2019
California | 94-2792841 | |||||
(State or other jurisdiction incorporation or organization) | (I.R.S. Employer
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63 Constitution Drive, Chico, California | 95973 | |||||
(Address of principal executive offices) | (Zip Code) |
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Trading Symbol(s) | ||||||||||||||
Common Stock | TCBK | NASDAQ |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of the Form10-K or any amendment to this Form10-K. YES ☒ NO ☐
Large accelerated filer | x | Accelerated filer | ||||||||||||||
Non-accelerated filer | o | Smaller reporting company | ☐ | |||||||||||||
Emerging growth company | ☐ |
30,432,929.
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acquisition date. The Bank relies substantially on local promotional activity, personal contacts by its officers, directors, employees and shareholders, extended hours, personalized service and its reputation in the communities it services to compete effectively. Bank’s operations.. was established in Chico, California in 1975. The Bank offers banking services to retail customersa unique brand of customer Service with Solutions® available in traditional stand-alone and small tomedium-sized businesses through 68 branch officesin-store bank branches in communities throughout Northern and Central California and had total assets of approximately $4.5$6.5 billion at December 31, 2016.2019. The Bank provides an extensive and competitive breadth of consumer, small business and commercial banking services easily accessed through its California communities branch network, advanced online and mobile banking, a shared nationwide network of over 32,000 ATMs, and bankers available by phone 7 days per week. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable limits. See “Business of Tri Counties Bank”. The Company and the Bank are headquartered in Chico, California.Note 17, “Junior“Note 14 – Junior Subordinated Debt” to the financial statements at Item 8 of this report.of this annual report.2629 counties in Northern and Central California.currently operates from 58 traditional branchesprovides a breadth of personal, small business and 10in-store branches.The Bank conducts a commercial banking businessfinancial services including accepting demand, savings and time deposits and making small business, commercial, real estate, and consumer loans. It also offers installment note collection, issues cashier’s checks, sells travelers checks and provides safe deposit boxesloans, as well as a range of Treasury Management Services and other customary banking services.services including safe deposit boxes. Brokerage services are provided at the Bank’s offices by the Bank’s arrangement with Raymond James Financial Services, Inc., an independent financial services provider and broker-dealer. The Bank does not offer trust services or international banking services.The Bank has emphasized retail banking since it opened. Mostcustomerswholesale, transportation, agriculture, commerce and small tomedium-sized businesses. The Bank emphasizes serving the needs of local businesses, farmers and ranchers, retired individuals and wage earners.professional services. The majority of the Bank’s loans are direct loans made to individuals and businesses in Northern and Central California where its branches are located. At December 31, 2016, the total of2019, the Bank’s consumer loans net of deferred fees outstanding was $362,303,000 (13.1%$455,542,000 (10.6%), the total of commercial loans outstanding was $217,047,000 (7.9%were $283,707,000 (6.6%), and the total of real estate loans including construction loans of $122,419,000 was $2,180,243,000 (79.0%$249,827,000 (5.8%)., and non-construction real estate mortgage loans were $3,328,290,000 (77.3%) of total loans. The Bank takes real estate, listed and unlisted securities, savings and time deposits, automobiles, machinery, equipment, inventory, accounts receivable and notes receivable secured by property as collateral for loans.Acquisition of Three Branch Offices and Deposits from Bank of AmericaMarch 18, 2016, the Bank completed its acquisition of three branch banking offices from Bank of America originally announced October 28, 2015. The acquired branches are located in Arcata, Eureka and Fortuna in Humboldt County on the North Coast of California, and have significant overlap compared to the Company’s then-existing Northern California customer base and branch locations. As a result, these branch acquisitions create potential cost savings and future growth potential. With the levels of capital at the time, the acquisitions fit well into the Company’s growth strategy. Also on March 18, 2016, the electronic customer service and other data processing systems of the acquired branches were converted into the Bank’s systems, and the effect of revenue and expenses from the operations of the acquired branches are included in the results of the Company. The Bank paid a premium of $3,204,000 for deposit relationships with balances of $161,231,000 and loans with balances of $289,000, and received cash of $159,520,000 from Bank of America.The assets acquired and liabilities assumed in the acquisition of these branches were accounted for in accordance with ASC 805 “Business Combinations,” using the acquisition method of accounting and were recorded at their estimated fair values on the March 18, 2016 acquisition date, and the results of operations of the acquired branches are included in the Company’s consolidated statements of income since that date. The excess of the fair value of consideration transferred over total identifiable net assets was recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations ofDecember 11, 2017, the Company and the acquired branches. $849,000FNB Bancorp (“FNBB”), entered into an Agreement and Plan of the goodwill is deductible for income tax purposes because the acquisition was accounted for as a purchase of assetsMerger and assumption of liabilities for tax purposes.See Note 2 in the financial statements at Item 8 of this report for a discussion about this transaction.Acquisition of North Valley BancorpOn October 3, 2014, TriCo completed the acquisition of North Valley Bancorp following receipt of shareholder approval for both institutions and all required regulatory approvals. As part of the acquisition, North Valley Bank, a wholly-owned subsidiary of North Valley Bancorp,Reorganization (the “Merger Agreement”) pursuant to which FNBB will be merged with and into TriCo, with TriCo as the surviving corporation (the “Merger”). The Merger Agreement provided that immediately after the Merger, FNBB’s bank subsidiary, First National Bank of Northern California (“First National Bank”), will merge with and into TriCo’s bank subsidiary, Tri Counties Bank. InBank, with Tri Counties Bank as the acquisition,surviving bank (the “Bank Merger”). The Merger and Bank Merger are collectively referred to as the outstanding shares“Merger Transaction.”North ValleyFNBB common stock wereissued and outstanding immediately prior to the effective time of the Merger would be canceled and converted into an aggregate of approximately 6.58 millionthe right to receive 0.98 shares of TriCo common stock to North Valley Bancorp shareholders, which was valued at a total(the “Exchange Ratio”), with cash paid in lieu of approximately $151 million basedfractional shares of TriCo common stock. trading price of TriCo common stock of $41.64 on October 3, 2014December 8, 2017, the consideration value was $40.81 per share of $23.01. In addition,FNBB common stock or approximately $315.3 million in aggregate. On July 6, 2018, the Merger Transaction was completed. Based on the closing price of TriCo’s common stock of $38.41 on July 6, 2018, and based on the conversion of FNBB outstanding optionscommon shares to purchase7,405,277 shares of North Valley BancorpTCBK common shares, the share consideration value was approximately $284.4 million. The Company also paid cash of $6.7 million to settle and retire all FNBB stock were cancelled and the holdersoptions outstanding as of the options received a total of $1,061,000 in cash. In connection with the merger, TriCo assumed North Valley Bancorp’s obligations with respect to its outstanding trust preferred securities.North Valley Bank was a full-service commercial bank headquartered in Redding, California. North Valley conducted a commercial and retail banking services which included accepting demand, savings, and money market rate deposit accounts and time deposits, and making commercial, real estate and consumer loans. North Valley Bank had $935 million in assets and 22 commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in Northern California at June 30, 2014.Other ActivitiesThe Bank may in the future engage in other businesses either directly or indirectly through subsidiaries acquired or formed by the Bank subject to regulatory constraints. See “Regulation and Supervision.”2016,2019, the Company employed 1,0631,184 persons, including sixfive executive officers. Full time equivalent employees were 1,013.1,165. No employees of the Company are presently represented by a union or covered under a collective bargaining agreement. Management believes that its employee relations are good.marketMarket (“Nasdaq”) under the trading symbol “TCBK” and the Company is, therefore, subject to the rules of Nasdaq for listed companies. as a state chartered bank, is subject to broad federal regulation, supervision and oversight extending to all its operationsperiodic examination by the FDIC, which is the bank’s primary federal regulator because the bank is a state-chartered bank that is not a member of the Federal Reserve System and the DBO, because the bank is a California state chartered bank. This regulation is broad and extends to state regulation byall of the DBO.are subject to the CFPB’s rules but continue to be examined for compliance with federal consumer laws by their primary federal banking agency. As a bank holding company, TriCo is required to file reports with the FRB and the FRB periodically examines the Company. Under the Dodd-Frank Act, a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary bank and, under appropriate circumstances, to commit resources to support the subsidiary bank. Qualified bank holding companies that elect to be financial holding companies may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity or (ii) complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or prior approval of the FRB for the directprior to directly or indirect acquisition ofindirectly acquiring more than 5 percent of the voting shares of a commercial bank or its parent holding company. Under the Bank Merger Act, the prior approval of an acquiring bank’s primary federal regulator is required before it may merge with another bank or purchase the assets or assume the deposits of another bank. In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory authorities will consider, among other things, the competitive effect and public benefits of the transactions, the capital position of the combined organization, the applicant’s performance record under the Community Reinvestment Act, consumer compliance, fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.Section 39 toFederal Deposit Insurance Act requires thefederal ban regulatory agencies tohave establish safety and soundness standards for insured financial institutions covering:internal•Internal controls, information systems and internal audit systems;
Additionally, under FDICIA, a bank
Requirements”.
The Company’s and the Bank’s primary federal regulators, the FRB and the FDIC, have adopted guidelines utilizing
The Company andcapital requirements, see “Note 26 – Regulatory Matters” to the Bank are also required to maintain a minimum leverage ratio of 4% of Tier 1 capital to total assets (the “leverage ratio”). The leverage ratio is determined by dividing an institution’s Tier 1 capital by its quarterly average total assets, less goodwill and certain other intangible assets. The minimum leverage ratio constitutes a minimum requirement for the mostwell-run banking organizations. See Note 29 in theconsolidated financial statements at Part II, Item 8 of this report for a discussion about the Company’s risk-based capital and leverage ratios.
In July, 2013, the federal banking agencies approved new capital rules implementing the “Basel III” regulatory capital reforms and other changes required by the Dodd-Frank Act. “Basel III” refers to capital guidelines adopted by the Basel Committee on Banking Supervision, which is a committee of central banks and bank supervisors/regulators from the major industrialized countries. The new capital rules include new risk-based capital and leverage ratios, which are being phased in from 2015 to 2019, and which refine the definition of what constitutes “capital” for purposes of calculating those ratios. The new minimum capital level requirements applicable to the Company and the Bank as of January 1, 2015 under the new capital rules include: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The new capital rules also establish a “capital conservation buffer” above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital. The capital conservation buffer will bephased-in over four years beginning on January 1, 2016, as follows: The buffer will be 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter. This will result in the following minimum ratios beginning in 2019: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. Under the new capital rules, institutions are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its common equity capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.
The new capital rules provide regulators discretion to impose an additional capital buffer, the “countercyclical buffer,” of up to 2.5% of common equity Tier 1 capital to take into account the macro-financial environment and periods of excessive credit growth. However, the countercyclical buffer only applies to larger banks with $250 billion or more in total assets or $10 billion or more in total foreign exposures and is not expected to have an impact on the Company or the Bank.
The new capital rules also implement revisions and clarifications consistent with Basel III regarding the various components of Tier 1 capital, including common equity, unrealized gains and losses, as well as certain instruments including trust preferred securities that will no longer qualify as Tier 1 capital, some of which will be phased out over time. However, the new capital rules provide that depository institution holding companies with less than $15 billion in total assets as of December 31, 2009, such as the Company, will be able to continue to includenon-qualifying instruments that were issued and included in Tier 1 capital prior to May 19, 2010, such as the Company’s Trust Preferred Securities, as Tier 1. This treatment is grandfathered and will apply even if the Company exceeds $15 billion assets due to organic growth. However, if the Company exceeds $15 billion in assets as the result of a merger or acquisition, then the Tier 1 treatment of its outstanding trust preferred securities will be phased out but may still be treated as Tier 2 capital.
The new capital rules also include changes for the calculation of risk-weighted assets, which are being phased in beginning January 1, 2015. The new capital rules utilizes an increased number of credit risk exposure categories and risk weights, and also addresses: (i) an alternative standard of creditworthiness consistent with Section 939A of the Dodd-Frank Act; (ii) revisions to recognition of credit risk mitigation; (iii) rules for risk weighting of equity exposures and past due loans; (iv) revised capital treatment for derivatives and repo-style transactions; and (v) disclosure requirements fortop-tier banking organizations with $50 billion or more in total assets that are not subject to the “advance approach rules” that apply to banks with greater than $250 billion in consolidated assets.
report.
December 31, 2019.
adoption.
equity. The Dodd-Frank Act also increased the minimum designated reserve ratio of the DIF from 1.15% to 1.35% of the estimated amount of total insured deposits by 2020, eliminates the upper limit for the reserve ratio designated by the FDIC each year, and eliminates the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Continued action by the FDIC to replenish the DIF, as well as the changes contained in the Dodd-Frank Act, may result in higher assessment rates, which could reduce our profitability or otherwise negatively impact our operations.
Interstate Branching
The Dodd-Frank Act authorized national and state banks to establish branches in other states to the same extent as a bank chartered by that state would be permitted to branch. Previously, banks could only establish branches in other states if the host state expressly permittedout-of-state banks to establish branches in that state. Accordingly, banks will be able to enter new markets more freely.
The act also requires financial institutions, including banks, to establish anti-money laundering programs, including employee training and independent audit requirements, meet minimum standards specified by the act, follow minimum standards for customer identification and maintenance of customer identification records, and regularly compare customer lists against lists of suspected terrorists, terrorist organizations and money launderers.
andor related parties may fail to perform in accordance with the terms of their loans.the loans we make or acquire. Our earnings are significantly affected by our ability to properly originate, underwrite and service loans. We have underwriting and credit monitoring procedures and credit policies, including the establishment and review of the allowance for loan losses, that we believe appropriately address this risk by assessing the likelihood of nonperformance, tracking loan performance and diversifying our respective loan portfolios. Such policies and procedures, however, may not preventaffecteffect on our business, financial condition and results of operations.Northernnorthern and Centralcentral California.Northernnorthern and Centralcentral California. As a result of this geographic concentration, our financial results may be impacted by economic conditions in California. Deterioration in the economic conditions in California could result in the following consequences, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows:
We depend on key personnel and the loss
Severe weather, natural disasters
Severe weather, drought, fires, natural disasters such as earthquakes, or actscause a contraction in U.S. and global economic growth and higher volatility in the financial markets, including:
Marketinvestment securities and Interest Rate Risk
Lowoverall profitability.
Our abilitycontrol, and they fluctuate in response to earn a profit, like that of most financial institutions, depends on our net interest income, which is the difference between the interest income we earn on our interest-earning assets, such as mortgage loans and investments,general economic conditions and the policies of various governmental and regulatory agencies, in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest expense we pay on our interest-bearing liabilities, such as deposits. Our profitability depends onrates, may negatively affect our ability to manageoriginate loans and leases, the value of our assets and liabilities during periodsour ability to realize gains from the sale of changing market interest rates. Recently, the FRB has maintained the targeted federal funds rate at record low levels. A sustained decrease in market interest ratesour assets, all of which ultimately could adversely affect our earnings. When interest rates decline, borrowers tend to refinance higher-rate, fixed-rate loans at lower rates. Under those circumstances, we would not be able to reinvest those prepayments in assets earning interest rates as high as the rates on the prepaid loans on investment securities. In addition, our commercial real estate and commercial loans, which carry interest rates that adjust in accordance with changes in the prime rate, will adjust to lower rates.
Regulatory Risks
Recently enacted
The Dodd-Frank Act, which waswhat extent banks will continue to provide LIBOR submissions to the LIBOR administrator or whether any additional reforms to LIBOR may be enacted in 2010, significantly changed the current bank regulatory structure and affects the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies. Among other things, the Dodd-Frank Act created a new Consumer Financial Protection Bureau with broad powersUnited Kingdom or elsewhere. Similarly, it is not possible to supervise and enforce consumer protection laws. The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The CFPB has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Banks with $10 billion or less in assets, such as the Bank, are subject to the CFPB’s rules butpredict whether LIBOR will continue to be examinedviewed as an acceptable benchmark for compliance withcertain financial instruments, what rate or rates may become accepted alternatives to LIBOR, or the consumer laws by their primary bank regulators. In addition,effect of any such changes in views or alternatives on the Dodd-Frank Act requiredvalues of the FDIC and FRBfinancial instruments, whose interest rates are tied to adopt new, more stringent capital rules that applyLIBOR. Uncertainty as to us. The Dodd-Frank Act also weakens the federal preemption rules that have been applicable for national banks and federal savings associations, and gives state attorneys generalnature of such potential changes, alternative reference rates, the ability to enforce federal consumer protection laws.
It is difficult to predictelimination or replacement of LIBOR, or other reforms may adversely affect the continuing impact that the Dodd-Frank Actvalue of, and the yet to be written implementing rules and regulations will havereturn on community banks. However, it is expected that at a minimum they will increase our operating and compliance costs and could increase our interest expense.
financial instruments.
operations, including the cost to conduct business.
members could be more difficult.
There are potential
may disrupt our business and dilute shareholder value.
In addition, to the extent that we acquire acquisitions. Acquiring other banks, in the future, our business may be negatively impacted by certainbusinesses, or branches involves various risks inherentcommonly associated with such acquisitions. These risks include:
As result
Our decisions regarding the fair value of assets acquired from North Valley Bancorp, Citizens Bank of Northern California and Granite Community Bank, including the FDIC loss sharing assets or liabilities associated with Granite, could be inaccurate which could materially and adversely affect our business, financial condition, results of operations, and future prospects.
Management makes various assumptions and judgments about the collectability of acquired loans, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of secured loans. In FDIC-assisted acquisitions that include loss sharing agreements, such as our acquisition of Granite
Community Bank, we may record a loss sharing asset or liability that we consider adequate to absorb future losses or recoveries which may occur in the acquired loan portfolio. In determining the size of the loss sharing asset or liability, we analyze the loan portfolio based on historical loss experience, volume and classification of loans, volume and trends in delinquencies and nonaccruals, local economic conditions, and other pertinent information.
If our assumptions are incorrect, the balance of the FDIC indemnification asset or liability may at any time be insufficient to cover future loan losses or recoveries, and credit loss provisions may be needed to respond to different economic conditions or adverse developments in the acquired loan portfolio. Any increase in future loan losses could have a negative effect on our operating results.
Our ability to obtain reimbursement under the loss sharing agreement on covered assets purchased from the FDIC depends on our compliance with the terms of the loss sharing agreement.
We must certify to the FDIC on a quarterly basis our compliance with the terms of the FDIC loss sharing agreement as a prerequisite to obtaining reimbursement from the FDIC for realized losses on covered assets. The required terms of the agreements are extensive and failure to comply with any of the guidelines could result in a specific asset or group of assets permanently losing their loss sharing coverage. Additionally, Management may decide to forgo loss share coverage on certain assets to allow greater flexibility over the management of certain assets. As of December 31, 2016, $3,399,000, or 0.08%, of the Company’s assets were covered by these FDIC loss sharing agreements.
