value
|
Value
|
||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$ | 362,971 | $ | 362,971 | ||||
Securities available for sale
|
645,948 | 645,948 | ||||||
Securities to be held to maturity
|
28,074 | 28,342 | ||||||
Mortgage loans held for sale
|
4,392 | 4,392 | ||||||
Loans, net
|
2,261,232 | 2,305,208 | ||||||
Federal Home Loan Bank stock
|
25,980 | 25,980 | ||||||
Accrued interest receivable
|
9,679 | 9,679 | ||||||
Liabilities:
|
||||||||
Non interest-bearing deposits
|
408,483 | 408,483 | ||||||
Transaction deposits
|
1,019,809 | 1,019,809 | ||||||
Time deposits
|
305,686 | 308,049 | ||||||
Securities sold under agreements
|
||||||||
to repurchase and other short-term
|
||||||||
borrowings
|
230,231 | 230,231 | ||||||
Federal Home Loan Bank advances
|
934,630 | 960,671 | ||||||
Subordinated note
|
41,240 | 41,158 | ||||||
Accrued interest payable
|
1,724 | 1,724 |
June 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 4,392 | $ | 15,228 | ||||
Origination of mortgage loans held for sale
|
97,132 | 52,558 | ||||||
Proceeds from the sale of mortgage loans held for sale
|
(101,153 | ) | (62,084 | ) | ||||
Net gain on sale of mortgage loans held for sale
|
3,722 | 1,465 | ||||||
Balance, June 30
|
$ | 4,093 | $ | 7,167 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net gain on sale of mortgage loans held for sale
|
$ | 2,034 | $ | 757 | $ | 3,722 | $ | 1,465 | ||||||||
Change in mortgage servicing rights valuation allowance
|
42 | - | 31 | - | ||||||||||||
Loan servicing income, net of amortization
|
(113 | ) | 167 | (436 | ) | 275 | ||||||||||
Total mortgage banking income
|
$ | 1,963 | $ | 924 | $ | 3,317 | $ | 1,740 |
June 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 6,087 | $ | 7,800 | ||||
Additions
|
904 | 538 | ||||||
Amortized to expense
|
(1,671 | ) | (1,169 | ) | ||||
Change in valuation allowance
|
31 | - | ||||||
Balance, June 30
|
$ | 5,351 | $ | 7,169 |
June 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | (203 | ) | $ | - | |||
Additions
|
(11 | ) | - | |||||
Reductions credited to operations
|
42 | - | ||||||
Direct write downs
|
- | - | ||||||
Balance, June 30
|
$ | (172 | ) | $ | - |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Fair value of mortgage servicing rights portfolio
|
$ | 6,260 | $ | 7,120 | ||||
Discount rate
|
9 | % | 9 | % | ||||
Prepayment speed range
|
220% - 550 | % | 221% - 550 | % | ||||
Weighted average default rate
|
1.50 | % | 1.50 | % |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Mandatory forward contracts:
|
||||||||
Notional amount
|
$ | 30,510 | $ | 20,490 | ||||
Change in fair value of mandatory forward contracts
|
(131 | ) | (96 | ) | ||||
Rate lock loan commitments:
|
||||||||
Notional amount
|
$ | 27,529 | $ | 15,623 | ||||
Change in fair value of rate lock loan commitments
|
253 | 16 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands, except per share data)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net income
|
$ | 9,578 | $ | 8,663 | $ | 92,050 | $ | 80,075 | ||||||||
Weighted average shares outstanding
|
20,958 | 20,936 | 20,957 | 20,937 | ||||||||||||
Effect of dilutive securities
|
59 | 58 | 77 | 55 | ||||||||||||
Average shares outstanding including
|
||||||||||||||||
dilutive securities
|
21,017 | 20,994 | 21,034 | 20,992 | ||||||||||||
Basic earnings per share:
|
||||||||||||||||
Class A Common Share
|
$ | 0.46 | $ | 0.42 | $ | 4.40 | $ | 3.83 | ||||||||
Class B Common Share
|
0.44 | 0.40 | 4.37 | 3.80 | ||||||||||||
Diluted earnings per share:
|
||||||||||||||||
Class A Common Share
|
$ | 0.46 | $ | 0.41 | $ | 4.38 | $ | 3.82 | ||||||||
Class B Common Share
|
0.44 | 0.40 | 4.35 | 3.79 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Antidilutive stock options
|
232,550 | 598,120 | 220,550 | 607,120 |
Three Months Ended June 30, 2012
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 28,090 | $ | 53 | $ | 169 | $ | 28,312 | ||||||||
Provision for loan losses
|
831 | - | (365 | ) | 466 | |||||||||||
Electronic refund check fees
|
- | - | 6,147 | 6,147 | ||||||||||||
Mortgage banking income
|
- | 1,963 | - | 1,963 | ||||||||||||
Bargain purchase gain
|
(96 | ) | - | - | (96 | ) | ||||||||||
Other non interest income
|
6,036 | 11 | 25 | 6,072 | ||||||||||||
Total non interest income
|
5,940 | 1,974 | 6,172 | 14,086 | ||||||||||||
Total non interest expenses
|
23,590 | 923 | 2,938 | 27,451 | ||||||||||||
Gross operating profit
|
9,609 | 1,104 | 3,768 | 14,481 | ||||||||||||
Income tax expense
|
3,129 | 386 | 1,388 | 4,903 | ||||||||||||
Net income
|
$ | 6,480 | $ | 718 | $ | 2,380 | $ | 9,578 | ||||||||
Segment end of period assets
|
$ | 3,248,453 | $ | 9,847 | $ | 20,500 | $ | 3,278,800 | ||||||||
Net interest margin
|
3.57 | % |
NM
|
NM
|
3.53 | % | ||||||||||
Three Months Ended June 30, 2011
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 26,393 | $ | 69 | $ | 367 | $ | 26,829 | ||||||||
Provision for loan losses
|
585 | - | (1,024 | ) | (439 | ) | ||||||||||
Electronic refund check fees
|
- | - | 6,584 | 6,584 | ||||||||||||
Mortgage banking income
|
- | 924 | - | 924 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
1,907 | - | - | 1,907 | ||||||||||||
Other non interest income
|
5,893 | 23 | 37 | 5,953 | ||||||||||||
Total non interest income
|
7,800 | 947 | 6,621 | 15,368 | ||||||||||||
Total non interest expenses
|
22,679 | 947 | 4,900 | 28,526 | ||||||||||||
Gross operating profit (loss)
|
10,929 | 69 | 3,112 | 14,110 | ||||||||||||
Income tax expense (benefit)
|
3,612 | 24 | 1,811 | 5,447 | ||||||||||||
Net income (loss)
|
$ | 7,317 | $ | 45 | $ | 1,301 | $ | 8,663 | ||||||||
Segment end of period assets
|
$ | 3,067,290 | $ | 14,695 | $ | 22,585 | $ | 3,104,570 | ||||||||
Net interest margin
|
3.50 | % |
NM
|
NM
|
3.50 | % |
Six Months Ended June 30, 2012
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 55,962 | $ | 173 | $ | 45,397 | $ | 101,532 | ||||||||
Provision for loan losses
|
3,962 | - | 7,674 | 11,636 | ||||||||||||
Electronic refund check fees
|
- | - | 77,896 | 77,896 | ||||||||||||
Mortgage banking income
|
- | 3,317 | - | 3,317 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
56 | - | - | 56 | ||||||||||||
Bargain purchase gain
|
27,803 | - | - | 27,803 | ||||||||||||
Other non interest income
|
11,618 | 16 | 189 | 11,823 | ||||||||||||
Total non interest income
|
39,477 | 3,333 | 78,085 | 120,895 | ||||||||||||
Total non interest expenses
|
50,634 | 2,077 | 15,893 | 68,604 | ||||||||||||
Gross operating profit
|
40,843 | 1,429 | 99,915 | 142,187 | ||||||||||||
Income tax expense
|
14,005 | 500 | 35,632 | 50,137 | ||||||||||||
Net income
|
$ | 26,838 | $ | 929 | $ | 64,283 | $ | 92,050 | ||||||||
Segment end of period assets
|
$ | 3,248,453 | $ | 9,847 | $ | 20,500 | $ | 3,278,800 | ||||||||
Net interest margin
|
3.58 | % |
NM
|
NM
|
5.73 | % | ||||||||||
Six Months Ended June 30, 2011
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 51,521 | $ | 191 | $ | 59,088 | $ | 110,800 | ||||||||
Provision for loan losses
|
4,907 | - | 12,736 | 17,643 | ||||||||||||
Electronic refund check fees
|
- | - | 87,646 | 87,646 | ||||||||||||
Mortgage banking income
|
- | 1,740 | - | 1,740 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
1,628 | - | - | 1,628 | ||||||||||||
Other non interest income
|
11,296 | 25 | 345 | 11,666 | ||||||||||||
Total non interest income
|
12,924 | 1,765 | 87,991 | 102,680 | ||||||||||||
Total non interest expenses
|
45,775 | 2,050 | 23,519 | 71,344 | ||||||||||||
Gross operating profit (loss)
|
13,763 | (94 | ) | 110,824 | 124,493 | |||||||||||
Income tax expense (benefit)
|
3,970 | (33 | ) | 40,481 | 44,418 | |||||||||||
Net income (loss)
|
$ | 9,793 | $ | (61 | ) | $ | 70,343 | $ | 80,075 | |||||||
Segment end of period assets
|
$ | 3,067,290 | $ | 14,695 | $ | 22,585 | $ | 3,104,570 | ||||||||
Net interest margin
|
3.42 | % |
NM
|
NM
|
6.48 | % |
● |
projections of revenue, expenses, income, losses, earnings per share, capital expenditures, dividends, capital structure or other financial items;
|
● |
descriptions of plans or objectives for future operations, products or services;
|
● |
forecasts of future economic performance; and
|
● |
descriptions of assumptions underlying or relating to any of the foregoing.
|
● |
loan delinquencies, future credit losses, non-performing loans and non-performing assets;
|
● |
further developments in the Bank’s ongoing review of and efforts to resolve possible problem credit relationships, which could result in, among other things, additional provision for loans losses;
|
● |
deteriorating credit quality, including changes in the interest rate environment and reducing interest margins;
|
● |
the overall adequacy of the allowance for loans losses;
|
● |
future short-term and long-term interest rates and the respective impact on net interest margin, net interest spread, net income, liquidity and capital;
|
● |
the future performance of assets, including loans, acquired in the Tennessee Commerce Bank (“TCB”) acquisition;
|
● |
the future operating performance of the Republic Payment Solutions (“RPS”) division;
|
● |
the future regulatory viability of the Tax Refund Solutions (“TRS”) division;
|
● |
the future operating performance of the TRS division, including the impact of the cessation of Refund Anticipation Loans (“RALs”);
|
● |
future Electronic Refund Check/Electronic Refund Deposit (“ERC/ERD” or “AR/ARD”) volume for the TRS division;
|
● |
future revenues associated with ERCs/ERDs at the TRS division;
|
● |
future recoveries associated with RALs originated during 2012 and prior;
|
● |
potential impairment of investment securities;
|
● |
the future value of mortgage servicing rights;
|
● |
the impact of new accounting pronouncements;
|
● |
legal and regulatory matters including results and consequences of regulatory guidance, litigation, administrative proceedings, rule-making, interpretations, actions and examinations;
|
● |
the extent to which regulations written and implemented by the Federal Bureau of Consumer Financial Protection, and other federal, state and local governmental regulation of consumer lending and related financial products and services may limit or prohibit the operation of the Company’s business;
|
● |
financial services reform and other current, pending or future legislation or regulation that could have a negative effect on the Company’s revenue and businesses, including the Dodd-Frank Act and legislation and regulation relating to overdraft fees (and changes to the Bank’s overdraft practices as a result thereof), debit card interchange fees, credit cards, and other bank services;
|
● |
future capital expenditures;
|
● |
the strength of the U.S. economy in general and the strength of the local economies in which the Company conducts operations;
|
● |
the Bank’s ability to maintain current deposit and loan levels at current interest rates and
|
● |
the Company’s ability to successfully implement future growth plans, including growth through future acquisitions.
