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) |
þ Yes
|
o No
|
þ Yes
|
o No
|
Large accelerated filer o
|
Accelerated filer þ
|
Non-accelerated filer o
|
Smaller reporting company o
|
o Yes
|
þ No
|
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) | ||||||||
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 96,187 | $ | 362,971 | ||||
Securities available for sale
|
533,236 | 645,948 | ||||||
Securities to be held to maturity (fair value of $48,448 in 2012 and $28,342 in 2011)
|
48,026 | 28,074 | ||||||
Mortgage loans held for sale
|
3,385 | 4,392 | ||||||
Loans, net of allowance for loan losses of $24,100 and $24,063 (2012 and 2011)
|
2,618,257 | 2,261,232 | ||||||
Federal Home Loan Bank stock, at cost
|
28,784 | 25,980 | ||||||
Premises and equipment, net
|
32,984 | 34,681 | ||||||
Goodwill
|
10,168 | 10,168 | ||||||
Other real estate owned
|
25,148 | 10,956 | ||||||
Other assets and accrued interest receivable
|
39,601 | 35,589 | ||||||
TOTAL ASSETS
|
$ | 3,435,776 | $ | 3,419,991 | ||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Non interest-bearing
|
$ | 514,893 | $ | 408,483 | ||||
Interest-bearing
|
1,540,717 | 1,325,495 | ||||||
Total deposits
|
2,055,610 | 1,733,978 | ||||||
Securities sold under agreements to repurchase and other short-term borrowings
|
169,839 | 230,231 | ||||||
Federal Home Loan Bank advances
|
553,487 | 934,630 | ||||||
Subordinated note
|
41,240 | 41,240 | ||||||
Other liabilities and accrued interest payable
|
57,844 | 27,545 | ||||||
Total liabilities
|
2,878,020 | 2,967,624 | ||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred stock, no par value
|
- | - | ||||||
Class A Common Stock and Class B Common Stock, no par value
|
4,945 | 4,947 | ||||||
Additional paid in capital
|
132,797 | 131,482 | ||||||
Retained earnings
|
414,133 | 311,799 | ||||||
Accumulated other comprehensive income
|
5,881 | 4,139 | ||||||
Total stockholders' equity
|
557,756 | 452,367 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 3,435,776 | $ | 3,419,991 |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||
(in thousands, except per share data)1 | ||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
INTEREST INCOME:
|
||||||||||||||||
Loans, including fees
|
$ | 31,292 | $ | 30,225 | $ | 137,118 | $ | 148,229 | ||||||||
Taxable investment securities
|
2,483 | 3,864 | 8,654 | 11,549 | ||||||||||||
Federal Home Loan Bank stock and other
|
353 | 337 | 1,757 | 1,730 | ||||||||||||
Total interest income
|
34,128 | 34,426 | 147,529 | 161,508 | ||||||||||||
INTEREST EXPENSE:
|
||||||||||||||||
Deposits
|
1,197 | 2,057 | 3,949 | 7,267 | ||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings
|
110 | 111 | 340 | 535 | ||||||||||||
Federal Home Loan Bank advances
|
3,619 | 4,467 | 11,245 | 13,857 | ||||||||||||
Subordinated note
|
630 | 628 | 1,891 | 1,886 | ||||||||||||
Total interest expense
|
5,556 | 7,263 | 17,425 | 23,545 | ||||||||||||
NET INTEREST INCOME
|
28,572 | 27,163 | 130,104 | 137,963 | ||||||||||||
Provision for loan losses
|
2,083 | (140 | ) | 13,719 | 17,503 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
26,489 | 27,303 | 116,385 | 120,460 | ||||||||||||
NON INTEREST INCOME:
|
||||||||||||||||
Service charges on deposit accounts
|
3,438 | 3,421 | 10,027 | 10,581 | ||||||||||||
Refund transfer fees
|
231 | 425 | 78,127 | 88,071 | ||||||||||||
Mortgage banking income
|
2,274 | 1,352 | 5,591 | 3,092 | ||||||||||||
Debit card interchange fee income
|
1,390 | 1,415 | 4,387 | 4,392 | ||||||||||||
Bargain purchase gain - Tennessee Commerce Bank
|
(189 | ) | - | 27,614 | - | |||||||||||
Bargain purchase gain - First Commercial Bank
|
27,112 | - | 27,112 | - | ||||||||||||
Gain on sale of banking center
|
- | 2,856 | - | 2,856 | ||||||||||||
Gain on sale of securities available for sale
|
- | 301 | 56 | 2,208 | ||||||||||||
Total impairment losses on investment securities
|
- | - | - | (279 | ) | |||||||||||
Gain recognized in other comprehensive income
|
- | - | - | - | ||||||||||||
Net impairment loss recognized in earnings
|
- | - | - | (279 | ) | |||||||||||
Other
|
589 | 706 | 2,826 | 2,235 | ||||||||||||
Total non interest income
|
34,845 | 10,476 | 155,740 | 113,156 | ||||||||||||
NON INTEREST EXPENSES:
|
||||||||||||||||
Salaries and employee benefits
|
14,921 | 13,145 | 46,205 | 43,634 | ||||||||||||
Occupancy and equipment, net
|
5,718 | 5,138 | 16,936 | 16,436 | ||||||||||||
Communication and transportation
|
1,045 | 1,081 | 4,667 | 4,468 | ||||||||||||
Marketing and development
|
828 | 736 | 2,670 | 2,508 | ||||||||||||
FDIC insurance expense
|
287 | 918 | 1,008 | 3,718 | ||||||||||||
Bank franchise tax expense
|
729 | 713 | 3,363 | 2,992 | ||||||||||||
Data processing
|
1,030 | 787 | 3,446 | 2,352 | ||||||||||||
Debit card interchange expense
|
648 | 566 | 1,909 | 1,690 | ||||||||||||
Supplies
|
270 | 409 | 1,748 | 1,617 | ||||||||||||
Other real estate owned expense
|
1,328 | 608 | 2,488 | 1,467 | ||||||||||||
Charitable contributions
|
232 | 178 | 3,110 | 5,710 | ||||||||||||
Legal expense
|
388 | 784 | 1,283 | 3,123 | ||||||||||||
FDIC civil money penalty
|
- | - | - | 2,000 | ||||||||||||
FHLB advance prepayment expense
|
- | - | 2,436 | - | ||||||||||||
Other
|
2,338 | 1,375 | 7,097 | 6,067 | ||||||||||||
Total non interest expenses
|
29,762 | 26,438 | 98,366 | 97,782 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
31,572 | 11,341 | 173,759 | 135,834 | ||||||||||||
INCOME TAX EXPENSE
|
10,904 | 3,471 | 61,041 | 47,889 | ||||||||||||
NET INCOME
|
$ | 20,668 | $ | 7,870 | $ | 112,718 | $ | 87,945 | ||||||||
BASIC EARNINGS PER SHARE:
|
||||||||||||||||
Class A Common Stock
|
$ | 0.99 | $ | 0.38 | $ | 5.38 | $ | 4.20 | ||||||||
Class B Common Stock
|
0.97 | 0.36 | 5.34 | 4.16 | ||||||||||||
DILUTED EARNINGS PER SHARE:
|
||||||||||||||||
Class A Common Stock
|
$ | 0.98 | $ | 0.38 | $ | 5.36 | $ | 4.19 | ||||||||
Class B Common Stock
|
0.97 | 0.36 | 5.32 | 4.15 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income
|
$ | 20,668 | $ | 7,870 | $ | 112,718 | $ | 87,945 | ||||||||
OTHER COMPREHENSIVE INCOME
|
||||||||||||||||
Unrealized gain on securities available for sale
|
649 | 3,588 | 2,324 | 5,474 | ||||||||||||
Change in unrealized losses on securities available for sale for
|
||||||||||||||||
which a portion of an other-than-temporary impairment has
|
||||||||||||||||
been recognized in earnings
|
374 | 143 | 411 | (75 | ) | |||||||||||
Realized amount on securities sold
|
- | (300 | ) | (55 | ) | (2,208 | ) | |||||||||
Reclassification adjustment for losses realized in income
|
- | - | - | (279 | ) | |||||||||||
Net unrealized gains
|
1,023 | 3,431 | 2,680 | 2,912 | ||||||||||||
Tax effect
|
(358 | ) | (1,201 | ) | (938 | ) | (1,019 | ) | ||||||||
Net of tax amount
|
665 | 2,230 | 1,742 | 1,893 | ||||||||||||
COMPREHENSIVE INCOME
|
$ | 21,333 | $ | 10,100 | $ | 114,460 | $ | 89,838 |
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED) | ||||||||||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2012 | ||||||||||||||||||||||||||||
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
|
- | - | - | - | 112,718 | - | 112,718 | |||||||||||||||||||||
Net change in accumulated other comprehensive
|
||||||||||||||||||||||||||||
income
|
- | - | - | - | - | 1,742 | 1,742 | |||||||||||||||||||||
Dividend declared Common Stock:
|
||||||||||||||||||||||||||||
Class A ($0.484 per share)
|
- | - | - | - | (9,033 | ) | - | (9,033 | ) | |||||||||||||||||||
Class B ($0.440 per share)
|
- | - | - | - | (1,007 | ) | - | (1,007 | ) | |||||||||||||||||||
Stock options exercised, net of shares redeemed
|
8 | - | 2 | 213 | (68 | ) | - | 147 | ||||||||||||||||||||
Repurchase of Class A Common Stock
|
(17 | ) | - | (4 | ) | (106 | ) | (276 | ) | - | (386 | ) | ||||||||||||||||
Conversion of Class B Common Stock to Class A
|
||||||||||||||||||||||||||||
Common Stock
|
29 | (29 | ) | - | - | - | - | - | ||||||||||||||||||||
Notes receivable on Common Stock, net of
|
||||||||||||||||||||||||||||
cash payments
|
- | - | - | 413 | - | - | 413 | |||||||||||||||||||||
Deferred director compensation expense -
|
||||||||||||||||||||||||||||
Company Stock
|
1 | - | - | 140 | - | - | 140 | |||||||||||||||||||||
Stock based compensation expense
|
- | - | - | 655 | - | - | 655 | |||||||||||||||||||||
Balance, September 30, 2012
|
18,673 | 2,271 | $ | 4,945 | $ | 132,797 | $ | 414,133 | $ | 5,881 | $ | 557,756 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (in thousands) | ||||||||
2012
|
2011
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 112,718 | $ | 87,945 | ||||
Adjustments to reconcile net income to net cash provided
|
||||||||
by operating activities:
|
||||||||
Depreciation, amortization and accretion, net
|
7,348 | 2,393 | ||||||
Provision for loan losses
|
13,719 | 17,503 | ||||||
Net gain on sale of mortgage loans held for sale
|
(6,541 | ) | (2,976 | ) | ||||
Origination of mortgage loans held for sale
|
(166,224 | ) | (93,052 | ) | ||||
Proceeds from sale of mortgage loans held for sale
|
173,772 | 106,535 | ||||||
Net realized impairment of mortgage servicing rights
|
129 | 203 | ||||||
Net realized gain on sales, calls and impairment of securities
|
(56 | ) | (1,929 | ) | ||||
Net gain on sale of other real estate owned
|
(381 | ) | (424 | ) | ||||
Writedowns of other real estate owned
|
1,207 | 463 | ||||||
Deferred director compensation expense - Company Stock
|
140 | 130 | ||||||
Stock based compensation expense
|
655 | 213 | ||||||
Bargain purchase gains on acquisitions
|
(54,726 | ) | - | |||||
Gain on sale of banking center
|
- | (2,856 | ) | |||||
Net change in other assets and liabilities:
|
||||||||
Accrued interest receivable
|
(409 | ) | (308 | ) | ||||
Accrued interest payable
|
(228 | ) | (566 | ) | ||||
Other assets
|
5,864 | 3,115 | ||||||
Other liabilities
|
16,347 | 17,660 | ||||||
Net cash provided by operating activities
|
103,334 | 134,049 | ||||||
INVESTING ACTIVITIES:
|
||||||||
Net cash received in FDIC-assisted transactions
|
921,161 | - | ||||||
Purchases of securities available for sale
|
(61,716 | ) | (694,640 | ) | ||||
Purchases of securities to be held to maturity
|
(23,115 | ) | (500 | ) | ||||
Purchases of Federal Home Loan Bank stock
|
- | (1 | ) | |||||
Proceeds from calls, maturities and paydowns of securities available for sale
|
193,403 | 384,947 | ||||||
Proceeds from calls, maturities and paydowns of securities to be held to maturity
|
3,354 | 4,114 | ||||||
Proceeds from sales of securities available for sale
|
38,724 | 160,075 | ||||||
Proceeds from sales of Federal Home Loan Bank stock
|
62 | 60 | ||||||
Proceeds from sales of other real estate owned
|
21,688 | 10,622 | ||||||
Purchase of commercial real estate loans
|
- | (32,650 | ) | |||||
Net change in loans
|
(184,454 | ) | (50,848 | ) | ||||
Net purchases of premises and equipment
|
(2,499 | ) | (1,845 | ) | ||||
Sale of banking center
|
- | (15,410 | ) | |||||
Net cash provided by/(used in) investing activities
|
906,608 | (236,076 | ) | |||||
FINANCING ACTIVITIES:
|
||||||||
Net change in deposits
|
(822,074 | ) | (468,372 | ) | ||||
Net change in securities sold under agreements to repurchase and other short-term borrowings
|
(60,392 | ) | (91,160 | ) | ||||
Payments of Federal Home Loan Bank advances
|
(589,208 | ) | (55,146 | ) | ||||
Proceeds from Federal Home Loan Bank advances
|
205,000 | 15,000 | ||||||
Repurchase of Common Stock
|
(386 | ) | (411 | ) | ||||
Net proceeds from Common Stock options exercised
|
147 | 438 | ||||||
Cash dividends paid
|
(9,813 | ) | (9,120 | ) | ||||
Net cash used in financing activities
|
(1,276,726 | ) | (608,771 | ) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(266,784 | ) | (710,798 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
362,971 | 786,371 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 96,187 | $ | 75,573 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 17,653 | $ | 24,118 | ||||
Income taxes
|
68,603 | 34,706 | ||||||
SUPPLEMENTAL NONCASH DISCLOSURES
|
||||||||
Transfers from loans to real estate acquired in settlement of loans
|
$ | 16,018 | $ | 9,873 | ||||
Loans provided for sales of other real estate owned
|
591 | 1,963 |
●
|
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”
|
||||
o
|
Management’s Discussion and Analysis
|
||||
●
|
Part I Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
|
||||
o
|
Business Segment Composition
|
||||
■
|
RPG Segment
|
||||
●
|
Discontinuance of the RAL Product and Future Competition
|
||||
●
|
Termination of Material TRS Contracts
|
||||
●
|
Part II Item 1A “Risk Factors”
|
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.
|
●
|
FASB Accounting Standards Codification (“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.
|
|
●
|
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. The Bank has historically applied this ASC to its deferred loan fees and costs associated with its traditional loan portfolio. In 2012, the Bank expanded the scope of this ASC to account for discounts on purchased loans.