We rely
We rely heavily on In fact, many other financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage systems, often through the introduction of computer viruses or malware, cyberattacks, and other means. Certain financial institutions in the United States have also experienced attacks from technically sophisticated and well-resourced third parties that were intended to disrupt normal business activities by making internet banking systems inaccessible to
regulatory focus. The federal bank regulatory agencies have proposed enhanced cyber risk management standards, which would apply to a wide range of large financial institutions and their third-party service providers, including TriCo and its bank subsidiary, and would focus on cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness. Several states have also proposed or adopted cybersecurity legislation and regulations, which require, among other things, notification to affected individuals when there has been a security breach of their personal data. For more information regarding cybersecurity regulation, refer to the “Supervision and Regulation” section of this report.
6869 traditional branches, 7 in-store branches and 2 loan production offices in 2629 counties in Northernnorthern and Centralcentral California including twelve offices in Shasta County, eight inthe counties of Butte, County, six in Humboldt and Nevada Counties, four in Placer and Sacramento Counties, three in Siskiyou and Stanislaus Counties, two each in Glenn, Mendocino, Sutter and Trinity Counties, and one each in Colusa, Contra Costa, Del Norte, Fresno, Glenn, Humboldt, Kern, Lake, Lassen, Madera, Mendocino, Merced, Nevada, Placer, Sacramento, San Francisco, San Mateo, Santa Clara, Shasta, Siskiyou, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Yolo and Yuba Counties.Yuba. All offices are constructed and equipped to meet prescribed security requirements.Theowns twenty-nineowned 34 branch office locations, fivetwo administrative buildings that include branch locations, and twoseven other buildings that it leases out.are used as either administrative, operational, or loan production offices. The Company leases thirty-nineleased 33 branch office locations, two loan production offices, and threeone administrative locations.location. Most of the leases contain multiple renewal options and provisions for rental increases, principally for changes in the cost of living index, property taxes and maintenance. All of the Company’s existing facilities are considered to be adequate for the Company’s present and future use. In the opinion of management, all properties are adequately covered by insurance. See “Note 7 – Premises and Equipment” to the consolidated financial statements at Part II, Item 8 of this report.
On September 15, 2014,former Personal Bankerparty to any pending legal proceedings that are material, nor is their property the subject of any other material pending legal proceeding at onethis time. All other legal proceedings are routine and arise out of the ordinary course of the Bank’sin-store branches filed business. None of those proceedings are currently expected to have a Class Action Complaint againstmaterial adverse impact upon the Bank in Butte County Superior Court, alleging causes of action related to the observance of meal and rest periods and seeking to represent a class of current and former hourly-paid ornon-exempt personal bankers, or employees with the same or similar job duties, employed by the Bank within the State of California during the preceding four years. On or about June 25, 2015, Plaintiff filed an Amended Complaint expanding the class definition to all current and formerly hourly-paid ornon-exempt branch employees employed by the Bank within the State of California at any time during the period from September 15, 2010 to final judgment. The Bank responded to the First Amended Complaint, denying the charges,Company’s and the parties engagedBank’s business, their consolidated financial position nor their operations in written discovery. The parties engaged innon-binding mediation of this action during the third quarter of 2016.On January 20, 2015, a then-current Personal Banker at one of the Bank’sin-store branches filed a First Amended Complaint against Tri Counties Bank and TriCo Bancshares, dba Tri Counties Bank, in Sacramento County Superior Court, alleging causes of action related to wage statement violations. Plaintiff seeks to represent a class of current and former exempt andnon-exempt employees who worked for the defendants during the time period beginning October 18, 2013 through the date of the filing of this action. The Company and the Bank responded to the First Amended Complaint, denying the charges, and engaged in written discovery with Plaintiff. The parties engaged innon-binding mediation of this action during the third quarter of 2016.During the third quarter of 2016, the Bank agreed to settle the two foregoing matters. In connection with the settlement and inany material amount not already accrued, after taking into consideration for the full settlement and release of all claims, the Bank would pay up to $1.9 million. The actual cost of the settlement will depend on the number of claims submitted by purported class members and the Bank estimates that the actual cost of settlement will be approximately $1,450,000. In the event that the parties enter into a stipulation of settlement, hearings will be scheduled at which the court will consider the settlement. The settlement is subject to customary conditions, including court approval following notice to members of the purported classes. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve the settlement even if the parties were to enter into such stipulation.
Inapplicable.
2016: Fourth quarter Third quarter Second quarter First quarter 2015: Fourth quarter Third quarter Second quarter First quarter $36.56 per share. 2018. Period Oct.1-31, 2016 Nov.1-30, 2016 Dec.1-31, 2016 Total 2019: Index TriCo Bancshares Russell 3000 SNL Western Bank Plan category Equity compensation plans not approved by shareholders Equity compensation plans approved by shareholders Total High Low $ 34.46 $ 25.49 $ 28.40 $ 25.40 $ 28.90 $ 24.60 $ 27.44 $ 23.80 $ 29.39 $ 24.25 $ 25.55 $ 23.08 $ 24.75 $ 23.18 $ 24.77 $ 22.82 2019 High Low Fourth quarter $ 41.25 $ 35.05 Third quarter $ 39.06 $ 34.81 Second quarter $ 41.23 $ 37.30 First quarter $ 40.36 $ 33.79 2018 Fourth quarter $ 38.45 $ 31.96 Third quarter $ 39.63 $ 36.98 Second quarter $ 40.22 $ 36.65 First quarter $ 39.75 $ 36.35 20172020 there were approximately 1,6161,661 shareholders of record of the Company’s common stock. On February 24, 2017,2020, the closing salesmarket price was $37.18.2016 $82,615,0002019, there was $131,000,000 available for payment of dividends by the Bank to the Company, under applicable laws and regulations. The Company paidSee “Note 27 – Summary of Quarterly Results of Operations (unaudited)” for the quarterly cash dividends of $0.15 per common sharepaid by the Company in each of the quarters ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016,2019 and December 31, 2015, and $0.13 per common share in each of the quarters ended September 30, 2015, June 30, 2015, and $0.11 per common share in the quarter ended March 31, 2015.adopted ahas one previously announced stock repurchase plan on August 21, 2007 for the repurchase of upunder which it is currently authorized to 500,000purchase shares of the Company’sits common stock from time to time as market conditions allow.stock. The 500,000 shares authorized for repurchase undertable that follows provides additional information regarding this plan represented approximately 3.2% of the Company’s approximately 15,815,000 common shares outstanding as of August 21, 2007. This plan has no stated expiration date for the repurchases. As of December 31, 2016, the Company had purchased 166,600 shares under this plan.Announcement Date Total shares approved
for purchase Total shares repurchased
under the plan Expiration date 11/12/2019 1,525,000 — none 2016: (a) Total number
of shares purchased(1) (b) Average price
paid per share (c) Total number of
shares purchased as of
part of publicly
announced plans
or programs (d) Maximum number
shares that may yet
be purchased under the
plans or programs(2) — — — 333,400 176,779 $ 30.72 — 333,400 1,407 $ 34.18 — 333,400 178,186 $ 30.74 — 333,400 (1)Includes shares purchased by the Company’s Employee Stock Ownership Plan and pursuant to various other equity incentive plans. See Note 19 to the consolidated financial statements at Item 8 of Part II of this report, for a discussion of the Company’s stock repurchased under equity compensation plans.(2)Does not include shares that may be purchased by the Company’s Employee Stock Ownership Plan and pursuant to various other equity incentive plans.Period (a) Total number of
shares purchased(b) Average price
paid per share(c) Total number of shares
purchased as of part
of publicly announced
plans or programs(d) Maximum number
of shares that may
yet be purchased under
the plans
or programs (3)7,462 $ 35.84 — — November 1-30, 2019 — $ — — — 13,562 $ 40.93 — 1,525,000 Total 21,024 $ 39.12 — 1,525,000 2011,2014, in each of TriCo common stock, the Russell 3000 Index, and the SNL Western Bank Index. The SNL Western Bank Index compiled by SNL Financial includes banks located in California, Oregon, Washington, Montana, Hawaii and Alaska with market capitalization similar to that of TriCo’s. The amounts shown assume that any dividends were reinvested. Period Ending 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 100.00 120.43 207.94 184.41 209.08 266.01 100.00 116.42 155.47 175.00 175.84 198.23 100.00 126.20 177.56 213.09 220.79 244.77 Period Ending Index 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 TriCo Bancshares 100.00 113.39 144.26 162.69 147.88 182.47 Russell 3000 Index 100.00 100.48 113.27 137.21 130.02 170.35 SNL Western Bank Index 100.00 103.61 114.87 128.07 101.40 123.66 2016.2019. All of our equity compensation plans have been approved by shareholders. (a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (b)
Weighted average
exercise price of
outstanding options,
warrants and rights (c)
Number of securities
remaining available for
issuance under equity
compensation plans
(excluding securities
reflected in
column (a)) — — — 708,126 $ 17.12 637,262 708,126 $ 17.12 637,262 Plan category (a) Number of securities to
be issued upon exercise
of outstanding options,
options, warrants and rights(b) Weighted average
exercise price of
outstanding options,
warrants and rights(c) Number of securities remaining available
for issuance under future equity compensation plans
(excluding securities reflected in column (a))Equity compensation plans not approved by shareholders — $ — — Equity compensation plans approved by shareholders 160,500 $ 17.60 1,315,537 Total 160,500 $ 17.60 1,315,537
Year ended December 31, Interest income Interest expense Net interest income (Benefit from) provision for loan losses Noninterest income Noninterest expense Income before income taxes Provision for income taxes Net income Earnings per share: Basic Diluted Per share: Dividends paid Book value at December 31 Tangible book value at December 31 Average common shares outstanding Average diluted common shares outstanding Shares outstanding at December 31 At December 31: Loans, net of allowance Total assets Total deposits Other borrowings Junior subordinated debt Shareholders’ equity Financial Ratios: For the year: Return on average assets Return on average equity Net interest margin1 Net loan (recoveries) losses to average loans Efficiency ratio2 Average equity to average assets Dividend payout ratio At December 31: Equity to assets Total capital to risk-adjusted assetsinIn thousands, except per share amounts) 2016 2015 2014 2013 2012 $ 173,708 $ 161,414 $ 121,115 $ 106,560 $ 108,716 5,721 5,416 4,681 4,696 7,344 167,987 155,998 116,434 101,864 101,372 (5,970 ) (2,210 ) (4,045 ) (715 ) 9,423 44,563 45,347 34,516 36,829 37,980 145,997 130,841 110,379 93,604 97,998 72,523 72,714 44,616 45,804 31,931 27,712 28,896 18,508 18,405 12,937 $ 44,811 $ 43,818 $ 26,108 $ 27,399 $ 18,994 $ 1.96 $ 1.93 $ 1.47 $ 1.71 $ 1.19 $ 1.94 $ 1.91 $ 1.46 $ 1.69 $ 1.18 $ 0.60 $ 0.52 $ 0.44 $ 0.42 $ 0.36 $ 20.87 $ 19.85 $ 18.41 $ 15.61 $ 14.33 $ 17.77 $ 16.81 $ 15.31 $ 14.59 $ 13.30 22,814 22,750 17,716 16,045 15,988 23,087 22,998 17,923 16,197 16,052 22,868 22,775 22,715 16,077 16,001 $ 2,727,090 $ 2,486,926 $ 2,245,939 $ 1,633,762 $ 1,522,175 4,517,968 4,220,722 3,916,458 2,744,066 2,609,269 3,895,560 3,631,266 3,380,423 2,410,483 2,289,702 17,493 12,328 9,276 6,335 9,197 56,667 56,470 56,272 41,238 41,238 477,347 452,116 418,172 250,946 229,359 1.02 % 1.11 % 0.87 % 1.04 % 0.75 % 9.46 % 10.04 % 8.67 % 11.34 % 8.44 % 4.23 % 4.32 % 4.17 % 4.18 % 4.32 % (0.09 )% (0.07 )% (0.13 )% 0.23 % 0.82 % 67.9 % 64.7 % 72.9 % 67.3 % 70.2 % 10.84 % 11.01 % 10.00 % 9.21 % 8.91 % 30.6 % 27.2 % 30.1 % 24.9 % 30.5 % 10.57 % 10.71 % 10.68 % 9.15 % 8.79 % 14.65 % 15.09 % 15.63 % 14.77 % 14.53 % 1Fully taxable equivalent.
amounts; unaudited)2The sum of fully taxable equivalent net interest income and noninterest income divided by noninterest expense.Year ended December 31, 2019 2018 2017 2016 2015 Interest income $ 272,444 $ 228,218 $ 181,402 $ 173,708 $ 161,414 Interest expense (15,375) (12,872) (6,798) (5,721) (5,416) Net interest income 257,069 215,346 174,604 167,987 155,998 (Provision for) benefit from loan losses 1,690 (2,583) (89) 5,970 2,210 Noninterest income 53,520 49,061 49,452 44,678 46,210 Noninterest expense (185,457) (168,472) (146,455) (146,112) (131,704) Income before income taxes 126,822 93,352 77,512 72,523 72,714 Provision for income taxes (34,750) (25,032) (36,958) (27,712) (28,896) Net income $ 92,072 $ 68,320 $ 40,554 $ 44,811 $ 43,818 Share Data Earnings per share: Basic $ 3.02 $ 2.57 $ 1.77 $ 1.96 $ 1.93 Diluted $ 3.00 $ 2.54 $ 1.74 $ 1.94 $ 1.91 Per share: Dividends paid $ 0.82 $ 0.70 $ 0.66 $ 0.60 $ 0.52 Book value at period end $ 29.70 $ 27.20 $ 22.03 $ 20.87 $ 19.85 Tangible book value at period end $ 21.69 $ 18.97 $ 19.01 $ 17.77 $ 16.81 Average common shares outstanding 30,478 26,593 22,912 22,814 22,750 Average diluted common shares outstanding 30,645 26,880 23,250 23,087 22,998 Shares outstanding at period end 30,524 30,417 22,956 22,868 22,775 Financial Ratios During the period: Return on average assets 1.43 % 1.24 % 0.89 % 1.02 % 1.11 % Return on average equity 10.49 % 10.75 % 8.10 % 9.46 % 10.04 % Net interest margin(1) 4.47 % 4.30 % 4.22 % 4.23 % 4.32 % Efficiency ratio 59.71 % 63.72 % 65.37 % 68.71 % 65.13 % Average equity to average assets 13.97 % 11.52 % 10.99 % 10.84 % 11.01 % Dividend payout ratio 27.15 % 27.24 % 37.30 % 30.60 % 27.20 % At period end: Equity to assets 14.01 % 13.02 % 10.62 % 10.57 % 10.71 % Total capital to risk-adjusted assets 15.10 % 14.40 % 14.07 % 14.65 % 15.09 % Balance Sheet Data Total investments $ 1,345,954 $ 1,580,096 $ 1,262,683 $ 1,162,769 $ 1,131,415 Total loans 4,307,366 4,022,014 3,015,165 2,759,593 2,522,937 Total assets 6,471,181 6,352,441 4,761,315 4,517,968 4,220,722 Total non-interest bearing deposits 1,832,665 1,760,580 1,368,218 1,275,745 1,155,695 Total deposits 5,366,994 5,366,466 4,009,131 3,895,560 3,631,266 Total other borrowings 18,484 15,839 122,166 17,493 12,328 Total junior subordinated debt 57,232 57,042 56,858 56,667 56,470 Total shareholders’ equity 906,570 827,373 505,808 477,347 452,116 Total tangible equity (2) $ 662,141 $ 577,121 $ 436,323 $ 406,473 $ 382,760
Bakersfield and San Luis Obispo. Following is a summary of the components of net income for the periods indicated (dollars in thousands): Components of Net Income Net interest income Benefit from (provision for) loan losses Noninterest income Noninterest expense Taxes Net income Net income per average fully-diluted share Net income as a percentage of average shareholders’ equity Net income as a percentage of average total assets Following is a summary of the Company’s net interest income for the periods indicated (dollars in thousands): Components of Net Interest Income Interest income Interest expense Net interest income FTE adjustment Net interest income (FTE) Net interest margin (FTE) 2018. Assets Loans Investment securities—taxable Investment securities—nontaxable Cash at Federal Reserve and other banks Total earning assets Other assets Total assets Liabilities and shareholders’ equity Interest-bearing demand deposits Savings deposits Time deposits Other borrowings Junior subordinated debt Total interest-bearing liabilities Noninterest-bearing demand Other liabilities Shareholders’ equity Total liabilities and shareholders’ equity Net interest spread(1) Net interest income and interest margin(2) Assets Loans Investment securities—taxable Investment securities—nontaxable Cash at Federal Reserve and other banks Total earning assets Other assets Total assets Liabilities and shareholders’ equity Interest-bearing demand deposits Savings deposits Time deposits Other borrowings Junior subordinated debt Total interest-bearing liabilities Noninterest-bearing demand Other liabilities Shareholders’ equity Total liabilities and shareholders’ equity Net interest spread(1) Net interest income and interest margin(2) Assets Loans Investment securities—taxable Investment securities—nontaxable Cash at Federal Reserve and other banks Total earning assets Other assets Total assets Liabilities and shareholders’ equity Interest-bearing demand deposits Savings deposits Time deposits Other borrowings Junior subordinated debt Total interest-bearing liabilities Noninterest-bearing demand Other liabilities Shareholders’ equity Total liabilities and shareholders’ equity Net interest spread(1) Net interest income and interest margin(2) $2,499 for the years ended December 31, 2019, 2018 and 2017, respectively. Increase (decrease) in interest income: Loans Investments—taxable Investments—nontaxable Cash at Federal Reserve and other banks Total �� Increase (decrease) in interest expense: Demand deposits (interest-bearing) Savings deposits Time deposits Other borrowings Junior subordinated debt Total Increase (decrease) in net interest income 2018. Components of Noninterest Income: Service charges on deposit accounts ATM fees and interchange Other service fees Mortgage banking service fees Change in value of mortgage servicing rights Total service charges and fees Gain on sale of loans Commissions on sale of nondeposit investment products Increase in cash value of life insurance Change in indemnification asset Gain on disposition of foreclosed assets Gain on life insurance death benefit Lease brokerage income Other noninterest income Total noninterest income Components of Noninterest Expense Salaries and related benefits: Base salaries, net of deferred loan origination costs Incentive compensation Benefits and other compensation costs Total salaries and related benefits Other noninterest expense: Occupancy Equipment Data processing and software Assessments ATM & POS network charges Advertising & marketing Professional fees Telecommunications Postage Courier service Foreclosed asset expense Intangible amortization Operational losses Provision for foreclosed asset losses Change in reserve for unfunded commitments Legal settlement Merger & acquisition expense Miscellaneous other Total other noninterest expenses Total noninterest expense Merger & acquisition expense: Base salaries, net of loan origination costs Incentive compensation Benefits and other compensation costs Data processing and software Professional fees Miscellaneous other Total merger expense Average full time equivalent staff Noninterest expense to revenue (FTE) accelerated by $226,000. rate of approximately 29.6% during 2019 and 2018 and 42.0% during 2017. Investment securities available for sale (at fair value): Obligations