|
Three Months Ended June 30, 2012
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total
Company
|
||||||||||||
Net income
|
$ | 6,480 | $ | 718 | $ | 2,380 | $ | 9,578 | ||||||||
Segment assets
|
3,248,453 | 9,847 | 20,500 | 3,278,800 | ||||||||||||
Net interest margin
|
3.57 | % |
NM
|
NM
|
3.53 | % | ||||||||||
Three Months Ended June 30, 2011
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total
Company
|
||||||||||||
Net income (loss)
|
$ | 7,317 | $ | 45 | $ | 1,301 | $ | 8,663 | ||||||||
Segment assets
|
3,067,290 | 14,695 | 22,585 | 3,104,570 | ||||||||||||
Net interest margin
|
3.50 | % |
NM
|
NM
|
3.50 | % | ||||||||||
Six Months Ended June 30, 2012
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total
Company
|
||||||||||||
Net income
|
$ | 26,838 | $ | 929 | $ | 64,283 | $ | 92,050 | ||||||||
Segment assets
|
3,248,453 | 9,847 | 20,500 | 3,278,800 | ||||||||||||
Net interest margin
|
3.58 | % |
NM
|
NM
|
5.73 | % | ||||||||||
Six Months Ended June 30, 2011
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total
Company
|
||||||||||||
Net income (loss)
|
$ | 9,793 | $ | (61 | ) | $ | 70,343 | $ | 80,075 | |||||||
Segment assets
|
3,067,290 | 14,695 | 22,585 | 3,104,570 | ||||||||||||
Net interest margin
|
3.42 | % |
NM
|
NM
|
6.48 | % |
o
|
Generate a low-cost deposit source;
|
o
|
Generate float revenue from the previously mentioned low cost deposit source;
|
o
|
Serve as a source of fee income; and
|
o
|
Generate debit card interchange revenue.
|
● |
Net income decreased $830,000 for the second quarter of 2012 compared to the same period in 2011. The decrease was generally related to the operating loss of the recently acquired TCB franchise and a $1.9 million pre-tax security gain recorded during the second quarter of 2011.
|
● |
Net interest income increased $1.7 million, or 6%, for the second quarter of 2012 to $28.1 million. The Traditional Banking segment net interest margin increased 7 basis points for the quarter ended June 30, 2012 to 3.57%.
|
● |
Provision for loan losses was $831,000 for the quarter ended June 30, 2012 compared to $585,000 for the same period in 2011.
|
● |
Total non interest income decreased $1.9 million for the second quarter of 2011 compared to the same period in 2011 primarily due to security gains recorded during the second quarter of 2011.
|
● |
Total non interest expense increased $911,000, or 4%, during the second quarter of 2012 compared to the second quarter of 2011 due primarily to pre-conversion overhead costs associated with the TCB acquisition.
|
● |
Total non-performing loans to total loans for the Traditional Banking segment was 0.93% at June 30, 2012, compared to 1.02% at December 31, 2011 and 1.28% at June 30, 2011.
|
● |
During the second quarter of 2011, the Bank purchased commercial real estate loans with a face amount of approximately $37 million at a 13% discount to par.
|
● |
During the second quarter of 2011, the Bank sold available for sale mortgage backed securities with an amortized cost of $132 million, resulting in a pre-tax gain of $1.9 million.
|
● |
The Bank launched its Warehouse Lending division during the second quarter of 2011 and had $89 million in loans outstanding at June 30, 2012 compared to $41 million and $6 million at December 31, 2011 and June 30, 2011, respectively.
|
● |
Within the Mortgage Banking segment, mortgage banking income increased $1.0 million during the second quarter of 2012 compared to the same period in 2011.
|
● |
Mortgage banking income was positively impacted by an increase in secondary market loan volume during the second quarter of 2012.
|
● |
Net income increased $1.1 million, or 83%, for the second quarter of 2012 compared to the same period in 2011. The increase in quarter-over-quarter earnings was generally attributable to a Civil Money Penalty assessed by the FDIC against RB&T during the second quarter of 2011 at a non-tax deductible $2 million level as part of the Amended Notice. The actual penalty paid during the fourth quarter of 2011 in connection with the settlement was $900,000, resulting in a $1.1 million credit to pre-tax income recorded during the fourth quarter of 2011.
|
● |
Net interest income decreased $198,000, or 54%, for the second quarter of 2012 compared to the same period in 2011.
|
● |
RPG recorded a net credit to provision for loan losses of $365,000 for the second quarter of 2012, compared to a net credit of $1.0 million for the same period in 2011.
|
● |
RPG posted non-interest income of $6.2 million for the second quarter of 2012 compared to $6.6 million for the same period in 2011.
|
● |
The current year tax season represents the last season that RB&T will originate RALs. RB&T will continue to offer ERC/ERD products in the future.
|
Three Months Ended June 30, 2012
|
Three Months Ended June 30, 2011
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average
Balance
|
Interest
|
Average Rate
|
Average
Balance
|
Interest
|
Average Rate
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Taxable investment securities, including FHLB stock(1)
|
$ | 680,134 | $ | 3,217 | 1.89 | % | $ | 652,693 | $ | 4,400 | 2.70 | % | ||||||||||||
Federal funds sold and other interest-earning deposits
|
117,497 | 63 | 0.21 | % | 221,695 | 216 | 0.39 | % | ||||||||||||||||
Refund Anticipation Loan fees(2)
|
1,026 | 135 | 52.63 | % | 3,548 | 454 | 51.18 | % | ||||||||||||||||
Traditional Bank loans and fees(2)(3)
|
2,405,154 | 30,399 | 5.06 | % | 2,189,271 | 29,389 | 5.37 | % | ||||||||||||||||
Total interest-earning assets
|
3,203,811 | 33,814 | 4.22 | % | 3,067,207 | 34,459 | 4.49 | % | ||||||||||||||||
Less: Allowance for loan losses
|
23,694 | 29,255 | ||||||||||||||||||||||
Non interest-earning assets:
|
||||||||||||||||||||||||
Non interest-earning cash and cash equivalents
|
35,922 | 75,614 | ||||||||||||||||||||||
Premises and equipment, net
|
33,674 | 36,690 | ||||||||||||||||||||||
Other assets(1)
|
53,274 | 58,680 | ||||||||||||||||||||||
Total assets
|
$ | 3,302,987 | $ | 3,208,936 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Transaction accounts
|
$ | 602,613 | $ | 108 | 0.07 | % | $ | 357,268 | $ | 132 | 0.15 | % | ||||||||||||
Money market accounts
|
464,325 | 193 | 0.17 | % | 716,227 | 614 | 0.34 | % | ||||||||||||||||
Time deposits
|
231,104 | 512 | 0.89 | % | 249,804 | 1,043 | 1.67 | % | ||||||||||||||||
Brokered money market and brokered CD's
|
116,385 | 400 | 1.37 | % | 130,707 | 483 | 1.48 | % | ||||||||||||||||
Total deposits
|
1,414,427 | 1,213 | 0.34 | % | 1,454,006 | 2,272 | 0.63 | % | ||||||||||||||||
Securities sold under agreements to repurchase and
|
||||||||||||||||||||||||
other short-term borrowings
|
250,515 | 118 | 0.19 | % | 274,074 | 173 | 0.25 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
479,064 | 3,540 | 2.96 | % | 527,669 | 4,556 | 3.45 | % | ||||||||||||||||
Subordinated note
|
41,240 | 631 | 6.12 | % | 41,240 | 629 | 6.10 | % | ||||||||||||||||
Total interest-bearing liabilities
|
2,185,246 | 5,502 | 1.01 | % | 2,296,989 | 7,630 | 1.33 | % | ||||||||||||||||
Non interest-bearing liabilities and Stockholders' equity
|
||||||||||||||||||||||||
Non interest-bearing deposits
|
533,649 | 409,391 | ||||||||||||||||||||||
Other liabilities
|
49,516 | 56,424 | ||||||||||||||||||||||
Stockholders' equity
|
534,576 | 446,132 | ||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 3,302,987 | $ | 3,208,936 | ||||||||||||||||||||
Net interest income
|
$ | 28,312 | $ | 26,829 | ||||||||||||||||||||
Net interest spread
|
3.21 | % | 3.16 | % | ||||||||||||||||||||
Net interest margin
|
3.53 | % | 3.50 | % |
(1)
|
For the purpose of this calculation, the fair market value adjustment on investment securities resulting from FASB ASC Topic 320, Investments – Debt and Equity Securities, is included as a component of other assets.
|
(2)
|
The amount of loan fee income included in total interest income was $1.3 million and $1.1 million for the three months ended June 30, 2012 and 2011.
|
(3)
|
Average balances for loans include the principal balance of non accrual loans and loans held for sale.
|
Three Months Ended June 30, 2012
|
||||||||||||
Compared to
|
||||||||||||
Three Months Ended June 30, 2011
|
||||||||||||
Increase / (Decrease) Due to
|
||||||||||||
(in thousands)
|
Total Net
Change
|
Volume
|
Rate
|
|||||||||
Interest income:
|
||||||||||||
Taxable investment securities, including FHLB stock
|
$ | (1,183 | ) | $ | 178 | $ | (1,361 | ) | ||||
Federal funds sold and other interest-earning deposits
|
(153 | ) | (78 | ) | (75 | ) | ||||||
Refund Anticipation Loan fees
|
(319 | ) | (332 | ) | 13 | |||||||
Traditional Bank loans and fees
|
1,010 | 2,792 | (1,782 | ) | ||||||||
Net change in interest income
|
(645 | ) | 2,560 | (3,205 | ) | |||||||
Interest expense:
|
||||||||||||
Transaction accounts
|
(24 | ) | 64 | (88 | ) | |||||||
Money market accounts
|
(421 | ) | (171 | ) | (250 | ) | ||||||
Time deposits
|
(531 | ) | (73 | ) | (458 | ) | ||||||
Brokered money market and brokered CDs
|
(83 | ) | (51 | ) | (32 | ) | ||||||
Securities sold under agreements to repurchase and
|
||||||||||||
other short-term borrowings
|
(55 | ) | (14 | ) | (41 | ) | ||||||
Federal Home Loan Bank advances
|
(1,016 | ) | (396 | ) | (620 | ) | ||||||
Subordinated note
|
2 | - | 2 | |||||||||
Net change in interest expense
|
(2,128 | ) | (641 | ) | (1,487 | ) | ||||||
Net change in net interest income
|
$ | 1,483 | $ | 3,201 | $ | (1,718 | ) |
Three Months Ended
|
||||||||
June 30,
|
||||||||
(dollars in thousands)
|
2012
|
2011
|
||||||
Allowance for loan losses at beginning of period
|
$ | 23,732 | $ | 29,144 | ||||
Charge offs:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
(491 | ) | (544 | ) | ||||
Non owner occupied
|
(262 | ) | (41 | ) | ||||
Commercial real estate
|
(295 | ) | (161 | ) | ||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
(501 | ) | (53 | ) | ||||
Commercial
|
(7 | ) | (100 | ) | ||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
(199 | ) | (347 | ) | ||||
Consumer:
|
||||||||
Credit cards
|
(50 | ) | (29 | ) | ||||
Overdrafts
|
(100 | ) | (141 | ) | ||||
Other consumer
|
(52 | ) | (77 | ) | ||||
Refund Anticipation Loans
|
(343 | ) | (2,037 | ) | ||||
Total charge offs
|
(2,300 | ) | (3,530 | ) | ||||
Recoveries:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
34 | 53 | ||||||
Non owner occupied
|
- | - | ||||||
Commercial real estate
|
13 | 225 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
27 | 4 | ||||||
Commercial
|
10 | 5 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
55 | 63 | ||||||
Consumer:
|
||||||||
Credit cards
|
4 | 3 | ||||||
Overdrafts
|
87 | 151 | ||||||
Other consumer
|
44 | 62 | ||||||
Refund Anticipation Loans
|
338 | 190 | ||||||
Total recoveries
|
612 | 756 | ||||||
Net loan charge offs
|
(1,688 | ) | (2,774 | ) | ||||
Provision for loan losses - Traditional Banking
|
831 | 585 | ||||||
Provision for loan losses - Refund Anticipation Loans
|
(365 | ) | (1,024 | ) | ||||
Total provision for loan losses
|
466 | (439 | ) | |||||
Allowance for loan losses at end of period
|
$ | 22,510 | $ | 25,931 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.92 | % | 1.17 | % | ||||
Allowance for loan losses to non performing loans
|
100 | % | 91 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.28 | % | 0.51 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.92 | % | 1.17 | % | ||||
Allowance for loan losses to non performing loans
|
100 | % | 91 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.28 | % | 0.17 | % |
● |
Republic acquired loans with a fair value of $56 million and deposits with a fair value of $947 million from TCB in a failed bank acquisition from the FDIC on January 27, 2012. The transaction resulted in a pre-tax bargain purchase gain of $27.8 million primarily recorded during the first quarter of 2012. See additional discussion regarding the TCB acquisition under Footnote 2 “Bank Acquisition” of Part I Item 1 “Financial Statements.”