|
Tennessee Commerce Bank
|
January 27, 2012
|
|||||||||||||||
As Previously Reported
|
As Recasted
|
|||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
Assets acquired
|
||||||||||||||||
Cash and cash equivalents
|
$ | 61,943 | $ | (89 | ) | $ | (2 | ) | $ | 61,852 | ||||||
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 | ) | 830 | 57,276 | |||||||||||
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 | ) | (1,113 | ) | 9,717 | ||||||||||
Core deposit intangible
|
- | 64 | - | 64 | ||||||||||||
Discount
|
(56,970 | ) | 56,970 | - | - | |||||||||||
FDIC settlement receivable
|
784,545 | - | - | 784,545 | ||||||||||||
Total assets acquired
|
$ | 948,701 | $ | 28,063 | $ | (285 | ) | $ | 976,479 | |||||||
Liabilities assumed
|
||||||||||||||||
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 | (100 | ) | 9,888 | |||||||||||
Other liabilities and accrued interest payable
|
1,306 | 110 | - | 1,416 | ||||||||||||
Total liabilities assumed
|
$ | 948,701 | $ | 10,152 | $ | (100 | ) | $ | 958,753 | |||||||
Equity
|
||||||||||||||||
Bargain purchase gain, net of taxes
|
- | 17,911 | (185 | ) | 17,726 | |||||||||||
Other operating loss, net of taxes
|
- | - | - | - | ||||||||||||
Accumulated other comprehensive loss
|
- | - | - | - | ||||||||||||
Total liabilities assumed and equity
|
$ | 948,701 | $ | 28,063 | $ | (285 | ) | $ | 976,479 |
First Commercial Bank
|
September 7, 2012
|
|||||||||||
Contractual
|
Fair Value
|
Fair
|
||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Value
|
|||||||||
Assets acquired
|
||||||||||||
Cash and cash equivalents
|
$ | 10,524 | $ | - | $ | 10,524 | ||||||
Securities available for sale
|
12,002 | - | 12,002 | |||||||||
Loans
|
171,744 | (44,214 | ) | 127,530 | ||||||||
Federal Home Loan Bank stock, at cost
|
407 | - | 407 | |||||||||
Other assets and accrued interest receivable
|
829 | (95 | ) | 734 | ||||||||
Other real estate owned
|
19,360 | (8,389 | ) | 10,971 | ||||||||
Core deposit intangible
|
- | 559 | 559 | |||||||||
Discount
|
(79,412 | ) | 79,412 | - | ||||||||
FDIC settlement receivable
|
64,326 | - | 64,326 | |||||||||
Total assets acquired
|
$ | 199,780 | $ | 27,273 | $ | 227,053 | ||||||
Liabilities assumed
|
||||||||||||
Deposits
|
||||||||||||
Non interest-bearing
|
$ | 7,197 | $ | - | $ | 7,197 | ||||||
Interest-bearing
|
189,057 | 3 | 189,060 | |||||||||
Total deposits
|
196,254 | 3 | 196,257 | |||||||||
Federal Home Loan Bank advances
|
3,002 | 63 | 3,065 | |||||||||
Accrued income taxes payable
|
- | 9,706 | 9,706 | |||||||||
Other liabilities and accrued interest payable
|
524 | 95 | 619 | |||||||||
Total liabilities assumed
|
$ | 199,780 | $ | 9,867 | $ | 209,647 | ||||||
Equity
|
||||||||||||
Bargain purchase gain, net of taxes
|
- | 17,406 | 17,406 | |||||||||
Other operating loss, net of taxes
|
- | - | - | |||||||||
Accumulated other comprehensive loss
|
- | - | - | |||||||||
Total liabilities assumed and equity
|
$ | 199,780 | $ | 27,273 | $ | 227,053 |
Tennessee Commerce Bank
|
January 27, 2012
|
|||||||||||||||
Second Quarter
|
Third Quarter
|
|||||||||||||||
As Previously
|
Recast
|
Recast
|
As
|
|||||||||||||
(in thousands)
|
Reported
|
Adjustments
|
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 | ) | $ | 919 | $ | (89 | ) | $ | (21,836 | ) | |||||
Discount for loans to be repurchased by the FDIC
|
(2,797 | ) | - | - | (2,797 | ) | ||||||||||
Other real estate owned
|
(3,359 | ) | (1,000 | ) | (113 | ) | (4,472 | ) | ||||||||
Other assets and accrued interest receivable
|
(60 | ) | - | - | (60 | ) | ||||||||||
Core deposit intangible
|
64 | - | - | 64 | ||||||||||||
Deposits
|
(54 | ) | - | - | (54 | ) | ||||||||||
All other
|
(199 | ) | (15 | ) | 13 | (201 | ) | |||||||||
Total fair value adjustments
|
(29,071 | ) | (96 | ) | (189 | ) | (29,356 | ) | ||||||||
Discount
|
56,970 | - | - | 56,970 | ||||||||||||
Bargain purchase gain, pre-tax
|
$ | 27,899 | $ | (96 | ) | $ | (189 | ) | $ | 27,614 |
First Commercial Bank
|
||||
(in thousands)
|
September 7, 2012
|
|||
Assets acquired, at contractual amount
|
$ | 214,866 | ||
Liabilities assumed, at contractual amount
|
(199,780 | ) | ||
Net liabilities assumed per the P&A Agreement
|
15,086 | |||
Contractual Discount
|
(79,412 | ) | ||
Net receivable from the FDIC
|
$ | (64,326 | ) | |
Fair value adjustments:
|
||||
Loans
|
$ | (44,214 | ) | |
Other real estate owned
|
(8,389 | ) | ||
Other assets and accrued interest receviable
|
(95 | ) | ||
Core deposit intangible
|
559 | |||
Deposits
|
(3 | ) | ||
Federal Home Loan Bank advances
|
(63 | ) | ||
All other
|
(95 | ) | ||
Total fair value adjustments
|
(52,300 | ) | ||
Discount
|
79,412 | |||
Bargain purchase gain, pre-tax
|
$ | 27,112 |
Tennessee Commerce Bank
|
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 | ) | 1,988 | 13,663 | |||||||||||
Real estate construction
|
14,877 | (2,681 | ) | (1,972 | ) | 10,224 | ||||||||||
Commercial
|
13,224 | (6,939 | ) | 496 | 6,781 | |||||||||||
Home equity
|
6,220 | (606 | ) | 24 | 5,638 | |||||||||||
Consumer:
|
||||||||||||||||
Credit cards
|
608 | (22 | ) | - | 586 | |||||||||||
Overdrafts
|
672 | (621 | ) | - | 51 | |||||||||||
Other consumer
|
2,172 | (750 | ) | 51 | 1,473 | |||||||||||
Total loans
|
$ | 79,112 | $ | (22,666 | ) | $ | 830 | $ | 57,276 |
First Commercial Bank
|
September 7, 2012
|
|||||||||||
Contractual
|
Fair Value
|
Fair
|
||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Value
|
|||||||||
Residential real estate
|
$ | 48,409 | $ | (9,353 | ) | $ | 39,056 | |||||
Commercial real estate
|
82,161 | (12,688 | ) | 69,473 | ||||||||
Real estate construction
|
14,918 | (6,182 | ) | 8,736 | ||||||||
Commercial
|
25,475 | (15,983 | ) | 9,492 | ||||||||
Home equity
|
404 | (3 | ) | 401 | ||||||||
Consumer:
|
||||||||||||
Credit cards
|
- | - | - | |||||||||
Overdrafts
|
6 | - | 6 | |||||||||
Other consumer
|
371 | (5 | ) | 366 | ||||||||
Total loans
|
$ | 171,744 | $ | (44,214 | ) | $ | 127,530 |
Tennessee Commerce Bank
|
January 27, 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 | ) | (58 | ) | (483 | ) | ||||||
Fair value of loans
|
$ | 30,545 | $ | 845 | $ | 31,390 |
First Commercial Bank Acquisition
|
||||
(in thousands)
|
September 7, 2012
|
|||
Contractually-required principal and interest payments
|
$ | 116,940 | ||
Non-accretable difference
|
(33,523 | ) | ||
Accretable yield
|
(2,827 | ) | ||
Fair value of loans
|
$ | 80,590 |
Tennessee Commerce Bank
|
January 27, 2012
|
|||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
Demand
|
$ | 3,190 | $ | - | $ | - | $ | 3,190 | ||||||||
Money market accounts
|
11,338 | - | - | 11,338 | ||||||||||||
Savings
|
91,859 | - | - | 91,859 | ||||||||||||
Individual retirement accounts*
|
15,486 | - | - | 15,486 | ||||||||||||
Time deposits, $100,000 and over*
|
278,825 | - | - | 278,825 | ||||||||||||
Other certificates of deposit*
|
108,003 | 14 | - | 108,017 | ||||||||||||
Brokered certificates of deposit*
|
418,940 | 40 | - | 418,980 | ||||||||||||
Total interest-bearing deposits
|
927,641 | 54 | - | 927,695 | ||||||||||||
Total non interest-bearing deposits
|
19,754 | - | - | 19,754 | ||||||||||||
Total deposits
|
$ | 947,395 | $ | 54 | $ | - | $ | 947,449 |
First Commercial Bank
|
September 7, 2012
|
|||||||||||||||
Contractual
|
Fair Value
|
Recast
|
Fair
|
|||||||||||||
(in thousands)
|
Amount
|
Adjustments
|
Adjustments
|
Value
|
||||||||||||
Demand
|
$ | 4,003 | $ | - | $ | - | $ | 4,003 | ||||||||
Money market accounts
|
38,187 | - | - | 38,187 | ||||||||||||
Savings
|
- | - | - | - | ||||||||||||
Individual retirement accounts*
|
16,780 | - | - | 16,780 | ||||||||||||
Time deposits, $100,000 and over*
|
14,740 | - | - | 14,740 | ||||||||||||
Other certificates of deposit*
|
62,033 | 3 | - | 62,036 | ||||||||||||
Brokered certificates of deposit*
|
53,314 | - | - | 53,314 | ||||||||||||
Total interest-bearing deposits
|
189,057 | 3 | - | 189,060 | ||||||||||||
Total non interest-bearing deposits
|
7,197 | - | - | 7,197 | ||||||||||||
Total deposits
|
$ | 196,254 | $ | 3 | $ | - | $ | 196,257 | ||||||||
* - denotes a time deposit
|
Tennessee Commerce Bank
|
||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||
(in thousands)
|
September 30, 2012
|
September 30, 2012
|
||||||
Interest income:
|
||||||||
Loans, including fees
|
$ | 729 | $ | 2,372 | ||||
Taxable investment securities
|
253 | 696 | ||||||
Total interest income
|
982 | 3,068 | ||||||
Interest expense:
|
||||||||
Deposits
|
9 | 56 | ||||||
Total interest expense
|
9 | 56 | ||||||
Net interest income
|
973 | 3,012 | ||||||
Provision for loan losses
|
- | - | ||||||
Net interest income after provision for loan losses
|
973 | 3,012 | ||||||
Non interest income:
|
||||||||
Service charges on deposit accounts
|
24 | 48 | ||||||
Bargain purchase gain
|
(189 | ) | 27,614 | |||||
Gain on sale of securities available for sale
|
- | 56 | ||||||
Other
|
74 | 700 | ||||||
Total non interest income
|
(91 | ) | 28,418 | |||||
Non interest income
|
||||||||
Salaries and employee benefits
|
488 | 2,497 | ||||||
Occupancy and equipment, net
|
188 | 774 | ||||||
Communication and transportation
|
29 | 189 | ||||||
Marketing and development
|
(15 | ) | 4 | |||||
FDIC insurance expense
|
8 | 60 | ||||||
Data processing
|
78 | 685 | ||||||
Supplies
|
7 | 28 | ||||||
Other real estate owned expense
|
58 | 161 | ||||||
Other
|
183 | 963 | ||||||
Total non interest expenses
|
1,024 | 5,361 | ||||||
Income before income tax expense
|
$ | (142 | ) | $ | 26,069 |
First Commercial Bank
|
||||
Three and Nine Months Ended
|
||||
(in thousands)
|
September 30, 2012
|
|||
Interest income:
|
||||
Loans, including fees
|
$ | 474 | ||
Taxable investment securities
|
4 | |||
Total interest income
|
478 | |||
Interest expense:
|
||||
Deposits
|
141 | |||
Total interest expense
|
141 | |||
Net interest income
|
337 | |||
Provision for loan losses
|
- | |||
Net interest income after provision for loan losses
|
337 | |||
Non interest income:
|
||||
Service charges on deposit accounts
|
7 | |||
Bargain purchase gain
|
27,112 | |||
Gain on sale of securities available for sale
|
- | |||
Other
|
1 | |||
Total non interest income
|
27,120 | |||
Non interest income
|
||||
Salaries and employee benefits
|
613 | |||
Occupancy and equipment, net
|
210 | |||
Communication and transportation
|
15 | |||
Marketing and development
|
- | |||
FDIC insurance expense
|
9 | |||
Data processing
|
265 | |||
Supplies
|
41 | |||
Other real estate owned expense
|
165 | |||
Other
|
644 | |||
Total non interest expenses
|
1,962 | |||
Income before income tax expense
|
$ | 25,495 |
Gross
|
Gross
|
Gross
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
September 30, 2012 (in thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 91,910 | $ | 771 | $ | - | $ | 92,681 | ||||||||
Private label mortgage backed security
|
5,818 | - | (866 | ) | 4,952 | |||||||||||
Mortgage backed securities - residential
|
217,147 | 7,446 | - | 224,593 | ||||||||||||
Collateralized mortgage obligations
|
209,312 | 1,758 | (60 | ) | 211,010 | |||||||||||
Total securities available for sale
|
$ | 524,187 | $ | 9,975 | $ | (926 | ) | $ | 533,236 | |||||||
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
|
|||||||||||||
September 30, 2012 (in thousands)
|
Value
|
Gains
|
Losses
|
Value
|
||||||||||||
U.S. Treasury securities and
|
||||||||||||||||
U.S. Government agencies
|
$ | 4,417 | $ | 13 | $ | (7 | ) | $ | 4,423 | |||||||
Mortgage backed securities - residential
|
1,085 | 95 | - | 1,180 | ||||||||||||
Collateralized mortgage obligations
|
42,524 | 321 | - | 42,845 | ||||||||||||
Total securities to be held to maturity
|
$ | 48,026 | $ | 429 | $ | (7 | ) | $ | 48,448 | |||||||
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 or third quarters 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 $2.0 million.
|
|
●
|
During the third quarter of 2011, the Bank realized $188,000 in pre-tax gains related to unamortized discount accretion on $24 million of callable U.S. Government agencies that were called during the third quarter of 2011 before their maturity.
|
Securities
|
Securities
|
|||||||||||||||
available for sale
|
held to maturity
|
|||||||||||||||
Amortized
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
September 30, 2012 (in thousands)
|
Cost
|
Value
|
Value
|
Value
|
||||||||||||
Due in one year or less
|
$ | 1,009 | $ | 1,009 | $ | 2,211 | $ | 2,213 | ||||||||
Due from one year to five years
|
88,342 | 89,112 | 2,206 | 2,210 | ||||||||||||
Due from five years to ten years
|
2,559 | 2,560 | - | - | ||||||||||||
Due beyond ten years
|
- | - | - | - | ||||||||||||
Private label mortgage backed security
|
5,818 | 4,952 | - | - | ||||||||||||
Mortgage backed securities - residential
|
217,147 | 224,593 | 1,085 | 1,180 | ||||||||||||
Collateralized mortgage obligations
|
209,312 | 211,010 | 42,524 | 42,845 | ||||||||||||
Total securities
|
$ | 524,187 | $ | 533,236 | $ | 48,026 | $ | 48,448 |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
September 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
|
$ | 500 | $ | (7 | ) | $ | - | $ | - | $ | 500 | $ | (7 | ) | ||||||||||
Private label mortgage backed security
|
- | - | 4,952 | (866 | ) | 4,952 | (866 | ) | ||||||||||||||||
Mortgage backed securities - residential,
|
||||||||||||||||||||||||
including Collateralized mortgage obligations
|
16,336 | (60 | ) | - | - | 16,336 | (60 | ) | ||||||||||||||||
Total
|
$ | 16,836 | $ | (67 | ) | $ | 4,952 | $ | (866 | ) | $ | 21,788 | $ | (933 | ) | |||||||||
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)
|
September 30, 2012
|
December 31, 2011
|
||||||
Carrying amount
|
$ | 403,009 | $ | 613,927 | ||||
Fair value
|
411,720 | 620,922 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 1,144,544 | $ | 985,735 | ||||
Non owner occupied
|
80,142 | 99,161 | ||||||
Commercial real estate
|
716,516 | 639,966 | ||||||
Commercial real estate - purchased whole loans
|
33,374 | 32,741 | ||||||
Real estate construction
|
79,162 | 67,406 | ||||||
Commercial
|
146,400 | 119,117 | ||||||
Warehouse lines of credit
|
166,884 | 41,496 | ||||||
Home equity
|
251,072 | 280,235 | ||||||
Consumer:
|
||||||||
Credit cards
|
8,570 | 8,580 | ||||||
Overdrafts
|
733 | 950 | ||||||
Other consumer
|
14,960 | 9,908 | ||||||
Total loans
|
2,642,357 | 2,285,295 | ||||||
Less: Allowance for loan losses
|
24,100 | 24,063 | ||||||
Total loans, net
|
$ | 2,618,257 | $ | 2,261,232 |
September 30, 2012 (in thousands)
|
TCB
|
FCB
|
Total
|
|||||||||
Residential real estate
|
$ | 13,215 | $ | 37,971 | $ | 51,186 | ||||||
Commercial real estate
|
8,100 | 69,440 | 77,540 | |||||||||
Real estate construction
|
5,326 | 8,732 | 14,058 | |||||||||
Commercial
|
1,549 | 9,238 | 10,787 | |||||||||
Home equity
|
4,755 | 381 | 5,136 | |||||||||
Consumer:
|
- | |||||||||||
Credit cards
|
393 | - | 393 | |||||||||
Overdrafts
|
4 | 8 | 12 | |||||||||
Other consumer
|
859 | 370 | 1,229 | |||||||||
Total loans
|
$ | 34,201 | $ | 126,140 | $ | 160,341 |
●
|
For new and renewed commercial, commercial real estate and real estate construction, the Bank’s Credit Administration Department (“CAD”), which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for new commercial, commercial real estate and real estate construction 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, commercial real estate and real estate construction 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 CAD.
|
|
●
|
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 loan officers an opportunity to identify an existing loan that should be downgraded.
|
|
●
|
Monthly, members of senior management along with managers of Commercial Lending, CAD, 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.
|
|
●
|
All new and renewed warehouse lending loans are approved by the SLC and Executive Loan Committee. The CAD assigns the initial credit quality grade to warehouse lending loans. Monthly, members of senior management along with the SLC, review warehouse lending activity and monitor key performance indicators such as average days outstanding, average FICO, average LTV and other important factors.
|
●
|
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.
|
Purchased
|
Purchased
|
|||||||||||||||||||||||||||
Credit
|
Credit
|
|||||||||||||||||||||||||||
Special
|
Impaired
|
Impaired
|
Total
|
|||||||||||||||||||||||||
September 30, 2012
|
Mention /
|
Doubtful /
|
Loans
|
Loans
|
Rated
|
|||||||||||||||||||||||
(in thousands)
|
Pass
|
Watch
|
Substandard
|
Loss
|
Group 1
|
Group 2
|
Loans*
|
|||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||||||
Owner occupied
|
$ | - | $ | 2,336 | $ | 11,370 | $ | - | $ | 4,983 | $ | - | $ | 18,689 | ||||||||||||||
Non owner occupied
|
- | 4,400 | 2,524 | - | 23,294 | - | 30,218 | |||||||||||||||||||||
Commercial real estate
|
624,382 | 20,740 | 17,710 | - | 53,684 | - | 716,516 | |||||||||||||||||||||
Commercial real estate -
|
||||||||||||||||||||||||||||
Purchased whole loans
|
33,374 | - | - | - | - | - | 33,374 | |||||||||||||||||||||
Real estate construction
|
60,146 | 1,787 | 3,056 | - | 14,173 | - | 79,162 | |||||||||||||||||||||
Commercial
|
138,356 | 2,215 | 589 | - | 5,240 | - | 146,400 | |||||||||||||||||||||
Warehouse lines of credit
|
166,884 | - | - | - | - | - | 166,884 | |||||||||||||||||||||
Home equity
|
- | 136 | 2,223 | - | - | - | 2,359 | |||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
Credit cards
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Overdrafts
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other consumer
|
- | 355 | 58 | - | 202 | - | 615 | |||||||||||||||||||||
Total rated loans
|
$ | 1,023,142 | $ | 31,969 | $ | 37,530 | $ | - | $ | 101,576 | $ | - | $ | 1,194,217 |
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 rated loans
|
$ | 845,988 | $ | 35,455 | $ | 43,088 | $ | - | $ | 924,531 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Allowance for loan losses at beginning of period
|
$ | 22,510 | $ | 25,931 | $ | 24,063 | $ | 23,079 | ||||||||
Charge offs - Traditional Banking
|
(1,220 | ) | (2,975 | ) | (7,444 | ) | (6,142 | ) | ||||||||
Charge offs - Refund Anticipation Loans
|
- | (6 | ) | (11,097 | ) | (15,484 | ) | |||||||||
Total charge offs
|
(1,220 | ) | (2,981 | ) | (18,541 | ) | (21,626 | ) | ||||||||
Recoveries - Traditional Banking
|
267 | 442 | 976 | 1,554 | ||||||||||||
Recoveries - Refund Anticipation Loans
|
460 | 693 | 3,883 | 3,435 | ||||||||||||
Total recoveries
|
727 | 1,135 | 4,859 | 4,989 | ||||||||||||
Net loan charge offs - Traditional Banking
|
(953 | ) | (2,533 | ) | (6,468 | ) | (4,588 | ) | ||||||||
Net loan charge offs - Refund Anticipation Loans
|
460 | 687 | (7,214 | ) | (12,049 | ) | ||||||||||
Net loan charge offs
|
(493 | ) | (1,846 | ) | (13,682 | ) | (16,637 | ) | ||||||||
Provision for loan losses - Traditional Banking
|
2,543 | 547 | 6,505 | 5,454 | ||||||||||||
Provision for loan losses - Refund Anticipation Loans
|
(460 | ) | (687 | ) | 7,214 | 12,049 | ||||||||||
Total provision for loan losses
|
2,083 | (140 | ) | 13,719 | 17,503 | |||||||||||
Allowance for loan losses at end of period
|
$ | 24,100 | $ | 23,945 | $ | 24,100 | $ | 23,945 |
●
|
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
|
||
●
|
Non Owner Occupied
|
||
●
|
Home equity
|
||
●
|
Consumer:
|
||
●
|
Credit cards
|
||
●
|
Overdrafts
|
||
●
|
Other consumer
|
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Nine Months Ended
|
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
||||||||||||||||||||||
September 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
|
2,617 | 255 | 1,513 | 40 | 1,604 | (293 | ) | 313 | ||||||||||||||||||||
Loans charged off
|
(2,422 | ) | (318 | ) | (353 | ) | - | (1,796 | ) | (18 | ) | - | ||||||||||||||||
Recoveries
|
183 | 14 | 70 | - | 83 | 21 | - | |||||||||||||||||||||
Ending balance
|
$ | 6,707 | $ | 1,239 | $ | 9,001 | $ | 40 | $ | 2,933 | $ | 735 | $ | 417 | ||||||||||||||
(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
|
765 | 7,214 | (293 | ) | (14 | ) | (2 | ) | - | 13,719 | ||||||||||||||||||
Loans charged off
|
(1,947 | ) | (11,097 | ) | (87 | ) | (318 | ) | (185 | ) | - | (18,541 | ) | |||||||||||||||
Recoveries
|
73 | 3,883 | 33 | 332 | 167 | - | 4,859 | |||||||||||||||||||||
Ending balance