of US government corporations and agencies Obligations of states and political subdivisions Corporate bonds Marketable equity securities Total investment securities available for sale Investment securities held to maturity (at cost): Obligations of US government corporations and agencies Obligations of states and political subdivisions Total investment securities held to maturity $985,000. Composition Real estate mortgage Consumer Commercial Real estate construction Total loans Real estate mortgage Consumer Commercial Real estate construction Total loans 2018. FNBB. Performing nonaccrual loans Nonperforming nonaccrual loans Total nonaccrual loans Originated and PNCI loans 90 days past due and still accruing Total nonperforming loans Noncovered foreclosed assets Covered foreclosed assets Total nonperforming assets U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans Indemnified portion of covered foreclosed assets Nonperforming assets to total assets Nonperforming loans to total loans Allowance for loan losses to nonperforming loans Allowance for loan losses, unamortized loan fees, and discounts to loan principal balances owed Performing nonaccrual loans Nonperforming nonaccrual loans Total nonaccrual loans Originated loans 90 days past due and still accruing Total nonperforming loans Noncovered foreclosed assets Covered foreclosed assets Total nonperforming assets U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans Indemnified portion of covered foreclosed assets Nonperforming assets to total assets Nonperforming loans to total loans Allowance for loan losses to nonperforming loans Allowance for loan losses, unamortized loan fees, and discounts to loan principal balances owed Performing nonaccrual loans Nonperforming nonaccrual loans Total nonaccrual loans Originated loans 90 days past due and still accruing Total nonperforming loans Noncovered foreclosed assets Covered foreclosed assets Total nonperforming assets U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans Indemnified portion of covered foreclosed assets Nonperforming assets to total assets Nonperforming loans to total loans Allowance for loan losses to nonperforming loans Allowance for loan losses, unamortized loan fees, and discounts to loan principal balances owed year ended December 31, 2019 Real estate mortgage: Residential Commercial Consumer Home equity lines Home equity loans Auto indirect Other consumer Commercial Construction: Residential Commercial Total nonperforming loans Noncovered foreclosed assets Covered foreclosed assets Total nonperforming assets 2019: net charge-offs of $1,364,000. Balance at Balance at September 30, Real estate mortgage: Residential Commercial Consumer Home equity lines Home equity loans Other consumer Commercial (C&I) Construction: Residential Commercial Total nonperforming loans Foreclosed assets Total nonperforming assets 2019 Balance at September 30, Pay-downs /Sales Charge-offs/ Balance at June 30, Real estate mortgage: Residential Commercial Consumer Home equity lines Home equity loans Other consumer Commercial (C&I) Construction: Residential Commercial Total nonperforming loans Foreclosed assets Total nonperforming assets Balance at March 31, Real estate mortgage: Residential Commercial Consumer Home equity lines Home equity loans Other consumer Commercial (C&I) Construction: Residential Commercial Total nonperforming loans Foreclosed assets Total nonperforming assets Balance at December 31, Real estate mortgage: Residential Commercial Consumer Home equity lines Home equity loans Other consumer Commercial (C&I) Construction: Residential Commercial Total nonperforming loans Foreclosed assets Total nonperforming assets are generallymay be presented on a fullytax-equivalent (FTE) basis. The presentation of interest income and net interest income on a FTE basis is a common practice within the banking industry. Interest income and net interest income are shown on anon-FTE basis in thiswithin Item 7 and Item 8 of this report, and a reconciliation of the FTE andnon-FTE presentations is provided below in the discussion of net interest income.America.America (GAAP). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On anon-going basis, the Company evaluates its estimates, including those that materially affect the financial statements and are related to the adequacy of the allowance for loan losses, investments, mortgage servicing rights, fair value measurements, retirement plans, intangible assets and the fair value of acquired assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company’s policies related to estimates on the allowance for loan losses, other than temporary impairment of investments and impairment of intangible assets, can be found in Note 1 in the financial statements at Item 8 of this report.March 18, 2016,July 6, 2018 the Bank completed its acquisition of three branch banking offices from Bank of AmericaFNBB originally announced October 28, 2015. Theon December 11, 2017 for an aggregate transaction value of $291,132,000. Through this business combination assets acquired, branches are located in Arcata, Eurekaincluding core deposit intangibles of $27,605,000, totaled $1,306,539,000 and Fortuna in Humboldt County onliabilities assumed totaled $1,171,968. Goodwill recognized totaled $156,561,000 and the North Coast of California, and have significant overlap comparedmerger expenses incurred during the year ended December 31, 2018 totaled $5,227,000. There were no merger expenses incurred during the year ended December 31, 2019. the Company’s then-existing Northern California customer base and branch locations. As a result, these branch acquisitions create potential cost savings and future growth potential. With the levels of capital at the time the acquisitions fit well into the Company’s growth strategy. Also on March 18, 2016, the electronic customer service and other data processing systems of the acquired branches were converted into the Bank’s systems, and the effect of revenue and expenses from the operations of the acquired branches are included in the results of the Company. The Bank paid a premium of $3,204,000 for deposit relationships with balances of $161,231,000 and loans with balances of $289,000, and received cash of $159,520,000 from Bank of America.On October 3, 2014, TriCo completed the acquisition of North Valley Bancorp. As part of the acquisition, North Valley Bank, a wholly-owned subsidiary of North Valley Bancorp, merged with and into Tri Counties Bank. In the acquisition, each share of North Valley common stock was converted into the right to receive 0.9433 shares of TriCo common stock. TriCo issued an aggregate of approximately 6.58 million shares of TriCo common stock to North Valley Bancorp shareholders, which was valued at a total of approximately $151 million based on the closing trading price of TriCo common stock on October 3, 2014 of $21.73. TriCo also assumed North Valley Bancorp’s obligations with respect to its outstanding trust preferred securities. Beginning on October 4, 2014, the effect of revenue and expenses from the operations of North Valley Bancorp, and the TriCo Bancshares common shares issued in consideration of the merger are included in the results of the Company.North Valley Bank was a full-service commercial bank headquartered in Redding, California. North Valley conducted a commercial and retail banking services which included accepting demand, savings, and money market rate deposit accounts and time deposits, and making commercial, real estate and consumer loans. North Valley Bank had approximately $935 million in assets and 22 commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in Northern California at June 30, 2014. See Note 2 in the financial statements at Item 8 of Part II of this report for a discussion about this transaction.On September 23, 2011, the California DBO closed Citizens Bank of Northern California (“Citizens”), Nevada City, California and appointed the FDIC as receiver. That same date, the Bank assumed the banking operations of Citizens from the FDIC under a whole bank purchase and assumption agreement without loss sharing. With this agreement, the Bank added seven traditional bank branches including two in Grass Valley, and one in each of Nevada City, Penn Valley, Lake of the Pines, Truckee, and Auburn, California. This acquisition is consistentmay be presented with the Bank’s community banking expansion strategy and provides further opportunity to fillpurchase individual or pools of loans in whole or in part outside of a transaction that would be considered a business combination. As of December 31, 2019 and 2018 the Bank’s market presenceoutstanding carrying value of purchased loans that were not acquired in the Northern California market.On May 28, 2010, the Office of the Comptroller of the Currency closed Granite Community Bank (“Granite”), Granite Bay, Californiaa business combination totaled $52,678,000 and appointed the FDIC as receiver. That same date, the Bank assumed the banking operations of Granite from the FDIC under a whole bank purchase and assumption agreement with loss sharing. Under the terms of the loss sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, other real estate owned (OREO)/foreclosed assets and accrued interest on loans for up to 90 days. $56,023,000, respectively. FDIC will absorb 80% of losses and share in 80% of loss recoveries on the covered assets acquired from Granite. The loss sharing arrangements fornon-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date. With this agreement, the Bank added one traditional bank branch in each of Granite Bay and Auburn, California. This acquisition is consistent with the Bank’s community banking expansion strategy and provides further opportunity to fill in the Bank’s market presence in the greater Sacramento, California market.The Company refers to loans and foreclosed assets that are covered by loss sharing agreements as “covered loans” and “covered foreclosed assets”, respectively. In addition, the Company refers to loans purchased or obtained in a business combination as “purchased credit impaired” (PCI) loans, or “purchased not credit impaired” (PNCI) loans. The Company refers to loans that it originates as “originated” loans. Additional information regarding the North ValleyFNB Bancorp (FNBB) acquisition can be found in Note 2 in the consolidated financial statements at Item 8 of this report. Additional information regarding the definitions and accounting for originated, PNCI and PCI loans can be found in Notes 1, 2, 4 and 5 in the consolidated financial statements at Item 8 of this report, and under the headingloans,operations, the Company has defined northern California as that area of California north of, and including, Stockton;Stockton to the east and San Jose to the west; central California as that area of the Statestate south of Stockton and San Jose, to and including, Bakersfield;Bakersfield to the east and San Luis Obispo to the west; and southern California as that area of the Statestate south of Bakersfield. Year ended December 31, 2016 2015 2014 $ 167,987 $ 155,998 $ 116,434 5,970 2,210 4,045 44,563 45,347 34,516 (145,997 ) (130,841 ) (110,379 ) (27,712 ) (28,896 ) (18,508 ) $ 44,811 $ 43,818 $ 26,108 $ 1.94 $ 1.91 $ 1.46 9.46 % 10.04 % 8.67 % 1.02 % 1.11 % 0.87 % Included in the Company’s resultsYear ended December 31, 2019 2018 2017 Net interest income $ 257,069 $ 215,346 $ 174,604 Reversal of (provision for) loan losses 1,690 (2,583) (89) Noninterest income 53,520 49,061 49,452 Noninterest expense (185,457) (168,472) (146,455) Provision for income taxes (34,750) (25,032) (36,958) Net income $ 92,072 $ 68,320 $ 40,554 Net income per average fully-diluted share $ 3.00 $ 2.54 $ 1.74 Net income as a percentage of average shareholders’ equity (ROAE) 10.49 % 10.75 % 8.10 % Net income as a percentage of average total assets (ROAA) 1.43 % 1.24 % 0.89 % Year ended December 31, 2016 2015 2014 $ 173,708 $ 161,414 $ 121,115 (5,721 ) (5,416 ) (4,681 ) 167,987 155,998 116,434 2,329 905 303 $ 170,316 $ 156,903 $ 116,737 4.23 % 4.32 % 4.17 % Year ended December 31, 2019 2018 2017 Interest income $ 272,444 $ 228,218 $ 181,402 Interest expense (15,375) (12,872) (6,798) Net interest income (not FTE) 257,069 215,346 174,604 FTE adjustment 1,201 1,304 2,499 Net interest income (FTE) $ 258,270 $ 216,650 $ 177,103 Net interest margin (FTE) 4.47 % 4.30 % 4.22 % Acquired loans discount accretion: Purchased loan discount accretion $ 8,137 $ 5,271 $ 6,564 Effect on average loan yield 0.20 % 0.15 % 0.23 % Effect of purchased loan discount accretion on net interest margin (FTE) 0.11 % 0.10 % 0.16 % 20162018 increased $13,413,000 (8.6%$39,547,000 (22.3%) to $170,316,000$216,650,000 from $156,903,000$177,103,000 during the year ended December 31, 2015.2017. The increase in net interest income (FTE) was due primarily to a $240,292,000 (10.1%$705,839,000 (24.8%) increase in the average balance of loans to $2,629,729,000,$3,548,498,000 and a $140,526,000 (13.4%$160,433,000 (13.1%) increase in the average balance of investmentsinvestment securities to $1,190,509,000,$1,383,975,000. Increases in average yields for earnings assets from 4.39% during 2017 to 4.55% during 2018 were offset by increases in the average rates paid on interest-bearing liabilities, primarily time deposits and a sevenother borrowings. The average rate paid on time deposits increased by 38 basis pointpoints from 0.48% during 2017 to 0.86% during 2018. Additionally, the average rate paid on other borrowings increased by 104 basis points, from 0.74% during 2017 to 1.78% during 2018. Also offsetting increases in net interest income was an increase in the average yieldbalance of nontaxable investmentsother borrowings, which increased by $113,120,000 (274%) from 4.85%$41,252,000 during the year ended December 31, 20152017 to 4.92%$154,372,000 during the year ended December 31, 2016 , that were partially offset by a 15 basis point decrease in2018. Despite the average yield on loans from 5.52% during the year ended December 31, 2015 to 5.37% during the year ended December 31, 2016, and a 15 basis point decrease in the average yield on investments taxable from 2.74% during the year ended December 31, 2015 to 2.59% during the year ended December 31, 2016. The $240,292,000 increase in average loan balancesbalance of other borrowings during 2016the 2018 year as compared to 2015 was due primarily2017, the outstanding balance of other borrowings decreased to organic loan growth. The $140,526,000 increase in average investment balances during 2016$15,839,000 at December 31, 2018 as compared to 2015 was due primarily to investment purchases in excess of investment maturities.$122,166,000 at December 31, 2017. The increases in average loan and investment balances during 2016 were funded primarily by a $350,461,000 increase in the average balance of deposits, and a $37,528,000 increase in the average balance of shareholders’ equity during 2016. The $350,461,000 increase in the average balance of deposits during 2016 compared to 2015 included the effect of the purchase of three branches and $161,231,000 of deposits from Bank of America on March 18, 2016. The seven basis point increase in the average yield of investments nontaxable was due to purchases of investments nontaxable with higher averagetax-equivalent yields during 2016 compared to the yields on investments nontaxable that the Company owned during 2015. The 15 basis point decrease in average loan yieldsother borrowings of $106,327,000 was due primarily to declines in market yields on new and renewed loans compared to yields on repricing, maturing, and paid off loans.made possible through deposit growth. See Deposit Portfolio Composition below. The 15 basis point decrease in the average yield of investments taxable was due to purchases of investments taxable with lower averagetax-equivalent yields during 2016 compared to the yields on investments taxable that the Company owned during 2015, and increased amortization of purchase premiums on mortgage backed securities during 2016 compared to 2015. The increased amortization of purchase premiums on mortgage backed securities during 2016 was due primarily to faster prepayment of existing mortgages caused by higher mortgage refinance activity that was caused by reduced mortgage rates during most of 2016 compared to 2015. The increases in average loan and investment balances added $9,948,000 and $4,096,000, respectively, to net interest income (FTE) while the decreases in average loan and investments taxable yields reduced net interest income (FTE) during 2016 by $698,000 and $1,162,000, respectively, compared to 2015. The increase in average investments nontaxable yield increased net interest income (FTE) during 2016 by $1,019,000 compared to 2015. Included in investment interest income during the years ended December 31, 2016 and 2015 were special cash dividend of $578,000 and $626,000, respectively, from the Company’s investment in Federal Home Loan Bank of San Francisco stock. Included in loan interest income during the year ended December 31, 2016 was discount accretion from purchased loans of $7,399,000 compared to $10,056,000 during the year ended December 31, 2015. Also included in loan interest income during the year ended December 31, 2016 was interest income of $2,311,000 from the recovery of interest payments previously applied to principal balances of nonperforming loans sold during 2016. Included in loan interest income during the year ended December 31, 2015 was the recovery of $728,000 of loan interest income from the payoff of a single originated loan that was in interest nonaccrual status; and while recoveries of loan interest income from paid off nonaccrual loans occur from time to time, a single recovery of this magnitude is unusual.Net interest income (FTE) for the year ended December 31, 2015 increased $40,166,000 (34.4%) to $156,903,000 from $116,737,000 during. The increase in net interest income (FTE) was due primarily to a $541,688,000 (29.3%) increase in the average balance of loans to $2,389,437,000, and a $505,217,000 (93%) increase in the average balance of investments to $1,049,983,000 that were partially offset by a 10 basis point decrease in the average yield on loans from 5.62% during the year ended December 31, 2014 to 5.52% during the year ended December 31, 2015, and a 17 basis point decrease in the average yield on investments from 3.01% during the year ended December 31, 2014 to 2.84% during the year ended December 31, 2015. The $541,688,000$705,839,000 increase in average loan balances compared to the prior year was due primarily to the additionmerger of $499,327,000 of loans through the acquisition of North Valley Bancorp on October 4, 2014, and net loan growthof $240,414,000 (10.5%) during the year ended December 31, 2015.FNBB. The $505,217,000 increase in the average investment balances from the prior yearyield on loans and investments-taxable was due primarily to the addition of $212,616,000 of investments through the acquisition of North Valley Bancorp on October 4, 2014, and $371,784,000 of investment purchases in excess of investment maturities and paydowns during 2015. The 10 basis point decrease in average loan yields was due primarily to declines in market yields on new and renewed loans compared to yields on repricing, maturing, and paid off loans. The decrease in average investment yields was due primarily to declines in market yields on new investments compared to yields on existing investments. The increases in average loanthe prime lending rate and market rates on investment balances added $30,443,000 and $15,493,000, respectively, to net interest income (FTE) while the decreases in average loan and investment yields reduced net interest income (FTE) during 2015 by $2,494,000 and $2,056,000, respectively, when compared to 2014. Included in investment interest income during the year ended December 31, 2015 was a special cash dividendpurchased.3027 to the consolidated financial statements at Part II, Item 8 of this report. The “Yield” and “Volume/Rate” tables shown below are useful in illustrating and quantifying the developments that affected net interest income during 20162019 and 2015.current statutory tax rate applicable during the period presented (dollars in thousands): Year ended December 31, 2016 Average