|
● |
As expected, approximately $873 million of the deposit liabilities assumed in the TCB transaction exited RB&T by June 30, 2012 due to the substantial reduction in the rates paid to the former TCB depositors by RB&T.
|
● |
Net income increased $17.0 million for the first six months of 2012 compared to the same period in 2011.
|
● |
Net interest income increased $4.4 million, or 9%, for the first six months of 2012 to $56.0 million. The Traditional Banking segment net interest margin increased 16 basis points for the six months ended June 30, 2012 to 3.58%.
|
● |
Provision for loan losses was $4.0 million for the six months ended June 30, 2012 compared to $4.9 million for the same period in 2011.
|
● |
Total non interest income increased $26.6 million for the first six months of 2012 compared to the same period in 2011 primarily due to the bargain purchase gain detailed above.
|
● |
Total non interest expense increased $4.9 million, or 11%, during the first six months of 2012 compared to the same period in 2011.
|
● |
Total non-performing loans to total loans for the Traditional Banking segment was 0.93% at June 30, 2012, compared to 1.02% at December 31, 2011 and 1.28% at June 30, 2011.
|
● |
The Bank’s Warehouse Lending division had $89 million in loans outstanding at June 30, 2012.
|
● |
Within the Mortgage Banking segment, mortgage banking income increased $1.6 million, or 91%, during the first six months of 2012 compares to the same period in 2011.
|
● |
Mortgage banking income was positively impacted by an increase in secondary market loan volume during the first six months of 2012.
|
● |
The total dollar volume of tax refunds processed during the 2012 tax season decreased $1.1 billion, or 9%, from the 2011 tax season.
|
● |
Total RAL dollar volume decreased from $1.0 billion during the 2011 tax season to $796 million during the 2012 tax season.
|
● |
Total ERC dollar volume declined $1.1 billion, or 17%, during the 2012 tax season compared to the 2011 tax season. The decline in ERC volume was partially offset by a $258 million, or 6%, increase in the lower margin ERD product. Revenue from both products is included in the income statement line item “Electronic Refund Check Fees.”
|
● |
Net income decreased $6.1 million, or 9%, for the first six months of 2012 compared to the same period in 2011.
|
● |
Net interest income decreased $13.7 million, or 23%, for the first six months of 2012 compared to the same period in 2011.
|
● |
RPG recorded a provision for loan losses of $7.7 million for the first six months of 2012, compared to $12.7 million for the same period in 2011.
|
● |
RPG posted non interest income of $78.1 million for the first six months of 2012 compared to $88.0 million for the same period in 2011.
|
● |
RB&T obtained $300 million of FHLB advances during the fourth quarter of 2011 to fund projected RAL volume during the first quarter 2012 tax season. In addition, during the first quarter of 2012, RB&T obtained $252 million of brokered deposits to complete its required funding for the first quarter 2012 tax season.
|
● |
The current year tax season represents the last season that RB&T will originate RALs. RB&T will continue to offer ERC/ERD products in the future.
|
Six Months Ended June 30, 2012
|
Six Months Ended June 30, 2011
|
|||||||||||||||||||||||
(dollars in thousands)
|
Average
Balance
|
Interest
|
Average Rate
|
Average
Balance
|
Interest
|
Average Rate
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Taxable investment securities, including FHLB stock(1)
|
$ | 685,230 | $ | 7,104 | 2.07 | % | $ | 633,679 | $ | 8,305 | 2.62 | % | ||||||||||||
Federal funds sold and other interest-earning deposits
|
434,542 | 471 | 0.22 | % | 537,611 | 773 | 0.29 | % | ||||||||||||||||
Refund Anticipation Loan fees(2)
|
48,665 | 45,215 | 185.82 | % | 59,730 | 59,131 | 197.99 | % | ||||||||||||||||
Traditional Bank loans and fees(2)(3)
|
2,374,091 | 60,611 | 5.11 | % | 2,186,124 | 58,873 | 5.39 | % | ||||||||||||||||
Total interest-earning assets
|
3,542,528 | 113,401 | 6.40 | % | 3,417,144 | 127,082 | 7.44 | % | ||||||||||||||||
Less: Allowance for loan losses
|
27,384 | 32,694 | ||||||||||||||||||||||
Non interest-earning assets:
|
||||||||||||||||||||||||
Non interest-earning cash and cash equivalents
|
111,818 | 160,847 | ||||||||||||||||||||||
Premises and equipment, net
|
34,120 | 36,899 | ||||||||||||||||||||||
Other assets(1)
|
66,009 | 58,575 | ||||||||||||||||||||||
Total assets
|
$ | 3,727,091 | $ | 3,640,771 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Transaction accounts
|
$ | 602,704 | $ | 228 | 0.08 | % | $ | 348,386 | $ | 260 | 0.15 | % | ||||||||||||
Money market accounts
|
455,728 | 395 | 0.17 | % | 695,733 | 1,225 | 0.35 | % | ||||||||||||||||
Time deposits
|
280,697 | 1,201 | 0.86 | % | 274,444 | 2,231 | 1.63 | % | ||||||||||||||||
Brokered money market and brokered CD's
|
203,167 | 928 | 0.91 | % | 352,937 | 1,494 | 0.85 | % | ||||||||||||||||
Total deposits
|
1,542,296 | 2,752 | 0.36 | % | 1,671,500 | 5,210 | 0.62 | % | ||||||||||||||||
Securities sold under agreements to repurchase and
|
||||||||||||||||||||||||
other short-term borrowings
|
260,919 | 230 | 0.18 | % | 295,957 | 424 | 0.29 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
580,291 | 7,626 | 2.63 | % | 544,886 | 9,390 | 3.45 | % | ||||||||||||||||
Subordinated note
|
41,240 | 1,261 | 6.12 | % | 41,240 | 1,258 | 6.10 | % | ||||||||||||||||
Total interest-bearing liabilities
|
2,424,746 | 11,869 | 0.98 | % | 2,553,583 | 16,282 | 1.28 | % | ||||||||||||||||
Non interest-bearing liabilities and Stockholders' equity
|
||||||||||||||||||||||||
Non interest-bearing deposits
|
727,546 | 606,906 | ||||||||||||||||||||||
Other liabilities
|
51,664 | 52,948 | ||||||||||||||||||||||
Stockholders' equity
|
523,135 | 427,334 | ||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 3,727,091 | $ | 3,640,771 | ||||||||||||||||||||
Net interest income
|
$ | 101,532 | $ | 110,800 | ||||||||||||||||||||
Net interest spread
|
5.42 | % | 6.16 | % | ||||||||||||||||||||
Net interest margin
|
5.73 | % | 6.48 | % |
(4)
|
For the purpose of this calculation, the fair market value adjustment on investment securities resulting from FASB ASC Topic 320, Investments – Debt and Equity Securities, is included as a component of other assets.
|
(5)
|
The amount of loan fee income included in total interest income was $47.3 million and $60.4 million for the three months ended June 30, 2012 and 2011.
|
(6)
|
Average balances for loans include the principal balance of non accrual loans and loans held for sale.
|
Six Months Ended June 30, 2012
|
||||||||||||
Compared to
|
||||||||||||
Six Months Ended June 30, 2011
|
||||||||||||
Increase / (Decrease) Due to
|
||||||||||||
(in thousands)
|
Total Net
Change
|
Volume
|
Rate
|
|||||||||
Interest income:
|
||||||||||||
Taxable investment securities, including FHLB stock
|
$ | (1,201 | ) | $ | 636 | $ | (1,837 | ) | ||||
Federal funds sold and other interest-earning deposits
|
(302 | ) | (132 | ) | (170 | ) | ||||||
Refund Anticipation Loan fees
|
(13,916 | ) | (10,449 | ) | (3,467 | ) | ||||||
Traditional Bank loans and fees
|
1,738 | 4,898 | (3,160 | ) | ||||||||
Net change in interest income
|
(13,681 | ) | (5,047 | ) | (8,634 | ) | ||||||
Interest expense:
|
||||||||||||
Transaction accounts
|
(32 | ) | 134 | (166 | ) | |||||||
Money market accounts
|
(830 | ) | (336 | ) | (494 | ) | ||||||
Time deposits
|
(1,030 | ) | 50 | (1,080 | ) | |||||||
Brokered money market and brokered CDs
|
(566 | ) | (676 | ) | 110 | |||||||
Securities sold under agreements to repurchase and
|
||||||||||||
other short-term borrowings
|
(194 | ) | (46 | ) | (148 | ) | ||||||
Federal Home Loan Bank advances
|
(1,764 | ) | 579 | (2,343 | ) | |||||||
Subordinated note
|
3 | - | 3 | |||||||||
Net change in interest expense
|
(4,413 | ) | (295 | ) | (4,118 | ) | ||||||
Net change in net interest income
|
$ | (9,268 | ) | $ | (4,752 | ) | $ | (4,516 | ) |
Six Months Ended
|
||||||||
June 30,
|
||||||||
(dollars in thousands)
|
2012
|
2011
|
||||||
Allowance for loan losses at beginning of period
|
$ | 24,063 | $ | 23,079 | ||||
Charge offs:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
(2,074 | ) | (1,079 | ) | ||||
Non owner occupied
|
(298 | ) | (55 | ) | ||||
Commercial real estate
|
(316 | ) | (719 | ) | ||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
(1,796 | ) | (53 | ) | ||||
Commercial
|
(7 | ) | (100 | ) | ||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
(1,314 | ) | (624 | ) | ||||
Consumer:
|
||||||||
Credit cards
|
(78 | ) | (103 | ) | ||||
Overdrafts
|
(218 | ) | (288 | ) | ||||
Other consumer
|
(123 | ) | (146 | ) | ||||
Refund Anticipation Loans
|
(11,097 | ) | (15,478 | ) | ||||
Total charge offs
|
(17,321 | ) | (18,645 | ) | ||||
Recoveries:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
151 | 114 | ||||||
Non owner occupied
|
12 | 3 | ||||||
Commercial real estate
|
46 | 242 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
55 | 105 | ||||||
Commercial
|
18 | 119 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
61 | 76 | ||||||
Consumer:
|
||||||||
Credit cards
|
24 | 17 | ||||||
Overdrafts
|
231 | 298 | ||||||
Other consumer
|
111 | 138 | ||||||
Refund Anticipation Loans
|
3,423 | 2,742 | ||||||
Total recoveries
|
4,132 | 3,854 | ||||||
Net loan charge offs
|
(13,189 | ) | (14,791 | ) | ||||
Provision for loan losses - Traditional Banking
|
3,962 | 4,907 | ||||||
Provision for loan losses - Refund Anticipation Loans
|
7,674 | 12,736 | ||||||
Total provision for loan losses
|
11,636 | 17,643 | ||||||
Allowance for loan losses at end of period
|
$ | 22,510 | $ | 25,931 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.92 | % | 1.17 | % | ||||
Allowance for loan losses to non performing loans
|
100 | % | 91 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
1.09 | % | 1.32 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.92 | % | 1.17 | % | ||||
Allowance for loan losses to non performing loans
|
100 | % | 91 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.46 | % | 0.19 | % |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Loss
|
$ | 231 | $ | - | ||||
Doubtful
|
- | - | ||||||
Substandard
|
39,498 | 43,088 | ||||||
Special Mention/Watch
|
52,372 | 35,455 | ||||||
Total
|
$ | 92,101 | $ | 78,543 |
● |
Rolling four quarters
|
● |
Rolling eight quarters average
|
● |
Rolling twelve quarters average
|
● |
Rolling sixteen quarters average
|
● |
Current year to date historical loss factor (average)
|
● |
Prior annual three year historical loss factors
|
● |
Peer group data
|
● |
Concentrations of credit;
|
● |
Nature, volume and seasoning of particular loan portfolios;
|
● |
Experience, ability and depth of lending staff;
|
● |
Effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures and practices;
|
● |
Trends that could impact collateral values;
|
● |
Expectations regarding business cycles;
|
● |
Credit quality trends (including trends in classified, past due and nonperforming loans);
|
● |
Competition, legal and regulatory requirements;
|
● |
General national and local economic and business conditions;
|
● |
Offering of new loan products; and
|
● |
Expansion into new markets.