|
$ | 2,411 | $ | - | $ | 203 | $ | 152 | $ | 262 | $ | - | $ | 24,100 | ||||||||||||||
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Nine Months Ended
|
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
||||||||||||||||||||||
September 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
|
2,372 | 192 | 1,512 | - | 1,083 | (322 | ) | 43 | ||||||||||||||||||||
Loans charged off
|
(1,699 | ) | (512 | ) | (1,081 | ) | - | (823 | ) | (100 | ) | - | ||||||||||||||||
Recoveries
|
186 | 4 | 284 | - | 231 | 125 | - | |||||||||||||||||||||
Ending balance
|
$ | 4,634 | $ | 1,191 | $ | 7,929 | $ | - | $ | 3,103 | $ | 1,050 | $ | 43 | ||||||||||||||
(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
|
555 | 12,049 | 114 | 67 | (162 | ) | - | 17,503 | ||||||||||||||||||||
Loans charged off
|
(1,043 | ) | (15,484 | ) | (172 | ) | (486 | ) | (226 | ) | - | (21,626 | ) | |||||||||||||||
Recoveries
|
100 | 3,435 | 24 | 395 | 205 | - | 4,989 | |||||||||||||||||||||
Ending balance
|
$ | 3,193 | $ | - | $ | 458 | $ | 101 | $ | 278 | $ | 1,965 | $ | 23,945 | ||||||||||||||
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Loans on non-accrual status
|
$ | 20,436 | $ | 23,306 | ||||
Loans past due 90 days or more and still on accrual
|
616 | - | ||||||
Total non-performing loans
|
21,052 | 23,306 | ||||||
Other real estate owned
|
25,148 | 10,956 | ||||||
Total non-performing assets
|
$ | 46,200 | $ | 34,262 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.80 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.73 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.34 | % | 1.00 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.80 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.73 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.34 | % | 1.10 | % |
Loans Past Due 90 Days or More
|
||||||||||||||||
Non-Accrual Loans
|
and Still Accruing Interest
|
|||||||||||||||
in thousands)
|
September 30, 2012
|
December 31, 2011
|
September 30, 2012
|
December 31, 2011
|
||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | 11,636 | $ | 12,183 | $ | 158 | $ | - | ||||||||
Non owner occupied
|
1,582 | 1,565 | - | - | ||||||||||||
Commercial real estate
|
2,808 | 3,032 | - | - | ||||||||||||
Commercial real estate -
|
||||||||||||||||
purchased whole loans
|
- | - | - | - | ||||||||||||
Real estate construction
|
1,911 | 2,521 | 455 | - | ||||||||||||
Commercial
|
505 | 373 | - | - | ||||||||||||
Warehouse lines of credit
|
- | - | - | - | ||||||||||||
Home equity
|
1,880 | 3,603 | - | - | ||||||||||||
Consumer:
|
||||||||||||||||
Credit cards
|
- | - | - | - | ||||||||||||
Overdrafts
|
- | - | - | - | ||||||||||||
Other consumer
|
114 | 29 | 3 | - | ||||||||||||
Total
|
$ | 20,436 | $ | 23,306 | $ | 616 | $ | - |
30 - 59 | 60 - 89 |
Greater than
|
Total
|
Total
|
||||||||||||||||||||
Days
|
Days
|
90 Days
|
Loans
|
Loans Not
|
Total
|
|||||||||||||||||||
September 30, 2012 (in thousands)
|
Past Due
|
Past Due
|
Past Due *
|
Past Due
|
Past Due
|
Loans
|
||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
$ | 2,488 | $ | 968 | $ | 7,034 | $ | 10,490 | $ | 1,134,054 | $ | 1,144,544 | ||||||||||||
Non owner occupied
|
842 | 5 | 602 | 1,449 | 78,693 | 80,142 | ||||||||||||||||||
Commercial real estate
|
446 | 606 | 737 | 1,789 | 714,727 | 716,516 | ||||||||||||||||||
Commercial real estate - purchased
|
||||||||||||||||||||||||
whole loans
|
- | - | - | - | 33,374 | 33,374 | ||||||||||||||||||
Real estate construction
|
- | - | 1,974 | 1,974 | 77,188 | 79,162 | ||||||||||||||||||
Commercial
|
- | 191 | 67 | 258 | 146,142 | 146,400 | ||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | 166,884 | 166,884 | ||||||||||||||||||
Home equity
|
814 | 89 | 676 | 1,579 | 249,493 | 251,072 | ||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
Credit cards
|
50 | 10 | - | 60 | 8,510 | 8,570 | ||||||||||||||||||
Overdrafts
|
128 | 1 | - | 129 | 604 | 733 | ||||||||||||||||||
Other consumer
|
84 | 72 | 8 | 164 | 14,796 | 14,960 | ||||||||||||||||||
Total
|
$ | 4,852 | $ | 1,942 | $ | 11,098 | $ | 17,892 | $ | 2,624,465 | $ | 2,642,357 |
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 loans
|
$ | 7,231 | $ | 2,802 | $ | 14,400 | $ | 24,433 | $ | 2,260,862 | $ | 2,285,295 |
●
|
All loans, excluding ASC Topic 310-30 purchased credit impaired loans, internally classified as “Substandard,” “Doubtful” or “Loss;”
|
|
●
|
All loans, excluding ASC Topic 310-30 purchased credit impaired loans, internally classified as “Special Mention/Watch” on non-accrual status,
|
|
●
|
All retail and commercial TDRs including ASC Topic 310-30 purchased credit impaired loans;
|
|
●
|
ASC Topic 310-30 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)
|
September 30, 2012
|
December 31, 2011
|
||||||
Loans with no allocated allowance for loan losses
|
$ | 47,103 | $ | 32,171 | ||||
Loans with allocated allowance for loan losses
|
44,615 | 45,022 | ||||||
Total impaired loans
|
$ | 91,718 | $ | 77,193 | ||||
Amount of the allowance for loan losses allocated
|
$ | 6,664 | $ | 7,086 |
Commercial
|
||||||||||||||||||||||||||||
Residential Real Estate
|
Real Estate -
|
Real
|
Warehouse
|
|||||||||||||||||||||||||
Owner
|
Non Owner
|
Commercial
|
Purchased
|
Estate
|
Lines of
|
|||||||||||||||||||||||
September 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
|
$ | 1,429 | $ | 566 | $ | 2,705 | $ | - | $ | 1,291 | $ | 367 | $ | - | ||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
5,278 | 673 | 6,296 | 40 | 1,642 | 368 | 417 | |||||||||||||||||||||
Acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 6,707 | $ | 1,239 | $ | 9,001 | $ | 40 | $ | 2,933 | $ | 735 | $ | 417 | ||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 37,993 | $ | 5,272 | $ | 36,114 | $ | - | $ | 5,979 | $ | 4,694 | $ | - | ||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
1,106,551 | 74,870 | 680,402 | 33,374 | 73,183 | 141,706 | 166,884 | |||||||||||||||||||||
Loans acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total ending loan balance
|
$ | 1,144,544 | $ | 80,142 | $ | 716,516 | $ | 33,374 | $ | 79,162 | $ | 146,400 | $ | 166,884 | ||||||||||||||
(continued)
|
Consumer
|
|||||||||||||||||||||||||||
Home
|
Credit
|
Other
|
||||||||||||||||||||||||||
Equity
|
Cards
|
Overdrafts
|
Consumer
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Ending allowance balance
|
||||||||||||||||||||||||||||
attributable to loans:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$ | 306 | $ | - | $ | - | $ | - | $ | 6,664 | ||||||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
2,105 | 203 | 152 | 262 | 17,436 | |||||||||||||||||||||||
Acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | |||||||||||||||||||||||
Total ending allowance
|
||||||||||||||||||||||||||||
for loan losses
|
$ | 2,411 | $ | 203 | $ | 152 | $ | 262 | $ | 24,100 | ||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||
Impaired loans individually
|
||||||||||||||||||||||||||||
evaluated
|
$ | 1,300 | $ | - | $ | - | $ | 366 | $ | 91,718 | ||||||||||||||||||
Loans collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
249,772 | 8,570 | 733 | 14,594 | 2,550,639 | |||||||||||||||||||||||
Loans acquired with deteriorated
|
||||||||||||||||||||||||||||
credit quality
|
- | - | - | - | - | |||||||||||||||||||||||
Total ending loan balance
|
$ | 251,072 | $ | 8,570 | $ | 733 | $ | 14,960 | $ | 2,642,357 | ||||||||||||||||||
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
|
Nine Months Ended
|
|||||||||||||||||||||||||||
September 30, 2012
|
September 30, 2012
|
|||||||||||||||||||||||||||
Unpaid
|
Allowance for
|
Average
|
Interest
|
Average
|
Interest
|
|||||||||||||||||||||||
Principal
|
Recorded
|
Loan Losses
|
Recorded
|
Income
|
Recorded
|
Income
|
||||||||||||||||||||||
September 30, 2012 (in thousands)
|
Balance
|
Investment
|
Allocated
|
Investment
|
Recognized
|
Investment
|
Recognized
|
|||||||||||||||||||||
Impaired loans with no related allowance recorded:
|
||||||||||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||||||
Owner occupied
|
$ | 30,879 | $ | 30,879 | $ | - | $ | 28,249 | $ | 177 | $ | 25,378 | $ | 397 | ||||||||||||||
Non owner occupied
|
2,557 | 2,557 | - | 2,097 | 138 | 1,539 | 138 | |||||||||||||||||||||
Commercial real estate
|
9,257 | 9,257 | - | 10,416 | 404 | 8,924 | 456 | |||||||||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Real estate construction
|
1,794 | 1,794 | - | 2,637 | 35 | 3,018 | 54 | |||||||||||||||||||||
Commercial
|
2,082 | 2,082 | - | 2,096 | 28 | 2,127 | 68 | |||||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Home equity
|
168 | 168 | - | 782 | - | 648 | - | |||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
Credit cards
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Overdrafts
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other consumer
|
366 | 366 | - | 214 | 13 | 123 | 13 | |||||||||||||||||||||
Impaired loans with an allowance recorded:
|
||||||||||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||||||
Owner occupied
|
7,169 | 7,114 | 1,429 | 6,927 | 6 | 5,886 | 33 | |||||||||||||||||||||
Non owner occupied
|
2,715 | 2,715 | 566 | 2,270 | 6 | 2,249 | 33 | |||||||||||||||||||||
Commercial real estate
|
27,265 | 26,857 | 2,705 | 27,233 | 236 | 26,164 | 738 | |||||||||||||||||||||
Commercial real estate - purchased whole loans
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Real estate construction
|
5,304 | 4,185 | 1,291 | 5,165 | 36 | 6,108 | 108 | |||||||||||||||||||||
Commercial
|
2,612 | 2,612 | 367 | 2,583 | 47 | 2,520 | 116 | |||||||||||||||||||||
Warehouse lines of credit
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Home equity
|
1,132 | 1,132 | 306 | 1,297 | 6 | 1,675 | 14 | |||||||||||||||||||||
Consumer:
|
- | |||||||||||||||||||||||||||
Credit cards
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Overdrafts
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other consumer
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total impaired loans
|
93,300 | 91,718 | 6,664 | 91,966 | 1,132 | 86,359 | 2,168 |
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
|
||||||||||
September 30, 2012 (in thousands)
|
Non-Accrual Status
|
Accrual Status
|
Restructurings
|
|||||||||
Residential real estate
|
$ | 5,378 | $ | 33,273 | $ | 38,651 | ||||||
Commercial real estate
|
2,438 | 29,435 | 31,873 | |||||||||
Real estate construction
|
1,974 | 3,060 | 5,034 | |||||||||
Commercial
|
486 | 5,075 | 5,561 | |||||||||
Total troubled debt restructurings
|
$ | 10,276 | $ | 70,843 | $ | 81,119 |
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
|
||||||||||
September 30, 2012 (in thousands)
|
Modified Terms
|
Modified Terms
|
Restructurings
|
|||||||||
Residential real estate loans (including
|
||||||||||||
home equity loans):
|
||||||||||||
Interest only payments for 6-24 months
|
$ | 1,911 | $ | 1,727 | $ | 3,638 | ||||||
Rate reduction
|
21,456 | 1,800 | 23,256 | |||||||||
Forbearance for 3-6 months
|
3,065 | 613 | 3,678 | |||||||||
First modification extension
|
2,595 | 225 | 2,820 | |||||||||
Subsequent modification extension
|
5,259 | - | 5,259 | |||||||||
Total residential TDRs
|
34,286 | 4,365 | 38,651 | |||||||||
Commercial related and construction loans:
|
||||||||||||
Interest only payments for 6-24 months
|
10,096 | 708 | 10,804 | |||||||||
Rate reduction
|
5,729 | 262 | 5,991 | |||||||||
Forbearance for 3-6 months
|
747 | 829 | 1,576 | |||||||||
First modification extension
|
10,816 | 1,146 | 11,962 | |||||||||
Subsequent modification extension
|
12,135 | - | 12,135 | |||||||||
Total commercial TDRs
|
39,523 | 2,945 | 42,468 | |||||||||
Total troubled debt restructurings
|
$ | 73,809 | $ | 7,310 | $ | 81,119 |
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
|
||||||||||
September 30, 2012 (in thousands)
|
Modified Terms
|
Modified Terms
|
Restructurings
|
|||||||||
Residential real estate loans (including
|
||||||||||||
home equity loans):
|
||||||||||||
Interest only payments for 6-24 months
|
$ | 511 | $ | 1,727 | $ | 2,238 | ||||||
Rate reduction
|
9,266 | 454 | 9,720 | |||||||||
Forbearance for 3-6 months
|
3,347 | 410 | 3,757 | |||||||||
First modification extension
|
2,595 | 225 | 2,820 | |||||||||
Subsequent modification extension
|
1,149 | 613 | 1,762 | |||||||||
Total residential TDRs
|
16,868 | 3,429 | 20,297 | |||||||||
Commercial related and construction loans:
|
||||||||||||
Interest only payments for 6 - 12 months
|
3,690 | 708 | 4,398 | |||||||||
Rate reduction
|
3,026 | - | 3,026 | |||||||||
Forbearance for 3-6 months
|
593 | - | 593 | |||||||||
First modification extension
|
9,389 | 455 | 9,844 | |||||||||
Subsequent modification extension
|
- | - | - | |||||||||
Total commercial TDRs
|
16,698 | 1,163 | 17,861 | |||||||||
Total troubled debt restructurings
|
$ | 33,566 | $ | 4,592 | $ | 38,158 |
Troubled Debt Restructurings
|
||||||||
That Subsequently Defaulted:
|
Number of
|
Recorded
|
||||||
($'s in thousands)
|
Loans
|
Investment
|
||||||
Residential real estate
|
11 | $ | 2,980 | |||||
Commercial real estate
|
3 | 970 | ||||||
Commercial real estate -
|
||||||||
purchased whole loans
|
- | - | ||||||
Real estate construction
|
4 | 1,974 | ||||||
Commercial
|
- | - | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
- | - | ||||||
Consumer:
|
||||||||
Credit cards
|
- | - | ||||||
Overdrafts
|
- | - | ||||||
Other consumer
|
- | - | ||||||
Total
|
18 | $ | 5,924 |
5.
|
DEPOSITS
|
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Demand
|
$ | 562,470 | $ | 523,708 | ||||
Money market accounts
|
511,079 | 433,508 | ||||||
Brokered money market accounts
|
29,461 | 18,121 | ||||||
Savings
|
61,919 | 44,472 | ||||||
Individual retirement accounts*
|
40,088 | 31,201 | ||||||
Time deposits, $100,000 and over*
|
89,306 | 82,970 | ||||||
Other certificates of deposit*
|
157,025 | 103,230 | ||||||
Brokered certificates of deposit*
|
89,369 | 88,285 | ||||||
Total interest-bearing deposits
|
1,540,717 | 1,325,495 | ||||||
Total non interest-bearing deposits
|
514,893 | 408,483 | ||||||
Total deposits
|
$ | 2,055,610 | $ | 1,733,978 |
September 30 , 2012 (in thousands)
|
TCB
|
FCB
|
Total
|
|||||||||
Demand
|
$ | 994 | $ | 3,583 | $ | 4,577 | ||||||
Money market accounts
|
1,495 | 30,575 | 32,070 | |||||||||
Brokered money market accounts
|
- | - | - | |||||||||
Savings
|
10,439 | - | 10,439 | |||||||||
Individual retirement accounts*
|
1,489 | 9,823 | 11,312 | |||||||||
Time deposits, $100,000 and over*
|
14,085 | 7,321 | 21,406 | |||||||||
Other certificates of deposit*
|
8,336 | 33,808 | 42,144 | |||||||||
Brokered certificates of deposit*
|
9,258 | 31,540 | 40,798 | |||||||||
Total interest-bearing deposits
|
46,096 | 116,650 | 162,746 | |||||||||
Total non interest-bearing deposits
|
5,711 | 17,873 | 23,584 | |||||||||
Total deposits
|
$ | 51,807 | $ | 134,523 | $ | 186,330 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Overnight FHLB advances
|
$ | 20,000 | $ | 145,000 | ||||
Fixed interest rate advances with a weighted average
|
||||||||
interest rate of 2.27% due through 2035
|
433,487 | 669,630 | ||||||
Putable fixed interest rate advances with a weighted average
|
||||||||
interest rate of 4.39% due through 2017(1)
|
100,000 | 120,000 | ||||||
Total FHLB advances
|
$ | 553,487 | $ | 934,630 |
Year
|
(in thousands)
|
|||
2012
|
$ | 20,000 | ||
2013
|
35,000 | |||
2014
|
178,000 | |||
2015
|
25,000 | |||
2016
|
72,000 | |||
Thereafter
|
223,487 | |||
Total
|
$ | 553,487 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
First lien, single family residential real estate
|
$ | 787,078 | $ | 670,819 | ||||
Home equity lines of credit
|
49,425 | 60,211 | ||||||
Multi-family commercial real estate
|
7,353 | 14,697 |
Fair Value Measurements at
|
||||||||||||||||
September 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
|
$ | - | $ | 92,681 | $ | - | $ | 92,681 | ||||||||
Private label mortgage backed security
|
- | - | 4,952 | 4,952 | ||||||||||||
Mortgage backed securities - residential
|
- | 224,593 | - | 224,593 | ||||||||||||
Collateralized mortgage obligations
|
- | 211,010 | - | 211,010 | ||||||||||||
Total securities available for sale
|
$ | - | $ | 528,284 | $ | 4,952 | $ | 533,236 | ||||||||
Mandatory forward contracts
|
$ | - | $ | 31,166 | $ | - | $ | 31,166 | ||||||||
Rate lock loan commitments
|
- | 26,489 | - | 26,489 | ||||||||||||
Mortgage loans held for sale
|
- | 3,385 | - | 3,385 |
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
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Balance, beginning of period
|
$ | 4,579 | $ | 4,402 | $ | 4,542 | $ | 5,124 | ||||||||
Total gains or losses included in earnings:
|
||||||||||||||||
Net impairment loss recognized in earnings
|
- | - | - | (279 | ) | |||||||||||
Net change in unrealized gain/(loss)
|
373 | 2,628 | 410 | 4,595 | ||||||||||||
Realized pass through of actual losses
|
- | (2,347 | ) | - | (4,399 | ) | ||||||||||
Principal paydowns
|
- | (141 | ) | - | (499 | ) | ||||||||||
Balance, end of period
|
$ | 4,952 | $ | 4,542 | $ | 4,952 | $ | 4,542 |
Fair
|
||||||||||
Value
|
Valuation
|
Unobservable
|
||||||||
(in thousands)
|
Technique
|
Inputs
|
Range
|
|||||||
Private label mortgage backed security
|
$ | 4,952 |
Discounted cash flow
|
(1) Constant prepayment rate
|
2% - 6 | % | ||||
(2) Probability of default
|
7% - 31.50 | % | ||||||||
(2) Loss severity
|
60% - 70 | % |
Fair Value Measurements at
|
||||||||||||||||
September 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
|
$ | - | $ | - | $ | 904 | $ | 904 | ||||||||
Non owner occupied
|
- | - | 355 | 355 | ||||||||||||
Commercial real estate
|
- | - | 2,827 | 2,827 | ||||||||||||
Real estate construction
|
- | - | 247 | 247 | ||||||||||||
Commercial
|
- | - | 23 | 23 | ||||||||||||
Home equity
|
- | - | 994 | 994 | ||||||||||||
Total impaired loans *
|
$ | - | $ | - | $ | 5,350 | $ | 5,350 | ||||||||
Other real estate owned:
|
||||||||||||||||
Residential real estate:
|
||||||||||||||||
Owner occupied
|
$ | - | $ | - | $ | 1,355 | $ | 1,355 | ||||||||
Non owner occupied
|
- | - | - | - | ||||||||||||
Commercial real estate
|
- | - | 6,069 | 6,069 | ||||||||||||
Real estate construction
|
- | - | 1,033 | 1,033 | ||||||||||||
Total other real estate owned
|
$ | - | $ | - | $ | 8,457 | $ | 8,457 | ||||||||
Mortgage servicing rights
|
$ | - | $ | - | $ | 3,467 | $ | 3,467 |
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
|
$ | 3,098 |
(1) Sales comparison approach
|
(1) Adjustments determined by
|
10% - 69% | (19%) | ||||
Management for differences
|
||||||||||
between the comparable sales
|
||||||||||
$ | 1,813 |
(2) Income approach
|
(2) Adjustments for differences
|
9% - 9% | (9%) | |||||
between net operating income
|
||||||||||
expectations
|
||||||||||
Impaired loans - residential real estate
|
$ | 2,252 |
Sales comparison approach
|
Adjustments determined by
|
14% - 65% | (27%) | ||||
Management for differences
|
||||||||||
between the comparable sales
|
||||||||||
Other real estate owned - residential
|
$ | 1,355 |
Sales comparison approach
|
Adjustments determined by
|
4% - 26% | (11%) | ||||
Management for differences
|
||||||||||
between the comparable sales
|
||||||||||
Other real estate owned - commercial
|
||||||||||
real estate
|
$ | 7,102 |
Sales comparison approach
|
Adjustments determined by
|
7% - 54% | (25%) | ||||
Management for differences
|
||||||||||
between the comparable sales
|
||||||||||
Mortgage servicing rights
|
$ | 3,467 |
Third party valuation pricing
|
Prepayment speeds
|
200% - 411% | (222%) | ||||
Default rate
|
1.50% - 1.50% | (1.50%) | ||||||||
Discount rate
|
9% - 9% | (9%) | ||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net impairment loss recognized in earnings
|
$ | - | $ | - | $ | - | $ | 279 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Carrying amount of loans with a valuation allowance
|
$ | 5,903 | $ | 5,391 | ||||
Valuation allowance
|
1,147 | 1,717 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Other real estate owned write-downs
|
$ | 866 | $ | 236 | $ | 1,207 | $ | 463 |
Fair Value Measurements at
|
||||||||||||||||||||
September 30, 2012 Using:
|
||||||||||||||||||||
Total
|
||||||||||||||||||||
Carrying
|
Fair
|
|||||||||||||||||||
(in thousands)
|
Value
|
Level 1
|
Level 2