balance Interest
income/expense Rates
earned/paid $ 2,629,729 $ 141,086 5.37 % 1,064,410 27,578 2.59 % 126,099 6,210 4.92 % 205,263 1,163 0.57 % 4,025,501 176,037 4.37 % 347,521 $ 4,373,022 $ 878,436 441 0.05 % 1,344,304 1,685 0.13 % 342,511 1,357 0.40 % 18,873 9 0.05 % 56,566 2,229 3.94 % 2,640,690 5,721 0.22 % 1,193,297 65,206 473,829 $ 4,373,022 4.15 % $ 170,316 4.23 % (1)Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.(2)Net interest margin is computed by dividing net interest income by total average earning assets.SummaryYear ended December 31, 2019 2018 2017 Average
BalanceInterest
Income/
ExpenseRates
Earned
/PaidAverage
BalanceInterest
Income/
ExpenseRates
Earned
/PaidAverage
BalanceInterest
Income/
ExpenseRates
Earned
/PaidAssets: Loans $ 4,111,093 $ 223,750 5.44 % $ 3,548,498 $ 186,117 5.24 % $ 2,842,659 $ 146,794 5.16 % Investment securities—taxable 1,360,793 41,095 3.02 % 1,241,829 35,702 2.87 % 1,087,302 29,096 2.68 % Investment securities—nontaxable (1) 133,733 5,203 3.89 % 142,146 5,649 3.97 % 136,240 6,664 4.89 % Total investments 1,494,526 46,298 3.10 % 1,383,975 41,351 2.99 % 1,223,542 35,760 2.92 % Cash at Federal Reserve and other banks 171,021 3,597 2.10 % 109,352 2,054 1.88 % 126,432 1,347 1.07 % Total interest-earning assets 5,776,640 273,645 4.74 % 5,041,825 229,522 4.55 % 4,192,633 183,901 4.39 % Other assets 660,455 496,323 361,872 Total assets $ 6,437,095 $ 5,538,148 $ 4,554,505 Liabilities and shareholders’ equity: Interest-bearing demand deposits $ 1,254,375 1,089 0.09 % $ 1,075,331 945 0.09 % $ 939,516 744 0.08 % Savings deposits 1,883,964 4,892 0.26 % 1,610,202 2,803 0.17 % 1,368,705 1,683 0.12 % Time deposits 446,142 5,735 1.29 % 378,058 3,248 0.86 % 317,724 1,531 0.48 % Total interest-bearing deposits 3,584,481 11,716 0.33 % 3,063,591 6,996 0.23 % 2,625,945 3,958 0.15 % Other borrowings 15,484 387 2.50 % 154,372 2,745 1.78 % 41,252 305 0.74 % Junior subordinated debt 57,133 3,272 5.73 % 56,950 3,131 5.50 % 56,762 2,535 4.47 % Total interest-bearing liabilities 3,657,098 15,375 0.42 % 3,274,913 12,872 0.39 % 2,723,959 6,798 0.25 % Noninterest-bearing deposits 1,780,746 1,531,383 1,262,592 Other liabilities 121,933 74,113 67,301 Shareholders’ equity 877,318 657,739 500,653 Total liabilities and shareholders’ equity $ 6,437,095 $ 5,538,148 $ 4,554,505 Net interest spread (2) 4.32 % 4.16 % 4.14 % Net interest income and interest margin (3) $ 258,270 4.47 % $ 216,650 4.30 % $ 177,103 4.22 % Interest Differential – Yield Tables (continued) Year ended December 31, 2015 Average
balance Interest
income/expense Rates
earned/paid $ 2,389,437 $ 131,836 5.52 % 1,000,221 27,421 2.74 % 49,762 2,414 4.85 % 189,506 648 0.34 % 3,628,926 162,319 4.47 % 335,072 $ 3,963,998 $ 808,281 476 0.06 % 1,183,201 1,475 0.12 % 340,443 1,482 0.44 % 8,668 4 0.05 % 56,345 1,979 3.51 % 2,396,938 5,416 0.23 % 1,076,162 54,597 436,301 $ 3,963,998 4.24 % $ 156,903 4.32 % Year ended December 31, 2014 Average
balance Interest
income/expense Rates
earned/paid $ 1,847,749 $ 103,887 5.62 % 527,742 15,590 2.95 % 17,024 808 4.75 % 404,056 1,133 0.28 % 2,796,571 121,418 4.34 % 216,878 $ 3,013,449 $ 605,241 484 0.08 % 926,389 1,153 0.12 % 291,515 1,637 0.56 % 7,512 4 0.05 % 44,366 1,403 3.16 % 1,875,023 4,681 0.25 % 801,056 36,085 301,285 $ 3,013,449 4.09 % $ 116,737 4.17 % (1)Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.(2)Net interest margin is computed by dividing net interest income by total average earning assets.The rate/Changes applicable to both rate and volume variance hashave been included in the rate variance. Amounts are calculated on a fully taxable equivalent basis: 2016 over 2015 2015 over 2014 Yield/ Yield/ Volume Rate Total Volume Rate Total (dollars in thousands) $ 9,948 $ (698 ) $ 9,250 $ 30,443 $ (2,494 ) $ 27,949 1,319 (1,162 ) 157 13,938 (2,107 ) 11,831 2,777 1,019 3,796 1,555 51 1,606 40 475 515 (601 ) 116 (485 ) 14,084 (366 ) 13,718 45,335 (4,434 ) 40,901 32 (67 ) (35 ) 162 (170 ) (8 ) 145 65 210 308 14 322 7 (133 ) (126 ) 274 (428 ) (154 ) 4 1 5 1 (1 ) — 6 245 251 379 196 575 194 111 305 1,124 (389 ) 735 $ 13,890 $ (477 ) $ 13,413 $ 44,211 $ (4,045 ) $ 40,166 2019 over 2018 2018 over 2017 Volume Rate Total Volume Rate Total Increase in interest income: Loans $ 29,480 $ 8,153 $ 37,633 $ 36,421 $ 2,902 $ 39,323 Investment securities—taxable 3,414 1,979 5,393 4,141 2,465 6,606 Investment securities—nontaxable (334) (112) (446) 289 (1,304) (1,015) Cash at Federal Reserve and other banks 1,159 384 1,543 (183) 890 707 Total interest-earning assets 33,719 10,404 44,123 40,668 4,953 45,621 Increase in interest expense: Interest-bearing demand deposits 161 (17) 144 109 92 201 Savings deposits 465 1,624 2,089 290 830 1,120 Time deposits 586 1,901 2,487 290 1,427 1,717 Other borrowings (2,472) 114 (2,358) 837 1,603 2,440 Junior subordinated debt 10 131 141 8 588 596 Total interest-bearing liabilities (1,250) 3,753 2,503 1,534 4,540 6,074 Increase in net interest income $ 34,969 $ 6,651 $ 41,620 $ 39,134 $ 413 $ 39,547 Ending balances As of December 31, $ Change % Change ($’s in thousands) 2019 2018 Total assets $ 6,471,181 $ 6,352,441 $ 118,740 1.9 % Total loans 4,307,366 4,022,014 285,352 7.1 % Total investments 1,345,954 1,580,096 (234,142) (14.8) % Total deposits $ 5,366,994 $ 5,366,466 $ 528 - % Annual average balances As of December 31, $ Change Average
Acquired
Balances *Organic
$ ChangeOrganic
% Change($’s in thousands) 2019 2018 Total assets $ 6,437,095 $ 5,516,126 $ 920,969 $ 713,561 $ 207,408 3.76 % Total loans 4,111,093 3,548,498 562,595 407,051 155,544 4.38 % Total investments 1,494,526 1,383,975 110,551 163,695 (53,144) (3.84) % Total deposits $ 5,365,227 $ 4,594,974 $ 770,253 $ 483,738 $ 286,515 6.24 % 20162019 and 2015”2018” at Note 5 in Item 8 of Part II of this report for the components that make up the provision for loan losses for the years ended December 31, 20162019 and 2015.benefitedrecorded a benefit of $1,690,000 from loan losses during the year ended December 31, 2019, versus a $5,970,000 reversal of$2,583,000 provision for loan losses during the year ended December 31, 2016 versus a $2,210,000 reversal of provision for loan losses during the year ended December 31, 2015.2018. The increase in the reversal ofreduced provision for loan losses for the year ended December 31, 20162019 compared to the year ended December 31, 20152018 was primarily attributable to a $1,375,000 decreases in the resultamount of an increasespecific reserves required on impaired loans subsequent to the sale or repayment of the outstanding balances owed. In addition, while the Company remains cautious about the risks associated with trends in California real estate prices and the affordability of housing in the markets served by the Company, changes in home affordability and energy related index rates improved during the year ended December 31, 2019. The qualitative factors associated with these two measures reduced the level of calculated required reserves by approximately $1,059,000. These decreases were partially offset by the provisions to the allowance for loan losses necessitated by net loan recoveries from 0.07%growth during the year. As of average loans during 2015 to 0.09% of average loans during 2016, a decrease in nonperforming loans from $37,119,000 at December 31, 20152019, the Company had established reserves totaling $2,500,000 related to $20,128,000 atthe Camp Fire, compared to $3,250,000 as of December 31, 2016, continued improvement in loan portfolio loss history, and improvements in collateral values and estimated cash flows related to nonperforming loans and purchased credit impaired loans.2018. As shown in the Table labeled“Allowance for Loan Losses—year ended December 31, 2016”2019” at Note 5 in Item 8 of Part II of this report residential and commercial real estate loans, home equity lines, of credit, home equity loans, and commercial construction loans all experienced a benefit from reversal of provision for loan losses during the year ended December 31, 2016.2019. The level of provision, orbenefit from reversal of provision for loan losses of each loan category during the year ended December 31, 20162019 was due primarily to improvements in historical loss factors and decreases in nonperforming loans as a decrease in the required allowance for loan losses astotal percentage of December 31, 2016 when compared to the required allowance for loan losses as of December 31, 2015 less net charge-offs during the year ended December 31, 2016. All categories of loans exceptloans. The remaining other consumer, commercial real estate mortgage loans, C & I loans, and residential construction loans experienced a decrease in the required allowanceprovision for loan losses during the year ended December 31, 2016. These decreases in required allowance for loan losses were2019 due primarily to reduced impaired loans, improvements in estimated cash flows and collateral valuesloan growth. Net charge-offs for the remaining and newly impaired loans, and reductions in historical loss factors that, in part, determine the required loan loss allowance for performing loans in accordance with the Company’s allowance for loan losses methodology as described under the heading“Loans and Allowance for Loan Losses” at Note 1 in Item 8 of Part II of this report. These same factors were also present, to some extent, for commercial real estate mortgage loans, C & I loans, and residential construction loans, but were more than offset by the effect of increased loan balances in these loan categories resulting in net provisions for loan losses in these categories during the year ended December 31, 2016.2019 were $276,000 as compared to $324,000 net charge offs for the year ended December 31, 2018. Total nonperforming loans decreased from 0.68% of total loans at December 31, 2018 to 0.39% of total loans at December 31, 2019. For details of the change in nonperforming loans during the year ended December 31, 20162018 see the Tables, and associated narratives, labeled“Changes in nonperforming assets during the year ended December 31, 2016”2019”and“Changes in nonperforming assets during the three months ended December 31, September 30, June 30, and March 31, 2016”2019”under the heading“Asset Quality andNon-Performing Assets” below.benefited from a $2,210,000 reversal ofprovided $2,583,000 for loan losses during the year ended December 31, 2018 versus an $89,000 provision for loan losses during the year ended December 31, 2015 versus a $4,045,000 reversal of provision for loan losses during the year ended December 31, 2014.2017. The decreaseincrease in the reversal of provision for loan losses for the year ended December 31, 2015 as2018 compared to the year ended December 31, 20142017 was due primarily the result of increased loan originations during 2015 compared to 2014, and a decrease in net loan recoveries from 0.13% of average loans during 2014 to 0.07% of average loans during 2015. During 2015, improvements in collateral values and estimated cash flowslosses related to nonperforming loans and purchased credit impaired loans, and reductionsthe Camp Fire that occurred in nonperforming loans contributedthe 4th quarter of 2018. As of December 31, 2018, the Company had established reserves totaling $3,250,000 related to the reversal of provision for loan losses.Camp Fire. As shown in the Table labeled“Allowance for Loan Losses—year ended December 31, 2015”2018” at Note 5 in Item 8 of Part II of this report residential and commercial real estate loans, home equity lines of credit, auto indirectother consumer loans, commercial, and residential construction loans experienced a reversal of provision for loan losses during the year ended December 31, 2015.2018. The level of provision, or reversal of provision for loan losses of each loan category during the year ended December 31, 20152018 was due primarily to a decreaseincreases in the required allowance for loan losses as of December 31, 20152018 when compared to the required allowance for loan losses as of December 31, 20142017 less net charge-offs during the year ended December 31, 2015, and the effect of the changes in the allowance methodology during the year ended December 31, 2015 as described under the heading“Loans and Allowance for Loan Losses”at Note 1 in Item 8 of Part II of this report.2018. All categories of loans except commercial real estate mortgage loans, C & I loans,consumer home equity lines of credit and commercial construction loans experienced a decreasean increase in the required allowance for loan losses during the year ended December 31, 2015.2018. These decreasesincreases in required allowance for loan losses were due primarily to reduced impaired loans,the estimated losses related to the Camp Fire, as mentioned above, which were offset by improvements in estimated cash flows and collateral values for the remaining and newly impaired loans, and reductions in historical loss factors that,and decreases in part, determine the required loan loss allowancenonperforming loans as a total percentage of loans. Total net charge-offs for performing loans in accordance with the Company’s allowance for loan losses methodology as described under the heading“Loans and Allowance for Loan Losses” at Note 1 in Item 8 of Part II of this report. These same factors were also present, to some extent, for commercial real estate mortgage loans, C & I loans, and commercial construction loans, but were more than offset by the effect of increased loan balances in these loan categories resulting in net provisions for loan losses in these categories during the year ended December 31, 2015.2018 were $324,000 as compared to total net charge offs for the year ended December 31, 2017 of $2,269,000. Total nonperforming loans decreased from 0.81% of total loans at December 31, 2017 to 0.68% of total loans at December 31, 2018. For details of the change in nonperforming loans during the year ended December 31, 20152017 see the Tables, and associated narratives, labeled“Changes in nonperforming assets during the year ended December 31, 2015”2018”and“Changes in nonperforming assets during the three months ended December 31, September 30, June 30, and March 31, 2015”2018”under the heading“Asset Quality andNon-Performing Assets” below. During the year ended December 31, 2015, the Company made one change to its allowance for loan loss methodology. The change in methodology is described under the heading“Allowance for loan losses” in the section below labeled“Financial Condition”. Excluding the effect of the change in allowance methodology during the year ended December 31, 2015, the reversal of provision for loan losses during the year ended December 31, 2015 would have been approximately $3,528,000, or $1,318,000 more than the $2,210,000 that was actually recorded, and the allowance for loan losses at December 31, 2015 would have been approximately $34,693,000, or $1,318,000 less than the $36,011,000 that was actually recorded.Noninterestnoninterestnon-interest income for the periods indicated (dollars in thousands): Year ended December 31, 2016 2015 2014 $ 14,365 $ 14,276 $ 11,811 15,859 13,364 9,651 3,121 2,977 2,206 2,065 2,164 1,869 (2,184 ) (701 ) (1,301 ) 33,226 32,080 24,236 4,037 3,064 2,032 2,329 3,349 2,995 2,717 2,786 1,953 (493 ) (207 ) (856 ) 262 991 2,153 238 155 — 711 712 504 1,536 2,417 1,499 $ 44,563 $ 45,347 $ 34,516 NoninterestYear Ended December 31, 2019 2018 2017 ATM and interchange fees $ 20,639 $ 18,249 $ 16,727 Service charges on deposit accounts 16,657 15,467 16,056 Other service fees 3,015 2,852 3,282 Mortgage banking service fees 1,917 2,038 2,076 Change in value of mortgage loan servicing rights (1,811) (146) (718) Total service charges and fees 40,417 38,460 37,423 Commissions on sale of non-deposit investment products 2,877 3,151 2,729 Increase in cash value of life insurance 3,029 2,718 2,685 Gain on sale of loans 3,282 2,371 3,109 Lease brokerage income 878 678 782 Sale of customer checks 529 449 372 Gain on sale of investment securities 110 207 961 Gain (loss) on marketable equity securities 86 (64) — Other 2,312 1,091 1,391 Total other non-interest income 13,103 10,601 12,029 Total non-interest income $ 53,520 $ 49,061 $ 49,452 decreased $784,000 (1.7%)increased $4,459,000 or 9.1% to $44,563,000 in 2016 compared to 2015. The decrease in noninterest income was due primarily to $870,000 of recoveries of loans from acquired institutions that were charged off prior to acquisition of those institutions by the Company that were recorded in other noninterest income$53,520,000 during the year ended December 31, 2015, a $1,483,0002019 compared to $49,061,000 during the comparable twelve month period in 2018. Increases in non-interest income for the year ended 2019 as compared to the same period in 2018 was largely driven by increases in fees charged for various services and increases in usage associated with both services and interchange transactions. More specifically, the increase in income charged for interchange fees and service charges increased by $2,390,000 or 13.1% and $1,190,000 or 7.7%, respectively. Gains from the sale of mortgage loans, which resulted from increased volume, contributed $911,000 to the overall increase in non-interest income during the 2019 year. Other non-interest income was positively impacted by the recognition of $831,000 in life insurance death benefits during the year ended December 31, 2019, compared to none in the equivalent period in 2018. These positive changes were partially offset by $1,655,000 greater decline in the value of the Company's mortgage loan servicing rights due to increases in prepayment speeds and the overall decreases in interest rates on home loans as compared to those in the prior year.change in value of mortgage servicing rights, a $1,020,000non-interest income was due primarily to an decrease in commissionsservice charges on saledeposit accounts and other service fees of nondeposit investment products, and$1,019,000 (5.3%) to $18,319,000, a $729,000 decrease in gain on sale of foreclosed assets thatloans of $738,000 (23.7%) to $2,371,000, a decrease in gain on sale of investment securities of $754,000 (78.5%), which were partially offset by a $2,495,000an increase of $1,522,000 (9.1%) increase in ATM fees and interchange incomerevenue, and a $973,000$422,000 (15.5%) increase in gaincommissions on sale of loans.non-depository products. The decrease in change in value of mortgage servicing rights (MSRs) is primarily due to a change in the required rate of return on MSRs by market participants and a decrease in estimated future MSR cash flows as a result of reduced mortgage rates and higher rates of early mortgage payoffs from mortgage refinancing, both of which reduced the value of such MSRs during the year ended December 31, 2016 compared to a smaller decrease in the value of MSRs during the year ended December 31, 2015 that was primarily due to a decrease in estimated future MSR cash flows as a result of reduced mortgage rates and higher rates of early mortgage payoffs from mortgage refinancing. The decrease in gain on sale of foreclosed assets was due to decreased foreclosed asset sales during the year ended December 31, 2016, and the uniqueness of individual foreclosed asset sales when compared to theyear-ago period. The $2,495,000$1,522,000 increase in ATM fees and interchange revenue was due primarily due to the Company’s increasedcontinued focus in this area, including the