|
● |
The Bank decreased its “Substandard” rated loan loss allowance by a net $2.1 million during the first six months of 2012. Charge-offs within the Company’s Substandard loan category totaled $4.4 million for the first six months of 2012. A significant portion of these charge-offs were for loans previously reserved for in prior quarters. The charge-offs were offset by approximately $2.3 million in additional allocations recorded for Substandard loans during the first six months of 2012.
|
● |
The Bank increased its “Special Mention/Watch” rated loan loss allowance by a net $522,000 during the first six months of 2012 due primarily to an updated loss migration analysis in combination with an increase in this portfolio balance.
|
● |
Primarily as a result of a decline in balances associated with the Bank’s 90-day delinquent and/or non-accrual retail and small dollar commercial relationships not specifically evaluated as part of the Bank’s large-dollar commercial classified asset review process, the Bank decreased its loan loss allowance by a net $600,000 during the first six months of 2012 for this category.
|
● |
The Bank increased its overall allowance for its “Pass” rated credits by a net $600,000 during the first six months of 2012 attributable primarily to loan portfolio growth and an increase the Bank’s average historical loss rates during the period.
|
● |
Residential real estate – Owner Occupied
|
● |
Residential real estate – Non Owner Occupied
|
● |
Home Equity
|
● |
Consumer
|
● |
Overdrafts
|
● |
Credit Cards
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Loans on non-accrual status
|
$ | 22,578 | $ | 23,306 | ||||
Loans past due 90 days or more and still on accrual
|
- | - | ||||||
Total non-performing loans
|
22,578 | 23,306 | ||||||
Other real estate owned
|
18,345 | 10,956 | ||||||
Total non-performing assets
|
$ | 40,923 | $ | 34,262 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.93 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.66 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.25 | % | 1.00 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.93 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.66 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.26 | % | 1.10 | % |
(1)
|
Loans on non-accrual status include impaired loans. See Footnote 4 “Loans and Allowance for Loan Losses” of Part I Item 1 “Financial Statements” for additional discussion regarding impaired loans.
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 12,398 | $ | 12,183 | ||||
Non owner occupied
|
864 | 1,565 | ||||||
Commercial real estate
|
2,284 | 3,032 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
3,912 | 2,521 | ||||||
Commercial
|
351 | 373 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
2,677 | 3,603 | ||||||
Consumer:
|
||||||||
Credit cards
|
- | - | ||||||
Overdrafts
|
- | - | ||||||
Other consumer
|
92 | 29 | ||||||
Total non-performing loans
|
$ | 22,578 | $ | 23,306 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
1.13 | % | 1.24 | % | ||||
Non owner occupied
|
0.99 | % | 1.58 | % | ||||
Commercial real estate
|
0.35 | % | 0.47 | % | ||||
Commercial real estate - purchased whole loans
|
0.00 | % | 0.00 | % | ||||
Real estate construction
|
5.17 | % | 3.74 | % | ||||
Commercial
|
0.27 | % | 0.31 | % | ||||
Warehouse lines of credit
|
0.00 | % | 0.00 | % | ||||
Home equity
|
1.03 | % | 1.29 | % | ||||
Consumer:
|
||||||||
Credit cards
|
0.00 | % | 0.00 | % | ||||
Overdrafts
|
0.00 | % | 0.00 | % | ||||
Other consumer
|
0.66 | % | 0.29 | % | ||||
Total non performing loans to total loans
|
0.93 | % | 1.02 | % |
(in thousands)
|
||||
Non-performing loans at January 1, 2012
|
$ | 23,306 | ||
Loans added to non-performing status
|
9,175 | |||
Non-performing loans purchased
|
936 | |||
Loans removed from non-performing status
|
(10,468 | ) | ||
Principal paydowns
|
(371 | ) | ||
Non-performing loans at June 30, 2012
|
$ | 22,578 |
(in thousands)
|
||||
Loans charged off
|
$ | 1,799 | ||
Loans transferred to OREO
|
4,082 | |||
Loans refinanced at other institutions
|
1,909 | |||
Loans returned to accrual status
|
2,678 | |||
Total loans removed from non-performing status
|
$ | 10,468 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 9,541 | $ | 13,208 | ||||
Non owner occupied
|
1,066 | 1,091 | ||||||
Commercial real estate
|
2,474 | 5,126 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
1,688 | 541 | ||||||
Commercial
|
95 | 105 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
2,846 | 4,041 | ||||||
Consumer:
|
||||||||
Credit cards
|
114 | 53 | ||||||
Overdrafts
|
86 | 129 | ||||||
Other consumer
|
210 | 139 | ||||||
Total delinquent loans
|
$ | 18,120 | $ | 24,433 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
0.87 | % | 1.34 | % | ||||
Non owner occupied
|
1.23 | % | 1.10 | % | ||||
Commercial real estate
|
0.38 | % | 0.80 | % | ||||
Commercial real estate - purchased whole loans
|
0.00 | % | 0.00 | % | ||||
Real estate construction
|
2.23 | % | 0.80 | % | ||||
Commercial
|
0.07 | % | 0.09 | % | ||||
Warehouse lines of credit
|
0.00 | % | 0.00 | % | ||||
Home equity
|
1.09 | % | 1.44 | % | ||||
Consumer:
|
||||||||
Credit cards
|
1.36 | % | 0.62 | % | ||||
Overdrafts
|
13.80 | % | 13.58 | % | ||||
Other consumer
|
1.50 | % | 1.40 | % | ||||
Total delinquent loans to total loans
|
0.74 | % | 1.07 | % |
(1)
|
– Represents total loans over 30 days past due divided by total loans.
|
● |
All loans internally classified as “Substandard,” “Doubtful” or “Loss;”
|
● |
All loans internally classified as “Special Mention/Watch” on non-accrual status;
|
● |
All non-classified retail and commercial loan TDRs;
|
● |
Purchased credit impaired loans whereby current projected cash flows have deteriorated since acquisition, or cash flows cannot be reasonably estimated in terms of timing and amounts; and
|
● |
Any other situation where the collection of total amount due for a loan is improbable or otherwise meets the definition of impaired.
|
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Troubled debt restructurings
|
$ | 83,628 | $ | 67,022 | ||||
Classifed loans (which are not TDRs)
|
8,581 | 10,171 | ||||||
Total impaired loans
|
$ | 92,209 | $ | 77,193 |
(in thousands)
|
June 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 7,382 | $ | 4,337 | ||||
Non owner occupied
|
279 | 417 | ||||||
Commercial real estate
|
2,361 | 2,030 | ||||||
Real estate construction
|
8,323 | 4,172 | ||||||
Total OREO
|
$ | 18,345 | $ | 10,956 |
(in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 10,956 | $ | 11,973 | ||||
OREO acquired from TCB acquisition at fair value
|
9,830 | - | ||||||
Transfer from loans to OREO
|
12,078 | 6,574 | ||||||
Proceeds from sale
|
(14,597 | ) | (6,552 | ) | ||||
Net gain on sale
|
419 | 244 | ||||||
Writedowns
|
(341 | ) | (227 | ) | ||||
Balance, June 30
|
$ | 18,345 | $ | 12,012 |
As of June 30, 2012
|
As of December 31, 2011
|
|||||||||||||||
Actual
|
Actual
|
|||||||||||||||
(dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||
Total Risk Based Capital (to Risk Weighted Assets)
|
||||||||||||||||
Republic Bancorp, Inc.
|
$ | 579,216 | 27.50 | % | $ | 501,188 | 24.74 | % | ||||||||
Republic Bank & Trust Co.
|
530,788 | 26.24 | 447,143 | 22.97 | ||||||||||||
Republic Bank
|
15,029 | 18.24 | 16,441 | 20.34 | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
||||||||||||||||
Republic Bancorp, Inc.
|
$ | 557,822 | 26.49 | % | $ | 478,003 | 23.59 | % | ||||||||
Republic Bank & Trust Co.
|
486,988 | 24.07 | 401,529 | 20.63 | ||||||||||||
Republic Bank
|
13,985 | 16.98 | 15,420 | 19.08 | ||||||||||||
Tier I Leverage Capital (to Average Assets)
|
||||||||||||||||
Republic Bancorp, Inc.
|
$ | 557,822 | 16.94 | % | $ | 478,003 | 14.77 | % | ||||||||
Republic Bank & Trust Co.
|
486,988 | 15.01 | 401,529 | 12.78 | ||||||||||||
Republic Bank
|
13,985 | 13.36 | 15,420 | 14.44 |
Previous
|
Increase in Rates
|
|||||||||||||||||||
Twelve
|
100 | 200 | 300 | |||||||||||||||||
(dollars in thousands)
|
Months
|
Base
|
Basis Points
|
Basis Points
|
Basis Points
|
|||||||||||||||
Projected interest income:
|
||||||||||||||||||||
Short-term investments
|
$ | - | $ | 8 | $ | 32 | $ | 57 | $ | 82 | ||||||||||
Investment securities
|
16,954 | 12,471 | 15,216 | 17,572 | 19,810 | |||||||||||||||
Loans, excluding loan fees (1)
|
119,326 | 115,728 | 123,485 | 131,807 | 140,750 | |||||||||||||||
Total interest income, excluding loan fees
|
136,280 | 128,207 | 138,733 | 149,436 | 160,642 | |||||||||||||||
Projected interest expense:
|
||||||||||||||||||||
Deposits
|
7,418 | 4,534 | 13,092 | 21,401 | 29,409 | |||||||||||||||
Securities sold under agreements to repurchase
|
506 | 311 | 2,255 | 4,200 | 6,143 | |||||||||||||||
Federal Home Loan Bank advances and other
|
||||||||||||||||||||
long-term borrowings
|
19,872 | 16,583 | 17,515 | 18,462 | 18,464 | |||||||||||||||
Total interest expense
|
27,796 | 21,428 | 32,862 | 44,063 | 54,016 | |||||||||||||||
Net interest income, excluding loan fees
|
$ | 108,484 | $ | 106,779 | $ | 105,871 | $ | 105,373 | $ | 106,626 | ||||||||||
Change from base
|
$ | (908 | ) | $ | (1,406 | ) | $ | (153 | ) | |||||||||||
% Change from base
|
-0.85 | % | -1.32 | % | -0.14 | % |
Quantitative and Qualitative Disclosures about Market Risk.
|
Controls and Procedures.
|
Total Number of
|
Maximum Number
|
||||||||||||||
Shares Purchased
|
of Shares that May
|
||||||||||||||
as Part of Publicly
|
Yet Be Purchased
|
||||||||||||||
Total Number of
|
Average Price
|
Announced Plans
|
Under the Plan
|
||||||||||||
Period
|
Shares Purchased
|
Paid Per Share
|
or Programs
|
or Programs
|
|||||||||||
April 1 - April 30
|
3,015 | $ | 23.30 | 3,015 | |||||||||||
May 1 - May 31
|
3,147 | 20.08 | 3,147 | ||||||||||||
June 1 - June 30
|
245 | 20.69 | 245 | ||||||||||||
Total
|
6,407 | $ | 21.62 | 6,407 |
596,782
|
Exhibit Number
|
Description of Exhibit
|
31.1
|
Certification of Principal Executive Officer pursuant to the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002.
|
32*
|
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101**
|
Interactive data files: (i) Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, (ii) Consolidated Statements of Income and Comprehensive Income for the three months ended June 30, 2012 and 2011, (iii) Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2012, (iv) Consolidated Statements of Cash Flows for the three months ended June 30, 2012 and 2011 and (v) Notes to Consolidated Financial Statements.
|
* -
|
This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
|
** -
|
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
REPUBLIC BANCORP, INC.