|
Level 3
|
Value
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 96,187 | $ | 96,187 | $ | - | $ | - | $ | 96,187 | ||||||||||
Securities available for sale
|
533,236 | - | 528,284 | 4,952 | 533,236 | |||||||||||||||
Securities to be held to maturity
|
48,026 | - | 48,448 | - | 48,448 | |||||||||||||||
Mortgage loans held for sale
|
3,385 | - | 3,385 | - | 3,385 | |||||||||||||||
Loans, net
|
2,618,257 | - | - | 2,692,285 | 2,692,285 | |||||||||||||||
Federal Home Loan Bank stock
|
28,784 | - | - | - | N/A | |||||||||||||||
Accrued interest receivable
|
10,088 | - | 10,088 | - | 10,088 | |||||||||||||||
Liabilities:
|
||||||||||||||||||||
Non interest-bearing deposits
|
514,893 | - | 514,893 | - | 514,893 | |||||||||||||||
Transaction deposits
|
1,679,822 | - | 1,679,822 | - | 1,679,822 | |||||||||||||||
Time deposits
|
375,788 | - | 379,866 | - | 379,866 | |||||||||||||||
Securities sold under agreements
|
||||||||||||||||||||
to repurchase and other short-term
|
||||||||||||||||||||
borrowings
|
169,839 | - | 169,839 | - | 169,839 | |||||||||||||||
Federal Home Loan Bank advances
|
553,487 | - | 569,667 | - | 569,667 | |||||||||||||||
Subordinated note
|
41,240 | - | 41,162 | - | 41,162 | |||||||||||||||
Accrued interest payable
|
1,496 | - | 1,496 | - | 1,496 |
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 |
September 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 4,392 | $ | 15,228 | ||||
Origination of mortgage loans held for sale
|
166,224 | 93,052 | ||||||
Proceeds from the sale of mortgage loans held for sale
|
(173,772 | ) | (106,535 | ) | ||||
Net gain on sale of mortgage loans held for sale
|
6,541 | 2,976 | ||||||
Balance, September 30
|
$ | 3,385 | $ | 4,721 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net gain on sale of mortgage loans held for sale
|
$ | 2,819 | $ | 1,511 | $ | 6,541 | $ | 2,976 | ||||||||
Change in mortgage servicing rights valuation allowance
|
(160 | ) | (203 | ) | (129 | ) | (203 | ) | ||||||||
Loan servicing income, net of amortization
|
(385 | ) | 44 | (821 | ) | 319 | ||||||||||
Total Mortgage Banking income
|
$ | 2,274 | $ | 1,352 | $ | 5,591 | $ | 3,092 |
September 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 6,087 | $ | 7,800 | ||||
Additions
|
1,496 | 924 | ||||||
Amortized to expense
|
(2,474 | ) | (1,833 | ) | ||||
Change in valuation allowance
|
(129 | ) | (203 | ) | ||||
Balance, September 30
|
$ | 4,980 | $ | 6,688 |
September 30, (in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | (203 | ) | $ | - | |||
Additions
|
(171 | ) | (203 | ) | ||||
Reductions credited to operations
|
42 | - | ||||||
Direct write downs
|
- | - | ||||||
Balance, September 30
|
$ | (332 | ) | $ | (203 | ) |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Fair value of mortgage servicing rights portfolio
|
$ | 5,696 | $ | 7,120 | ||||
Prepayment speed range
|
255% - 499 | % | 221% - 550 | % | ||||
Discount rate
|
9 | % | 9 | % | ||||
Weighted average default rate
|
1.50 | % | 1.50 | % |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Mandatory forward contracts:
|
||||||||
Notional amount
|
$ | 31,650 | $ | 20,490 | ||||
Change in fair value of mandatory forward contracts
|
(484 | ) | (96 | ) | ||||
Rate lock loan commitments:
|
||||||||
Notional amount
|
$ | 25,978 | $ | 15,623 | ||||
Change in fair value of rate lock loan commitments
|
511 | 16 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands, except per share data)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net income
|
$ | 20,668 | $ | 7,870 | $ | 112,718 | $ | 87,945 | ||||||||
Weighted average shares outstanding
|
20,948 | 20,953 | 20,954 | 20,942 | ||||||||||||
Effect of dilutive securities
|
81 | 41 | 78 | 50 | ||||||||||||
Average shares outstanding including
|
||||||||||||||||
dilutive securities
|
21,029 | 20,994 | 21,032 | 20,992 | ||||||||||||
Basic earnings per share:
|
||||||||||||||||
Class A Common Share
|
$ | 0.99 | $ | 0.38 | $ | 5.38 | $ | 4.20 | ||||||||
Class B Common Share
|
0.97 | 0.36 | 5.34 | 4.16 | ||||||||||||
Diluted earnings per share:
|
||||||||||||||||
Class A Common Share
|
$ | 0.98 | $ | 0.38 | $ | 5.36 | $ | 4.19 | ||||||||
Class B Common Share
|
0.97 | 0.36 | 5.32 | 4.15 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Antidilutive stock options
|
219,350 | 600,676 | 219,350 | 605,676 |
Three Months Ended September 30, 2012
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 28,444 | $ | 110 | $ | 18 | $ | 28,572 | ||||||||
Provision for loan losses
|
2,543 | - | (460 | ) | 2,083 | |||||||||||
Refund transfer fees
|
- | - | 231 | 231 | ||||||||||||
Mortgage banking income
|
- | 2,274 | - | 2,274 | ||||||||||||
Bargain purchase gains
|
26,923 | - | - | 26,923 | ||||||||||||
Other non interest income
|
5,387 | 11 | 19 | 5,417 | ||||||||||||
Total non interest income
|
32,310 | 2,285 | 250 | 34,845 | ||||||||||||
Total non interest expenses
|
26,118 | 851 | 2,793 | 29,762 | ||||||||||||
Gross operating profit (loss)
|
32,093 | 1,544 | (2,065 | ) | 31,572 | |||||||||||
Income tax expense (benefit)
|
11,145 | 541 | (782 | ) | 10,904 | |||||||||||
Net income (loss)
|
$ | 20,948 | $ | 1,003 | $ | (1,283 | ) | $ | 20,668 | |||||||
Segment end of period assets
|
$ | 3,413,293 | $ | 8,765 | $ | 13,718 | $ | 3,435,776 | ||||||||
Net interest margin
|
3.54 | % |
NM
|
NM
|
3.54 | % |
Three Months Ended September 30, 2011
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 27,059 | $ | 100 | $ | 4 | $ | 27,163 | ||||||||
Provision for loan losses
|
547 | - | (687 | ) | (140 | ) | ||||||||||
Refund transfer fees
|
- | - | 425 | 425 | ||||||||||||
Mortgage banking income
|
- | 1,352 | - | 1,352 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
301 | - | - | 301 | ||||||||||||
Other non interest income
|
8,367 | 26 | 5 | 8,398 | ||||||||||||
Total non interest income
|
8,668 | 1,378 | 430 | 10,476 | ||||||||||||
Total non interest expenses
|
22,065 | 705 | 3,668 | 26,438 | ||||||||||||
Gross operating profit (loss)
|
13,115 | 773 | (2,547 | ) | 11,341 | |||||||||||
Income tax expense (benefit)
|
4,293 | 270 | (1,092 | ) | 3,471 | |||||||||||
Net income (loss)
|
$ | 8,822 | $ | 503 | $ | (1,455 | ) | $ | 7,870 | |||||||
Segment end of period assets
|
$ | 3,067,504 | $ | 11,810 | $ | 15,827 | $ | 3,095,141 | ||||||||
Net interest margin
|
3.61 | % |
NM
|
NM
|
3.60 | % |
Nine Months Ended September 30, 2012
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 84,406 | $ | 283 | $ | 45,415 | $ | 130,104 | ||||||||
Provision for loan losses
|
6,505 | - | 7,214 | 13,719 | ||||||||||||
Refund transfer fees
|
- | - | 78,127 | 78,127 | ||||||||||||
Mortgage banking income
|
- | 5,591 | - | 5,591 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
56 | - | - | 56 | ||||||||||||
Bargain purchase gains
|
54,726 | - | - | 54,726 | ||||||||||||
Other non interest income
|
17,005 | 27 | 208 | 17,240 | ||||||||||||
Total non interest income
|
71,787 | 5,618 | 78,335 | 155,740 | ||||||||||||
Total non interest expenses
|
76,752 | 2,928 | 18,686 | 98,366 | ||||||||||||
Gross operating profit
|
72,936 | 2,973 | 97,850 | 173,759 | ||||||||||||
Income tax expense
|
25,150 | 1,041 | 34,850 | 61,041 | ||||||||||||
Net income
|
$ | 47,786 | $ | 1,932 | $ | 63,000 | $ | 112,718 | ||||||||
Segment end of period assets
|
$ | 3,413,293 | $ | 8,765 | $ | 13,718 | $ | 3,435,776 | ||||||||
Net interest margin
|
3.51 | % |
NM
|
NM
|
5.11 | % |
Nine Months Ended September 30, 2011
|
||||||||||||||||
(dollars in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing Group
|
Total Company
|
||||||||||||
Net interest income
|
$ | 78,580 | $ | 291 | $ | 59,092 | $ | 137,963 | ||||||||
Provision for loan losses
|
5,454 | - | 12,049 | 17,503 | ||||||||||||
Refund transfer fees
|
- | - | 88,071 | 88,071 | ||||||||||||
Mortgage banking income
|
- | 3,092 | - | 3,092 | ||||||||||||
Net gain on sales, calls and impairment
|
||||||||||||||||
of securities
|
1,929 | - | - | 1,929 | ||||||||||||
Other non interest income
|
19,663 | 51 | 350 | 20,064 | ||||||||||||
Total non interest income
|
21,592 | 3,143 | 88,421 | 113,156 | ||||||||||||
Total non interest expenses
|
67,840 | 2,755 | 27,187 | 97,782 | ||||||||||||
Gross operating profit (loss)
|
26,878 | 679 | 108,277 | 135,834 | ||||||||||||
Income tax expense (benefit)
|
8,263 | 237 | 39,389 | 47,889 | ||||||||||||
Net income (loss)
|
$ | 18,615 | $ | 442 | $ | 68,888 | $ | 87,945 | ||||||||
Segment end of period assets
|
$ | 3,067,504 | $ | 11,810 | $ | 15,827 | $ | 3,095,141 | ||||||||
Net interest margin
|
3.48 | % |
NM
|
NM
|
5.60 | % |
●
|
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 loan losses;
|
●
|
deteriorating credit quality, including changes in the interest rate environment and reducing interest margins;
|
●
|
the overall adequacy of the allowance for loan 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 FDIC-assisted failed bank acquisitions;
|
●
|
the future operating performance of the Republic Payment Solutions (“RPS”) division;
|
●
|
the future operating performance of the Republic Credit Solutions (“RCS”) 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 Refund Transfer (“RT”) (formerly referred to as Electronic Refund Checks/Electronic Refund Deposits or ERCs/ERDs) volume for the TRS division;
|
●
|
future revenues associated with RTs 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.
|
●
|
Traditional Banking segment allowance for loan losses and provision for loan losses
|
●
|
Mortgage servicing rights
|
●
|
Income tax accounting
|
●
|
Goodwill and other intangible assets
|
●
|
Impairment of investment securities
|
Three Months Ended September 30, 2012
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total Company
|
||||||||||||
Net income
|
$ | 20,948 | $ | 1,003 | $ | (1,283 | ) | $ | 20,668 | |||||||
Segment assets
|
3,413,293 | 8,765 | 13,718 | 3,435,776 | ||||||||||||
Net interest margin
|
3.54 | % |
NM
|
NM
|
3.54 | % | ||||||||||
Three Months Ended September 30, 2011
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total Company
|
||||||||||||
Net income (loss)
|
$ | 8,822 | $ | 503 | $ | (1,455 | ) | $ | 7,870 | |||||||
Segment assets
|
3,067,504 | 11,810 | 15,827 | 3,095,141 | ||||||||||||
Net interest margin
|
3.61 | % |
NM
|
NM
|
3.60 | % |
Nine Months Ended September 30, 2012
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total Company
|
||||||||||||
Net income
|
$ | 47,786 | $ | 1,932 | $ | 63,000 | $ | 112,718 | ||||||||
Segment assets
|
3,413,293 | 8,765 | 13,718 | 3,435,776 | ||||||||||||
Net interest margin
|
3.51 | % |
NM
|
NM
|
5.11 | % | ||||||||||
Nine Months Ended September 30, 2011
|
||||||||||||||||
(in thousands)
|
Traditional
Banking
|
Mortgage
Banking
|
Republic
Processing
Group
|
Total Company
|
||||||||||||
Net income (loss)
|
$ | 18,615 | $ | 442 | $ | 68,888 | $ | 87,945 | ||||||||
Segment assets
|
3,067,504 | 11,810 | 15,827 | 3,095,141 | ||||||||||||
Net interest margin
|
3.48 | % |
NM
|
NM
|
5.60 | % |
NM = Not Meaningful
|
●
|
Kentucky – 34
|
o
|
Metropolitan Louisville – 20
|
o
|
Central Kentucky – 11
|
§
|
Elizabethtown – 1
|
§
|
Frankfort – 1
|
§
|
Georgetown – 1
|
§
|
Lexington – 5
|
§
|
Owensboro – 2
|
§
|
Shelbyville, Kentucky - 1
|
o
|
Northern Kentucky – 3
|
§
|
Covington, Kentucky – 1
|
§
|
Florence, Kentucky – 1
|
§
|
Independence, Kentucky - 1
|
●
|
Southern Indiana – 3
|
o
|
Floyds Knobs – 1
|
o
|
Jeffersonville – 1
|
o
|
New Albany – 1
|
●
|
Metropolitan Nashville, Tennessee – 1
|
●
|
Metropolitan Minneapolis, Minnesota – 1
|
●
|
Metropolitan Tampa, Florida – 4*
|
●
|
Metropolitan Cincinnati, Ohio – 1*
|
(1)
|
set the term of the M&S Agreement to expire on October 16, 2014;
|
(2)
|
named RB&T as the exclusive provider of all RT products and the previously offered RAL product for a mutually agreed upon list of locations through the term of the contract; and
|
(3)
|
provided that either party may at its option terminate the M&S Agreement upon twenty (20) days’ prior written notice if (i) the other party has materially breached any of the terms thereof and has failed to cure such breach within such twenty day time period or (ii) the continued operation of the Financial Product Program or the electronic filing program was no longer commercially feasible or practical, or no longer provided the same opportunity, to the terminating party due to legal, legislative or regulatory determinations, enactments or interpretations or significant external events or occurrences beyond the control of the terminating party; and provided that in the case of clause (ii) above, the parties shall first mutually endeavor in good faith to modify the Financial Product Program in a manner resolving the problems caused by legal, legislative, regulatory or external events or occurrences.
|
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 increased $12.1 million, or 137%, for the third quarter of 2012 compared to the same period in 2011.
|
●
|
On September 7, 2012, RB&T acquired loans and deposits with a fair value of $127 million and $196 million, resulting in a pre-tax bargain purchase gain of $27.1 million. See additional discussion regarding the FCB acquisition under Footnote 2 “Acquisitions of Failed Banks” of Part I Item 1 “Financial Statements.”
|
●
|
Net interest income increased $1.4 million, or 5%, for the third quarter of 2012 to $28.4 million. The Traditional Banking segment net interest margin decreased 7 basis points for the quarter ended September 30, 2012 to 3.54%.
|
●
|
Provision for loan losses was $2.5 million for the quarter ended September 30, 2012 compared to $547,000 for the same period in 2011.
|
●
|
Total non interest income increased $23.6 million for the third quarter of 2011 compared to the same period in 2011, primarily due to the bargain purchase gain detailed above.
|
●
|
During the third quarter of 2011, the Bank sold its Bowling Green, Kentucky banking center and recorded a pre-tax gain on sale of $2.9 million. Also, during the third quarter of 2011, the Bank realized $301,000 in gains related to sales and calls of $26 million of available for sale investment securities.
|
●
|
Total non interest expense increased $4.1 million, or 18%, during the third quarter of 2012 compared to the third quarter of 2011 due primarily to pre-conversion overhead costs associated with the 2012 acquisitions of failed banks.
|
●
|
Total non-performing loans to total loans were 0.80% at September 30, 2012, compared to 1.02% at December 31, 2011 and 1.07% at September 30, 2011.
|
●
|
The Bank launched its Warehouse Lending division during the second quarter of 2011 and had $167 million in loans outstanding at September 30, 2012 compared to $41 million and $17 million at December 31, 2011 and September 30, 2011, respectively.
|
●
|
Within the Mortgage Banking segment, mortgage banking income increased $922,000, or 68%, during the third 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 third quarter of 2012.
|
●
|
RPG posted a net loss of $1.3 million for the third quarter of 2012 compared to a net loss of $1.5 million for the same period in 2011.
|
●
|
RPG recorded a net credit to provision for loan losses of $460,000 for the third quarter of 2012, compared to a net credit of $687,000 for the same period in 2011.
|
●
|
RPG posted non-interest income of $250,000 for the third quarter of 2012 compared to $430,000 for the same period in 2011.
|
●
|
Total non interest expense decreased $875,000, or 24%, during the third quarter of 2012 compared to the third quarter of 2011 due primarily to the decline in legal and FDIC assessment expenses.
|
●
|
Liberty and JH unilaterally terminated their contracts with TRS during the third quarter of 2012.
|
●
|
RB&T permanently discontinued the offering of its RAL product effective April 30, 2012.
|
Three Months Ended September 30, 2012
|
Three Months Ended September 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)
|
$ | 629,542 | $ | 2,791 | 1.77 | % | $ | 711,050 | $ | 4,141 | 2.33 | % | ||||||||||||
Federal funds sold and other interest-earning deposits
|
82,404 | 45 | 0.22 | % | 68,108 | 60 | 0.35 | % | ||||||||||||||||
Refund Anticipation Loan fees(2)
|
- | 9 | 0.00 | % | - | 1 | 0.00 | % | ||||||||||||||||
Traditional Bank loans and fees(2)(3)
|
2,520,174 | 31,283 | 4.97 | % | 2,237,559 | 30,224 | 5.40 | % | ||||||||||||||||
Total interest-earning assets
|
3,232,120 | 34,128 | 4.22 | % | 3,016,717 | 34,426 | 4.56 | % | ||||||||||||||||
Less: Allowance for loan losses
|
22,560 | 25,928 | ||||||||||||||||||||||
Non interest-earning assets:
|
||||||||||||||||||||||||
Non interest-earning cash and cash equivalents
|
38,086 | 63,670 | ||||||||||||||||||||||
Premises and equipment, net
|
33,035 | 35,760 | ||||||||||||||||||||||
Other assets(1)
|
41,396 | 57,011 | ||||||||||||||||||||||
Total assets
|
$ | 3,322,077 | $ | 3,147,230 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Transaction accounts
|
$ | 617,919 | $ | 56 | 0.04 | % | $ | 389,542 | $ | 107 | 0.11 | % | ||||||||||||
Money market accounts
|
488,609 | 172 | 0.14 | % | 681,683 | 485 | 0.28 | % | ||||||||||||||||
Time deposits
|
240,424 | 489 | 0.81 | % | 244,114 | 1,005 | 1.65 | % | ||||||||||||||||
Brokered money market and brokered CD's
|
115,117 | 480 | 1.67 | % | 129,238 | 460 | 1.42 | % | ||||||||||||||||
Total deposits
|
1,462,069 | 1,197 | 0.33 | % | 1,444,577 | 2,057 | 0.57 | % | ||||||||||||||||
Securities sold under agreements to repurchase and
|
||||||||||||||||||||||||
other short-term borrowings
|
208,051 | 110 | 0.21 | % | 249,002 | 111 | 0.18 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
523,053 | 3,619 | 2.77 | % | 517,739 | 4,467 | 3.45 | % | ||||||||||||||||
Subordinated note
|
41,240 | 630 | 6.11 | % | 41,240 | 628 | 6.09 | % | ||||||||||||||||
Total interest-bearing liabilities
|
2,234,413 | 5,556 | 0.99 | % | 2,252,558 | 7,263 | 1.29 | % | ||||||||||||||||
Non interest-bearing liabilities and Stockholders' equity
|
||||||||||||||||||||||||
Non interest-bearing deposits
|
505,127 | 396,568 | ||||||||||||||||||||||
Other liabilities
|
42,674 | 48,927 | ||||||||||||||||||||||
Stockholders' equity
|
539,863 | 449,177 | ||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 3,322,077 | $ | 3,147,230 | ||||||||||||||||||||
Net interest income
|
$ | 28,572 | $ | 27,163 | ||||||||||||||||||||
Net interest spread
|
3.23 | % | 3.27 | % | ||||||||||||||||||||
Net interest margin
|
3.54 | % | 3.60 | % | ||||||||||||||||||||
(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 $1.1 million and $1.1 million for the three months ended September 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 September 30, 2012
|
||||||||||||
Compared to
|
||||||||||||
Three Months Ended September 30, 2011
|
||||||||||||
Increase / (Decrease) Due to
|
||||||||||||
(in thousands)
|
Total Net Change
|
Volume
|
Rate
|
|||||||||
Interest income:
|
||||||||||||
Taxable investment securities, including FHLB stock
|
$ | (1,350 | ) | $ | (438 | ) | $ | (912 | ) | |||
Federal funds sold and other interest-earning deposits
|
(15 | ) | 11 | (26 | ) | |||||||
Refund Anticipation Loan fees
|
8 | - | 8 | |||||||||
Traditional Bank loans and fees
|
1,059 | 3,629 | (2,570 | ) | ||||||||
Net change in interest income
|
(298 | ) | 3,202 | (3,500 | ) | |||||||
Interest expense:
|
||||||||||||
Transaction accounts
|
(51 | ) | 43 | (94 | ) | |||||||
Money market accounts
|
(313 | ) | (112 | ) | (201 | ) | ||||||
Time deposits
|
(516 | ) | (15 | ) | (501 | ) | ||||||
Brokered money market and brokered CDs
|
20 | (54 | ) | 74 | ||||||||
Securities sold under agreements to repurchase and
|
||||||||||||
other short-term borrowings
|
(1 | ) | (20 | ) | 19 | |||||||
Federal Home Loan Bank advances
|
(848 | ) | 46 | (894 | ) | |||||||
Subordinated note
|
2 | - | 2 | |||||||||
Net change in interest expense
|
(1,707 | ) | (112 | ) | (1,595 | ) | ||||||
Net change in net interest income
|
$ | 1,409 | $ | 3,314 | $ | (1,905 | ) |
●
|
Approximately $693,000 of the net increase in the provision for loan losses from the third quarter of 2011 to the third quarter of 2012 was attributable to increases in the Bank’s general loan loss reserves for its pass-rated credits. This was due to growth in the loan portfolio combined with increases in historical loss percentages.