introduction of new servicesand growth in this area during the quarter ended March 31, 2016.electronic payments volume. The $973,000 increase$738,000 decrease in gain on sale of loans was due primarily to continued high levels ofreduced residential mortgage refinance and home purchase activity and increased focus in this area by the Company. The $4,037,000 of gain on sale of loans during 2016 included $3,729,000 of gain on sale of residential real estate loans originated for sale, and $308,000 of gain on sale of loans not originated for sale. The changes in noninterest income include the effects from the operation of three branches, including $161,231,000 of deposits, acquired from Bank of America on March 18, 2016.Noninterest income increased $10,831,000 (31.4%) to $45,347,000 in 20152018 compared to 2014. The increase in noninterest income was due primarily to an increase in service charges on deposit accounts2017.noninterestnon-interest expense for the periods indicated (dollars in thousands): Year ended December 31, 2016 2015 2014 $ 53,169 $ 46,822 $ 39,342 8,872 6,964 5,068 18,683 17,619 13,134 80,724 71,405 57,544 10,139 10,126 8,203 6,597 5,997 4,514 8,846 7,670 6,512 2,105 2,572 2,107 4,999 4,190 2,996 3,829 3,992 2,413 5,409 4,545 3,888 2,749 3,007 2,870 1,603 1,296 949 998 1,154 1,055 266 490 528 1,377 1,157 446 1,564 737 764 140 502 208 244 330 (395 ) 1,450 — — 784 586 4,858 12,174 11,085 10,919 65,273 59,436 52,835 $ 145,997 $ 130,841 $ 110,379 $ 187 — — — — $ 1,174 — — 94 — $ 108 475 342 120 2,390 255 358 725 $ 784 $ 586 $ 4,858 999 949 783 67.9 % 64.7 % 72.9 % Year Ended December 31, 2019 2018 2017 Base salaries, net of deferred loan origination costs $ 70,218 $ 62,422 $ 54,589 Incentive compensation 13,106 11,147 9,227 Benefits and other compensation costs 22,741 20,373 19,114 Total salaries and benefits expense 106,065 93,942 82,930 Occupancy 14,893 12,139 10,894 Data processing and software 13,517 11,021 10,448 Equipment 7,022 6,651 7,141 ATM and POS network charges 5,447 5,271 4,752 Merger and acquisition expense — 5,227 530 Advertising 5,633 4,578 4,101 Professional fees 3,754 3,546 3,745 Intangible amortization 5,723 3,499 1,389 Telecommunications 3,190 3,023 2,713 Regulatory assessments and insurance 1,188 1,906 1,676 Courier service 1,308 1,287 1,035 Operational losses 986 1,260 1,394 Postage 1,258 1,154 1,296 Gain on sale of foreclosed assets (246) (408) (711) Loss on disposal of fixed assets 82 185 142 Other miscellaneous expense 15,637 14,191 12,980 Total other non-interest expense 79,392 74,530 63,525 Total non-interest expense $ 185,457 $ 168,472 $ 146,455 Average full-time equivalent staff 1,150 1,071 1,000 $9,319,000 (13.1%$12,123,000 (12.9%) to $80,724,000$106,065,000 during the year ended December 31, 20162019 compared to $93,942,000 during the prior year month ended December 31, 2015.2018. Base salaries, incentive compensation and benefits & other compensation expensenet of deferred loan origination costs increased $6,347,000 (13.6%$7,796,000 (12.5%), 1,908,000 (27.4%), and 1,064,000 (6.0%), respectively, to $53,169,000, $8,872,000 and $18,683,000, respectively, during the year ended December 31, 2016. The average number of full-time equivalent staff increased 50 (5.3%) from 949 during the year ended December 31, 2015 to 999 for the year ended December 31, 2016.$70,218,000. The increase in base salaries was due primarily to annual pay raises, ana 7.4% increase in average full-timefull time equivalent staff,employees to 1,150 from 1,071 in the prior year-to-date period. Also affecting the increase in base salaries were annual merit increases and a $1,409,000higher wage base per employee resulting from the employees associated with the FNBB merger transaction due to the Bay Area region’s higher cost of living. During the year ended December 31, 2019 and 2018 there were $3,133,000 and $2,721,000, respectively, in salaries expense that were capitalized in association with loan origination activities and the increase in temporary help expense from $63,000 during 2015 to $1,472,000 during 2016. The increase in temporary help expense was due solely to increases in the number of loans originated. Commissions and incentive compensation increased $1,959,000 (17.6%) to $13,106,000 during 2019 compared to 2018 primarily due to an expansionorganic growth of the Bank’s customer call center capacity during 2016. All categories of incentiveloans and non-interest bearing deposits. Benefits & other compensation expense increased during 2016 compared to 2015 due to related production and profitability measures, and the general increase in staff, except for commissions on sale of nondeposit investment products for which production was down compared to 2015. The increase in benefits and other compensation expense was due primarily to the increase in full-time equivalent staff during 2016.Salary and benefit expenses increased $13,861,000 (24.1%$2,368,000 (11.6%) to $71,405,000$22,741,000 during the year ended December 31, 20152019 due primarily to increases in the average full time equivalent employees, as mentioned above, and to a lesser extent, annual increases in healthcare and benefits costs.2014. Base salaries, incentive compensation and benefits & other compensation expense increased $7,480,000 (19.0%), 1,896,000 (37.4%), and 4,485,000 (34.1%), respectively, to $46,822,000, $6,964,000 and $17,619,000, respectively, during the year ended December 31, 2015. The increases in these categories of salary and benefits expense are primarily due to the Company’s acquisition of North Valley Bancorp on October 4, 2014. The average number of full-time equivalent staff increased 166 (21.2%) from 783 during the year ended December 31, 2014 to 949 for the year ended December 31, 2015.Other noninterest expense increased $5,837,000 (9.8%) to $65,273,000 during the year ended December 31, 2016 compared to the year ended December 31, 2015.2017. The increase in other noninterestnon-interest expense was due primarily due to system conversion and capacity expansion expenses during 2016. Expense categories including equipment,increased costs related to the merger of FNBB. Highlighting some of those increases were merger increases, increases in intangible amortization, occupancy, data processing, and software, ATM & POS network chargesadvertising, which increased by $4,697,000, $2,110,000, $1,245,000, $573,000 and $477,000, respectively, as compared to the prior year. The increases in non-interest expenses were partially offset by decreased equipment expenses and professional (consulting) experienced significant increases due primarilyfees of $490,000 and $199,000, respectively.system conversion and capacity expansion during 2016. The Company recorded a litigation contingency expense of $1,450,000 during 2016. The details of this contingency can be found at Note 18 in Item 8 of Part II of this report. Assessments expense decrease $467,000 (18.2%) to $2,105,000 during 2016 compared to $2,572,000 during 2015 due to a decrease in FDIC insurance premiums during the three months ended September 30, 2016. Nonrecurring expenses related to the acquisition of three branches from Bank of America in March 2016 totaling $784,000 and the acquisition of North Valley Bancorp in October 2014 are included in other noninterest expenseincome before taxes for the years ended December 31, 20162019, 2018 and 2015, respectively. Included2017 differ from amounts computed by applying the statutory Federal income tax rates to income before taxes. The effective tax rate and the statutory federal income tax rate are reconciled as follows:Year Ended December 31, 2019 2018 2017 Federal statutory income tax rate 21.0 % 21.0 % 35.0 % State income taxes, net of federal tax benefit 7.9 8.6 6.9 Tax Cuts and Jobs Act impact of federal rate change — — 9.6 Tax-exempt interest on municipal obligations (0.7) (1.0) (1.9) Tax-exempt life insurance related income (0.6) (0.6) (1.3) Low income housing and other tax credits (2.3) (2.2) (2.3) Low income housing tax credit amortization 2.1 2.0 2.1 Compensation and benefits (0.4) (0.5) (1.2) Non-deductible merger expenses — 0.2 0.2 Other 0.4 (0.8) 0.5 Effective Tax Rate 27.4 % 26.7 % 47.6 % miscellaneous other noninterestthe Federal corporate tax rate had a positive impact on the Company’s net income beginning January 1, 2018. However, the enactment of the law during 2017 required the Company to re-measure its deferred tax assets and liabilities as of December 31, 2017. The Company concluded that this caused the Company’s net deferred tax asset to be reduced, and Federal income tax expense during 2016 were $782,000 valuation allowance expenses on fixed assets transferred to held for sale including a $716,000 valuation allowance expense related to a closed branch building held for sale, the value of which was written down to current market value, and subsequently soldbe increased by $7,416,000 during the three months ended September 30, 2016. Net proceeds fromfourth quarter of 2017. Additionally, amortization expense of the sale of this building were $1,218,000, and resulted in no gain or additional loss being recorded upon the sale of this building.Other noninterest expense increased $6,601,000 (12.5%) to $59,436,000 during the year ended December 31, 2015 compared to the year ended December 31, 2014. The increase in other noninterest expenselow income housing tax credit investments was primarily due to the Company’s acquisition of North Valley Bancorp on October 4, 2014. Nonrecurring merger expenses related to the North Valley Bancorp acquisition totaling $586,000 and $4,858,000 are included in other noninterest expense for the years ended December 31, 2015 and 2014, respectively, of which $0 and $1,269,000 were not deductible for income tax purposes, respectively.Income Taxes38.2%27.4%, 39.7%,26.8% and 41.5%47.7% in 2016, 2015,2019, 2018, and 2014,2017, respectively. The effective tax rate was greater than the federalFederal statutory tax raterates of 21% in 2019 and 2018 and 35% in 2017 due to the combination of state tax expenses of 7.9% in 2019, 8.6% in 2018 and 6.9% in 2017. Tax provision expense for 2017 was increased further by $7,416,000 due to the remeasurement of $7,576,000, $7,412,000, and $4,817,000,respectively,the Company’s net deferred tax asset resulting from the Federal tax law change. These increases in these years, and $1,310,000 of nondeductible merger expenses in 2014.tax expense were partially offset by Federaltax-exempt investment income of $3,881,000, $1,509,000,$4,002,000, $4,345,000 and $505,000,$4,165,000, respectively, from investment securities, Federal and Statetax-exempt income of $2,955,000, $2,786,000,$3,860,000, $2,718,000 and $1,953,000,$2,792,000, respectively, from increase in cash value and gain on death benefit of life insurance, andlow income housing tax credits and losses, net of $197,000, $0,amortization of $230,000, $179,000 and $0$142,000 respectively, and equity compensation excess tax benefits, net of non-deductible compensation of $2,537,000, $499,000 and $916,000, respectively. The low income housing tax credits and the equity compensation excess tax benefits represent direct reductions in these years helped to reducetax expense. The items noted above resulted in an effective combined Federal and State income tax rate that differed from the effectivecombined Federal and State statutory income tax rate. Year ended December 31, (In thousands) 2016 2015 2014 2013 2012 $ 429,678 $ 313,682 $ 75,120 $ 97,143 $ 151,701 117,617 88,218 3,175 5,589 9,421 — — 1,908 1,915 1,905 2,938 2,985 3,002 — — $ 550,233 $ 404,885 $ 83,205 $ 104,647 $ 163,027 InvestmentYear ended December 31, (dollars in thousands) 2019 2018 2017 2016 2015 Marketable equity securities $ 2,960 $ 2,874 $ 2,938 $ 2,938 $ 2,985 Debt securities available for sale: Obligations of U.S. government and agencies $ 472,980 $ 629,981 $ 604,789 $ 429,678 $ 313,682 Obligations of states and political subdivisions 109,601 126,072 123,156 117,617 88,218 Corporate bonds 2,532 4,478 — — — Asset backed securities 365,025 354,505 — — — Total debt securities available for sale $ 950,138 $ 1,115,036 $ 727,945 $ 547,295 $ 401,900 Debt securities held to maturity: Obligations of U.S. government agencies $ 361,785 $ 430,343 $ 500,271 $ 597,982 $ 711,994 Obligations of states and political subdivisions 13,821 14,593 14,573 14,554 14,536 Total debt securities held to maturity $ 375,606 $ 444,936 $ 514,844 $ 612,536 $ 726,530 increased $145,348,000decreased $164,898,000 to $550,233,000$950,138,000 as of December 31, 2016,2019, compared to December 31, 2015.2018. This increasedecrease is attributable to purchases of $247,717,000, maturities and principal repayments of $71,684,000, a decrease$97,993,000, sales of $127,066,000, an increase in fair value of investments securities available for sale of $11,015,000,$24,361,000 and amortization of net purchase price premiums of $2,598,000.The following table presents the held to maturity investment securities portfolio by major type as of the dates indicated: Year ended December 31, (In thousands) 2016 2015 2014 2013 2012 $ 597,982 $ 711,994 $ 660,836 $ 227,864 — 14,554 14,536 15,590 12,640 — $ 602,536 $ 726,530 $ 676,426 $ 240,504 — Investment$1,567,000.$123,994,000$69,330,000 to $602,536,000$375,606,000 as of December 31, 2016,2019, compared to December 31, 2015.2018. This decrease is attributable to principal repayments of $121,666,000$68,346,000 and amortization of net purchase price discounts/premiums of $2,328,000.$16,956,000$17,250,000 at December 31, 20162019 and December 31, 2015.2018, respectively. The entire balance of restricted equity securities at December 31, 20162019 and December 31, 20152018 represents the Bank’s investment in the Federal Home Loan Bank of San Francisco (“FHLB”).Compositecosts,fees, at the dates indicated: Year ended December 31, (dollars in thousands) 2016 2015 2014 2013 2012 $ 2,057,824 $ 1,811,832 $ 1,615,359 $ 1,107,863 $ 1,010,130 362,303 395,283 417,084 383,163 386,111 217,047 194,913 174,945 131,878 135,528 122,419 120,909 75,136 49,103 33,054 $ 2,759,593 $ 2,522,937 $ 2,282,524 $ 1,672,007 $ 1,564,823 Year ended December 31, (dollars in thousands) 2019 2018 2017 2016 2015 Real estate mortgage $ 3,328,290 $ 3,143,100 $ 2,300,322 $ 2,057,824 $ 1,811,832 Consumer 445,542 418,982 356,874 362,303 395,283 Commercial 283,707 276,548 220,412 217,047 194,913 Real estate construction 249,827 183,384 137,557 122,419 120,909 Total loans $ 4,307,366 $ 4,022,014 $ 3,015,165 $ 2,759,593 $ 2,522,937 costs,fees, as a percentage of total loans at the dates indicated: Year ended December 31, 2016 2015 2014 2013 2012 74.6 % 71.8 % 70.7 % 66.3 % 64.5 % 13.1 % 15.7 % 18.3 % 22.9 % 24.7 % 7.9 % 7.7 % 7.7 % 7.9 % 8.7 % 4.4 % 4.8 % 3.3 % 2.9 % 2.1 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Year ended December 31, (dollars in thousands) 2019 2018 2017 2016 2015 Real estate mortgage 77.3 % 78.1 % 76.3 % 74.6 % 71.8 % Consumer 10.3 % 10.4 % 11.8 % 13.1 % 15.7 % Commercial 6.6 % 6.9 % 7.3 % 7.9 % 7.7 % Real estate construction 5.8 % 4.6 % 4.6 % 4.4 % 4.8 % Total loans 100 % 100 % 100 % 100 % 100 % 20162019 loans, including net deferred loan costs, totaled $2,759,593,000$4,307,366,000 which was a 9.4%7.10% ($236,656,000)285,352,000) increase over the balances at the end of 2015. Demand for commercial real estate (real estate mortgage) loans was strong during 2016. Demand for residential mortgage loans was strong during 2016. Demand for home equity loans and lines of credit was moderate during 2016.20152018 loans, including net deferred loan costs, totaled $2,522,937,000$4,022,014,000 which was a 10.5%33.4% ($240,413,000)1,006,849,000) increase over the balances at the end of 2014. Demand for commercial real estate (real estate mortgage) loans was strong during 2015. Demand for home equity loans and lines of credit was weak during 2015.At December 31, 2014 loans, including net deferred loan costs, totaled $2,282,524,000 which was a 36.5% ($610,517,000) increase over2017. Included in the balances at the end of 2013. This increase in loans during 2014 included $499,327,000for 2018 is acquired loans, net of loans acquired indiscount, of $834,683,000 from the North Valley Bancorp acquisition on October 3, 2014, and $32,017,000 of purchased single family residential real estate loans. Demand for commercial real estate (real estate mortgage) loans was moderate during 2014. Demand for home equity loans and lines of credit was weak during 2014.Loans originated by the Company, i.e., not purchased or acquired in a business combination, are referred to as originated loans. Originated loans are reported at the principal amount outstanding, net of deferred loan fees and costs. Loan origination and commitment fees and certain direct loan origination costs are deferred, and the net amount is amortized as an adjustment of the related loan’s yield over the actual life of the loan. Originated loans on which the accrual of interest has been discontinued are designated as nonaccrual loans.Originated loans are placed in nonaccrual status when reasonable doubt exists as to the full, timely collection of interest or principal, or a loan becomes contractually past due by 90 days or more with respect to interest or principal and is not well secured and in the process of collection. When an originated loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loan is estimated to be fully collectible as to both principal and interest.An allowance for loan losses for originated loans is established through a provision for loan losses charged to expense. Originated loans and deposit related overdrafts are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely or, with respect to consumer installment loans, according to an established delinquency schedule. The allowance is an amount that management believes will be adequate to absorb probable losses inherent in existing loans and leases, based on evaluations of the collectability, impairment and prior loss experience of loans and leases. The evaluations take into consideration such factors as changes in the nature and size of the portfolio, overall portfolio quality, loan concentrations, specific problem loans, and current economic conditions that may affect the borrower’s ability to pay. The Company defines an originated loan as impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired originated loans are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate. As a practical expedient, impairment may be measured based on the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. When the measure of the impaired loan is less than the recorded investment in the loan, the impairment is recorded through a valuation allowance. In situations related to originated loans where, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession for other than an insignificant period of time to the borrower that the Company would not otherwise consider, the related loan is classified as a troubled debt restructuring (TDR). The Company strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where the Company grants the borrower new terms that result in the loan being classified as a TDR, the Company measures any impairment on the restructuring as noted above for impaired loans. TDR loans are classified as impaired until they are fully paid off or charged off. Loans that are in nonaccrual status at the time they become TDR loans, remain in nonaccrual status until the borrower demonstrates a sustained period of performance which the Company generally believes to be six consecutive months of payments, or equivalent. Otherwise, TDR loans are subject to the same nonaccrual andcharge-off policies as noted above with respect to their restructured principal balance.Credit risk is inherent in the business of lending. As a result, the Company maintains an allowance for loan losses to absorb losses inherent in the