|
||
(Registrant)
|
||
Principal Executive Officer:
|
||
|
||
August 9, 2012
|
By:
|
Steven E. Trager
|
Chairman and Chief Executive Officer
|
||
|
Principal Financial Officer:
|
|
August 9, 2012
|
By:
|
Kevin Sipes
|
Executive Vice President, Chief Financial
|
||
Officer and Chief Accounting Officer
|
1.)
|
I have reviewed this quarterly report on Form 10-Q of Republic 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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.
|
1.)
|
I have reviewed this quarterly report on Form 10-Q of Republic 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 9, 2012
|
|
Steven E. Trager
|
|
Chairman and Chief Executive Officer
|
Date: August 9, 2012
|
|
Kevin Sipes
Executive Vice President, Chief Financial Officer and Chief Accounting Officer
|
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(/VU/C7)\5?AY^T]J7P\L_&?@*+P#\8])M-&2Z/B3PPE\;WR+ M>1G4V=R6:6$S8<>3P4`?A110!;HHHH`****`/_V3\_ ` end
Investment Securities - Additional Information (Detail) (USD $)
|
6 Months Ended | 3 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
Investment
|
Jun. 30, 2011
|
Dec. 31, 2011
|
Jun. 30, 2011
Mortgage backed securities
|
Jun. 30, 2012
Mortgage backed securities
Investment
|
Dec. 31, 2011
Mortgage backed securities
|
Mar. 31, 2012
Mortgage backed securities
Tennessee Commerce Bank ( "TCB" )
Investment
|
Jun. 30, 2012
Private label mortgage backed and other private label mortgage-related securities
Investment
|
Dec. 31, 2011
Private label mortgage backed and other private label mortgage-related securities
|
Mar. 31, 2012
US Government Agencies Debt Securities
|
|
Schedule of Investments [Line Items] | ||||||||||
Mortgage backed securities fair value | $ 4,600,000 | |||||||||
Gross unrealized loss | 0 | 568,000 | 1,200,000 | 1,300,000 | ||||||
Number of Securities sold | 6 | |||||||||
Available for Sale securities, amortized cost | 574,296,000 | 639,579,000 | 132,000,000 | 0 | 35,000,000 | 5,818,000 | 5,818,000 | |||
Available-for-sale securities, recognized net pre-tax gain | (279,000) | 53,000 | ||||||||
Available-for-sale securities, recognized net pre-tax gain | 1,900,000 | 3,000 | ||||||||
Available for sale securities, unamortized discount | 10,000,000 | |||||||||
Tax provision related to Bank's realized gains | 20,000 | 667,000 | ||||||||
Number of securities | 155 | 1 | ||||||||
Number of securities unrealized loss position | 1 | |||||||||
Private label mortgage-related security at carrying value | 5,800,000 | |||||||||
Additional impairment charges related to credit losses | $ 279,000 | $ 5,800,000 |
Activity in Allowance for Loan Losses (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Allowance for loan losses at beginning of period | $ 23,732 | $ 29,144 | $ 24,063 | $ 23,079 |
Charge offs | (2,300) | (3,530) | (17,321) | (18,645) |
Recoveries | 612 | 756 | 4,132 | 3,854 |
Net loan charge offs | (1,688) | (2,774) | (13,189) | (14,791) |
Provision for loan losses | 466 | (439) | 11,636 | 17,643 |
Allowance for loan losses at end of period | 22,510 | 25,931 | 22,510 | 25,931 |
Traditional Banking
|
||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Charge offs | (1,957) | (1,493) | (6,224) | (3,167) |
Recoveries | 274 | 566 | 709 | 1,112 |
Net loan charge offs | (1,683) | (927) | (5,515) | (2,055) |
Provision for loan losses | 831 | 585 | 3,962 | 4,907 |
Refund Anticipation Loans
|
||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Charge offs | (343) | (2,037) | (11,097) | (15,478) |
Recoveries | 338 | 190 | 3,423 | 2,742 |
Net loan charge offs | (5) | (1,847) | (7,674) | (12,736) |
Provision for loan losses | $ (365) | $ (1,024) | $ 7,674 | $ 12,736 |
Gross Amortized Cost and Fair Value of Securities Available for Sale and Related Gross Unrealized Gains and Losses Recognized in Accumulated Other Comprehensive Income (Loss) ss (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | ||||
Balance, beginning of period | $ 4,520 | $ 4,874 | $ 4,542 | $ 5,124 |
Net impairment loss recognized in earnings | (279) | |||
Net change in unrealized gain/(loss) | 59 | 1,194 | 37 | 1,967 |
Realized pass through of actual losses | (1,506) | (2,052) | ||
Principal paydowns | (160) | (358) | ||
Balance, end of period | $ 4,579 | $ 4,402 | $ 4,579 | $ 4,402 |
Impaired Loans (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Financing Receivable, Impaired [Line Items] | ||
Loans with no allocated allowance for loan losses | $ 45,874 | $ 32,171 |
Loans with allocated allowance for loan losses | 46,335 | 45,022 |
Total impaired loans | 92,209 | 77,193 |
Amount of the allowance for loan losses allocated | $ 5,842 | $ 7,086 |
Carrying Amount and Estimated Fair Values of Financial Instruments (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Assets, Carrying Value | ||||
Cash and cash equivalents | $ 124,357 | $ 362,971 | $ 130,262 | $ 786,371 |
Securities available for sale | 582,321 | 645,948 | ||
Securities to be held to maturity | 25,769 | 28,074 | ||
Mortgage loans held for sale | 4,093 | 4,392 | 7,167 | 15,228 |
Loans, net | 2,417,884 | 2,261,232 | ||
Federal Home Loan Bank stock | 28,391 | 25,980 | ||
Accrued interest receivable | 9,455 | 9,679 | ||
Liabilities, Carrying Value | ||||
Non interest-bearing deposits | 513,136 | 408,483 | ||
Transaction deposits | 1,083,547 | 1,019,809 | ||
Time deposits | 308,608 | 305,686 | ||
Securities sold under agreements to repurchase and other short-term borrowings | 194,412 | 230,231 | ||
Federal Home Loan Bank advances | 538,555 | 934,630 | ||
Subordinated note | 41,240 | 41,240 | ||
Accrued interest payable | 1,405 | 1,724 | ||
Assets, Fair Value | ||||
Cash and cash equivalents | 124,357 | 362,971 | ||
Securities available for sale | 582,321 | 645,948 | ||
Securities to be held to maturity | 26,287 | 28,342 | ||
Mortgage loans held for sale | 4,093 | 4,392 | ||
Loans, net | 2,563,013 | 2,305,208 | ||
Federal Home Loan Bank stock | 25,980 | |||
Accrued interest receivable | 9,455 | 9,679 | ||
Liabilities, Fair Value | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 194,412 | 230,231 | ||
Federal Home Loan Bank advances | 560,871 | 960,671 | ||
Subordinated note | 41,160 | 41,158 | ||
Accrued interest payable | 1,405 | 1,724 | ||
Fair Value, Inputs, Level 1
|
||||
Assets, Fair Value | ||||
Cash and cash equivalents | 124,357 | |||
Fair Value, Inputs, Level 2
|
||||
Assets, Fair Value | ||||
Securities available for sale | 577,742 | |||
Securities to be held to maturity | 26,287 | |||
Mortgage loans held for sale | 4,093 | |||
Accrued interest receivable | 9,455 | |||
Liabilities, Fair Value | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 194,412 | |||
Federal Home Loan Bank advances | 560,871 | |||
Subordinated note | 41,160 | |||
Accrued interest payable | 1,405 | |||
Fair Value, Inputs, Level 3
|
||||
Assets, Fair Value | ||||
Securities available for sale | 4,579 | |||
Loans, net | 2,563,013 | |||
Non Interest Bearing Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 513,136 | 408,483 | ||
Non Interest Bearing Deposits | Fair Value, Inputs, Level 1
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 513,136 | |||
Demand Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 1,083,547 | 1,019,809 | ||
Demand Deposits | Fair Value, Inputs, Level 1
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 1,083,547 | |||
Bank Time Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 314,037 | 308,049 | ||
Bank Time Deposits | Fair Value, Inputs, Level 2
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | $ 314,037 |
Composition of Outstanding Loans (Detail) (Tennessee Commerce Bank ( "TCB" ), USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Composition of Loan Acquired [Line Items] | ||
Consumer: | $ 38,543 | $ 56,000 |
Residential Real Estate
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 14,670 | |
Commercial Real Estate
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 8,682 | |
Real Estate Construction
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 5,798 | |
Commercial
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 2,811 | |
Home Equity
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 4,996 | |
Consumer | Credit Card
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 515 | |
Consumer | Overdrafts
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | 2 | |
Consumer | Other Consumer
|
||
Composition of Loan Acquired [Line Items] | ||
Consumer: | $ 1,069 |
Net Assets Acquired from FDIC and Estimated Fair Value Adjustments (Detail) (USD $)
In Thousands, unless otherwise specified |
1 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2012
|
Jan. 27, 2012
Previously Reported
|
Jan. 27, 2012
Recast Adjustments
|
Jan. 27, 2012
Recasted
|
|
Business Acquisition [Line Items] | ||||
Assets acquired, at contractual amount | $ 221,000 | $ 221,126 | $ 221,126 | |
Liabilities assumed, at contractual amount | (948,701) | (948,701) | ||
Net liabilities assumed per the P&A Agreement | (727,575) | (727,575) | ||
Contractual Discount | (56,970) | (56,970) | ||
Net receivable from the FDIC | 785,000 | (784,545) | (784,545) | |
Fair value adjustments: | ||||
Loans | (22,666) | 1,006 | (21,660) | |
Discount for loans to be repurchased by the FDIC | (2,797) | (2,797) | ||
Other real estate owned | (3,359) | (1,000) | (4,359) | |
Other assets and accrued interest receivable | (60) | (60) | ||
Core deposit intangible | 64 | 64 | ||
Deposits | (54) | (54) | ||
All other | (199) | (102) | (301) | |
Total fair value adjustments | (29,071) | (96) | (29,167) | |
Discount | 56,970 | 56,970 | ||
Bargain purchase gain, pre-tax | $ 27,899 | $ (96) | $ 27,803 |
Mortgage Loan Held for Sale (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Participating Mortgage Loans [Line Items] | ||||
Balance, January 1 | $ 4,392 | $ 15,228 | ||
Origination of mortgage loans held for sale | 97,132 | 52,558 | ||
Proceeds from the sale of mortgage loans held for sale | (101,153) | (62,084) | ||
Net gain on sale of mortgage loans held for sale | 2,034 | 757 | 3,722 | 1,465 |
Balance, June 30 | $ 4,093 | $ 7,167 | $ 4,093 | $ 7,167 |
Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis (Detail) (Fair Value, Measurements, Nonrecurring, USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Mortgage Servicing Rights
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | $ 1,954 |
Valuation Technique | Third party valuation pricin |
Unobservable Inputs | Prepayment speeds, g default rate and discount rate |
Weighted average | 0.04% |
Mortgage Servicing Rights | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 0.01% |
Mortgage Servicing Rights | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 0.10% |
Other Real Estate Owned | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,996 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 40.00% |
Other Real Estate Owned | Commercial Real Estate | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 6.00% |
Other Real Estate Owned | Commercial Real Estate | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 50.00% |
Other Real Estate Owned | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,167 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 12.00% |
Other Real Estate Owned | Residential Real Estate | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 10.00% |
Other Real Estate Owned | Residential Real Estate | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 50.00% |
Impaired Loans
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,846 |
Valuation Technique | (2) Income approach |
Unobservable Inputs | (2) Adjustments for differences between net operating income expectations |
Weighted average | 6.00% |
Impaired Loans | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 6.00% |
Impaired Loans | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 6.00% |
Impaired Loans | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,041 |
Valuation Technique | (1) Sales comparison approach |