|
●
|
Approximately $912,000 of the net increase in the provision for loan losses from the third quarter of 2011 to the third quarter of 2012 was attributable to the Bank’s large classified loan portfolio. The Bank increased allocations for relationships that were either downgraded to substandard or displayed further signs of credit deterioration during the quarter.
|
●
|
While the Bank’s delinquency and nonperforming loan ratios continue to trend favorably, the Bank’s charge offs in the third quarter of 2012 remained elevated as compared to historical amounts. These charge offs were mostly reserved for in prior periods.
|
Three Months Ended
|
||||||||
September 30,
|
||||||||
(dollars in thousands)
|
2012
|
2011
|
||||||
Allowance for loan losses at beginning of period
|
$ | 22,510 | $ | 25,931 | ||||
Charge offs:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
(348 | ) | (620 | ) | ||||
Non owner occupied
|
(20 | ) | (457 | ) | ||||
Commercial real estate
|
(37 | ) | (362 | ) | ||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
- | (770 | ) | |||||
Commercial
|
(11 | ) | - | |||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
(633 | ) | (419 | ) | ||||
Consumer:
|
||||||||
Credit cards
|
(9 | ) | (69 | ) | ||||
Overdrafts
|
(100 | ) | (199 | ) | ||||
Other consumer
|
(62 | ) | (79 | ) | ||||
Refund Anticipation Loans
|
- | (6 | ) | |||||
Total charge offs
|
(1,220 | ) | (2,981 | ) | ||||
Recoveries:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
32 | 69 | ||||||
Non owner occupied
|
2 | 4 | ||||||
Commercial real estate
|
24 | 42 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
28 | 126 | ||||||
Commercial
|
3 | 6 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
12 | 24 | ||||||
Consumer:
|
||||||||
Credit cards
|
9 | 7 | ||||||
Overdrafts
|
101 | 96 | ||||||
Other consumer
|
56 | 68 | ||||||
Refund Anticipation Loans
|
460 | 693 | ||||||
Total recoveries
|
727 | 1,135 | ||||||
Net loan charge offs
|
(493 | ) | (1,846 | ) | ||||
Provision for loan losses - Traditional Banking
|
2,543 | 547 | ||||||
Provision for loan losses - Refund Anticipation Loans
|
(460 | ) | (687 | ) | ||||
Total provision for loan losses
|
2,083 | (140 | ) | |||||
Allowance for loan losses at end of period
|
$ | 24,100 | $ | 23,945 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.91 | % | 1.08 | % | ||||
Allowance for loan losses to non performing loans
|
118 | % | 101 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.08 | % | 0.33 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.91 | % | 1.08 | % | ||||
Allowance for loan losses to non performing loans
|
118 | % | 101 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.15 | % | 0.45 | % |
●
|
Citizens acquired loans totaling $13 million, representing approximately one-half of the outstanding loans of the banking center.
|
●
|
Citizens assumed all deposits of the banking center, or approximately $33 million consisting of nearly 3,800 accounts.
|
●
|
Citizens acquired all of the fixed assets of the banking center.
|
●
|
The total pre-tax gain on sale recognized by the Bank as a result of the transaction was $2.9 million.
|
●
|
The Bank realized $188,000 in pre-tax gains related to unamortized discount accretion on $24 million of callable U.S. Government agencies that were called during the third quarter of 2011 before their maturity.
|
●
|
Within its Florida-based thrift charter, the Bank sold available for sale mortgage backed securities with an amortized cost of $2 million, resulting in a pre-tax gain of $113,000.
|
●
|
Net income increased $29.2 million for the first nine months of 2012 compared to the same period in 2011.
|
●
|
On January 27, 2012, RB&T acquired loans and deposits with a fair value of $57 million and $947 million, resulting in a pre-tax bargain purchase gain of $27.6 million, primarily recorded during the first quarter of 2012. See additional discussion regarding the TCB acquisition under Footnote 2 “Acquisitions of Failed Banks” of Part I Item 1 “Financial Statements.”
|
●
|
On September 7, 2012, RB&T acquired loans and deposits with a fair value of $127 million and $196 million, resulting in a pre-tax bargain purchase gain of $27.1 million. See additional discussion regarding the FCB acquisition under Footnote 2 “Acquisitions of Failed Banks” of Part I Item 1 “Financial Statements.”
|
●
|
As expected, approximately $895 million of the deposit liabilities assumed in the TCB acquisition exited RB&T by September 30, 2012 due to the substantial strategic reduction in the interest rates paid to the former TCB depositors by RB&T.
|
●
|
Net interest income increased $5.8 million, or 7%, for the first nine months of 2012 to $84.4 million. The Traditional Banking segment net interest margin increased 3 basis points for the nine months ended September 30, 2012 to 3.51%.
|
●
|
Provision for loan losses was $6.5 million for the nine months ended September 30, 2012 compared to $5.5 million for the same period in 2011.
|
●
|
Total non interest income increased $50.2 million for the first nine months of 2012 compared to the same period in 2011 primarily due to the bargain purchase gains detailed above.
|
●
|
During the first nine months of 2011, the Bank sold and had called available for sale mortgage backed securities with an amortized cost of $158 million, resulting in a pre-tax gain of $2.2 million.
|
●
|
During the third quarter of 2011, the Bank closed the transaction related to the sale of its only banking center located in Bowling Green, Kentucky. The Bank recorded a pre-tax gain on sale of $2.9 million as a result of the transaction.
|
●
|
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.
|
●
|
Total non interest expense increased $8.9 million, or 13%, during the first nine months of 2012 compared to the same period in 2011.
|
●
|
Total loans to total loans for the Traditional Banking segment was 0.80% at September 30, 2012, compared to 1.02% at December 31, 2011 and 1.07% at September 30, 2011.
|
●
|
The Bank launched its Warehouse Lending division during the second quarter of 2011 and had $167 million in loans outstanding at September 30, 2012 compared to $41 million and $17 million at December 31, 2011 and September 30, 2011, respectively.
|
●
|
Within the Mortgage Banking segment, mortgage banking income increased $2.5 million, or 81%, during the first nine months 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 first nine 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 RT dollar volume declined $818 million, or 8%, during the 2012 tax season compared to the 2011 tax season.
|
●
|
Net income decreased $5.9 million, or 9%, for the first nine months of 2012 compared to the same period in 2011.
|
●
|
Net interest income decreased $13.7 million, or 23%, for the first nine months of 2012 compared to the same period in 2011.
|
●
|
RPG recorded a provision for loan losses of $7.2 million for the first nine months of 2012, compared to $12.0 million for the same period in 2011.
|
●
|
RPG posted non interest income of $78.3 million for the first nine months of 2012 compared to $88.4 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.
|
●
|
RPG posted non interest expenses of $18.7 million for the first nine months of 2012 compared to $27.2 million for the same period in 2011.
|
●
|
The FDIC assessed a Civil Money Penalty 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.
|
●
|
Liberty and JH unilaterally terminated their contracts with TRS during the third quarter of 2012.
|
●
|
RB&T permanently discontinued the offering of its RAL product effective April 30, 2012.
|
Nine Months Ended September 30, 2012
|
Nine Months Ended September 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)
|
$ | 666,531 | $ | 9,895 | 1.98 | % | $ | 659,753 | $ | 12,446 | 2.52 | % | ||||||||||||
Federal funds sold and other interest-earning deposits
|
277,550 | 516 | 0.25 | % | 379,713 | 833 | 0.29 | % | ||||||||||||||||
Refund Anticipation Loan fees(2)
|
32,305 | 45,224 | 186.65 | % | 39,567 | 59,132 | 199.26 | % | ||||||||||||||||
Traditional Bank loans and fees(2)(3)
|
2,421,008 | 91,894 | 5.06 | % | 2,203,492 | 89,097 | 5.39 | % | ||||||||||||||||
Total interest-earning assets
|
3,397,394 | 147,529 | 5.79 | % | 3,282,525 | 161,508 | 6.56 | % | ||||||||||||||||
Less: Allowance for loan losses
|
25,749 | 30,414 | ||||||||||||||||||||||
Non interest-earning assets:
|
||||||||||||||||||||||||
Non interest-earning cash and cash equivalents
|
143,819 | 127,757 | ||||||||||||||||||||||
Premises and equipment, net
|
33,756 | 36,515 | ||||||||||||||||||||||
Other assets(1)
|
44,356 | 58,048 | ||||||||||||||||||||||
Total assets
|
$ | 3,593,576 | $ | 3,474,431 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Transaction accounts
|
$ | 607,654 | $ | 284 | 0.06 | % | $ | 362,255 | $ | 367 | 0.14 | % | ||||||||||||
Money market accounts
|
466,416 | 567 | 0.16 | % | 690,998 | 1,710 | 0.33 | % | ||||||||||||||||
Time deposits
|
266,054 | 1,690 | 0.85 | % | 264,222 | 3,236 | 1.63 | % | ||||||||||||||||
Brokered money market and brokered CD's
|
173,520 | 1,408 | 1.08 | % | 277,414 | 1,954 | 0.94 | % | ||||||||||||||||
Total deposits
|
1,513,644 | 3,949 | 0.35 | % | 1,594,889 | 7,267 | 0.61 | % | ||||||||||||||||
Securities sold under agreements to repurchase and
|
||||||||||||||||||||||||
other short-term borrowings
|
243,168 | 340 | 0.19 | % | 280,133 | 535 | 0.25 | % | ||||||||||||||||
Federal Home Loan Bank advances
|
561,072 | 11,245 | 2.67 | % | 535,738 | 13,857 | 3.45 | % | ||||||||||||||||
Subordinated note
|
41,240 | 1,891 | 6.11 | % | 41,240 | 1,886 | 6.10 | % | ||||||||||||||||
Total interest-bearing liabilities
|
2,359,124 | 17,425 | 0.98 | % | 2,452,000 | 23,545 | 1.28 | % | ||||||||||||||||
Non interest-bearing liabilities and Stockholders' equity
|
||||||||||||||||||||||||
Non interest-bearing deposits
|
652,498 | 536,007 | ||||||||||||||||||||||
Other liabilities
|
53,588 | 51,737 | ||||||||||||||||||||||
Stockholders' equity
|
528,366 | 434,687 | ||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 3,593,576 | $ | 3,474,431 | ||||||||||||||||||||
Net interest income
|
$ | 130,104 | $ | 137,963 | ||||||||||||||||||||
Net interest spread
|
4.81 | % | 5.28 | % | ||||||||||||||||||||
Net interest margin
|
5.11 | % | 5.60 | % |
(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 $48.4 million and $61.5 million for the nine months ended September 30, 2012 and 2011.
|
(3)
|
Average balances for loans include the principal balance of non-accrual loans and loans held for sale.
|
Nine Months Ended September 30, 2012
|
||||||||||||
Compared to
|
||||||||||||
Nine Months Ended September 30, 2011
|
||||||||||||
Increase / (Decrease) Due to
|
||||||||||||
(in thousands)
|
Total Net Change
|
Volume
|
Rate
|
|||||||||
Interest income:
|
||||||||||||
Taxable investment securities, including FHLB stock
|
$ | (2,551 | ) | $ | 127 | $ | (2,678 | ) | ||||
Federal funds sold and other interest-earning deposits
|
(317 | ) | (203 | ) | (114 | ) | ||||||
Refund Anticipation Loan fees
|
(13,908 | ) | (10,342 | ) | (3,566 | ) | ||||||
Traditional Bank loans and fees
|
2,797 | 8,463 | (5,666 | ) | ||||||||
Net change in interest income
|
(13,979 | ) | (1,955 | ) | (12,024 | ) | ||||||
Interest expense:
|
||||||||||||
Transaction accounts
|
(83 | ) | 174 | (257 | ) | |||||||
Money market accounts
|
(1,143 | ) | (445 | ) | (698 | ) | ||||||
Time deposits
|
(1,546 | ) | 23 | (1,569 | ) | |||||||
Brokered money market and brokered CDs
|
(546 | ) | (811 | ) | 265 | |||||||
Securities sold under agreements to repurchase and
|
||||||||||||
other short-term borrowings
|
(195 | ) | (64 | ) | (131 | ) | ||||||
Federal Home Loan Bank advances
|
(2,612 | ) | 630 | (3,242 | ) | |||||||
Subordinated note
|
5 | - | 5 | |||||||||
Net change in interest expense
|
(6,120 | ) | (493 | ) | (5,627 | ) | ||||||
Net change in net interest income
|
$ | (7,859 | ) | $ | (1,462 | ) | $ | (6,397 | ) |
●
|
Approximately $1.8 million of the net year-to-date increase in the provision for loan losses from 2011 to 2012 was attributable to increases in the Bank’s general loan loss reserves for its pass-rated credits. This was due to growth in the loan portfolio combined with increases in historical loss percentages.
|
●
|
The Bank experienced a net decrease of $895,000 to the year to date provision for loan losses attributable primarily to a decline in required provisions for the Bank’s large classified loan portfolio.
|
Nine Months Ended
|
||||||||
September 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
|
(2,422 | ) | (1,699 | ) | ||||
Non owner occupied
|
(318 | ) | (512 | ) | ||||
Commercial real estate
|
(353 | ) | (1,081 | ) | ||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
(1,796 | ) | (823 | ) | ||||
Commercial
|
(18 | ) | (100 | ) | ||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
(1,947 | ) | (1,043 | ) | ||||
Consumer:
|
||||||||
Credit cards
|
(87 | ) | (172 | ) | ||||
Overdrafts
|
(318 | ) | (487 | ) | ||||
Other consumer
|
(185 | ) | (225 | ) | ||||
Refund Anticipation Loans
|
(11,097 | ) | (15,484 | ) | ||||
Total charge offs
|
(18,541 | ) | (21,626 | ) | ||||
Recoveries:
|
||||||||
Residential real estate:
|
||||||||
Owner occupied
|
183 | 186 | ||||||
Non owner occupied
|
14 | 4 | ||||||
Commercial real estate
|
70 | 284 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
83 | 231 | ||||||
Commercial
|
21 | 125 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
73 | 100 | ||||||
Consumer:
|
||||||||
Credit cards
|
33 | 24 | ||||||
Overdrafts
|
332 | 395 | ||||||
Other consumer
|
167 | 205 | ||||||
Refund Anticipation Loans
|
3,883 | 3,435 | ||||||
Total recoveries
|
4,859 | 4,989 | ||||||
Net loan charge offs
|
(13,682 | ) | (16,637 | ) | ||||
Provision for loan losses - Traditional Banking
|
6,505 | 5,454 | ||||||
Provision for loan losses - Refund Anticipation Loans
|
7,214 | 12,049 | ||||||
Total provision for loan losses
|
13,719 | 17,503 | ||||||
Allowance for loan losses at end of period
|
$ | 24,100 | $ | 23,945 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.91 | % | 1.08 | % | ||||
Allowance for loan losses to non performing loans
|
118 | % | 101 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.74 | % | 0.99 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Allowance for loan losses to total loans
|
0.91 | % | 1.08 | % | ||||
Allowance for loan losses to non performing loans
|
118 | % | 101 | % | ||||
Annualized net loan charge offs to average loans outstanding
|
0.36 | % | 0.28 | % |
●
|
Citizens acquired loans totaling $13 million, representing approximately one-half of the outstanding loans of the banking center.
|
●
|
Citizens assumed all deposits of banking center, or approximately $33 million consisting of nearly 3,800 accounts.
|
●
|
Citizens acquired all of the fixed assets of the banking center.
|
●
|
The total pre-tax gain on sale recognized by the Bank as a result of the transaction was $2.9 million.
|
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Loss
|
$ | - | $ | - | ||||
Doubtful
|
- | - | ||||||
Substandard
|
37,530 | 43,088 | ||||||
Special Mention/Watch
|
31,969 | 35,455 | ||||||
Purchased Credit Impaired Loans Group 1
|
101,576 | - | ||||||
Purchased Credit Impaired Loans Group 2
|
- | - | ||||||
Total
|
$ | 171,075 | $ | 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 $719,000 during the first nine months of 2012, as charge-offs within the Bank’s substandard loan category totaled $4.9 million during that time period. A significant portion of these charge-offs were for loans substantially reserved for in prior quarters. The charge-offs were offset by approximately $4.2 million in additional net allocations recorded for Substandard loans during the first nine months of 2012.
|
|
●
|
The Bank increased its “Special Mention/Watch” rated loan loss allowance by a net $187,000 during the first nine 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 $623,000 during the first nine months of 2012 for this category.