Company’s originated loan portfolio. This is maintained through periodic charges to earnings. These charges are included in the Consolidated Statements of Income as provision for loan losses. All specifically identifiable and quantifiable losses are immediately charged off against the allowance. However, for a variety of reasons, not all losses are immediately known to the Company and, of those that are known, the full extent of the loss may not be quantifiable at that point in time. The balance of the Company’s allowance for originated loan losses is meant to be an estimate of these unknown but probable losses inherent in the portfolio.The Company formally assesses the adequacy of the allowance for originated loan losses on a quarterly basis. Determination of the adequacy is based on ongoing assessments of the probable risk in the outstanding originated loan portfolio, and to a lesser extent the Company’s originated loan commitments. These assessments include the periodicre-grading of credits based on changes in their individual credit characteristics including delinquency, seasoning, recent financial performance of the borrower, economic factors, changes in the interest rate environment, growth of the portfolio as a whole or by segment, and other factors as warranted. Loans are initially graded when originated. They arere-graded as they are renewed, when there is a new loan to the same borrower, when identified facts demonstrate heightened risk of nonpayment, or if they become delinquent.Re-grading of larger problem loans occurs at least quarterly. Confirmation of the quality of the grading process is obtained by independent credit reviews conducted by consultants specifically hired for this purpose and by various bank regulatory agencies.The Company’s method for assessing the appropriateness of the allowance for originated loan losses includes specific allowances for impaired originated loans and leases, formula allowance factors for pools of credits, and allowances for changing environmental factors (e.g., interest rates, growth, economic conditions, etc.). Allowance factors for loan pools were based on historical loss experience by product type and prior risk rating.Loans purchased or acquired in a business combination are referred to as acquired loans. Acquired loans are valued as of acquisition date in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 805,Business Combinations. Loans acquired with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are referred to as purchased credit impaired (PCI) loans. PCI loans are accounted for under FASB ASC Topic310-30,Loans and Debt Securities Acquired with Deteriorated Credit Quality. Under FASB ASC Topic 805 and FASB ASC Topic310-30, PCI loans are recorded at fair value at acquisition date, factoring in credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for loan losses is not carried over or recorded as of the acquisition date. Fair value is defined as the present value of the future estimated principal and interest payments of the loan, with the discount rate used in the present value calculation representing the estimated effective yield of the loan. Default rates, loss severity, and prepayment speed assumptions are periodically reassessed and our estimate of future payments is adjusted accordingly. The difference between contractual future payments and estimated future payments is referred to as the nonaccretable difference. The difference between estimated future payments and the present value of the estimated future payments is referred to as the accretable yield. The accretable yield represents the amount that is expected to be recorded as interest income over the remaining life of the loan. If after acquisition, the Company determines that the estimated future cash flows of a PCI loan are expected to be more than the originally estimated, an increase in the discount rate (effective yield) would be made such that the newly increased accretable yield would be recognized, on a level yield basis, over the remaining estimated life of the loan. If, after acquisition, the Company determines that the estimated future cash flows of a PCI loan are expected to be less than the previously estimated, the discount rate would first be reduced until the present value of the reduced cash flow estimate equals the previous present value however, the discount rate may not be lowered below its original level at acquisition. If the discount rate has been lowered to its original level and the present value has not been sufficiently lowered, an allowance for loan loss would be established through a provision for loan losses charged to expense to decrease the present value to the required level. If the estimated cash flows improve after an allowance has been established for a loan, the allowance may be partially or fully reversed depending on the improvement in the estimated cash flows. Only after the allowance has been fully reversed may the discount rate be increased. PCI loans are put on nonaccrual status when cash flows cannot be reasonably estimated. PCI loans on nonaccrual status are accounted for using the cost recovery method or cash basis method of income recognition. PCI loans are charged off when evidence suggests cash flows are not recoverable. Foreclosed assets from PCI loans are recorded in foreclosed assets at fair value with the fair value at time of foreclosure representing cash flow from the loan. ASC310-30 allows PCI loans with similar risk characteristics and acquisition time frame to be “pooled” and have their cash flows aggregated as if they were one loan. The Company elected to use the “pooled” method of ASC310-30 for PCI – other loans in the acquisition of certain assets and liabilities of Granite and Citizens.Acquired loans that are not PCI loans are referred to as purchased not credit impaired (PNCI) loans. PNCI loans are accounted for under FASB ASC Topic310-20,Receivables – Nonrefundable Fees and Other Costs,in which interest income is accrued on a level-yield basis for performing loans. For income recognition purposes, this method assumes that all contractual cash flows will be collected, and no allowance for loan losses is established at the time of acquistion. Post-acquisition date, an allowance for loan losses may need to be established for acquired loans through a provision charged to earnings for credit losses incurred subsequent to acquisition. Under ASC310-20, the loss would be measured based on the probable shortfall in relation to the contractual note requirements, consistent with our allowance for loan loss policy for similar loans.When referring to PNCI and PCI loans we use the terms “nonaccretable difference”, “accretable yield”, or “purchase discount”. Nonaccretable difference is the difference between undiscounted contractual cash flows due and undiscounted cash flows we expect to collect, or put another way, it is the undiscounted contractual cash flows we do not expect to collect. Accretable yield is the difference between undiscounted cash flows we expect to collect and the value at which we have recorded the loan on our financial statements. On the date of acquisition, all purchased loans are recorded on our consolidated financial statements at estimated fair value. Purchase discount is the difference between the estimated fair value of loans on the date of acquisition and the principal amount owed by the borrower, net of charge offs, on the date of acquisition. We may also refer to “discounts to principal balance of loans owed, net of charge-offs”. Discounts to principal balance of loans owed, net of charge-offs is the difference between principal balance of loans owed, net of charge-offs, and loans as recorded on our financial statements. Discounts to principal balance of loans owed, net of charge-offs arise from purchase discounts, and equal the purchase discount on the acquisition date.Loans are also categorized as “covered” or “noncovered”. Covered loans refer to loans covered by a FDIC loss sharing agreement. Noncovered loans refer to loans not covered by a FDIC loss sharing agreement.Originated loans and PNCI loans are reviewed on an individual basis for reclassification to nonaccrual status when any one of the following occurs: the loan becomes 90 days past due as to interest or principal, the full and timely collection of additional interest or principal becomes uncertain, the loan is classified as doubtful by internal credit review or bank regulatory agencies, a portion of the principal balance has been charged off, or the Company takes possession of the collateral. Loans that are placed on nonaccrual even though the borrowers continue to repay the loans as scheduled are classified as “performing nonaccrual” and are included in total nonperforming loans. The reclassification of loans as nonaccrual does not necessarily reflect management’s judgment as to whether they are collectible.Interest income on originated nonaccrual loans that would have been recognized during the years ended December 31, 2016, 2015 and 2014, if all such loans had been current in accordance with their original terms, totaled $783,000, $1,840,000, and $2,734,000, respectively. Interest income actually recognized on these originated loans during the years ended December 31, 2016, 2015 and 2014 was $377,000, $170,000, and $81,000, respectively. Interest income on PNCI nonaccrual loans that would have been recognized during the years ended December 31, 2016, 2015 and 2014, if all such loans had been current in accordance with their original terms, totaled $178,000, $386,000, and $254,000. Interest income actually recognized on these PNCI loans during the years ended December 31, 2016, 2015 and 2014 was $11,000, $205,000, and $4,000.The Company’s policy is to place originated loans and PNCI loans 90 days or more past due on nonaccrual status. In some instances when an originated loan is 90 days past due Management does not place it on nonaccrual status because the loan is well secured and in the process of collection. A loan is considered to be in the process of collection if, based on a probable specific event, it is expected that the loan will be repaid or brought current. Generally, this collection period would not exceed 30 days. Loans where the collateral has been repossessed are classified as foreclosed assets. Management considers both the adequacy of the collateral and the other resources of the borrower in determining the steps to be taken to collect nonaccrual loans. Alternatives that are considered are foreclosure, collecting on guarantees, restructuring the loan or collection lawsuits.table setstables set forth the amount of the Bank’s nonperforming assets as of the dates indicated. For purposes of the following table, “PCI – other” loans that are 90 days past due and still accruing are not considered nonperforming loans. “Performing nonaccrualnon-accrual loans” are loans that may be current for both principal and interest payments, or are less than 90 days past due, but for which payment in full of both principal and interest is not expected, and are not well secured and in the process of collection: December 31, (dollars in thousands) 2016 2015 2014 2013 2012 $ 17,677 $ 31,033 $ 45,072 $ 48,112 $ 49,045 2,451 6,086 2,517 5,104 23,471 20,128 37,119 47,589 53,216 72,516 — — — — — 20,128 37,119 47,589 53,216 72,516 3,763 5,369 4,449 5,588 5,957 223 — 445 674 1,541 $ 24,114 $ 42,488 $ 52,483 $ 59,478 $ 80,014 $ 911 $ 28 $ 123 $ 101 $ 131 $ 218 — $ 356 $ 539 $ 1,233 0.53 % 1.01 % 1.88 % 2.30 % 3.07 % 0.73 % 1.47 % 2.08 % 3.18 % 4.63 % 161 % 97 % 77 % 72 % 59 % 2.09 % 2.69 % 3.31 % 4.09 % 5.30 % The following tables set forth the amountDecember 31, (dollars in thousands) 2019 2018 2017 2016 2015 Performing nonaccrual loans $ 11,266 $ 22,689 $ 20,937 $ 17,677 $ 31,033 Nonperforming nonaccrual loans 5,579 4,805 3,176 2,451 6,086 Total nonaccrual loans 16,845 27,494 24,113 20,128 37,119 Originated and PNCI loans 90 days past due and still accruing 19 — 281 — — Total nonperforming loans 16,864 27,494 24,394 20,128 37,119 Foreclosed assets 2,541 2,280 3,226 3,986 5,369 Total nonperforming assets $ 19,405 $ 29,774 $ 27,620 $ 24,114 $ 42,488 U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans $ 992 $ 1,173 $ 358 $ 911 $ 28 Nonperforming assets to total assets 0.30 % 0.47 % 0.58 % 0.53 % 1.01 % Nonperforming loans to total loans 0.39 % 0.68 % 0.81 % 0.73 % 1.47 % Allowance for loan losses to nonperforming loans 182 % 119 % 124 % 161 % 97 % December 31, 2019 (dollars in thousands) Originated PNCI PCI Total Performing nonaccrual loans $ 7,644 $ 1,481 $ 2,141 $ 11,266 Nonperforming nonaccrual loans 3,107 2,431 41 5,579 Total nonaccrual loans 10,751 3,912 2,182 16,845 Originated and PNCI loans 90 days past due and still accruing — 19 — 19 Total nonperforming loans 10,751 3,931 2,182 16,864 Foreclosed assets 1,047 — 1,494 2,541 Total nonperforming assets $ 11,798 $ 3,931 $ 3,676 $ 19,405 U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans $ 780 $ — $ 212 $ 992 Nonperforming assets to total assets 0.18 % 0.06 % 0.06 % 0.30 % Nonperforming loans to total loans 0.25 % 0.09 % 0.05 % 0.39 % Allowance for loan losses to nonperforming loans 280 % 13 % 0.27 % 182 % December 31, 2018 (dollars in thousands) Originated PNCI PCI Total Performing nonaccrual loans $ 16,573 $ 1,269 $ 4,847 $ 22,689 Nonperforming nonaccrual loans 2,843 1,589 373 4,805 Total nonaccrual loans 19,416 2,858 5,220 27,494 Originated loans 90 days past due and still accruing — — — — Total nonperforming loans 19,416 2,858 5,220 27,494 Foreclosed assets 1,490 — 790 2,280 Total nonperforming assets $ 20,906 $ 2,858 $ 6,010 $ 29,774 U.S. government, including its agencies and its government-sponsored agencies, guaranteed portion of nonperforming loans $ 800 $ — $ 373 $ 1,173 Nonperforming assets to total assets 0.34 % 0.04 % 0.09 % 0.47 % Nonperforming loans to total loans 0.65 % 0.28 % 36.70 % 0.68 % Allowance for loan losses to nonperforming loans 164 % 23.30 % 2.34 % 119 % as ofduring the dates indicated. For purposes of the following tables, “PCI – other” loans that are 90 days past due and still accruing are not considered nonperforming loans. “Performing nonaccrual loans” are loans that may be current for both principal and interest payments, or are less than 90 days past due, but for which payment in full of both principal and interest is not expected, and are not well secured and in the process of collection: December 31, 2016 (dollars in thousands) Originated PNCI PCI – cash basis PCI - other Total $ 11,146 $ 2,131 $ 2,983 $ 1,417 $ 17,677 1,748 703 — — 2,451 12,894 2,834 $ 2,983 $ 1,417 20,128 — — — — — 12,894 2,834 $ 2,983 $ 1,417 20,128 2,277 — — 1,486 3,763 — — — 223 223 $ 15,171 $ 2,834 $ 2,983 $ 3,126 $ 24,114 $ 911 — — — $ 911 — — — $ 218 $ 218 0.34 % 0.06 % 0.07 % 0.07 % 0.53 % 0.55 % 0.75 % 100.00 % 6.42 % 0.73 % 218 % 59 % 1 % 189 % 161 % 1.48 % 2.98 % 64.18 % 24.44 % 2.09 % The following tables set forth the amount of the Bank’s nonperforming assets as of the dates indicated. For purposes of the following tables, “PCI – other” loans that are 90 days past due and still accruing are not considered nonperforming loans. “Performing nonaccrual loans” are loans that may be current for both principal and interest payments, or are less than 90 days past due, but for which payment in full of both principal and interest is not expected, and are not well secured and in the process of collection: December 31, 2015 (dollars in thousands) Originated PNCI PCI - cash basis PCI - other Total $ 18,483 $ 3,747 $ 5,055 $ 3,748 $ 31,033 4,341 1,651 24 70 6,086 22,824 5,398 5,079 3,818 37,119 — — — — — 22,824 5,398 5,079 3,818 37,119 4,195 — — 1,174 5,369 — — — — — $ 27,019 $ 5,398 $ 5,079 $ 4,992 $ 42,488 $ 28 — — — $ 28 — — — — — 0.64 % 0.13 % 0.12 % 0.12 % 1.01 % 1.15 % 1.09 % 100.00 % 10.87 % 1.47 % 137 % 34 % 2 % 73 % 97 % 1.90 % 3.11 % 60.92 % 18.49 % 2.69 % 2016: Balance at
December 31, New Advances/
Capitalized Pay-downs
/Sales Charge-offs/ Transfers to
Foreclosed Category Balance at
December 31, (dollars in thousands): 2016 NPA Costs /Upgrades Write-downs Assets Changes 2015 $ 449 $ 795 $ 3 $ (3,512 ) $ (320 ) $ (219 ) — $ 3,702 10,978 8,862 272 (18,041 ) (827 ) (539 ) — 21,251 4,937 2,326 558 (5,048 ) (585 ) (1,177 ) $ (353 ) 9,216 785 863 392 (1,447 ) (220 ) (570 ) $ 353 1,414 — — — — — — — — 38 321 1 (41 ) (298 ) — — 55 2,930 4,120 345 (2,059 ) (455 ) — — 979 11 — — (1 ) — — — 12 — — — (490 ) — — — 490 20,128 17,287 1,571 (30,639 ) (2,705 ) (2,505 ) — 37,119 3,763 — — (3,748 ) (140 ) 2,282 — 5,369 223 — — — — $ 223 — — $ 24,114 $ 17,287 $ 1,571 $ (34,387 ) $ (2,845 ) — — $ 42,488 (in thousands) Balance at
December 31, 2018Additions Advances/
Paydowns, netCharge-offs/
Write-downsTransfers to
Foreclosed
AssetsCategory
ChangesBalance at
December 31, 2019Real estate mortgage: Residential $ 2,854 $ 4,186 $ (1,854) $ (2) $ (116) $ — $ 5,068 Commercial 15,046 1,167 (9,293) (746) (971) — 5,203 Consumer Home equity lines 2,749 1,391 (1,185) — (215) — 2,740 Home equity loans 2,963 445 (1,805) (3) — — 1,600 Other consumer 7 287 (78) (165) — — 51 Commercial 3,875 2,343 (1,924) (2,092) — — 2,202 Construction: Residential — — — — — — — Commercial — — — — — — — Total nonperforming loans 27,494 9,819 (16,139) (3,008) (1,302) — 16,864 Foreclosed assets 2,280 35 (1,090) 14 1,302 — 2,541 Total nonperforming assets $ 29,774 $ 9,854 $ (17,229) $ (2,994) $ — $ — $ 19,405 tables and narratives describetable shows the activity in the balance of nonperforming assets during each offor the three-month periods ending March 31, June 30, September 30, andyear ended December 31, 2016. These tables2018:(in thousands) Balance at
December 31,
2017New
NPAAdvances/
Paydowns, netCharge-offs/
Write-downsTransfers to
Foreclosed
AssetsCategory
ChangesBalance at
December 31,
2018Real estate mortgage: Residential $ 3,739 $ 2,007 $ (1,793) $ (51) $ — $ (1,048) $ 2,854 Commercial 11,820 6,204 (3,455) (15) (580) 1,072 15,046 Consumer 0 0 0 0 0 Home equity lines 3,482 3,048 (3,401) (104) (49) (227) 2,749 Home equity loans 1,636 2,434 (724) (51) (633) 301 2,963 Other consumer 11 114 (31) (87) — — 7 Commercial 3,706 3,209 (1,975) (967) — (98) 3,875 Construction: Residential — — — — — — — Commercial — — — — — — — Total nonperforming loans 24,394 17,016 (11,379) (1,275) (1,262) — 27,494 Foreclosed assets 3,226 — (2,119) (89) 1,262 — 2,280 Total nonperforming assets $ 27,620 $ 17,016 $ (13,498) $ (1,364) $ — $ — $ 29,774 narratives are presented in chronological order:2016
December 31, New Advances/
Capitalized Pay-downs
/Sales Charge-offs/ Transfers to
Foreclosed Category (In thousands): 2016 NPA Costs /Upgrades Write-downs Assets Changes 2016 $ 449 $ 72 — $ (1,097 ) $ (108 ) — — $ 1,582 10,978 1,639 $ 1 (778 ) (34 ) $ (346 ) — 10,496 4,937 867 — (1,681 ) (134 ) — — 5,885 785 127 165 (1,050 ) (101 ) (207 ) — 1,851 38 141 — (5 ) (119 ) — — 21 2,930 1,719 345 (206 ) (34 ) — — 1,106 11 — — — — — — 11 — — — — — — — — 20,128 4,565 511 (4,817 ) (530 ) (553 ) — 20,952 3,986 — — (591 ) (100 ) $ 553 — 4,124 $ 24,114 $ 4,565 $ 511 $ (5,408 ) $ (630 ) — — $ 25,076 (in thousands) Balance at
September 30, 2019Additions Advances/
Paydowns, netCharge-offs/
Write-downsTransfers to
Foreclosed
AssetsCategory
ChangesBalance at
December 31,