Unobservable Inputs | (1) Adjustments determined by Management for differences between the comparable sales |
Weighted average | 17.00% |
Impaired Loans | Commercial Real Estate | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 13.00% |
Impaired Loans | Commercial Real Estate | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 19.00% |
Impaired Loans | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | $ 2,790 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 15.00% |
Impaired Loans | Residential Real Estate | Minimum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 3.00% |
Impaired Loans | Residential Real Estate | Maximum
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 48.00% |
Segment Information (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Dec. 31, 2011
|
|
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | $ 28,312 | $ 26,829 | $ 101,532 | $ 110,800 | |
Provision for loan losses | 466 | (439) | 11,636 | 17,643 | |
Electronic refund check fees | 6,147 | 6,584 | 77,896 | 87,646 | |
Mortgage banking income | 1,963 | 924 | 3,317 | 1,740 | |
Net gain on sales, calls and impairment of securities | 1,907 | 56 | 1,628 | ||
Bargain purchase gain | (96) | 27,803 | |||
Other non interest income | 6,072 | 5,953 | 11,823 | 11,666 | |
Total non interest income | 14,086 | 15,368 | 120,895 | 102,680 | |
Total non interest expenses | 27,451 | 28,526 | 68,604 | 71,344 | |
Gross operating profit | 14,481 | 14,110 | 142,187 | 124,493 | |
INCOME TAX EXPENSE | 4,903 | 5,447 | 50,137 | 44,418 | |
Net income | 9,578 | 8,663 | 92,050 | 80,075 | |
Segment end of period assets | 3,278,800 | 3,104,570 | 3,278,800 | 3,104,570 | 3,419,991 |
Net interest margin | 3.53% | 3.50% | 5.73% | 6.48% | |
Traditional Banking
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 28,090 | 26,393 | 55,962 | 51,521 | |
Provision for loan losses | 831 | 585 | 3,962 | 4,907 | |
Net gain on sales, calls and impairment of securities | 1,907 | 56 | 1,628 | ||
Bargain purchase gain | (96) | 27,803 | |||
Other non interest income | 6,036 | 5,893 | 11,618 | 11,296 | |
Total non interest income | 5,940 | 7,800 | 39,477 | 12,924 | |
Total non interest expenses | 23,590 | 22,679 | 50,634 | 45,775 | |
Gross operating profit | 9,609 | 10,929 | 40,843 | 13,763 | |
INCOME TAX EXPENSE | 3,129 | 3,612 | 14,005 | 3,970 | |
Net income | 6,480 | 7,317 | 26,838 | 9,793 | |
Segment end of period assets | 3,248,453 | 3,067,290 | 3,248,453 | 3,067,290 | |
Net interest margin | 3.57% | 3.50% | 3.58% | 3.42% | |
Mortgage Banking
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 53 | 69 | 173 | 191 | |
Mortgage banking income | 1,963 | 924 | 3,317 | 1,740 | |
Other non interest income | 11 | 23 | 16 | 25 | |
Total non interest income | 1,974 | 947 | 3,333 | 1,765 | |
Total non interest expenses | 923 | 947 | 2,077 | 2,050 | |
Gross operating profit | 1,104 | 69 | 1,429 | (94) | |
INCOME TAX EXPENSE | 386 | 24 | 500 | (33) | |
Net income | 718 | 45 | 929 | (61) | |
Segment end of period assets | 9,847 | 14,695 | 9,847 | 14,695 | |
Republic Processing Group
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 169 | 367 | 45,397 | 59,088 | |
Provision for loan losses | (365) | (1,024) | 7,674 | 12,736 | |
Electronic refund check fees | 6,147 | 6,584 | 77,896 | 87,646 | |
Other non interest income | 25 | 37 | 189 | 345 | |
Total non interest income | 6,172 | 6,621 | 78,085 | 87,991 | |
Total non interest expenses | 2,938 | 4,900 | 15,893 | 23,519 | |
Gross operating profit | 3,768 | 3,112 | 99,915 | 110,824 | |
INCOME TAX EXPENSE | 1,388 | 1,811 | 35,632 | 40,481 | |
Net income | 2,380 | 1,301 | 64,283 | 70,343 | |
Segment end of period assets | $ 20,500 | $ 22,585 | $ 20,500 | $ 22,585 |
Loans Individually Evaluated For Impairment by Class of Loans (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2012
|
Dec. 31, 2011
|
|
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | $ 94,253 | $ 94,253 | $ 79,507 |
Recorded Investment | 92,209 | 92,209 | 77,193 |
Allowance for Loan Losses Allocated | 5,842 | 5,842 | 7,086 |
Average Recorded Investment | 88,263 | 77,364 | 59,711 |
Interest Income Recognized | 1,078 | 1,446 | 1,464 |
Impaired Financing Receivables with No Related Allowance | Real Estate Construction
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 3,480 | 3,480 | 2,824 |
Recorded Investment | 3,480 | 3,480 | 2,625 |
Average Recorded Investment | 3,827 | 2,746 | 1,589 |
Interest Income Recognized | 72 | 72 | 72 |
Impaired Financing Receivables with No Related Allowance | Commercial
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 2,109 | 2,109 | 2,011 |
Recorded Investment | 2,109 | 2,109 | 2,011 |
Average Recorded Investment | 2,208 | 1,910 | 1,413 |
Interest Income Recognized | 69 | 69 | 4 |
Impaired Financing Receivables with No Related Allowance | Home Equity
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 1,395 | 1,395 | 841 |
Recorded Investment | 1,395 | 1,395 | 705 |
Average Recorded Investment | 859 | 726 | 492 |
Interest Income Recognized | 4 | 4 | 16 |
Impaired Financing Receivables with No Related Allowance | Residential Real Estate | Owner Occupied
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 25,621 | 25,621 | 21,033 |
Recorded Investment | 25,618 | 25,618 | 21,033 |
Average Recorded Investment | 24,800 | 21,775 | 15,272 |
Interest Income Recognized | 23 | 23 | 296 |
Impaired Financing Receivables with No Related Allowance | Residential Real Estate | Non Owner Occupied
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 1,636 | 1,636 | 757 |
Recorded Investment | 1,636 | 1,636 | 329 |
Average Recorded Investment | 1,636 | 967 | 312 |
Interest Income Recognized | 37 | 37 | |
Impaired Financing Receivables with No Related Allowance | Commercial Real Estate
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 11,575 | 11,575 | 5,468 |
Recorded Investment | 11,575 | 11,575 | 5,468 |
Average Recorded Investment | 10,486 | 6,854 | 3,735 |
Interest Income Recognized | 545 | 574 | 84 |
Impaired Financing Receivables with No Related Allowance | Consumer | Other Consumer
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 61 | 61 | |
Recorded Investment | 61 | 61 | |
Average Recorded Investment | 63 | 31 | |
Impaired Financing Receivables with Related Allowance | Real Estate Construction
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 7,711 | 7,711 | 11,323 |
Recorded Investment | 6,145 | 6,145 | 10,343 |
Allowance for Loan Losses Allocated | 1,629 | 1,629 | 2,298 |
Average Recorded Investment | 4,953 | 7,496 | 9,291 |
Interest Income Recognized | 179 | ||
Impaired Financing Receivables with Related Allowance | Commercial
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 2,554 | 2,554 | 2,481 |
Recorded Investment | 2,554 | 2,554 | 2,481 |
Allowance for Loan Losses Allocated | 277 | 277 | 237 |
Average Recorded Investment | 2,494 | 2,619 | 3,137 |
Interest Income Recognized | 22 | 45 | 16 |
Impaired Financing Receivables with Related Allowance | Home Equity
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 1,462 | 1,462 | 2,402 |
Recorded Investment | 1,462 | 1,462 | 2,402 |
Allowance for Loan Losses Allocated | 429 | 429 | 982 |
Average Recorded Investment | 1,582 | 1,898 | 1,434 |
Interest Income Recognized | 11 | 11 | |
Impaired Financing Receivables with Related Allowance | Residential Real Estate | Owner Occupied
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 6,804 | 6,804 | 4,864 |
Recorded Investment | 6,740 | 6,740 | 4,770 |
Allowance for Loan Losses Allocated | 1,022 | 1,022 | 1,350 |
Average Recorded Investment | 5,829 | 4,805 | 3,137 |
Interest Income Recognized | 43 | 244 | 22 |
Impaired Financing Receivables with Related Allowance | Residential Real Estate | Non Owner Occupied
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 1,828 | 1,828 | 2,451 |
Recorded Investment | 1,825 | 1,825 | 2,448 |
Allowance for Loan Losses Allocated | 341 | 341 | 437 |
Average Recorded Investment | 1,916 | 2,040 | 1,983 |
Interest Income Recognized | 35 | 49 | 52 |
Impaired Financing Receivables with Related Allowance | Commercial Real Estate
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Unpaid Principal Balance | 28,017 | 28,017 | 23,052 |
Recorded Investment | 27,609 | 27,609 | 22,578 |
Allowance for Loan Losses Allocated | 2,144 | 2,144 | 1,782 |
Average Recorded Investment | 27,610 | 23,497 | 17,916 |
Interest Income Recognized | $ 217 | $ 318 | $ 723 |
Fair Value - Additional Information (Detail) (USD $)
|
6 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Dec. 31, 2011
|
Jun. 30, 2012
Mortgage Servicing Rights
|
Dec. 31, 2011
Mortgage Servicing Rights
|
|
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Other real estate, carrying value | $ 18,000,000 | $ 11,000,000 | |||
Mortgage servicing rights fair value | 2,000,000 | 3,000,000 | |||
Mortgage servicing rights outstanding balance | 2,200,000 | 3,200,000 | |||
Mortgage servicing rights, valuation allowance | 172,000 | 203,000 | |||
Mortgage servicing rights recovery amount | (1,671,000) | (1,169,000) | 30,000 | ||
Mortgage servicing rights, expense charged against earnings | $ 203,000 |
Off Balance Sheet Risks, Commitments and Contingent Liabilities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Loss Contingencies [Line Items] | ||
Loan commitment outstanding | $ 516 | $ 486 |
Federal Home Loan Bank
|
||
Loss Contingencies [Line Items] | ||
Loan commitment outstanding, letter of credit | 11 | 11 |
Standby Letters of Credit
|
||
Loss Contingencies [Line Items] | ||
Loan commitment outstanding, letter of credit | 18 | 19 |
Home Equity
|
||
Loss Contingencies [Line Items] | ||
Unfunded home equity line of credit | $ 232 | $ 238 |
Capitalized Mortgage Servicing rights (Detail) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Participating Mortgage Loans [Line Items] | ||
Balance, January 1 | $ 6,087 | $ 7,800 |
Additions | 904 | 538 |
Amortized to expense | (1,671) | (1,169) |
Change in valuation allowance | 31 | |
Balance, June 30 | $ 5,351 | $ 7,169 |
Earning per Share and Diluted (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Earnings Per Share Disclosure [Line Items] | ||||
Net income | $ 9,578 | $ 8,663 | $ 92,050 | $ 80,075 |
Weighted average shares outstanding | 20,958 | 20,936 | 20,957 | 20,937 |
Effect of dilutive securities | 59 | 58 | 77 | 55 |
Average shares outstanding including dilutive securities | 21,017 | 20,994 | 21,034 | 20,992 |
Class A Common Stock
|
||||
BASIC EARNINGS PER SHARE: | ||||
Basic earnings per share | $ 0.46 | $ 0.42 | $ 4.40 | $ 3.83 |
DILUTED EARNINGS PER SHARE: | ||||
Diluted earnings per share | $ 0.46 | $ 0.41 | $ 4.38 | $ 3.82 |
Class B Common Stock
|
||||
BASIC EARNINGS PER SHARE: | ||||
Basic earnings per share | $ 0.44 | $ 0.40 | $ 4.37 | $ 3.80 |
DILUTED EARNINGS PER SHARE: | ||||
Diluted earnings per share | $ 0.44 | $ 0.40 | $ 4.35 | $ 3.79 |
Other Real Estate Owned Write Downs (Detail) (Other Real Estate Owned, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Other Real Estate Owned
|
||||
Real Estate, Write-down or Reserve [Line Items] | ||||
Other real estate owned write-downs | $ 115 | $ 41 | $ 341 | $ 227 |
Quantitative Information about Recurring Level 3 Fair Value Measurements (Detail) (Fair Value, Inputs, Level 3, USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Private label mortgage backed security | 4,579 |
Minimum
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Constant prepayment rate | 2.00% |
Probability of default | 5.00% |
Loss severity | 60.00% |
Maximum
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Constant prepayment rate | 6.00% |
Probability of default | 41.25% |
Loss severity | 70.00% |
Deposits (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending deposit balances | deposit
balances at June 30, 2012 and December 31, 2011 were as
follows:
___________________________________
(*) - Represents a time deposit.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Composition of Deposits | The