|
|
●
|
The Bank increased its overall allowance for its “Pass” rated credits by a net $1.1 million during the first nine 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)
|
September 30, 2012
|
December 31, 2011
|
||||||
Loans on non-accrual status(1)
|
$ | 20,436 | $ | 23,306 | ||||
Loans past due 90 days or more and still on accrual
|
616 | - | ||||||
Total non-performing loans
|
21,052 | 23,306 | ||||||
Other real estate owned
|
25,148 | 10,956 | ||||||
Total non-performing assets
|
$ | 46,200 | $ | 34,262 | ||||
Total Company Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.80 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.73 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.34 | % | 1.00 | % | ||||
Traditional Banking Credit Quality Ratios:
|
||||||||
Non-performing loans to total loans
|
0.80 | % | 1.02 | % | ||||
Non-performing assets to total loans (including OREO)
|
1.73 | % | 1.49 | % | ||||
Non-performing assets to total assets
|
1.34 | % | 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)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 11,794 | $ | 12,183 | ||||
Non owner occupied
|
1,582 | 1,565 | ||||||
Commercial real estate
|
2,808 | 3,032 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
2,366 | 2,521 | ||||||
Commercial
|
505 | 373 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
1,880 | 3,603 | ||||||
Consumer:
|
||||||||
Credit cards
|
- | - | ||||||
Overdrafts
|
- | - | ||||||
Other consumer
|
117 | 29 | ||||||
Total non-performing loans
|
$ | 21,052 | $ | 23,306 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
1.05 | % | 1.24 | % | ||||
Non owner occupied
|
1.97 | % | 1.58 | % | ||||
Commercial real estate
|
0.39 | % | 0.47 | % | ||||
Commercial real estate - purchased whole loans
|
0.00 | % | 0.00 | % | ||||
Real estate construction
|
2.50 | % | 3.74 | % | ||||
Commercial
|
0.34 | % | 0.31 | % | ||||
Warehouse lines of credit
|
0.00 | % | 0.00 | % | ||||
Home equity
|
0.75 | % | 1.29 | % | ||||
Consumer:
|
||||||||
Credit cards
|
0.00 | % | 0.00 | % | ||||
Overdrafts
|
0.00 | % | 0.00 | % | ||||
Other consumer
|
0.75 | % | 0.29 | % | ||||
Total non performing loans to total loans
|
0.80 | % | 1.02 | % |
(in thousands)
|
||||
Non-performing loans at January 1, 2012
|
$ | 23,306 | ||
Loans added to non-performing status
|
12,027 | |||
Loans removed from non-performing status
|
(13,752 | ) | ||
Principal paydowns
|
(529 | ) | ||
Non-performing loans at September 30, 2012
|
$ | 21,052 |
(in thousands)
|
||||
Loans charged off
|
$ | 2,218 | ||
Loans transferred to OREO
|
5,448 | |||
Loans refinanced at other institutions
|
3,196 | |||
Loans returned to accrual status
|
2,890 | |||
Total loans removed from non-performing status
|
$ | 13,752 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
$ | 10,490 | $ | 13,208 | ||||
Non owner occupied
|
1,449 | 1,091 | ||||||
Commercial real estate
|
1,789 | 5,126 | ||||||
Commercial real estate - purchased whole loans
|
- | - | ||||||
Real estate construction
|
1,974 | 541 | ||||||
Commercial
|
258 | 105 | ||||||
Warehouse lines of credit
|
- | - | ||||||
Home equity
|
1,579 | 4,041 | ||||||
Consumer:
|
||||||||
Credit cards
|
60 | 53 | ||||||
Overdrafts
|
129 | 129 | ||||||
Other consumer
|
164 | 139 | ||||||
Total delinquent loans
|
$ | 17,892 | $ | 24,433 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate:
|
||||||||
Owner occupied
|
0.93 | % | 1.34 | % | ||||
Non owner occupied
|
1.81 | % | 1.10 | % | ||||
Commercial real estate
|
0.25 | % | 0.80 | % | ||||
Commercial real estate - purchased whole loans
|
0.00 | % | 0.00 | % | ||||
Real estate construction
|
2.09 | % | 0.80 | % | ||||
Commercial
|
0.18 | % | 0.09 | % | ||||
Warehouse lines of credit
|
0.00 | % | 0.00 | % | ||||
Home equity
|
0.63 | % | 1.44 | % | ||||
Consumer:
|
||||||||
Credit cards
|
0.70 | % | 0.62 | % | ||||
Overdrafts
|
17.60 | % | 13.58 | % | ||||
Other consumer
|
1.06 | % | 1.40 | % | ||||
Total delinquent loans to total loans
|
0.68 | % | 1.07 | % |
(1)
|
– Represents total loans over 30 days past due divided by total loans.
|
●
|
All loans, excluding ASC Topic 310-30 purchased credit impaired loans, internally classified as “Substandard,” “Doubtful” or “Loss;”
|
|
●
|
All loans, excluding ASC Topic 310-30 purchased credit impaired loans, internally classified as “Special Mention/Watch” on non-accrual status,
|
|
●
|
All retail and commercial TDRs including ASC Topic 310-30 purchased credit impaired loans;
|
|
●
|
ASC Topic 310-30 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)
|
September 30, 2012
|
December 31, 2011
|
||||||
Troubled debt restructurings
|
$ | 81,119 | $ | 67,022 | ||||
Classifed impaired loans (which are not TDRs)
|
10,599 | 10,171 | ||||||
Total impaired loans
|
$ | 91,718 | $ | 77,193 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Residential real estate
|
$ | 8,182 | $ | 4,754 | ||||
Commercial real estate
|
6,066 | 2,030 | ||||||
Real estate construction
|
10,900 | 4,172 | ||||||
Total other real estate owned
|
$ | 25,148 | $ | 10,956 |
(in thousands)
|
2012
|
2011
|
||||||
Balance, January 1
|
$ | 10,956 | $ | 11,973 | ||||
OREO acquired from failed bank acquisitions at fair value
|
20,688 | - | ||||||
Transfer from loans to OREO
|
16,018 | 9,873 | ||||||
Proceeds from sale
|
(21,688 | ) | (10,622 | ) | ||||
Net gain on sale
|
381 | 424 | ||||||
Writedowns
|
(1,207 | ) | (463 | ) | ||||
Balance, September 30
|
$ | 25,148 | $ | 11,185 |
|
●
|
Part I Item 1 “Financial Statements:”
|
|
o
|
Footnote 1 “Summary of Significant Accounting Policies”
|
|
o
|
Footnote 4 “Loans and Allowance for Loan Losses”
|
|
o
|
Footnote 5 “Deposits”
|
|
o
|
Footnote 6 “Off Balance Sheet Risks, Commitments and Contingent Liabilities”
|
|
o
|
Footnote 11 “Segment Information”
|
|
●
|
Part I Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations:”
|
|
o
|
“Business Segment Composition”
|
|
o
|
“Overview”
|
|
o
|
“Results of Operations”
|
As of September 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.
|
$ | 601,864 | 26.25 | % | $ | 501,188 | 24.74 | % | ||||||||
Republic Bank & Trust Co.
|
548,522 | 24.82 | 447,143 | 22.97 | ||||||||||||
Republic Bank
|
14,560 | 17.93 | 16,441 | 20.34 | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
||||||||||||||||
Republic Bancorp, Inc.
|
$ | 579,794 | 25.29 | % | $ | 478,003 | 23.59 | % | ||||||||
Republic Bank & Trust Co.
|
504,042 | 22.81 | 401,529 | 20.63 | ||||||||||||
Republic Bank
|
13,520 | 16.65 | 15,420 | 19.08 | ||||||||||||
Tier I Leverage Capital (to Average Assets)
|
||||||||||||||||
Republic Bancorp, Inc.
|
$ | 579,794 | 18.28 | % | $ | 478,003 | 14.77 | % | ||||||||
Republic Bank & Trust Co.
|
504,042 | 15.61 | 401,529 | 12.78 | ||||||||||||
Republic Bank
|
13,520 | 12.96 | 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
|
$ | 271 | $ | 2 | $ | 10 | $ | 17 | $ | 25 | ||||||||||
Investment securities
|
13,858 | 10,955 | 13,780 | 16,187 | 18,473 | |||||||||||||||
Loans, excluding loan fees (1)
|
117,443 | 114,787 | 121,405 | 130,681 | 140,556 | |||||||||||||||
Total interest income, excluding loan fees
|
131,572 | 125,744 | 135,195 | 146,885 | 159,054 | |||||||||||||||
Projected interest expense:
|
||||||||||||||||||||
Deposits
|
5,497 | 4,216 | 13,242 | 22,024 | 30,585 | |||||||||||||||
Securities sold under agreements to repurchase
|
451 | 249 | 1,910 | 3,571 | 5,232 | |||||||||||||||
Federal Home Loan Bank advances and other
|
||||||||||||||||||||
long-term borrowings
|
18,012 | 16,706 | 17,758 | 18,832 | 18,954 | |||||||||||||||
Total interest expense
|
23,960 | 21,171 | 32,910 | 44,427 | 54,771 | |||||||||||||||
Net interest income, excluding loan fees
|
$ | 107,612 | $ | 104,573 | $ | 102,285 | $ | 102,458 | $ | 104,283 | ||||||||||
Change from base
|
$ | (2,288 | ) | $ | (2,115 | ) | $ | (290 | ) | |||||||||||
% Change from base
|
-2.19 | % | -2.02 | % | -0.28 | % |
Quantitative and Qualitative Disclosures about Market Risk.
|
Controls and Procedures.
|
CRITICAL ACCOUNTING POLICIES/ESTIMATES, ACCOUNTING STANDARDS AND INTERNAL CONTROLS
|
●
|
Traditional Banking segment allowance for loan losses and provision for loan losses
|
|
●
|
Mortgage servicing rights
|
|
●
|
Income tax accounting
|
|
●
|
Goodwill and other intangible assets
|
|
●
|
Impairment of investment securities
|
|
●
|
Purchase accounting surrounding a failed bank acquisition
|
REPUBLIC PROCESSING GROUP – TAX REFUND SOLUTIONS (“TRS”) DIVISION
|
●
|
positive affirmations by EROs of individual tax preparer training related to regulatory requirements applicable to bank products;
|
|
●
|
annual audits covering 10% of active ERO locations and a significant sample of applications for Bank products. The audits will consist of onsite visits, document reviews, mystery shops of tax preparation offices, and tax product customer surveys;
|
|
●
|
on-site audit confirmation of ERO agreements to adhere to laws, processes, procedures, disclosure requirements and physical and electronic security requirements;
|
|
●
|
an advertising approval process that requires RB&T to approve all tax preparer advertisements prior to their issuance;
|
|
●
|
monitoring of ERO offices for income tax return quality;
|
|
●
|
monitoring of ERO offices for adherence to acceptable tax preparation fee parameters;
|
|
●
|
monitoring for federal and state tax preparation requirements, including local and state tax preparer registration, and posting and disclosure requirements relative to Bank products;
|
|
●
|
RB&T to provide advance notification, as practicable, to the FDIC of any significant changes in the TRS line of business, including
|
o
|
a change of more than 25% from the prior tax season in the number of EROs with which RB&T is doing business, or
|
||
o
|
the addition of tax-related products offered by RB&T that it did not previously offer; and
|
●
|
RB&T to provide advance notification, as practicable, to the FDIC when RB&T enters into a relationship with a new corporation that has multiple owned or franchised locations, when the relationship alone will represent an increase of more than 10% from the prior tax season in the number of EROs with which RB&T is doing business.
|
|
●
|
Part I Item 1 “Financial Statements:”
|
|
o
|
Footnote 1 “Summary of Significant Accounting Policies”
|
|
o
|
Footnote 4 “Loans and Allowance for Loan Losses”
|
|
o
|
Footnote 5 “Deposits”
|
|
o
|
Footnote 6 “Off Balance Sheet Risks, Commitments and Contingent Liabilities”
|
|
o
|
Footnote 11 “Segment Information”
|
|
●
|
Part I Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations:”
|
|
o
|
“Business Segment Composition”
|
|
o
|
“Overview”
|
|
o
|
“Results of Operations”
|
TRADITIONAL BANK LENDING AND THE ALLOWANCE FOR LOAN LOSSES
|
INVESTMENT SECURITIES AND FHLB STOCK
|
ASSET LIABILITY MANAGEMENT AND LIQUIDITY
|
DEPOSITS, OVERDRAFTS, FDIC INSURANCE PREMIUMS AND SERVICE CHARGES ON DEPOSITS
|
COMPANY COMMON STOCK
|
●
|
Variations in the Company’s and its competitors’ operating results;
|
|
●
|
Changes in earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to us or other financial institutions;
|
|
●
|
Announcements by the Company or its competitors of mergers, acquisitions and strategic partnerships;
|
|
●
|
Additions or departure of key personnel;
|
|
●
|
Actual or anticipated quarterly or annual fluctuations in operating results, cash flows and financial condition;
|
|
●
|
The announced exiting of or significant reductions in material lines of business within the Company;
|
|
●
|
Changes or proposed changes in banking laws or regulations or enforcement of these laws and regulations;
|
|
●
|
Events affecting other companies that the market deems comparable to the Company;
|
|
●
|
Developments relating to regulatory examinations;
|
|
●
|
Speculation in the press or investment community generally or relating to the Company’s reputation or the financial services industry;
|
|
●
|
Future issuances or re-sales of equity or equity-related securities, or the perception that they may occur;
|
●
|
General conditions in the financial markets and real estate markets in particular, developments related to market conditions for the financial services industry;
|
|
●
|
Domestic and international economic factors unrelated to the Company’s performance;
|
|
●
|
Developments related to litigation or threatened litigation;
|
|
●
|
The presence or absence of short selling of the Company’s common stock; and
|
|
●
|
Future sales of the Company’s common stock or debt securities.
|
GOVERNMENT REGULATION / ECONOMIC FACTORS
|
MANAGEMENT, INFORMATION SYSTEMS, ETC.
|
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
|
|||||||||||
July 1 - July 31
|
9,506 | $ | 23.17 | 9,506 | |||||||||||
August 1 - August 31
|
714 | 24.26 | 714 | ||||||||||||
September 1 - September 30
|
- | - | - | ||||||||||||
Total
|
10,220 | $ | 23.25 | 10,220 |
568,562
|
Exhibit Number
|
Description of Exhibit
|
10.1
|
Officer Compensation Agreement with Kevin Sipes effective November 7, 2012
|
10.2
|
Officer Compensation Agreement with Kevin Sipes effective November 7, 2012
|
10.3
|
Cash Bonus Plan For Acquisitions
|
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 September 30, 2012 and December 31, 2011, (ii) Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iii) Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2012, (iv) Consolidated Statements of Cash Flows for the nine months ended September 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:
|
|||
November 8, 2012
|
By:
|
Steven E. Trager
|
|
Chairman and Chief Executive Officer
|
Principal Financial Officer:
|
|||
|
By:
|
Kevin Sipes
|
|
November 8, 2012
|
Executive Vice President, Chief Financial
|
||
Officer and Chief Accounting Officer
|
|||
TO: Kevin Sipes
|
DATE: November 7, 2012
|
FROM: Steve Trager
|
SUBJECT: FCB Acquisition Bonus Program
|
|
1.
|
Convert all FCB loans and deposit accounts to Horizon within six months
|
|
2.
|
Limit operational, (non-loan) losses to less than $50,000
|
/s/ Kevin Sipes
|
/s/ November 7, 2012
|
|
Kevin Sipes
|
Date
|
TO: Kevin Sipes
|
DATE: November 7, 2012
|
FROM: Steve Trager
|
SUBJECT: FCB Acquisition Bonus Program
|
|
●
|
If a GOP for the FCB Acquisition of $25,000,000 is achieved your incentive payout will be $25,000.00.
|
|
●
|
If a GOP for the FCB Acquisition of $35,000,000 is achieved your incentive payout will be $50,000.00.
|
|
●
|
If a GOP for the FCB Acquisition of $40,000,000 is achieved your incentive payout will be $62,500.00.
|
/s/ Kevin Sipes
|
/s/ November 7, 2012
|
|
Kevin Sipes
|
Date
|
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:
|
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:
|
5.)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
Date: November 8, 2012
|
||||
Steven E. Trager
|
||||
Chairman and Chief Executive Officer
|
Date: November 8, 2012
|
||||
Kevin Sipes
Executive Vice President, Chief Financial Officer and Chief Accounting Officer
|
Investment Securities - Additional Information (Detail) (USD $)
|
9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
Investment
|
Sep. 30, 2011
|
Dec. 31, 2011
|
Sep. 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
|
Sep. 30, 2011
Mortgage backed securities
|
Sep. 30, 2012
Mortgage backed securities
Investment
|
Jun. 30, 2012
Mortgage backed securities
|
Dec. 31, 2011
Mortgage backed securities
|
Sep. 30, 2012
Mortgage backed securities
Tennessee Commerce Bank ("TCB")
Investment
|
Sep. 30, 2012
US Government Agencies Debt Securities
|
Sep. 30, 2011
US Government Agencies Debt Securities
|
|
Schedule of Investments [Line Items] | ||||||||||||
Gross Unrealized loss | $ 866,000.0 | $ 1,300,000 | $ 60,000 | $ 568,000 | ||||||||
Mortgage backed securities fair value | 5,000,000 | |||||||||||
Number of Securities sold | 6 | |||||||||||
Available for Sale securities, amortized cost | 524,187,000 | 639,579,000 | 5,818,000 | 5,818,000 | 132,000,000 | 0 | 0 | 35,000,000 | ||||
Available-for-sale securities, recognized net pre-tax gain | (279,000) | 53,000 | ||||||||||
Available-for-sale securities, recognized net pre-tax gain | 2,000,000 | 3,000 | 188,000 | |||||||||
Available for sale securities, unamortized discount | 10,000,000 | 24,000,000 | ||||||||||
Tax provision related to Bank's realized gains | 20,000 | 772,000 | ||||||||||
Number of securities | 167 | 1 | ||||||||||
Number of securities unrealized loss position | 6 | |||||||||||
Private label mortgage-related security at carrying value | 5,800,000 | |||||||||||
Additional impairment charges related to credit losses | $ 279,000 | $ 5,800,000 |
Risk Category of Loans by Class of Loans (Parenthetical) (Detail)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Credit Quality Ratio [Line Items] | ||
Concentration Risk Credit Risk Loan Products | Excludes all non classified small commercial and commercial real estate relationships totaling $100,000 or less. These loans are not rated since they are accruing interest and not past due 80 days or more. | Excludes all non classified small commercial and commercial real estate relationships totaling $100,000 or less. These loans are not rated since they are accruing interest and not past due 80 days or more. |
Reconciliation of Bank's Private Label Mortgage Backed Security Measured at Fair Value on Recurring Basis (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Fair value measurements Significant unobservable inputs [Line Items] | ||||
Balance, beginning of period | $ 4,579 | $ 4,402 | $ 4,542 | $ 5,124 |
Net impairment loss recognized in earnings | (279) | |||
Net change in unrealized gain/(loss) | 373 | 2,628 | 410 | 4,595 |
Realized pass through of actual losses | (2,347) | (4,399) | ||
Principal paydowns | (141) | (499) | ||
Balance, end of period | $ 4,952 | $ 4,542 | $ 4,952 | $ 4,542 |
Carrying Amount and Estimated Fair Values of Financial Instruments (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Assets, Carrying Value | ||||
Cash and cash equivalents | $ 96,187 | $ 362,971 | $ 75,573 | $ 786,371 |
Securities available for sale | 533,236 | 645,948 | ||
Securities to be held to maturity | 48,026 | 28,074 | ||
Mortgage loans held for sale | 3,385 | 4,392 | 4,721 | 15,228 |
Loans, net | 2,618,257 | 2,261,232 | ||
Federal Home Loan Bank stock | 28,784 | 25,980 | ||
Accrued interest receivable | 10,088 | 9,679 | ||
Liabilities, Carrying Value | ||||
Non interest-bearing deposits | 514,893 | 408,483 | ||
Transaction deposits | 1,679,822 | 1,019,809 | ||
Time deposits | 375,788 | 305,686 | ||
Securities sold under agreements to repurchase and other short-term borrowings | 169,839 | 230,231 | ||
Federal Home Loan Bank advances | 553,487 | 934,630 | ||
Subordinated note | 41,240 | 41,240 | ||
Accrued interest payable | 1,496 | 1,724 | ||
Assets, Fair Value | ||||
Cash and cash equivalents | 96,187 | 362,971 | ||
Securities available for sale | 533,236 | 645,948 | ||
Securities to be held to maturity | 48,448 | 28,342 | ||
Mortgage loans held for sale | 3,385 | 4,392 | ||
Loans, net | 2,692,285 | 2,305,208 | ||
Federal Home Loan Bank stock | 25,980 | |||
Accrued interest receivable | 10,088 | 9,679 | ||
Liabilities, Fair Value | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 169,839 | 230,231 | ||
Federal Home Loan Bank advances | 569,667 | 960,671 | ||
Subordinated note | 41,162 | 41,158 | ||
Accrued interest payable | 1,496 | 1,724 | ||
Fair Value, Inputs, Level 1
|
||||
Assets, Fair Value | ||||
Cash and cash equivalents | 96,187 | |||
Fair Value, Inputs, Level 2
|
||||
Assets, Fair Value | ||||
Securities available for sale | 528,284 | |||
Securities to be held to maturity | 48,448 | |||
Mortgage loans held for sale | 3,385 | |||
Accrued interest receivable | 10,088 | |||
Liabilities, Fair Value | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 169,839 | |||
Federal Home Loan Bank advances | 569,667 | |||
Subordinated note | 41,162 | |||
Accrued interest payable | 1,496 | |||
Fair Value, Inputs, Level 3
|
||||
Assets, Fair Value | ||||
Securities available for sale | 4,952 | |||
Loans, net | 2,692,285 | |||
Non Interest Bearing Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 514,893 | 408,483 | ||
Non Interest Bearing Deposits | Fair Value, Inputs, Level 2
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 514,893 | |||
Demand Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 1,679,822 | 1,019,809 | ||
Demand Deposits | Fair Value, Inputs, Level 2
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 1,679,822 | |||
Bank Time Deposits
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | 379,866 | 308,049 | ||
Bank Time Deposits | Fair Value, Inputs, Level 2
|
||||
Liabilities, Fair Value | ||||
Deposit liabilities, fair value | $ 379,866 |
Composition of Outstanding Loans (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
---|---|
Composition of Loan Acquired [Line Items] | |
Loan acquired | $ 160,341 |
Residential Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 51,186 |
Commercial Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 77,540 |
Real Estate Construction
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 14,058 |
Commercial
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 10,787 |
Home Equity
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 5,136 |
Consumer | Credit Card
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 393 |
Consumer | Overdrafts
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 12 |
Consumer | Other Consumer
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 1,229 |
Tennessee Commerce Bank ("TCB")
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 34,201 |
Tennessee Commerce Bank ("TCB") | Residential Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 13,215 |
Tennessee Commerce Bank ("TCB") | Commercial Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 8,100 |
Tennessee Commerce Bank ("TCB") | Real Estate Construction
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 5,326 |