2019Real estate mortgage: Residential $ 4,370 $ 773 $ (75) $ — $ — $ — $ 5,068 Commercial 6,040 315 (181) — (971) — 5,203 Consumer Home equity lines 2,600 484 (344) — — — 2,740 Home equity loans 2,063 10 (473) — — — 1,600 Other consumer 64 83 (27) (69) — — 51 Commercial 3,428 615 (960) (881) — — 2,202 Construction: Residential — — — — — — — Commercial — — — — — — — Total nonperforming loans 18,565 2,280 (2,060) (950) (971) — 16,864 Foreclosed assets 1,546 — (81) 105 971 — 2,541 Total nonperforming assets $ 20,111 $ 2,280 $ (2,141) $ (845) $ — $ — $ 19,405 20162019 by $962,000 (3.8%$706,000 (3.5%) to $24,114,000$19,405,000 at December 31, 20162019 compared to $25,076,000$20,111,000 at September 30, 2016.2019. The decrease in nonperforming assets during the fourth quarter of 20162019 was primarily the result of new nonperforming loans of $4,565,000, advances on existing nonperforming loans and capitalized costs on foreclosed assets of $511,000, lesspay-downs,$2,280,000, that were fully offset by net paydowns, sales or upgrades of nonperforming loans to performing status totaling $4,817,000, less$2,060,000, dispositions of foreclosed assets totaling $591,000, less loan$81,000, and net charge-offs of $530,000, and less write-downs845,000 in non-performing assets.$4,565,000$2,280,000 in new nonperforming loans during the fourth quarter of 20162019 was comprised of increases of $72,000$773,000 on four residential real estate loans, $315,000 on two commercial real estate loans, $484,000 on seven home equity lines and loans, and $615,000 on nine C&I loans.(in thousands) Balance at
September 30, 2018New
NPAAdvances/
Paydowns, netCharge-offs/
Write-downsTransfers to
Foreclosed
AssetsCategory
ChangesBalance at
December 31,
2018Real estate mortgage: Residential $ 3,038 $ 1,104 $ (1,288) $ — $ — $ — $ 2,854 Commercial 15,129 1,947 (1,450) — (580) — 15,046 Consumer Home equity lines 2,133 895 (230) — (49) — 2,749 Home equity loans 3,089 461 (489) (1) (97) — 2,963 Other consumer 8 — (1) — — — 7 Commercial 3,751 1,338 (990) (224) — — 3,875 Construction: Residential — — — — — — — Commercial — — — — — — — Total nonperforming loans 27,148 5,745 (4,448) (225) (726) — 27,494 Foreclosed assets 1,832 — (278) — 726 — 2,280 Total nonperforming assets $ 28,980 $ 5,745 $ (4,726) $ (225) $ — $ — $ 29,774 $1,639,000$1,947,000 on fourseven commercial real estate loans, $994,000$1,356,000 on 1514 home equity lines and loans, $141,000and $1,338,000 on 15 other consumer loans, and $1,719,000 on 2118 C&I loans.$1,639,000$1,104,000 in new nonperforming commercialresidential real estate loans was primarily made up of one loan in the amount of $346,000$624,000 secured by a single family property in northern California. The $1,947,000 in new nonperforming CRE loans was primarily comprised of three loans in the amount of $1,084,000 secured by agricultural real estate in northern California, one loan in the amount of $454,000 secured by a commercial office propertybuilding in northern California, and twothree smaller loans totaling $1,259,000 secured by agricultural production land$410,000. The $1,338,000 in northern California. Related charge-offs are discussed below.The $1,719,000 in new nonperforming C&I loans was primarily comprised of threetwo loans totaling $1,191,000 secured by rice crop proceeds in northern California. Related charge-offs are discussed below.The $4,817,000 inpay-downs, sales or upgrades of loans in the fourth quarter of 2016 was comprised of decreases of $1,097,000 on 15 residential real estate loans, $778,000 on 17 commercial real estate loans, $2,731,000 on 124 home equity lines and loans, $5,000 on four consumer loans, and 206,000 on five C&I loans.Loan charge-offs during the three months ended December 31, 2016In the fourth quarter of 2016, the Company recorded $530,000 in loan charge-offs and $104,000 in deposit overdraft charge-offs less $1,021,000 in loan recoveries and $67,000 in deposit overdraft recoveries resulting in $452,000 of net recoveries. Primary causes of the loan charges taken in the fourth quarter of 2016 were gross charge-offs of $108,000 on six residential real estate loans, $34,000 on one commercial real estate loan, $235,000 on 20 home equity lines and loans, $119,000 on 12 other consumer loans, and $34,000 on six C&I loans. During the fourth quarter of 2016, there were no individual charges greater than $250,000.Changes in nonperforming assets during the three months ended September 30, 2016 New Advances/
Capitalized Transfers to
Foreclosed Category (In thousands): 2016 NPA Costs /Upgrades Write-downs Assets Changes 2016 $ 1,582 $ 37 $ 1 $ (1,350 ) $ (51 ) $ (219 ) — $ 3,164 10,496 5,456 232 (2,136 ) — (193 ) — 7,137 5,885 806 185 (1,907 ) (122 ) (455 ) $ (258 ) 7,636 1,851 247 164 (126 ) (26 ) (234 ) $ 258 1,568 21 43 — (4 ) (35 ) — — 17 1,106 996 — (27 ) (307 ) — — 444 11 — — — — — — 11 — — — — — — — — 20,952 7,585 582 (5,550 ) (541 ) (1,101 ) — 19,977 4,124 — — (810 ) (9 ) $ 1,101 — 3,842 $ 25,076 $ 7,585 $ 582 $ 6,360 $ (550 ) — — $ 23,819 Nonperforming assets increased during the third quarter of 2016 by $1,257,000 (5.3%) to $25,076,000 at September 30, 2016 compared to $23,819,000 at June 30, 2016. The increase in nonperforming assets during the third quarter of 2016 was primarily the result of new nonperforming loans of $7,585,000, advances on existing nonperforming loans and capitalized costs on foreclosed assets of $582,000, lesspay-downs, sales or upgrades of nonperforming loans to performing status totaling $5,550,000, less dispositions of foreclosed assets totaling $810,000, less loan charge-offs of $541,000, and less write-downs of foreclosed assets of $9,000.The $7,585,000 in new nonperforming loans during the third quarter of 2016 was comprised of increases of $37,000 on one residential real estate loan, $5,456,000 on two commercial real estate loans, $1,053,000 on 15 home equity lines and loans, $43,000 on 10 other consumer loans, and $996,000 on 12 C&I loans.The $5,456,000 in new nonperforming commercial real estate loans was primarily made up of one loan in the amount of $5,209,000 secured by a commercial warehouse property in central California. Related charge-offs are discussed below.The $996,000 in new C&I loans was primarily comprised of one loan in the amount of $347,000 secured by crop proceeds in northern California. Related charge-offs are discussed below.The $5,550,000 inpay-downs, sales or upgrades of loans in the third quarter of 2016 was comprised of decreases of $1,350,000 on 22 residential real estate loans, $2,136,000 on 17 commercial real estate loans, $2,033,000 on 124 home equity lines and loans, $4,000 on four consumer loans, and 27,000 on six C&I loans.The $2,136,000 reduction in nonperforming commercial real estate loans was primarily made up of one payoff in the amount of $744,000 on one loan secured by a commercial multifamily residential property in central California, a payoff on two loans secured by agricultural production land in central California totaling $816,000, and a payoff on one loan secured by a commercial retail property in northern California in the amount of $375,000.Loan charge-offs during the three months ended September 30, 2016In the third quarter of 2016, the Company recorded $541,000 in loan charge-offs and $123,000 in deposit overdraft charge-offs less $2,541,000 in loan recoveries and $71,000 in deposit overdraft recoveries resulting in $1,948,000 of net recoveries. Primary causes of the loan charges taken in the third quarter of 2016 were gross charge-offs of $51,000 on three residential real estate loans, $148,000 on nine home equity lines and loans, $35,000 on nine other consumer loans, and $307,000 on eight C&I loans. During the third quarter of 2016, there were no individual charges greater than $250,000.Changes in nonperforming assets during the three months ended June 30, 2016 Balance at
June 30, New Advances/
Capitalized Pay-downs
/Sales Charge-offs/ Transfers to
Foreclosed Category (In thousands): 2016 NPA Costs /Upgrades Write-downs Assets Changes 2016 $ 3,164 $ 306 $ 1 $ (925 ) $ (124 ) — — $ 3,906 7,137 729 — (1,153 ) — — — 7,561 7,636 193 120 (1,036 ) (115 ) $ (307 ) $ (21 ) 8,802 1,568 429 63 (228 ) (93 ) (130 ) $ 21 1,506 17 58 — (26 ) (58 ) — — 43 444 95 — (1,779 ) (76 ) — — 2,204 11 — — (1 ) — — — 12 — — — — — — — — 19,977 1,810 184 (5,148 ) (466 ) (437 ) — 24,034 3,842 — — (1,023 ) (43 ) $ 437 — 4,471 $ 23,819 $ 1,810 $ 184 $ (6,171 ) $ (509 ) — — $ 28,505 Nonperforming assets decreased during the second quarter of 2016 by $4,686,000 (16.4%) to $23,819,000 at June 30, 2016 compared to $28,505,000 at March 31, 2016. The decrease in nonperforming assets during the second quarter of 2016 was primarily the result of new nonperforming loans of $1,810,000, advances on existing nonperforming loans and capitalized costs on foreclosed assets of $184,000, lesspay-downs, sales or upgrades of nonperforming loans to performing status totaling $5,148,000, less dispositions of foreclosed assets totaling $1,023,000, less loan charge-offs of $466,000, and less write-downs of foreclosed assets of $43,000.The $1,810,000 in new nonperforming loans during the second quarter of 2016 was comprised of increases of $306,000 on two residential real estate loans, $729,000 on three commercial real estate loans, 622,000 on 10 home equity lines and loans, 58,000 on 12 other consumer loans, and $95,000 on three C&I loans.The $306,000 in new nonperforming residential real estate loans was primarily comprised of one loan in the amount of $258,000 secured by a single family residence in northern California. Related charge-offs are discussed below.The $729,000 in new nonperforming commercial real estate loans was primarily made up of one loan in the amount of $286,000 secured by a commercial restaurant property in central California. Related charge-offs are discussed below.The $5,148,000 inpay-downs, sales or upgrades of loans in the second quarter of 2016 was comprised of decreases of $925,000 on 35 residential real estate loans, $1,153,000 on 18 commercial real estate loans, $1,264,000 on 128 home equity lines and loans, $26,000 on eight consumer loans, $1,779,000 on seven C&I loans, and $1,000 on a single residential construction loan.The $1,153,000 reduction in nonperforming commercial real estate loans was primarily made up of one payoff in the amount of $491,000 on one loan secured by a commercial manufacturing property in northern California, and a payoff on one loan secured by a commercial retail property in northern California in the amount of $478,000.The $1,779,000 in reduction in nonperforming C&I loans was primarily made up of the payoff of one loan in northernCalifornia in the amount of $1,273,000 secured by crop proceeds and apay-down in the amount of $498,000 on a single loan in northern California secured by general business assets.Loan charge-offs during the three months ended June 30, 2016In the second quarter of 2016, the Company recorded $466,000 in loan charge-offs and $176,000 in deposit overdraft charge-offs less $456,000 in loan recoveries and $80,000 in deposit overdraft recoveries resulting in $106,000 of net charge-offs. Primary causes of the loan charges taken in the second quarter of 2016 were gross charge-offs of $124,000 on one residential real estate loan, $208,000 on seven home equity lines and loans, $58,000 on 12 other consumer loans, and $95,000 on two C&I loans. During the second quarter of 2016, there were no individual charges greater than $250,000.Changes in nonperforming assets during the three months ended March 31, 2016 Balance at
March 31, New Advances/
Capitalized Pay-downs
/Sales Charge-offs/ Transfers to
Foreclosed Category (In thousands): 2016 NPA Costs /Upgrades Write-downs Assets Changes 2015 $ 3,906 $ 380 $ 1 $ (140 ) $ (37 ) — — $ 3,702 7,561 1,038 39 (13,974 ) (793 ) — — 21,251 8,802 460 253 (423 ) (214 ) $ (416 ) $ (74 ) 9,216 1,506 60 — (42 ) — — $ 74 1,414 43 79 1 (6 ) (86 ) — — 55 2,204 1,310 — (47 ) (38 ) — — 979 12 — — — — — — 12 — — — (490 ) — — — 490 24,034 3,327 294 (15,122 ) (1,168 ) (416 ) — 37,119 4,471 — — (1,325 ) 11 $ 416 — 5,369 $ 28,505 $ 3,327 $ 294 $ (16,447 ) $ (1,157 ) — — $ 42,488 Nonperforming assets decreased during the first quarter of 2016 by $13,983,000 (32.9%) to $28,505,000 at March 31, 2016 compared to $42,488,000 at December 31, 2015. The decrease in nonperforming assets during the first quarter of 2016 was primarily the result of sales or upgrades of nonperforming loans to performing status totaling $15,122,000, dispositions of foreclosed assets totaling $1,325,000, and loan charge-offs of $1,168,000, that were partially offset by new nonperforming loans of $3,327,000, advances on existing nonperforming loans and capitalized costs on foreclosed assets of $294,000, and an increase in foreclosed asset valuation of $11,000, the net result of $60,000 of write-downs and $71,000 of positive adjustments to foreclosed asset valuations.On March 31, 2016, the Company sold 27 nonperforming loans with total recorded value of $13,058,000 for net proceeds of $14,973,000, resulting in the recovery of $575,000 of previously charged off principal balances, the recognition of $1,237,000 of interest income from interest payments previously applied to principal balances on nonaccrual loans, and a gain on sale of $103,000. The $13,058,000 recorded value of these nonperforming loans was the result of contractual principal balances outstanding of $17,169,000, less $1,578,000 of principal balances previously charged off, less $2,684,000 of interest payments previously applied to principal balances on nonaccrual loans, and the addition of $151,000 of unamortized loan purchase premiums net of unearned deferred loan fees.Of the 27 nonperforming loans sold during the quarter, one was a commercial real estate loan with a recorded value of $94,000 secured by unimproved real estate in northern California, one was a commercial real estate loan with a recorded value of $630,000 secured by multifamily real estate in northern California, one was a commercial real estate loan with a recorded value of $78,000 secured by a commercial office building in central California, six were commercial real estate loans with a total recorded value of $5,897,000 secured by commercial retail buildings in northern California, seven were commercial real estate loans with a total recorded value of $4,393,000 secured by commercial warehouse buildings in central California, three were commercial real estate loans with a total recorded value of $478,000 secured by commercial manufacturing buildings in central California, one was a commercial real estate loan with a recorded value of $162,000 secured by a commercial manufacturing building in northern California, one was a commercial real estate loan with a recorded value of $516,000 secured by a fitness center in northern California, two were commercial real estate loans with a total recorded value of $659,000 secured by hospitality real estate in northern California, two were commercial real estate loans with a total recorded value of $144,000 secured bymulti-use properties in northern California, one was a home equity line of credit with a recorded value of $1,000 secured by a single family residence in central California, and one was a commercial and industrial loan with a recorded value of $6,000 secured by miscellaneous non real estate business assets in central California.The $3,327,000 in new nonperforming loans during the first quarter of 2016 was comprised of increases of $380,000 on three residential real estate loans, $1,038,000 on seven commercial real estate loans, $520,000 on seven home equity lines and loans, $79,000 on 10 consumer loans, and $1,310,000 on four C&I loans.The $380,000 in new nonperforming residential real estate loans was primarily comprised of a single loan in the amount of $343,000 secured by a single family residence in northern California.The $1,038,000 in new nonperforming commercial real estate loans was primarily made up of one loan in the amount of $491,000 secured by a commercial manufacturing property in northern California.The $1,310,000 in new nonperforming commercial and industrial loan was primarily comprised of a single loan in the amount of $1,273,000 secured by variousnon-real estate business assets in northern California. Related charge-offs are discussed below.Loan charge-offs during the three months ended March 31, 2016In the first quarter of 2016, the Company recorded $1,168,000 in loan charge-offs and $120,000 in deposit overdraft charge-offs less $1,364,000 in loan recoveries and $92,000 in deposit overdraft recoveries resulting in $168,000 of net recoveries. Primary causes of the loan charges taken in the first quarter of 2016 were gross charge-offs of $37,000 on two residential real estate loans, $793,000 on 14 commercial real estate loans, $214,000 on four home equity lines and loans, $86,000 on 12 other consumer loans, and $38,000 on five C&I loans.The $793,000 in charge-offs the bank incurred in its commercial real estate portfolio was primarily the result of $495,000 in charge-offs incurred on$740,000 within a single relationship secured by commercial officegeneral business assets in northern California, and three loans within a single family real estate propertiesrelationship in centralthe amount of $209,000 also secured by general business assets in northern California. The remaining $298,000 was spread over 10 loans spread throughout the Company’s footprint.Differences between the amounts explained in this section and the total charge-offs listed for a particular category are generally made up of individual charges of less than $250,000 each. Generally losses are triggered bynon-performance by the borrower and calculated based on any difference between the current loan amount and the current value of the underlying collateral less any estimated costs associated with the disposition of the collateral.The Company’s allowance for loan losses is comprised of allowances for originated, PNCI and PCI loans. All such allowances are established through a provision for loan losses charged to expense.Originated and PNCI loans, and deposit related overdrafts are charged against the allowance for originated loan losses when Management believes that the collectability of the principal is unlikely or, with respect to consumer installment loans, according to an established delinquency schedule. The allowances for originated and PNCI loan losses are amounts that Management believes will be adequate to absorb probable losses inherent in existing originated loans, based on evaluations of the collectability, impairment and prior loss experience of those loans and leases. The evaluations take into consideration such factors as changes in the nature and size of the portfolio, overall portfolio quality, loan concentrations, specific problem loans, and current economic conditions that may affect the borrower’s ability to pay. The Company defines an originated or PNCI loan as impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired originated and PNCI loans are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate. As a practical expedient, impairment may be measured based on the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. When the measure of the impaired loan is less than the recorded investment in the loan, the impairment is recorded through a valuation allowance.In situations related to originated and PNCI loans where, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession for other than an insignificant period of time to the borrower that the Company would not otherwise consider, the related loan is classified as a troubled debt restructuring (TDR). The Company strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where the Company grants the borrower new terms that provide for a reduction of either interest or principal, the Company measures any impairment on the restructuring as noted above for impaired loans. TDR loans are classified as impaired until they are fully paid off or charged off. Loans that are in nonaccrual status at the time they become TDR loans, remain in nonaccrual status until the borrower demonstrates a sustained period of performance which the Company generally believes to be six consecutive months of payments, or equivalent. Otherwise, TDR loans are subject to the same nonaccrual andcharge-off policies as noted above with respect to their restructured principal balance.Credit risk is inherent in the business of lending. As a result, the Company maintains an allowance for loan losses to absorb losses inherent in the Company’s originated and PNCI loan portfolios. These are maintained through periodic charges to earnings. These charges are included in the Consolidated Income Statements as provision for loan losses. All specifically identifiable and quantifiable losses are immediately charged off against the allowance. However, for a variety of reasons, not all losses are immediately known to the Company and, of those that are known, the full extent of the loss may not be quantifiable at that point in time. The balance of the Company’s allowances for originated and PNCI loan losses are meant to be an estimate of these unknown but probable losses inherent in these portfolios.The Company formally assesses the adequacy of the allowance for originated and PNCI loan losses on a quarterly basis. Determination of the adequacy is based on ongoing assessments of the probable risk in the outstanding originated and PNCI loan portfolios, and to a lesser extent the Company’s originated and PNCI loan commitments. These assessments include the periodicre-grading of credits based on changes in their individual credit characteristics including delinquency, seasoning, recent financial performance of the borrower, economic factors, changes in the interest rate environment, growth of the portfolio as a whole or by segment, and other factors as warranted. Loans are initially graded when originated or acquired. They arere-graded as they are renewed, when there is a new loan to the same borrower, when identified facts demonstrateheightened risk of nonpayment, or if they become delinquent.Re-grading of larger problem loans occurs at least quarterly. Confirmation of the quality of the grading process is obtained by independent credit reviews conducted by consultants specifically hired for this purpose and by various bank regulatory agencies. and leases, formula allowance factors for pools of credits, and allowances for changing environmental factors (e.g., interest rates, growth, economic conditions, etc.). Allowance factors for loan pools arewere based on historical loss experience by product type and prior risk rating. Allowances for impaired loans are based on analysis of individual credits. Allowances for changing environmental factors are Management’s best estimate of the probable impact these changes have had on the originated or PNCI loan portfolio as a whole. The allowances for originated and PNCI loans are included in the allowance for loan losses.As noted above, the allowances for originated and PNCI loan losses consists of a specific allowance, a formula allowance, and an allowance for environmental factors. housing sales, auto sales, agricultural prices, home affordability, and other economic factors which serve as indicators of economic health and trends and which may have an impact on the performance of our borrowers, and