composition of deposits assumed in the TCB transaction outstanding
at June 30, 2012 follows:
|
Non-performing Loans and Non-performing Assets (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Loans on non-accrual status | $ 22,578 | [1] | $ 23,306 | [1] | ||
Loans past due 90 days or more and still on accrual | ||||||
Total non-performing loans | 22,578 | 23,306 | ||||
Non-performing assets | 40,923 | 34,262 | ||||
Other Real Estate Owned
|
||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Non-performing assets | $ 18,345 | $ 10,956 | ||||
|
Securities with Unrealized Losses, Aggregated by Investment Category with Continuous Unrealized Loss Position (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | $ 197,322 | |
Less than 12 months Unrealized Losses | (803) | |
12 months or more Fair Value | 4,579 | 4,542 |
12 months or more Unrealized Losses | (1,239) | (1,276) |
Total Fair Value | 4,579 | 201,864 |
Total Unrealized Losses | (1,239) | (2,079) |
U.S. Treasury securities and U.S. Government agencies
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 60,547 | |
Less than 12 months Unrealized Losses | (235) | |
Total Fair Value | 60,547 | |
Total Unrealized Losses | (235) | |
Private label mortgage backed and other private label mortgage-related securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
12 months or more Fair Value | 4,579 | 4,542 |
12 months or more Unrealized Losses | (1,239) | (1,276) |
Total Fair Value | 4,579 | 4,542 |
Total Unrealized Losses | (1,239) | (1,276) |
Mortgage backed securities - residential
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 136,775 | |
Less than 12 months Unrealized Losses | (568) | |
Total Fair Value | 136,775 | |
Total Unrealized Losses | $ (568) |
Carrying Amount of Loans with Valuation Allowance (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | ||
Carrying amount of loans with a valuation allowance | $ 46,335 | $ 45,022 |
Valuation allowance | 5,842 | 7,086 |
Collateral Dependent Loans
|
||
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | ||
Carrying amount of loans with a valuation allowance | 3,574 | 5,391 |
Valuation allowance | $ 693 | $ 1,717 |
Results of Operations for TCB Franchise (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
INTEREST INCOME: | ||||
Loans, including fees | $ 30,534 | $ 29,843 | $ 105,826 | $ 118,004 |
Taxable investment securities | 2,904 | 4,093 | 6,171 | 7,685 |
Total interest income | 33,814 | 34,459 | 113,401 | 127,082 |
INTEREST EXPENSE: | ||||
Deposits | 1,213 | 2,272 | 2,752 | 5,210 |
Total interest expense | 5,502 | 7,630 | 11,869 | 16,282 |
Net interest income | 28,312 | 26,829 | 101,532 | 110,800 |
Provision for loan losses | 466 | (439) | 11,636 | 17,643 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 27,846 | 27,268 | 89,896 | 93,157 |
NON INTEREST INCOME: | ||||
Service charges on deposit accounts | 3,286 | 3,736 | 6,589 | 7,160 |
Bargain purchase gain | (96) | 27,803 | ||
Gain on sale of securities available for sale | 1,907 | 56 | 1,907 | |
Other | 1,345 | 724 | 2,237 | 1,529 |
Total non interest income | 14,086 | 15,368 | 120,895 | 102,680 |
NON INTEREST EXPENSES: | ||||
Salaries and employee benefits | 14,313 | 13,250 | 31,284 | 30,489 |
Occupancy and equipment, net | 5,144 | 5,001 | 11,218 | 11,298 |
Communication and transportation | 961 | 878 | 3,622 | 3,387 |
Marketing and development | 904 | 868 | 1,842 | 1,772 |
FDIC insurance expense | 291 | 1,165 | 721 | 2,800 |
Data processing | 1,195 | 817 | 2,416 | 1,565 |
Supplies | 529 | 314 | 1,478 | 1,208 |
Other real estate owned expense | 555 | 378 | 1,160 | 859 |
Other | 1,469 | 1,327 | 4,759 | 4,692 |
Total non interest expenses | 27,451 | 28,526 | 68,604 | 71,344 |
INCOME BEFORE INCOME TAX EXPENSE | 14,481 | 14,110 | 142,187 | 124,493 |
Tennessee Commerce Bank ( "TCB" )
|
||||
INTEREST INCOME: | ||||
Loans, including fees | 885 | 1,643 | ||
Taxable investment securities | 194 | 443 | ||
Total interest income | 1,079 | 2,086 | ||
INTEREST EXPENSE: | ||||
Deposits | 12 | 47 | ||
Total interest expense | 12 | 47 | ||
Net interest income | 1,067 | 2,039 | ||
Provision for loan losses | ||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 1,067 | 2,039 | ||
NON INTEREST INCOME: | ||||
Service charges on deposit accounts | 10 | 24 | ||
Bargain purchase gain | (96) | 27,803 | ||
Gain on sale of securities available for sale | 56 | |||
Other | 471 | 626 | ||
Total non interest income | 385 | 28,509 | ||
NON INTEREST EXPENSES: | ||||
Salaries and employee benefits | 1,015 | 2,009 | ||
Occupancy and equipment, net | 378 | 586 | ||
Communication and transportation | 95 | 160 | ||
Marketing and development | 18 | 19 | ||
FDIC insurance expense | 15 | 52 | ||
Data processing | 301 | 607 | ||
Supplies | 10 | 21 | ||
Other real estate owned expense | 82 | 103 | ||
Other | 338 | 780 | ||
Total non interest expenses | 2,252 | 4,337 | ||
INCOME BEFORE INCOME TAX EXPENSE | $ (800) | $ 26,211 |
Traditional Banking Credit Quality Ratios (Detail)
|
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Credit Quality Ratio [Line Items] | ||
Non-performing loans to total loans | 0.93% | 1.02% |
Non-performing assets to total loans (including OREO) | 1.66% | 1.49% |
Non-performing assets to total assets | 1.25% | 1.00% |
Traditional Banking
|
||
Credit Quality Ratio [Line Items] | ||
Non-performing loans to total loans | 0.93% | 1.02% |
Non-performing assets to total loans (including OREO) | 1.66% | 1.49% |
Non-performing assets to total assets | 1.26% | 1.10% |
FHLB Advances, Based on Contractual Maturity (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
---|---|
Schedule of Federal Home Loan Bank Advances and Other Borrowings [Line Items] | |
2012 | $ 50,000 |
2013 | 35,000 |
2014 | 178,000 |
2015 | 25,000 |
2016 | 72,000 |
Thereafter | 178,555 |
Total | $ 538,555 |
Deposit Balance (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|
Deposit Liabilities [Line Items] | ||||||
Demand | $ 538,183 | $ 523,708 | ||||
Money market accounts | 465,158 | 433,508 | ||||
Brokered money market accounts | 14,386 | 18,121 | ||||
Savings | 65,820 | 44,472 | ||||
Individual retirement accounts | 308,608 | 305,686 | ||||
Time deposits, $100,000 and over | 67,567 | [1] | 82,970 | [1] | ||
Other certificates of deposit | 114,659 | [1] | 103,230 | [1] | ||
Brokered certificates of deposit | 93,788 | [1] | 88,285 | [1] | ||
Total interest-bearing deposits | 1,392,155 | 1,325,495 | ||||
Total non interest-bearing deposits | 513,136 | 408,483 | ||||
Total deposits | 1,905,291 | 1,733,978 | ||||
Individual Retirement Accounts
|
||||||
Deposit Liabilities [Line Items] | ||||||
Individual retirement accounts | $ 32,594 | [1] | $ 31,201 | [1] | ||
|
Risk Category of Loans by Class of Loans (Detail) (USD $)
|
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | $ 750,000 | |
Commercial real estate | 639,966,000 | |
Real estate construction | 67,406,000 | |
Commercial | 119,117,000 | |
Warehouse lines of credit | 41,496,000 | |
Home equity | 280,235,000 | |
Credit cards | 8,580,000 | |
Overdrafts | 950,000 | |
Other consumer | 9,908,000 | |
Total | 2,440,394,000 | 2,285,295,000 |
Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 985,735,000 | |
Non Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 99,161,000 | |
Purchased Whole Loans
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 32,741,000 | |
Corporate Credit Quality Indicator
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 647,431,000 | 639,966,000 |
Real estate construction | 75,691,000 | 67,406,000 |
Commercial | 128,207,000 | 119,117,000 |
Warehouse lines of credit | 89,206,000 | 41,496,000 |
Home equity | 3,336,000 | 3,856,000 |
Credit cards | ||
Overdrafts | ||
Other consumer | 312,000 | 2,000 |
Total | 1,004,166,000 | 924,531,000 |
Corporate Credit Quality Indicator | Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 17,822,000 | 15,182,000 |
Corporate Credit Quality Indicator | Non Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 8,939,000 | 4,765,000 |
Corporate Credit Quality Indicator | Purchased Whole Loans
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 33,222,000 | 32,741,000 |
Corporate Credit Quality Indicator | Pass
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 595,117,000 | 600,338,000 |
Real estate construction | 69,867,000 | 54,963,000 |
Commercial | 124,653,000 | 116,450,000 |
Warehouse lines of credit | 89,206,000 | 41,496,000 |
Credit cards | ||
Overdrafts | ||
Total | 912,065,000 | 845,988,000 |
Corporate Credit Quality Indicator | Pass | Purchased Whole Loans
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 33,222,000 | 32,741,000 |
Corporate Credit Quality Indicator | Special Mention / Watch
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 34,991,000 | 27,158,000 |
Real estate construction | 975,000 | 2,353,000 |
Commercial | 3,112,000 | 2,294,000 |
Home equity | 204,000 | |
Credit cards | ||
Overdrafts | ||
Other consumer | 255,000 | |
Total | 52,372,000 | 35,455,000 |
Corporate Credit Quality Indicator | Special Mention / Watch | Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 6,421,000 | 1,180,000 |
Corporate Credit Quality Indicator | Special Mention / Watch | Non Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 6,414,000 | 2,470,000 |
Corporate Credit Quality Indicator | Substandard
|
||
Credit Quality Ratio [Line Items] | ||
Commercial real estate | 17,323,000 | 12,470,000 |
Real estate construction | 4,849,000 | 10,090,000 |
Commercial | 442,000 | 373,000 |
Home equity | 3,011,000 | 3,856,000 |
Credit cards | ||
Overdrafts | ||
Other consumer | 57,000 | 2,000 |
Total | 39,498,000 | 43,088,000 |
Corporate Credit Quality Indicator | Substandard | Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 11,291,000 | 14,002,000 |
Corporate Credit Quality Indicator | Substandard | Non Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | 2,525,000 | 2,295,000 |
Corporate Credit Quality Indicator | Doubtful / Loss
|
||
Credit Quality Ratio [Line Items] | ||
Home equity | 121,000 | |
Credit cards | ||
Overdrafts | ||
Total | 231,000 | |
Corporate Credit Quality Indicator | Doubtful / Loss | Owner Occupied
|
||
Credit Quality Ratio [Line Items] | ||
Residential Real Estate | $ 110,000 |
Basis of Presentation and Summary of Significant Accounting Policies
|
6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
|||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation – The consolidated financial
statements include the accounts of Republic Bancorp, Inc. (the
“Parent Company”) and its wholly-owned subsidiaries:
Republic Bank & Trust Company (“RB&T”) and
Republic Bank (“RB”) (collectively referred together
with RB&T as the “Bank”), Republic Funding Company
and Republic Invest Co. Republic Invest Co. includes its
subsidiary, Republic Capital LLC. The consolidated financial
statements also include the wholly-owned subsidiaries of RB&T:
Republic Financial Services, LLC, TRS RAL Funding, LLC and Republic
Insurance Agency, LLC. Republic Bancorp Capital Trust
(“RBCT”) is a Delaware statutory business trust that is
a wholly-owned unconsolidated finance subsidiary of Republic
Bancorp, Inc. All companies are collectively referred to as
“Republic” or the “Company.” All
significant intercompany balances and transactions are eliminated
in consolidation.
The
accompanying unaudited consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, the financial statements do not include all of the
information and footnotes required by U.S. generally accepted
accounting principles (“GAAP”) for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
fair presentation have been included. Operating results for the
three and six months ended June 30, 2012 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 2012. For further information, refer to the
consolidated financial statements and footnotes thereto included in
Republic’s Form 10-K for the year ended December 31,
2011.