Tennessee Commerce Bank ("TCB") | Commercial
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 1,549 |
Tennessee Commerce Bank ("TCB") | Home Equity
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 4,755 |
Tennessee Commerce Bank ("TCB") | Consumer | Credit Card
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 393 |
Tennessee Commerce Bank ("TCB") | Consumer | Overdrafts
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 4 |
Tennessee Commerce Bank ("TCB") | Consumer | Other Consumer
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 859 |
First Commercial Bank("FCB")
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 126,140 |
First Commercial Bank("FCB") | Residential Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 37,971 |
First Commercial Bank("FCB") | Commercial Real Estate
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 69,440 |
First Commercial Bank("FCB") | Real Estate Construction
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 8,732 |
First Commercial Bank("FCB") | Commercial
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 9,238 |
First Commercial Bank("FCB") | Home Equity
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 381 |
First Commercial Bank("FCB") | Consumer | Overdrafts
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | 8 |
First Commercial Bank("FCB") | Consumer | Other Consumer
|
|
Composition of Loan Acquired [Line Items] | |
Loan acquired | $ 370 |
Summary of Net Assets Acquired from FDIC and Estimated Fair Value Adjustments (Detail) (USD $)
In Thousands, unless otherwise specified |
1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 07, 2012
|
Sep. 07, 2012
First Commercial Bank("FCB")
|
Sep. 30, 2012
First Commercial Bank("FCB")
|
Sep. 30, 2012
Tennessee Commerce Bank ("TCB")
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
Previously Reported
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
Recast Adjustments
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
Recast Adjustments
Second Quarter
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
Recast Adjustments
Third Quarter
|
Jan. 27, 2012
Tennessee Commerce Bank ("TCB")
Recasted
|
|
Business Acquisition [Line Items] | |||||||||||
Assets acquired, at contractual amount | $ 221,000 | $ 215,000 | $ 214,866 | $ 126,000 | $ 34,000 | $ 57,000 | $ 221,126 | $ (285) | $ 221,126 | ||
Liabilities assumed, at contractual amount | (199,780) | (948,701) | 100 | (948,701) | |||||||
Net liabilities assumed per the P&A Agreement | 15,086 | (727,575) | (727,575) | ||||||||
Contractual Discount | (79,412) | (56,970) | (56,970) | ||||||||
Net receivable from the FDIC | (64,326) | (784,545) | (784,545) | ||||||||
Fair value adjustments: | |||||||||||
Loans | (44,214) | (22,666) | 830 | 919 | (89) | (21,836) | |||||
Discount for loans to be repurchased by the FDIC | (2,797) | (2,797) | |||||||||
Other real estate owned | (8,389) | (3,359) | (1,113) | (1,000) | (113) | (4,472) | |||||
Other assets and accrued interest receivable | (95) | (60) | (60) | ||||||||
Core deposit intangible | 559 | 64 | 64 | ||||||||
Deposits | (3) | (54) | (54) | ||||||||
Federal Home Loan Bank advances | (63) | ||||||||||
All other | (95) | (199) | (15) | 13 | (201) | ||||||
Total fair value adjustments | (52,300) | (29,071) | (96) | (189) | (29,356) | ||||||
Discount | 79,412 | 56,970 | 56,970 | ||||||||
Bargain purchase gain, pre-tax | $ 27,112 | $ 27,899 | $ (96) | $ (189) | $ 27,614 |
Mortgage Loan Held for Sale (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Participating Mortgage Loans [Line Items] | ||||
Balance, January 1 | $ 4,392 | $ 15,228 | ||
Origination of mortgage loans held for sale | 166,224 | 93,052 | ||
Proceeds from the sale of mortgage loans held for sale | (173,772) | (106,535) | ||
Net gain on sale of mortgage loans held for sale | 2,819 | 1,511 | 6,541 | 2,976 |
Balance, September 30 | $ 3,385 | $ 4,721 | $ 3,385 | $ 4,721 |
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 |
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Mortgage Servicing Rights
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | $ 3,467 |
Valuation Technique | Third party valuation pricing |
Unobservable Inputs | Prepayment speeds Default rate Discount rate |
Mortgage Servicing Rights | Prepayment Speed
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Weighted average | 222.00% |
Mortgage Servicing Rights | Default Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Weighted average | 1.50% |
Mortgage Servicing Rights | Discounted Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Weighted average | 9.00% |
Other Real Estate Owned | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 7,102 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 25.00% |
Other Real Estate Owned | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,355 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 11.00% |
Impaired Loans
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 1,813 |
Valuation Technique | (2) Income approach |
Unobservable Inputs | (2) Adjustments for differences between net operating income expectations |
Weighted average | 9.00% |
Impaired Loans | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | 3,098 |
Valuation Technique | (1) Sales comparison approach |
Unobservable Inputs | (1) Adjustments determined by Management for differences between the comparable sales |
Weighted average | 19.00% |
Impaired Loans | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Fair Value | $ 2,252 |
Valuation Technique | Sales comparison approach |
Unobservable Inputs | Adjustments determined by Management for differences between the comparable sales |
Weighted average | 14.00% |
Minimum | Mortgage Servicing Rights | Prepayment Speed
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 200.00% |
Minimum | Mortgage Servicing Rights | Default Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 1.50% |
Minimum | Mortgage Servicing Rights | Discounted Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 9.00% |
Minimum | Other Real Estate Owned | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 7.00% |
Minimum | Other Real Estate Owned | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 4.00% |
Minimum | Impaired Loans
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 9.00% |
Minimum | Impaired Loans | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 10.00% |
Minimum | Impaired Loans | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 14.00% |
Maximum | Mortgage Servicing Rights | Prepayment Speed
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 411.00% |
Maximum | Mortgage Servicing Rights | Default Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 1.50% |
Maximum | Mortgage Servicing Rights | Discounted Rate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 9.00% |
Maximum | Other Real Estate Owned | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 54.00% |
Maximum | Other Real Estate Owned | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 26.00% |
Maximum | Impaired Loans
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 9.00% |
Maximum | Impaired Loans | Commercial Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 69.00% |
Maximum | Impaired Loans | Residential Real Estate
|
|
Fair Value, Assets and Liabilities Measured on Non Recurring Basis [Line Items] | |
Range | 14.00% |
Segment Information (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
|
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | $ 28,572 | $ 27,163 | $ 130,104 | $ 137,963 | |
Provision for loan losses | 2,083 | (140) | 13,719 | 17,503 | |
Refund transfer fees | 231 | 425 | 78,127 | 88,071 | |
Mortgage banking income | 2,274 | 1,352 | 5,591 | 3,092 | |
Net gain on sales, calls and impairment of securities | 301 | 56 | 1,929 | ||
Bargain purchase gains | 26,923 | 54,726 | |||
Other non interest income | 5,417 | 8,398 | 17,240 | 20,064 | |
Total non interest income | 34,845 | 10,476 | 155,740 | 113,156 | |
Total non interest expenses | 29,762 | 26,438 | 98,366 | 97,782 | |
INCOME BEFORE INCOME TAX EXPENSE | 31,572 | 11,341 | 173,759 | 135,834 | |
INCOME TAX EXPENSE | 10,904 | 3,471 | 61,041 | 47,889 | |
Net income | 20,668 | 7,870 | 112,718 | 87,945 | |
Segment end of period assets | 3,435,776 | 3,095,141 | 3,435,776 | 3,095,141 | 3,419,991 |
Net interest margin | 3.54% | 3.60% | 5.11% | 5.60% | |
Traditional Banking
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 28,444 | 27,059 | 84,406 | 78,580 | |
Provision for loan losses | 2,543 | 547 | 6,505 | 5,454 | |
Net gain on sales, calls and impairment of securities | 301 | 56 | 1,929 | ||
Bargain purchase gains | 26,923 | 54,726 | |||
Other non interest income | 5,387 | 8,367 | 17,005 | 19,663 | |
Total non interest income | 32,310 | 8,668 | 71,787 | 21,592 | |
Total non interest expenses | 26,118 | 22,065 | 76,752 | 67,840 | |
INCOME BEFORE INCOME TAX EXPENSE | 32,093 | 13,115 | 72,936 | 26,878 | |
INCOME TAX EXPENSE | 11,145 | 4,293 | 25,150 | 8,263 | |
Net income | 20,948 | 8,822 | 47,786 | 18,615 | |
Segment end of period assets | 3,413,293 | 3,067,504 | 3,413,293 | 3,067,504 | |
Net interest margin | 3.54% | 3.61% | 3.51% | 3.48% | |
Mortgage Banking
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 110 | 100 | 283 | 291 | |
Mortgage banking income | 2,274 | 1,352 | 5,591 | 3,092 | |
Other non interest income | 11 | 26 | 27 | 51 | |
Total non interest income | 2,285 | 1,378 | 5,618 | 3,143 | |
Total non interest expenses | 851 | 705 | 2,928 | 2,755 | |
INCOME BEFORE INCOME TAX EXPENSE | 1,544 | 773 | 2,973 | 679 | |
INCOME TAX EXPENSE | 541 | 270 | 1,041 | 237 | |
Net income | 1,003 | 503 | 1,932 | 442 | |
Segment end of period assets | 8,765 | 11,810 | 8,765 | 11,810 | |
Republic Processing Group
|
|||||
Segment Reporting Disclosure [Line Items] | |||||
Net interest income | 18 | 4 | 45,415 | 59,092 | |
Provision for loan losses | (460) | (687) | 7,214 | 12,049 | |
Refund transfer fees | 231 | 425 | 78,127 | 88,071 | |
Other non interest income | 19 | 5 | 208 | 350 | |
Total non interest income | 250 | 430 | 78,335 | 88,421 | |
Total non interest expenses | 2,793 | 3,668 | 18,686 | 27,187 | |
INCOME BEFORE INCOME TAX EXPENSE | (2,065) | (2,547) | 97,850 | 108,277 | |
INCOME TAX EXPENSE | (782) | (1,092) | 34,850 | 39,389 | |
Net income | (1,283) | (1,455) | 63,000 | 68,888 | |
Segment end of period assets | $ 13,718 | $ 15,827 | $ 13,718 | $ 15,827 |
Allowance for loan losses and the recorded investment in loans by portfolio class based on impairment method (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | $ 6,664 | $ 7,086 |
Collectively evaluated for impairment | 17,436 | 16,977 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 24,100 | 24,063 |
Impaired loans individually evaluated | 91,718 | 77,193 |
Loans collectively evaluated for impairment | 2,550,639 | 2,208,102 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 2,642,357 | 2,285,295 |
Home Equity
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 306 | 982 |
Collectively evaluated for impairment | 2,105 | 2,002 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 2,411 | 2,984 |
Impaired loans individually evaluated | 1,300 | 3,107 |
Loans collectively evaluated for impairment | 249,772 | 277,128 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 251,072 | 280,235 |
Commercial
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 367 | 237 |
Collectively evaluated for impairment | 368 | 788 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 735 | 1,025 |
Impaired loans individually evaluated | 4,694 | 4,492 |
Loans collectively evaluated for impairment | 141,706 | 114,625 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 146,400 | 119,117 |
Warehouse Lines of Credit
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 417 | 104 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 417 | 104 |
Loans collectively evaluated for impairment | 166,884 | 41,496 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 166,884 | 41,496 |
Unallocated Financing Receivables
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 1,965 | |
Total ending allowance for loan losses | 1,965 | |
Consumer | Credit Card
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 203 | 503 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 203 | 503 |
Loans collectively evaluated for impairment | 8,570 | 8,580 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 8,570 | 8,580 |
Consumer | Overdrafts
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 152 | 135 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 152 | 135 |
Loans collectively evaluated for impairment | 733 | 950 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 733 | 950 |
Consumer | Other Consumer
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 262 | 227 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 262 | 227 |
Impaired loans individually evaluated | 366 | |
Loans collectively evaluated for impairment | 14,594 | 9,908 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 14,960 | 9,908 |
Residential Real Estate | Residential Real Estate - Owner Occupied
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 1,429 | 1,350 |
Collectively evaluated for impairment | 5,278 | 3,862 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 6,707 | 5,212 |
Impaired loans individually evaluated | 37,993 | 25,803 |
Loans collectively evaluated for impairment | 1,106,551 | 959,932 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 1,144,544 | 985,735 |
Residential Real Estate | Residential Real Estate - Non Owner Occupied
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 566 | 437 |
Collectively evaluated for impairment | 673 | 705 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 1,239 | 1,142 |
Impaired loans individually evaluated | 5,272 | 2,777 |
Loans collectively evaluated for impairment | 74,870 | 96,384 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 80,142 | 99,161 |
Commercial Real Estate
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 2,705 | 1,782 |
Collectively evaluated for impairment | 6,296 | 5,942 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 9,001 | 7,724 |
Impaired loans individually evaluated | 36,114 | 28,046 |
Loans collectively evaluated for impairment | 680,402 | 611,920 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 716,516 | 639,966 |
Commercial Real Estate | Purchased Whole Loans
|
||
Allowance balance attributable to loans: | ||
Collectively evaluated for impairment | 40 | |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 40 | |
Loans collectively evaluated for impairment | 33,374 | 32,741 |
Loans acquired with deteriorated credit quality | ||
Total Loans | 33,374 | 32,741 |
Real Estate Construction
|
||
Allowance balance attributable to loans: | ||
Individually evaluated for impairment | 1,291 | 2,298 |
Collectively evaluated for impairment | 1,642 | 744 |
Acquired with deteriorated credit quality | ||
Total ending allowance for loan losses | 2,933 | 3,042 |
Impaired loans individually evaluated | 5,979 | 12,968 |
Loans collectively evaluated for impairment | 73,183 | 54,438 |
Loans acquired with deteriorated credit quality | ||
Total Loans | $ 79,162 | $ 67,406 |
Fair Value - Additional Information (Detail) (USD $)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Other real estate, carrying value | $ 25,148,000 | $ 10,956,000 |
Mortgage Servicing Rights
|
||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Mortgage servicing rights fair value | 3,400,000 | 3,000,000 |
Mortgage servicing rights outstanding balance | 3,700,000 | 3,200,000 |
Mortgage servicing rights, valuation allowance | 333,000 | 203,000 |
Mortgage servicing rights, expense charged against earnings | $ 130,000 | $ 203,000 |
Off Balance Sheet Risks, Commitments and Contingent Liabilities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Loss Contingencies [Line Items] | ||
Loan commitment outstanding | $ 509 | $ 486 |
Federal Home Loan Bank
|
||
Loss Contingencies [Line Items] | ||
Loan commitment outstanding, letter of credit | 12 | 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 | $ 231 | $ 238 |
Capitalized Mortgage Servicing rights (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Participating Mortgage Loans [Line Items] | ||
Balance, January 1 | $ 6,087 | $ 7,800 |
Additions | 1,496 | 924 |
Amortized to expense | (2,474) | (1,833) |
Change in valuation allowance | (129) | (203) |
Balance, September 30 | $ 4,980 | $ 6,688 |
Earning per Share and Diluted (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Earnings Per Share Disclosure [Line Items] | ||||
Net income | $ 20,668 | $ 7,870 | $ 112,718 | $ 87,945 |
Weighted average shares outstanding | 20,948 | 20,953 | 20,954 | 20,942 |
Effect of dilutive securities | 81 | 41 | 78 | 50 |
Average shares outstanding including dilutive securities | 21,029 | 20,994 | 21,032 | 20,992 |
Class A Common Stock
|
||||
BASIC EARNINGS PER SHARE: | ||||
Basic earnings per share | $ 0.99 | $ 0.38 | $ 5.38 | $ 4.20 |
DILUTED EARNINGS PER SHARE: | ||||
Diluted earnings per share | $ 0.98 | $ 0.38 | $ 5.36 | $ 4.19 |
Class B Common Stock
|
||||
BASIC EARNINGS PER SHARE: | ||||
Basic earnings per share | $ 0.97 | $ 0.36 | $ 5.34 | $ 4.16 |
DILUTED EARNINGS PER SHARE: | ||||
Diluted earnings per share | $ 0.97 | $ 0.36 | $ 5.32 | $ 4.15 |
Other Real Estate Owned Write Downs (Detail) (Other Real Estate Owned, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Other Real Estate Owned
|
||||
Real Estate, Write-down or Reserve [Line Items] | ||||
Other real estate owned write-downs | $ 866 | $ 236 | $ 1,207 | $ 463 |
Quantitative Information about Recurring Level 3 Fair Value Measurements (Detail) (Fair Value, Inputs, Level 3, USD $)
In Thousands, unless otherwise specified |
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Private label mortgage backed security | 4,952 |
Minimum
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Constant prepayment rate | 2.00% |
Probability of default | 7.00% |
Loss severity | 60.00% |
Maximum
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Constant prepayment rate | 6.00% |
Probability of default | 31.50% |
Loss severity | 70.00% |
Deposits (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Deposit Balances | Ending
deposit balances at September 30, 2012 and December 31, 2011 were
as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Deposits | The
composition of TCB and FCB deposits outstanding at September 30,
2012 follows:
|
Activity in Allowance for Loan Losses By Portfolio Class (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
Real Estate Construction
|
Sep. 30, 2011
Real Estate Construction
|
Sep. 30, 2012
Commercial
|
Sep. 30, 2011
Commercial
|
Sep. 30, 2012
Warehouse Lines of Credit
|
Sep. 30, 2011
Warehouse Lines of Credit
|
Sep. 30, 2012
Residential Real Estate
Residential Real Estate - Owner Occupied
|
Sep. 30, 2011
Residential Real Estate
Residential Real Estate - Owner Occupied
|
Sep. 30, 2012
Residential Real Estate
Residential Real Estate - Non Owner Occupied
|
Sep. 30, 2011
Residential Real Estate
Residential Real Estate - Non Owner Occupied
|
Sep. 30, 2012
Commercial Real Estate
|
Sep. 30, 2011
Commercial Real Estate
|
Sep. 30, 2012
Commercial Real Estate
Purchased Whole Loans
|
Sep. 30, 2012
Home Equity
|
Sep. 30, 2011
Home Equity
|
Sep. 30, 2012
Tax Refund Solutions
|
Sep. 30, 2011
Tax Refund Solutions
|
Sep. 30, 2012
Credit Card
Consumer
|
Sep. 30, 2011
Credit Card
Consumer
|
Sep. 30, 2012
Overdrafts
Consumer
|
Sep. 30, 2011
Overdrafts
Consumer
|
Sep. 30, 2012
Other Consumer
Consumer
|
Sep. 30, 2011
Other Consumer
Consumer
|
Sep. 30, 2012
Unallocated Financing Receivables
|
Sep. 30, 2011
Unallocated Financing Receivables
|
Dec. 31, 2010
Unallocated Financing Receivables
|
|
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||||||||||||||||||||||
Allowance for loan losses at beginning of period | $ 22,510 | $ 25,931 | $ 24,063 | $ 23,079 | $ 3,042 | $ 2,612 | $ 1,025 | $ 1,347 | $ 104 | $ 5,212 | $ 3,775 | $ 1,142 | $ 1,507 | $ 7,724 | $ 7,214 | $ 2,984 | $ 3,581 | $ 503 | $ 492 | $ 135 | $ 125 | $ 227 | $ 461 | $ 1,965 | $ 1,965 | $ 1,965 | ||||
Allocation of previously unallocated allowance | 1,117 | 146 | 47 | 536 | 47 | 17 | 55 | (1,965) | ||||||||||||||||||||||
Provision for loan losses | 13,719 | 17,503 | 1,604 | 1,083 | (293) | (322) | 313 | 43 | 2,617 | 2,372 | 255 | 192 | 1,513 | 1,512 | 40 | 765 | 555 | 7,214 | 12,049 | (293) | 114 | (14) | 67 | (2) | (162) | |||||
Loans charged off | (1,220) | (2,981) | (18,541) | (21,626) | (1,796) | (823) | (18) | (100) | (2,422) | (1,699) | (318) | (512) | (353) | (1,081) | (1,947) | (1,043) | (11,097) | (15,484) | (87) | (172) | (318) | (486) | (185) | (226) | ||||||
Recoveries | 4,859 | 4,989 | 83 | 231 | 21 | 125 | 183 | 186 | 14 | 4 | 70 | 284 | 73 | 100 | 3,883 | 3,435 | 33 | 24 | 332 | 395 | 167 | 205 | ||||||||
Allowance for loan losses at end of period | $ 24,100 | $ 23,945 | $ 24,100 | $ 23,945 | $ 2,933 | $ 3,103 | $ 735 | $ 1,050 | $ 417 | $ 43 | $ 6,707 | $ 4,634 | $ 1,239 | $ 1,191 | $ 9,001 | $ 7,929 | $ 40 | $ 2,411 | $ 3,193 | $ 203 | $ 458 | $ 152 | $ 101 | $ 262 | $ 278 | $ 1,965 | $ 1,965 |
Securities with Unrealized Losses, Aggregated by Investment Category with Continuous Unrealized Loss Position (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | $ 16,836 | $ 197,322 |
Less than 12 months Unrealized Losses | (67) | (803) |
12 months or more Fair Value | 4,952 | 4,542 |
12 months or more Unrealized Losses | (866) | (1,276) |
Total Fair Value | 21,788 | 201,864 |
Total Unrealized Losses | (933) | (2,079) |
U.S. Treasury securities and U.S. Government agencies
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 500 | 60,547 |
Less than 12 months Unrealized Losses | (7) | (235) |
Total Fair Value | 500 | 60,547 |
Total Unrealized Losses | (7) | (235) |