As
of June 30, 2012, the Company was divided into three distinct
business operating segments: Traditional Banking, Mortgage Banking
and Republic Processing Group (“RPG”). During the
second quarter of 2012, the Company realigned the previously
reported Tax Refund Solutions (“TRS”) segment as a
division of the newly formed RPG segment. Along with the TRS
division, Republic Payment Solutions (“RPS”) was newly
created to operate as a second division of the RPG
segment.
Traditional Banking
and Mortgage Banking (collectively “Core
Banking”)
Republic
operates 43 banking centers, primarily in the retail banking
industry, and conducts its operations predominately in metropolitan
Louisville, Kentucky; central Kentucky; northern Kentucky; southern
Indiana; metropolitan Tampa, Florida; metropolitan Cincinnati,
Ohio; metropolitan Nashville, Tennessee and through an Internet
banking delivery channel.
Effective
January 27, 2012, RB&T assumed substantially all of the
deposits and certain other liabilities and acquired certain assets
of Tennessee Commerce Bank (“TCB”), headquartered in
Franklin (Nashville Metropolitan Statistical Area
(“MSA”)), Tennessee from the FDIC, as receiver for TCB.
This acquisition represents a single banking center located in the
Nashville MSA and represents RB&T’s initial entrance into
the Tennessee market. See additional discussion under Footnote 2
“Bank
Acquisition” of Part I Item 1 “Financial
Statements.”
Core
Banking results of operations are primarily dependent upon net
interest income, which represents the difference between the
interest income and fees on interest-earning assets and the
interest expense on interest-bearing liabilities. Principal
interest-earning Core Banking assets represent investment
securities and real estate mortgage, commercial and consumer loans.
Interest-bearing liabilities primarily consist of interest-bearing
deposit accounts, securities sold under agreements to repurchase,
as well as short-term and long-term borrowing sources.
Other
sources of Core Banking income include service charges on deposit
accounts, debit card interchange fee income, title insurance
commissions, fees charged to customers for trust services and
revenue generated from Mortgage Banking activities. Mortgage
Banking activities represent both the origination and sale of loans
in the secondary market and the servicing of loans for others.
Additionally, in June 2011, the Bank commenced business in its
newly established warehouse lending division. Through this
division, the Bank provides short-term, revolving credit facilities
to mortgage bankers across the nation. These credit facilities are
secured by single family residential real estate
loans.
Core
Banking operating expenses consist primarily of salaries and
employee benefits, occupancy and equipment expenses, communication
and transportation costs, marketing and development expenses,
Federal Deposit Insurance Corporation (“FDIC”)
insurance expense, and various general and administrative costs.
Core Banking results of operations are significantly impacted by
general economic and competitive conditions, particularly changes
in market interest rates, government laws and policies and actions
of regulatory agencies.
Republic
Processing Group (“RPG”)
Nationally,
through RB&T, RPG facilitates the receipt and payment of
federal and state tax refund products under the TRS division.
Nationally, through RB, the RPS
division is preparing to become an issuing bank to offer general
purpose reloadable prepaid debit, payroll, gift and incentive cards
through third party program managers.
TRS
division:
Republic,
through its TRS division, is one of a limited number of financial
institutions that facilitates the payment of federal and state tax
refund products through third-party tax preparers located
throughout the U.S., as well as tax-preparation software providers.
The TRS division’s three primary tax-related products have
historically included: Electronic Refund Checks (“ERCs”
or “ARs”), Electronic Refund Deposits
(“ERDs” or “ARDs”) and Refund Anticipation
Loans (“RALs”). Substantially all of the business
generated by the TRS division occurs in the first quarter of the
year. The TRS division traditionally operates at a loss during the
second half of the year, during which the division incurs costs
preparing for the upcoming year’s first quarter tax
season.
As
previously disclosed, effective December 8, 2011, RB&T entered
into an agreement with the FDIC resolving its differences regarding
the TRS division. RB&T’s resolution with the FDIC was in
the form of a Stipulation Agreement and a Consent Order
(collectively, the “Agreement”). As part of the
Agreement, RB&T and the FDIC settled all matters set out in the
FDIC’s Amended Notice of Charges dated May 3, 2011 and the
lawsuit filed against the FDIC by RB&T. As required by this
settlement, RB&T discontinued its offering of the RAL product
by April 30, 2012.
ERCs/ERDs
are products whereby a tax refund is issued to the taxpayer after
RB&T has received the refund from the federal or state
government. There is no credit risk or borrowing cost for RB&T
associated with these products because they are only delivered to
the taxpayer upon receipt of the refund directly from the Internal
Revenue Service (“IRS”). Fees earned on ERCs/ERDs are
reported as non interest income under the line item
“Electronic Refund Check fees.”
RALs
were short-term consumer loans offered to taxpayers that were
secured by the customer’s anticipated tax refund, which
represented the source of repayment. The fees earned on RALs are
reported as interest income under the line item “Loans,
including fees.”
RB&T’s
discontinuance of RALs beyond 2012 is expected to have a material
adverse impact on net income in 2013 and beyond, as the RAL product
accounted for approximately 34% of the TRS division’s net
income for the six months ended June 30, 2012 and 2011,
respectively. In addition, RB&T’s loss of the RAL product
is expected to negatively impact the revenue it receives on its
ERC/ERD products due to competitive pricing pressures. It is
expected that the TRS division will continue to be a material
contributor to the Company’s overall net income in 2013 and
beyond. The Company cannot, however, currently predict a precise
contribution from the TRS division going forward, as many of its
pricing and potential revenue sharing arrangements for the upcoming
first quarter 2013 tax season and beyond remain subject to
discussions. Actual TRS division net income for 2012 and beyond
will be impacted by a number of factors, including those factors
disclosed from time to time in the Company’s filings with the
SEC and set forth under Part I Item 1A “Risk
Factors” of the Company’s 2011 Form
10-K.
For additional discussion regarding the Agreement, see the
Company’s Form 8-K filed with the SEC on December 9, 2011,
including Exhibits 10.1 and 10.2.
For additional discussion regarding TRS, a division of RPG, see the
following sections:
● Part I Item 1
“Financial Statements:”
o Footnote
4 “Loans and Allowance for Loan
Losses”
o Footnote
6 “Federal Home Loan Bank Advances”
o Footnote
11 “Segment Information”
RPS
division:
Nationally,
through RB, the RPS division is preparing to become an issuing bank
to offer general purpose reloadable prepaid debit, payroll, gift
and incentive cards through third party program managers. If
successful, this program is expected to:
For
the projected near-term, as the prepaid card program is being
established, the operating results of the RPS division are expected
to be immaterial to the Company’s overall results of
operations and will be reported as part of the RPG business
segment. The RPS division will not be reported as a separate
business segment until such time, if any, that it becomes
material.
The
Company divides prepaid cards into two general categories:
reloadable and non-reloadable cards.
Reloadable
Cards: These types of cards are generally payroll or considered
general purpose reloadable (“GPR”) cards. Payroll cards
are issued to an employee by an employer to receive the direct
deposit of their payroll. GPR cards can also be issued to a
consumer at a retail location or mailed to a consumer after
completing an on-line application. GPR cards can be reloaded
multiple times with a consumer’s payroll, government benefit,
a federal or state tax refund or through cash reload networks
located at retail locations. Reloadable cards are generally open
loop cards as described below.
Non-Reloadable
Cards: These are generally one-time use cards that are only active
until the funds initially loaded to the card are spent. These types
of cards are gift or incentive cards. These cards may be open loop
or closed loop. Normally these types of cards are used for purchase
of goods or services at retail locations and cannot be used to
receive cash.
These
prepaid cards may be open loop, closed loop or semi-closed loop.
Open loop cards can be used to receive cash at ATM locations or
purchase goods or services by PIN or signature at retail locations.
These cards can be used virtually anywhere that Visa® or
MasterCard® is accepted. Closed loop cards can only be used at
a specific merchant. Semi-closed loop cards can be used at several
merchants such as a shopping mall.
The
prepaid card market is one of the fastest growing segments of the
payments industry in the U.S. This market has experienced
significant growth in recent years due to consumers and merchants
embracing improved technology, greater convenience, more product
choices and greater flexibility. Prepaid cards have also proven to
be an attractive alternative to traditional bank accounts for
certain segments of the population, particularly those without, or
who could not qualify for, a checking or savings
account.
The
RPS division will work with various third parties to distribute
prepaid cards to consumers throughout the U.S. The Company will
also likely work with these third parties to develop additional
financial services for consumers to increase the functionality of
the program and prepaid card usage.
Summary of New Significant Accounting Policies:
Purchased Credit Impaired Loans – Purchased credit
impaired loans acquired in a business combination are recorded at
estimated fair value on their purchase date with no carryover of
the related allowance for loan losses. In determining the estimated
fair value of these loans, management considers a number of factors
including, the remaining life of the acquired loans, estimated
prepayments, estimated future credit losses, estimated value of the
underlying collateral, estimated holding periods and the net
present value of the cash flows expected to be received. To the
extent that any smaller dollar purchased credit impaired loan is
not specifically reviewed, when evaluating the net present value of
the future estimated cash flows, management applies a loss estimate
to that loan based on the average expected loss rates for the loans
that were individually reviewed in that loan portfolio, adjusted
for other factors, as applicable.
For
the TCB transaction, the Company elected to account for purchased
credit impaired loans individually, as opposed to aggregating the
loans into pools based on common risk characteristics such as loan
type.
The
non-accretable difference on purchased credit impaired loans
represents the difference between the contractually required
payments and the cash flows expected to be collected in accordance
with management’s determination of the day one fair values.
Subsequent decreases to the expected cash flows will generally
result in a provision for loan losses. Subsequent increases in cash
flows will result in a reversal of the provision for loan losses to
the extent of prior charges with any additional increases resulting
in an adjustment to the accretable yield, which would have a
positive impact in interest income.
The
accretable difference on purchased credit impaired loans represents
the difference between the expected cash flows and the net present
value of expected cash flows. Such difference is accreted into
earnings using the level-yield method over the expected cash flow
periods of the loans. In determining the net present value of the
expected cash flows, the Bank used discount rates depending on loan
risk characteristics.
As
provided for under GAAP, management has up to twelve months
following the date of the acquisition to finalize the fair values
of acquired assets and assumed liabilities. Material events that
occur during the measurement period will be analyzed to determine
if the new information reflected facts and circumstances that
existed as of the acquisition date that if known, would have
affected the measurement of fair value of the amounts recognized as
of the acquisition date. The measurement period ends as soon as the
Bank receives the information it was seeking about facts and
circumstances that existed as of the acquisition date or learns
more information is not obtainable. The measurement period is
limited to one year from the acquisition date. Once management has
finalized the fair values of acquired assets and assumed
liabilities within this twelve month period, management considers
such values to be the “day one fair
values.”
Management
separately monitors the purchased credit impaired loan portfolio
and on a quarterly basis reviews loans contained within this
portfolio against the factors and assumptions used in determining
the day one fair values. In addition to its quarterly evaluation, a
loan is typically reviewed (i) when it is modified or extended,
(ii) when material information becomes available to the Bank that
provides additional insight regarding the loan’s performance,
the status of the borrower, or the quality or value of the
underlying collateral, or (iii) in conjunction with the quarterly
review of projected cash flows which include a substantial portion
of the acquired loans.
Reclassifications and recasts – Certain amounts
presented in prior periods have been reclassified to conform to the
current period presentation. These reclassifications had no impact
on prior years’ net income. Additionally, as discussed above
and in Footnote 2 “Bank
Acquisition,” during the second quarter of 2012 the
Bank posted adjustments to the acquired assets for its
FDIC-assisted acquisition in the determination of day one fair
values.
|
Deposits - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Deposit Liabilities [Line Items] | ||
Deposits | $ 1,905,291 | $ 1,733,978 |
Tennessee Commerce Bank ( "TCB" )
|
||
Deposit Liabilities [Line Items] | ||
Deposits | 74,591 | |
Tennessee Commerce Bank ( "TCB" ) | Interest-bearing Deposits
|
||
Deposit Liabilities [Line Items] | ||
Deposits | 15,000 | |
Tennessee Commerce Bank ( "TCB" ) | Non Interest Bearing Deposits
|
||
Deposit Liabilities [Line Items] | ||
Deposits | $ 60,000 |