Private label mortgage backed and other private label mortgage-related securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
12 months or more Fair Value | 4,952 | 4,542 |
12 months or more Unrealized Losses | (866) | (1,276) |
Total Fair Value | 4,952 | 4,542 |
Total Unrealized Losses | (866) | (1,276) |
Mortgage backed securities - residential
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 16,336 | 136,775 |
Less than 12 months Unrealized Losses | (60) | (568) |
Total Fair Value | 16,336 | 136,775 |
Total Unrealized Losses | $ (60) | $ (568) |
Carrying Amount of Loans with Valuation Allowance (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Financing Receivable, Impaired [Line Items] | ||
Carrying amount of loans with a valuation allowance | $ 44,615 | $ 45,022 |
Valuation allowance | 6,664 | 7,086 |
Collateral Dependent Loans
|
||
Financing Receivable, Impaired [Line Items] | ||
Carrying amount of loans with a valuation allowance | 5,903 | 5,391 |
Valuation allowance | $ 1,147 | $ 1,717 |
Results of Operations for Franchise Included in Consolidated Results (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
INTEREST INCOME: | ||||
Loans, including fees | $ 31,292 | $ 30,225 | $ 137,118 | $ 148,229 |
Taxable investment securities | 2,483 | 3,864 | 8,654 | 11,549 |
Total interest income | 34,128 | 34,426 | 147,529 | 161,508 |
INTEREST EXPENSE: | ||||
Deposits | 1,197 | 2,057 | 3,949 | 7,267 |
Total interest expense | 5,556 | 7,263 | 17,425 | 23,545 |
Net interest income | 28,572 | 27,163 | 130,104 | 137,963 |
Provision for loan losses | 2,083 | (140) | 13,719 | 17,503 |
Net interest income after provision for loan losses | 26,489 | 27,303 | 116,385 | 120,460 |
Non interest income: | ||||
Service charges on deposit accounts | 3,438 | 3,421 | 10,027 | 10,581 |
Bargain purchase gain | 26,923 | 54,726 | ||
Gain on sale of securities available for sale | 301 | 56 | 2,208 | |
Other | 589 | 706 | 2,826 | 2,235 |
Total non interest income | 34,845 | 10,476 | 155,740 | 113,156 |
Non interest income | ||||
Salaries and employee benefits | 14,921 | 13,145 | 46,205 | 43,634 |
Occupancy and equipment, net | 5,718 | 5,138 | 16,936 | 16,436 |
Communication and transportation | 1,045 | 1,081 | 4,667 | 4,468 |
Marketing and development | 828 | 736 | 2,670 | 2,508 |
FDIC insurance expense | 287 | 918 | 1,008 | 3,718 |
Data processing | 1,030 | 787 | 3,446 | 2,352 |
Supplies | 270 | 409 | 1,748 | 1,617 |
Other real estate owned expense | 1,328 | 608 | 2,488 | 1,467 |
Other | 2,338 | 1,375 | 7,097 | 6,067 |
Total non interest expenses | 29,762 | 26,438 | 98,366 | 97,782 |
Income before income tax expense | 31,572 | 11,341 | 173,759 | 135,834 |
Tennessee Commerce Bank ("TCB")
|
||||
INTEREST INCOME: | ||||
Loans, including fees | 729 | 2,372 | ||
Taxable investment securities | 253 | 696 | ||
Total interest income | 982 | 3,068 | ||
INTEREST EXPENSE: | ||||
Deposits | 9 | 56 | ||
Total interest expense | 9 | 56 | ||
Net interest income | 973 | 3,012 | ||
Provision for loan losses | ||||
Net interest income after provision for loan losses | 973 | 3,012 | ||
Non interest income: | ||||
Service charges on deposit accounts | 24 | 48 | ||
Bargain purchase gain | (189) | 27,614 | ||
Gain on sale of securities available for sale | 56 | |||
Other | 74 | 700 | ||
Total non interest income | (91) | 28,418 | ||
Non interest income | ||||
Salaries and employee benefits | 488 | 2,497 | ||
Occupancy and equipment, net | 188 | 774 | ||
Communication and transportation | 29 | 189 | ||
Marketing and development | (15) | 4 | ||
FDIC insurance expense | 8 | 60 | ||
Data processing | 78 | 685 | ||
Supplies | 7 | 28 | ||
Other real estate owned expense | 58 | 161 | ||
Other | 183 | 963 | ||
Total non interest expenses | 1,024 | 5,361 | ||
Income before income tax expense | (142) | 26,069 | ||
First Commercial Bank("FCB")
|
||||
INTEREST INCOME: | ||||
Loans, including fees | 474 | 474 | ||
Taxable investment securities | 4 | 4 | ||
Total interest income | 478 | 478 | ||
INTEREST EXPENSE: | ||||
Deposits | 141 | 141 | ||
Total interest expense | 141 | 141 | ||
Net interest income | 337 | 337 | ||
Provision for loan losses | ||||
Net interest income after provision for loan losses | 337 | 337 | ||
Non interest income: | ||||
Service charges on deposit accounts | 7 | 7 | ||
Bargain purchase gain | 27,112 | 27,112 | ||
Other | 1 | 1 | ||
Total non interest income | 27,120 | 27,120 | ||
Non interest income | ||||
Salaries and employee benefits | 613 | 613 | ||
Occupancy and equipment, net | 210 | 210 | ||
Communication and transportation | 15 | 15 | ||
FDIC insurance expense | 9 | 9 | ||
Data processing | 265 | 265 | ||
Supplies | 41 | 41 | ||
Other real estate owned expense | 165 | 165 | ||
Other | 644 | 644 | ||
Total non interest expenses | 1,962 | 1,962 | ||
Income before income tax expense | $ 25,495 | $ 25,495 |
Total Credit Quality Ratios (Detail)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Credit Quality Ratio [Line Items] | ||
Non-performing loans to total loans | 0.80% | 1.02% |
Non-performing assets to total loans (including OREO) | 1.73% | 1.49% |
Non-performing assets to total assets | 1.34% | 1.00% |
Aggregate Future Principal Payments on FHLB Advances (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
---|---|
Schedule of Federal Home Loan Bank Advances and Other Borrowings [Line Items] | |
2012 | $ 20,000 |
2013 | 35,000 |
2014 | 178,000 |
2015 | 25,000 |
2016 | 72,000 |
Thereafter | 223,487 |
Total | $ 553,487 |
Loans by Class Modified as Troubled Debt Restructurings (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
Loan
|
---|---|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | 18 |
Recorded Investment | $ 5,924 |
Real Estate Construction
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | 4 |
Recorded Investment | 1,974 |
Commercial
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Warehouse Lines of Credit
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Home Equity
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Residential Real Estate
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | 11 |
Recorded Investment | 2,980 |
Commercial Real Estate
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | 3 |
Recorded Investment | 970 |
Commercial Real Estate | Purchased Whole Loans
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Consumer | Credit Card
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Consumer | Overdrafts
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment | |
Consumer | Other Consumer
|
|
Financing Receivable, Modifications [Line Items] | |
Number of Loans | |
Recorded Investment |
Risk Category of Loans by Class of Loans (Detail) (USD $)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | $ 750,000 | |||||
Commercial real estate | 716,516,000 | 639,966,000 | ||||
Real estate construction | 79,162,000 | 67,406,000 | ||||
Commercial | 146,400,000 | 119,117,000 | ||||
Warehouse lines of credit | 166,884,000 | 41,496,000 | ||||
Home equity | 251,072,000 | 280,235,000 | ||||
Credit cards | 8,570,000 | 8,580,000 | ||||
Overdrafts | 733,000 | 950,000 | ||||
Other consumer | 14,960,000 | 9,908,000 | ||||
Total | 2,642,357,000 | 2,285,295,000 | ||||
Residential Real Estate - Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 1,144,544,000 | 985,735,000 | ||||
Residential Real Estate - Non Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 80,142,000 | 99,161,000 | ||||
Purchased Whole Loans
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 33,374,000 | 32,741,000 | ||||
Corporate Credit Quality Indicator
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 716,516,000 | [1] | 639,966,000 | [1] | ||
Real estate construction | 79,162,000 | [1] | 67,406,000 | [1] | ||
Commercial | 146,400,000 | [1] | 119,117,000 | [1] | ||
Warehouse lines of credit | 166,884,000 | [1] | 41,496,000 | [1] | ||
Home equity | 2,359,000 | [1] | 3,856,000 | [1] | ||
Credit cards | [1] | [1] | ||||
Overdrafts | [1] | [1] | ||||
Other consumer | 615,000 | [1] | 2,000 | [1] | ||
Total | 1,194,217,000 | [1] | 924,531,000 | [1] | ||
Corporate Credit Quality Indicator | Residential Real Estate - Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 18,689,000 | [1] | 15,182,000 | [1] | ||
Corporate Credit Quality Indicator | Residential Real Estate - Non Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 30,218,000 | [1] | 4,765,000 | [1] | ||
Corporate Credit Quality Indicator | Purchased Whole Loans
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 33,374,000 | [1] | 32,741,000 | [1] | ||
Corporate Credit Quality Indicator | Pass
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 624,382,000 | 600,338,000 | ||||
Real estate construction | 60,146,000 | 54,963,000 | ||||
Commercial | 138,356,000 | 116,450,000 | ||||
Warehouse lines of credit | 166,884,000 | 41,496,000 | ||||
Credit cards | ||||||
Overdrafts | ||||||
Total | 1,023,142,000 | 845,988,000 | ||||
Corporate Credit Quality Indicator | Pass | Purchased Whole Loans
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 33,374,000 | 32,741,000 | ||||
Corporate Credit Quality Indicator | Special Mention / Watch
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 20,740,000 | 27,158,000 | ||||
Real estate construction | 1,787,000 | 2,353,000 | ||||
Commercial | 2,215,000 | 2,294,000 | ||||
Home equity | 136,000 | |||||
Credit cards | ||||||
Overdrafts | ||||||
Other consumer | 355,000 | |||||
Total | 31,969,000 | 35,455,000 | ||||
Corporate Credit Quality Indicator | Special Mention / Watch | Residential Real Estate - Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 2,336,000 | 1,180,000 | ||||
Corporate Credit Quality Indicator | Special Mention / Watch | Residential Real Estate - Non Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 4,400,000 | 2,470,000 | ||||
Corporate Credit Quality Indicator | Substandard
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 17,710,000 | 12,470,000 | ||||
Real estate construction | 3,056,000 | 10,090,000 | ||||
Commercial | 589,000 | 373,000 | ||||
Home equity | 2,223,000 | 3,856,000 | ||||
Credit cards | ||||||
Overdrafts | ||||||
Other consumer | 58,000 | 2,000 | ||||
Total | 37,530,000 | 43,088,000 | ||||
Corporate Credit Quality Indicator | Substandard | Residential Real Estate - Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 11,370,000 | 14,002,000 | ||||
Corporate Credit Quality Indicator | Substandard | Residential Real Estate - Non Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 2,524,000 | 2,295,000 | ||||
Corporate Credit Quality Indicator | Doubtful / Loss
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Credit cards | ||||||
Overdrafts | ||||||
Corporate Credit Quality Indicator | Prepayment Speed
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Commercial real estate | 53,684,000 | |||||
Real estate construction | 14,173,000 | |||||
Commercial | 5,240,000 | |||||
Credit cards | ||||||
Overdrafts | ||||||
Other consumer | 202,000 | |||||
Total | 101,576,000 | |||||
Corporate Credit Quality Indicator | Prepayment Speed | Residential Real Estate - Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 4,983,000 | |||||
Corporate Credit Quality Indicator | Prepayment Speed | Residential Real Estate - Non Owner Occupied
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Residential real estate | 23,294,000 | |||||
Corporate Credit Quality Indicator | Default Rate
|
||||||
Credit Quality Ratio [Line Items] | ||||||
Credit cards | ||||||
Overdrafts | ||||||
|
Basis of Presentation and Summary of Significant Accounting Policies
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies |
1. 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 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 nine months ended September 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 September 30, 2012, the Company was divided into three
distinct business operating segments: Traditional Banking, Mortgage
Banking and Republic Processing Group (“RPG”). During
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”) and Republic Credit Solutions
(“RCS”) also operate as divisions of the newly formed
RPG segment.
Traditional
Banking and Mortgage Banking (collectively “Core
Banking”)
Republic operates 44 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,
metropolitan Minneapolis, Minnesota and through an Internet banking
delivery channel.
Effective January 27, 2012, RB&T acquired certain assets and
assumed substantially all of the deposits and certain other
liabilities of Tennessee Commerce Bank (“TCB”),
headquartered in Franklin, Tennessee from the FDIC, as receiver for
TCB. This acquisition of a failed bank represented a single banking
center located in metropolitan Nashville and was also
RB&T’s initial entrance into the Tennessee
market
Effective September 7, 2012 RB&T acquired substantially all of
the assets and assumed substantially all of the liabilities of
First Commercial Bank (“FCB”), headquartered in
Bloomington, Minnesota from the FDIC, as receiver for FCB. This
acquisition of a failed bank represented a single banking center
located in metropolitan Minneapolis and was also RB&T’s
initial entrance into the Minnesota market. See additional
discussion regarding the TCB and FCB acquisitions under Footnote 2
“Acquisitions of Failed
Banks” 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.
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. Nationally, through RB&T, the RCS division is
preparing to pilot short-term consumer credit products through
multiple channels.
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: Refund Transfers (“RTs”)
(formerly referred to as Electronic Refund Checks/Electronic Refund
Deposits or “ERCs/ERDs” or “ARs/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 time 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
effective April 30, 2012.
RTs 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 RTs are
reported as non interest income under the line item “Refund
Transfer 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.”
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.
Termination of Material TRS Contracts:
On August 27, 2012, RB&T received a termination notice to the
Amended and Restated Marketing and Servicing Agreement, dated
November 29, 2011, with Liberty Tax Service (“Liberty”)
related to RB&T’s RT products, as well as
RB&T’s previously offered RAL product. Approximately 19%
and 20% of the TRS division’s gross revenue for the nine
months ended as of September 30, 2012 and 2011 was derived from
Liberty tax offices.
On September 18, 2012, RB&T received a termination notice to
the Amended and Restated Program Agreement, dated August 3, 2011,
with Jackson Hewitt Technology Services LLC (“JHTSL”)
related to RB&T’s RT products, as well as
RB&T’s previously offered RAL product. Approximately 40%
of the TRS division’s gross revenue for the nine months ended
as of September 30, 2012 and 2011 was derived from JHTSL’s
tax offices.
For additional discussion regarding TRS, a division of RPG, see the
following sections:
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
operating segment. The RPS division will not be reported as a
separate business operating segment until such time, if any, that
it becomes material to the Company’s overall results of
operations.
The Company divides prepaid cards into two general categories:
reloadable and non-reloadable cards.
Reloadable
Cards: These types of cards are considered general purpose
reloadable (“GPR”) cards. These cards may take the form
of payroll cards 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 considered gift or incentive cards. These
cards may be open loop or closed loop, as described below. Normally
these types of cards are used for the purchase of goods or services
at retail locations and cannot be used to receive
cash.
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.
See additional discussion under
Part II Item 1A “Risk
Factors.”
RCS
division:
Nationally, through RB&T, the RCS division is preparing to
pilot short-term consumer credit products through multiple
channels. In general, the credit products are expected to be
unsecured small dollar consumer loans with maturities of 30 days or
more, and are dependent on various factors including the consumer's
ability to repay. All RCS programs will be piloted for a period of
time to ensure all aspects are meeting expectations before
continuation.
RB&T management preliminarily expects to fund RCS during its
pilot phase with a nominal amount of capital. At the conclusion of
its pilot phase, RB&T management will determine whether or not
to expand or modify the program based on the results of the pilot
phase. As with most start-up ventures, management expects the pilot
to operate at a loss in its initial stages. Given the speculative
nature of the program, management cannot currently predict how much
money the program may lose during the pilot phase, however,
RB&T does not plan to put more than $5 million of capital at
risk until such time the program may become
profitable.
Summary of New Significant Accounting Policies Related to the
Acquisitions of Failed Banks:
Loans purchased in the acquisitions of failed banks may be
accounted for using the following accounting
standards:
Purchased
Credit Impaired Loans (ASC Topic 310-30) – Management
individually evaluates substantially all purchased credit impaired
loans. This evaluation allows management to determine the estimated
fair value of the purchased credit impaired loans and includes no
carryover of any previously recorded allowance for loan losses. In
determining the estimated fair value of purchased credit impaired
loans, management considers a number of factors including, among
other things, the remaining life of the acquired loans, estimated
prepayments, estimated loss ratios, estimated value of the
underlying collateral, estimated holding periods, and net present
value of cash flows expected to be received. To the extent that any
purchased credit impaired loan acquired in a FDIC-assisted
acquisition is not specifically reviewed, management applies a loss
estimate to that loan based on the average expected loss rates for
the purchased credit impaired loans that were individually reviewed
in that purchased loan portfolio. For the TCB and FCB acquisitions,
RB&T 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.
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. As previously mentioned, 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 final “day-one
fair values.”
In determining the day-one fair values of purchased credit impaired
loans, management calculates a non-accretable difference (the
credit component of the purchased loans) and an accretable
difference (the yield component of the purchased loans). The
non-accretable difference is 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 and lease
losses. Subsequent increases in cash flows will result in a
reversal of the provision for loan and lease losses to the extent
of prior charges and then an adjustment to accretable yield, which
would have a positive impact on interest income. The accretable
difference on purchased credit impaired loans is 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.
With regard to purchased credit-impaired loans which are accounted
for under ASC Topic 310-30, management separately monitors this
portfolio and on a quarterly basis and reviews the 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 when it is modified or
extended, or 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.
To the extent that a purchased credit impaired loan’s
performance deteriorates from management’s expectation
established in conjunction with the determination of the day-one
fair values, such loan will be considered an impaired loan, and is
considered in the determination of the required level of allowance
for loan and lease losses. Any improvement in the expected
performance of a purchased credit impaired loan would result in a
reversal of the provision for loan and lease losses to the extent
of prior charges and then an adjustment to accretable yield, which
would have a positive impact on interest
income.
Purchased
Loans (ASC Topic 310-20) – Purchased loans accounted
for under ASC Topic 310-20 are accounted for as would any other
Bank-originated loan including presentation in any of the credit
quality ratios, potentially becoming nonaccrual or impaired, as
well as being risk rated under the Bank’s standard practices
and procedures. In addition, purchased loans accounted for under
ASC Topic 310-20 are considered in the determination of the
required allowance for loan and lease losses once day-one fair
value have been finalized.
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 “Acquisitions of Failed
Banks,” during the second and third quarters of 2012
the Bank posted adjustments to the TCB acquired assets in the
determination of day-one fair values, which resulted in an
immaterial overall adjustment to the bargain purchase
gain.
|
Ending Deposit Balances (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|
Deposit Liabilities [Line Items] | ||||||
Demand | $ 562,470 | $ 523,708 | ||||
Money market accounts | 511,079 | 433,508 | ||||
Brokered money market accounts | 29,461 | 18,121 | ||||
Savings | 61,919 | 44,472 | ||||
Individual retirement accounts | 375,788 | 305,686 | ||||
Time deposits, $100,000 and over | 89,306 | [1] | 82,970 | [1] | ||
Other certificates of deposit | 157,025 | [1] | 103,230 | [1] | ||
Brokered certificates of deposit | 89,369 | [1] | 88,285 | [1] | ||
Total interest-bearing deposits | 1,540,717 | 1,325,495 | ||||
Total non interest-bearing deposits | 514,893 | 408,483 | ||||
Total deposits | 2,055,610 | 1,733,978 | ||||
Individual Retirement Accounts
|
||||||
Deposit Liabilities [Line Items] | ||||||
Individual retirement accounts | $ 40,088 | [1] | $ 31,201 | [1] | ||
|