Acquired loans are valued as
December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Allowance for originated and PNCI loan losses: | ||||||||||||||||||||
Specific allowance | $ | 2,046 | $ | 2,890 | $ | 4,267 | $ | 3,975 | $ | 4,505 | ||||||||||
Formula allowance | 17,485 | 20,603 | 22,076 | 24,611 | 29,314 | |||||||||||||||
Environmental factors allowance | 10,275 | 9,625 | 6,815 | 5,619 | 3,919 | |||||||||||||||
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Allowance for originated and PNCI loan losses | 29,806 | 33,118 | 33,158 | 34,205 | 37,738 | |||||||||||||||
Allowance for PCI loan losses | 2,697 | 2,893 | 3,427 | 4,040 | 4,910 | |||||||||||||||
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Allowance for loan losses | $ | 32,503 | $ | 36,011 | $ | 36,585 | $ | 38,245 | $ | 42,648 | ||||||||||
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Allowance for loan losses to loans | 1.18 | % | 1.43 | % | 1.60 | % | 2.29 | % | 2.73 | % |
December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for non-impaired originated and PNCI loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental factors allowance | $ | 12,146 | $ | 11,577 | $ | 10,252 | $ | 10,275 | $ | 9,625 | |||||||||||||||||||||||||||||||||||||||||||
Formula allowance | 17,529 | 18,689 | 17,100 | 17,485 | 20,603 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total allowance for non-impaired originated and PNCI loan losses | 29,675 | 30,266 | 27,352 | 27,760 | 30,228 | ||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for impaired loans | 935 | 2,194 | 2,699 | 2,046 | 2,890 | ||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for PCI loan losses | 6 | 122 | 272 | 2,697 | 2,893 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 30,616 | $ | 32,582 | $ | 30,323 | $ | 32,503 | $ | 36,011 | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses to loans | 0.71 | % | 0.81 | % | 1.01 | % | 1.18 | % | 1.43 | % |
December 31, | ||||||||||||||||||||
(dollars in thousands) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Real estate mortgage | $ | 14,292 | $ | 13,950 | $ | 12,313 | $ | 12,854 | $ | 12,305 | ||||||||||
Consumer | 10,284 | 15,079 | 18,201 | 18,238 | 23,461 | |||||||||||||||
Commercial | 5,831 | 5,271 | 4,226 | 4,331 | 4,703 | |||||||||||||||
Real estate construction | 2,096 | 1,711 | 1,845 | 2,822 | 2,179 | |||||||||||||||
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Total allowance for loan losses | $ | 32,503 | $ | 36,011 | $ | 36,585 | $ | 38,245 | $ | 42,648 | ||||||||||
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December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage | $ | 14,301 | $ | 15,620 | $ | 13,758 | $ | 14,265 | $ | 13,911 | |||||||||||||||||||||||||||||||||||||||||||
Consumer | 7,778 | 8,375 | 8,227 | 10,310 | 15,118 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 5,149 | 6,090 | 6,512 | 5,831 | 5,271 | ||||||||||||||||||||||||||||||||||||||||||||||||
Real estate construction | 3,388 | 2,497 | 1,826 | 2,097 | 1,711 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 30,616 | $ | 32,582 | $ | 30,323 | $ | 32,503 | $ | 36,011 |
December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Real estate mortgage | 44.0 | % | 38.7 | % | 33.7 | % | 33.6 | % | 28.9 | % | ||||||||||
Consumer | 31.6 | % | 41.9 | % | 49.7 | % | 47.7 | % | 55.0 | % | ||||||||||
Commercial | 17.9 | % | 14.6 | % | 11.6 | % | 11.3 | % | 11.0 | % | ||||||||||
Real estate construction | 6.5 | % | 4.8 | % | 5.0 | % | 7.4 | % | 5.1 | % | ||||||||||
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Total allowance for loan losses | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
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December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage | 46.8 | % | 47.9 | % | 45.4 | % | 44.0 | % | 38.7 | % | |||||||||||||||||||||||||||||||||||||||||||
Consumer | 25.4 | % | 25.7 | % | 27.1 | % | 31.6 | % | 41.9 | % | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 16.8 | % | 18.7 | % | 21.5 | % | 17.9 | % | 14.6 | % | |||||||||||||||||||||||||||||||||||||||||||
Real estate construction | 11.0 | % | 7.7 | % | 6.0 | % | 6.5 | % | 4.8 | % | |||||||||||||||||||||||||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Real estate mortgage | 0.69 | % | 0.77 | % | 0.76 | % | 1.16 | % | 1.22 | % | ||||||||||
Consumer | 2.84 | % | 3.81 | % | 4.36 | % | 4.76 | % | 6.08 | % | ||||||||||
Commercial | 2.69 | % | 2.70 | % | 2.42 | % | 3.28 | % | 3.47 | % | ||||||||||
Real estate construction | 1.71 | % | 1.42 | % | 2.46 | % | 5.75 | % | 6.59 | % | ||||||||||
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| |||||||||||
Total allowance for loan losses | 1.18 | % | 1.43 | % | 1.60 | % | 2.29 | % | 2.73 | % | ||||||||||
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December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage | 0.43 | % | 0.50 | % | 0.60 | % | 0.69 | % | 0.77 | % | |||||||||||||||||||||||||||||||||||||||||||
Consumer | 1.75 | % | 2.00 | % | 2.31 | % | 2.84 | % | 3.81 | % | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 1.81 | % | 2.20 | % | 2.95 | % | 2.69 | % | 2.70 | % | |||||||||||||||||||||||||||||||||||||||||||
Real estate construction | 1.36 | % | 1.36 | % | 1.33 | % | 1.71 | % | 1.42 | % | |||||||||||||||||||||||||||||||||||||||||||
Total | 0.71 | % | 0.81 | % | 1.01 | % | 1.18 | % | 1.43 | % |
Year ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Balance at beginning of period | $ | 36,011 | $ | 36,585 | $ | 38,245 | $ | 42,648 | $ | 45,914 | ||||||||||
(Benefit from) provision for loan losses | (5,970 | ) | (2,210 | ) | (4,045 | ) | (715 | ) | 9,423 | |||||||||||
Loans charged off: | ||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | (321 | ) | (224 | ) | (171 | ) | (46 | ) | (1,558 | ) | ||||||||||
Commercial | (827 | ) | — | (110 | ) | (2,038 | ) | (3,457 | ) | |||||||||||
Consumer: | ||||||||||||||||||||
Home equity lines | (585 | ) | (694 | ) | (1,094 | ) | (2,651 | ) | (8,042 | ) | ||||||||||
Home equity loans | (219 | ) | (242 | ) | (29 | ) | (94 | ) | (385 | ) | ||||||||||
Auto indirect | — | (4 | ) | (3 | ) | (68 | ) | (83 | ) | |||||||||||
Other consumer | (823 | ) | (972 | ) | (599 | ) | (887 | ) | (1,202 | ) | ||||||||||
Commercial | (455 | ) | (680 | ) | (479 | ) | (1,599 | ) | (1,251 | ) | ||||||||||
Construction: | ||||||||||||||||||||
Residential | — | — | (4 | ) | (20 | ) | (406 | ) | ||||||||||||
Commercial | — | — | (69 | ) | (140 | ) | (100 | ) | ||||||||||||
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| |||||||||||
Total loans charged off | (3,230 | ) | (2,816 | ) | (2,558 | ) | (7,543 | ) | (16,484 | ) | ||||||||||
Recoveries of previouslycharged-off loans: | ||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Residential | 880 | 204 | 2 | 345 | 147 | |||||||||||||||
Commercial | 920 | 243 | 540 | 994 | 1,020 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Home equity lines | 2,317 | 666 | 960 | 1,053 | 398 | |||||||||||||||
Home equity loans | 590 | 252 | 34 | 41 | 100 | |||||||||||||||
Auto indirect | — | 42 | 86 | 195 | 215 | |||||||||||||||
Other consumer | 449 | 500 | 495 | 759 | 860 | |||||||||||||||
Commercial | 404 | 677 | 1,268 | 340 | 643 | |||||||||||||||
Construction: | ||||||||||||||||||||
Residential | 54 | 1,728 | 1,377 | 63 | 412 | |||||||||||||||
Commercial | 78 | 140 | 181 | 65 | — | |||||||||||||||
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| |||||||||||
Total recoveries of previously charged off loans | 5,692 | 4,452 | 4,943 | 3,855 | 3,795 | |||||||||||||||
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| |||||||||||
Net charge-offs | 2,462 | 1,636 | 2,385 | (3,688 | ) | (12,689 | ) | |||||||||||||
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Balance at end of period | $ | 32,503 | $ | 36,011 | $ | 36,585 | $ | 38,245 | $ | 42,648 | ||||||||||
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Year ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Reserve for unfunded commitments: | ||||||||||||||||||||
Balance at beginning of period | $ | 2,475 | $ | 2,145 | $ | 2,415 | $ | 3,615 | $ | 2,740 | ||||||||||
Provision for losses – unfunded commitments | 244 | 330 | (270 | ) | (1,200 | ) | 875 | |||||||||||||
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| |||||||||||
Balance at end of period | $ | 2,719 | $ | 2,475 | $ | 2,145 | $ | 2,415 | $ | 3,615 | ||||||||||
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Balance at end of period: | ||||||||||||||||||||
Allowance for loan losses | $ | 32,503 | $ | 36,011 | $ | 36,585 | $ | 38,245 | $ | 42,648 | ||||||||||
Reserve for unfunded commitments | 2,719 | 2,475 | 2,145 | 2,415 | 3,615 | |||||||||||||||
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| |||||||||||
Allowance for loan losses and reserve for unfunded commitments | $ | 35,222 | $ | 38,486 | $ | 38,730 | $ | 40,660 | $ | 46,263 | ||||||||||
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As a percentage of total loans at end of period: | ||||||||||||||||||||
Allowance for loan losses | 1.18 | % | 1.43 | % | 1.60 | % | 2.29 | % | 2.73 | % | ||||||||||
Reserve for unfunded commitments | 0.10 | % | 0.10 | % | 0.10 | % | 0.14 | % | 0.23 | % | ||||||||||
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| |||||||||||
Allowance for loan losses and reserve for unfunded commitments | 1.28 | % | 1.53 | % | 1.70 | % | 2.43 | % | 2.96 | % | ||||||||||
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| |||||||||||
Average total loans | $ | 2,629,729 | $ | 2,389,437 | $ | 1,847,749 | $ | 1,610,725 | $ | 1,552,540 | ||||||||||
Ratios: | ||||||||||||||||||||
Net charge-offs during period to average loans outstanding during period | (0.09 | )% | (0.07 | )% | (0.13 | )% | 0.23 | % | 0.82 | % | ||||||||||
Provision for loan losses to average loans outstanding | (0.21 | )% | (0.09 | )% | (0.22 | )% | (0.04 | )% | 0.61 | % | ||||||||||
Allowance for loan losses to loans at year end | 1.18 | % | 1.43 | % | 1.60 | % | 2.29 | % | 2.73 | % |
Year ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 32,582 | $ | 30,323 | $ | 32,503 | $ | 36,011 | $ | 36,585 | |||||||||||||||||||||||||||||||||||||||||||
Provision for (benefit from) loan losses | (1,690) | 2,583 | 89 | (5,970) | (2,210) | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans charged off: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | (2) | (77) | (60) | (321) | (224) | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | (746) | (15) | (186) | (827) | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines | — | (277) | (98) | (585) | (694) | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | (3) | (24) | (332) | (219) | (242) | ||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | (765) | (783) | (1,186) | (823) | (976) | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | (2,123) | (1,188) | (1,444) | (455) | (680) | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | (1,104) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loans charged off | (3,639) | (2,364) | (4,410) | (3,230) | (2,816) | ||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries of previously charged-off loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate mortgage: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 55 | — | — | 880 | 204 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 1,528 | 68 | 397 | 920 | 243 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines | 504 | 846 | 698 | 2,317 | 666 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 430 | 297 | 242 | 590 | 252 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | 321 | 288 | 375 | 449 | 542 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 525 | 541 | 428 | 404 | 677 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | 54 | 1,728 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | 1 | 78 | 140 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total recoveries of previously charged off loans | 3,363 | 2,040 | 2,141 | 5,692 | 4,452 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (276) | (324) | (2,269) | 2,462 | 1,636 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 30,616 | $ | 32,582 | $ | 30,323 | $ | 32,503 | $ | 36,011 | |||||||||||||||||||||||||||||||||||||||||||
Average total loans | $ | 4,111,093 | $ | 3,548,489 | $ | 2,842,659 | $ | 2,629,729 | $ | 2,389,437 | |||||||||||||||||||||||||||||||||||||||||||
Ratios: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net charge-offs (recoveries) during period to average loans outstanding during period | 0.01 | % | 0.01 | % | 0.08 | % | (0.09) | % | (0.07) | % | |||||||||||||||||||||||||||||||||||||||||||
Provision for (benefit from) loan losses to average loans outstanding during period | (0.04) | % | 0.07 | % | — | % | (0.23) | % | (0.09) | % | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses to loans at year-end | 0.71 | % | 0.81 | % | 1.01 | % | 1.18 | % | 1.43 | % |
(dollars in thousands): | Balance at December 31, 2016 | New NPA | Advances/ Capitalized Costs | Sales | Valuation Adjustments | Transfers from Loans | Category Changes | Balance at December 31, 2015 | ||||||||||||||||||||||||
Noncovered: | ||||||||||||||||||||||||||||||||
Land & Construction | $ | 1,512 | — | — | $ | (979 | ) | — | — | — | $ | 2,491 | ||||||||||||||||||||
Residential real estate | 1,441 | — | — | (2,380 | ) | $ | (56 | ) | $ | 2,090 | — | 1,787 | ||||||||||||||||||||
Commercial real estate | 810 | — | — | (389 | ) | (84 | ) | 192 | — | 1,091 | ||||||||||||||||||||||
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|
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|
|
|
|
|
| |||||||||||||||||
Total noncovered | 3,763 | — | — | (3,748 | ) | (140 | ) | 2,282 | — | 5,369 | ||||||||||||||||||||||
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| |||||||||||||||||
Covered: | ||||||||||||||||||||||||||||||||
Land & Construction | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Residential real estate | 223 | — | — | — | — | 223 | — | — | ||||||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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| |||||||||||||||||
Total covered | 223 | — | — | — | — | 223 | — | — | ||||||||||||||||||||||||
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|
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|
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|
|
|
|
|
|
| |||||||||||||||||
Total foreclosed assets | $ | 3,986 | — | — | $ | (3,748 | ) | $ | (140 | ) | $ | 2,505 | — | $ | 5,369 | |||||||||||||||||
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|
|
|
|
|
| |||||||||||||||||
(dollars in thousands): | Balance at December 31, 2015 | New NPA | Advances/ Capitalized Costs | Sales | Valuation Adjustments | Transfers from Loans | Category Changes | Balance at December 31, 2014 | ||||||||||||||||||||||||
Noncovered: | ||||||||||||||||||||||||||||||||
Land & Construction | $ | 2,491 | — | — | $ | (61 | ) | $ | (20 | ) | $ | 153 | $ | 445 | $ | 1,974 | ||||||||||||||||
Residential real estate | 1,787 | — | $ | 195 | (3,374 | ) | (276 | ) | 3,620 | — | 1,622 | |||||||||||||||||||||
Commercial real estate | 1,091 | — | — | (1,023 | ) | (206 | ) | 1,467 | — | 853 | ||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total noncovered | 5,369 | — | 195 | (4,458 | ) | (502 | ) | 5,240 | 445 | 4,449 | ||||||||||||||||||||||
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| |||||||||||||||||
Covered: | ||||||||||||||||||||||||||||||||
Land & Construction | — | — | — | — | — | — | (445 | ) | 445 | |||||||||||||||||||||||
Residential real estate | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||
Total covered | — | — | — | — | — | — | (445 | ) | 445 | |||||||||||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||||||
Total foreclosed assets | $ | 5,369 | — | $ | 195 | $ | (4,458 | ) | $ | (502 | ) | $ | 5,240 | — | $ | 4,894 | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2018 | Additions | Advances/ Capitalized Costs/Other | Sales | Valuation Adjustments | Balance at December 31, 2019 | ||||||||||||||||||||||||||||||
Land & Construction | $ | 445 | $ | — | $ | — | $ | — | $ | (132) | $ | 313 | |||||||||||||||||||||||
Residential real estate | 1,742 | 278 | — | (1,064) | 89 | 1,045 | |||||||||||||||||||||||||||||
Commercial real estate | 93 | 971 | — | (26) | 145 | 1,183 | |||||||||||||||||||||||||||||
Total foreclosed assets | $ | 2,280 | $ | 1,249 | $ | — | $ | (1,090) | $ | 102 | $ | 2,541 |
Balance at December 31, 2017 | Additions | Advances/ Capitalized Costs/Other | Sales | Valuation Adjustments | Balance at December 31, 2018 | ||||||||||||||||||||||||||||||
Land & Construction | $ | 1,786 | $ | — | $ | — | $ | (1,341) | $ | — | $ | 445 | |||||||||||||||||||||||
Residential real estate | 1,186 | 1,262 | — | (634) | (72) | 1,742 | |||||||||||||||||||||||||||||
Commercial real estate | 254 | — | — | (144) | (17) | 93 | |||||||||||||||||||||||||||||
Total foreclosed assets | $ | 3,226 | $ | 1,262 | $ | — | $ | (2,119) | $ | (89) | $ | 2,280 |
December 31, 2016 | December 31, 2015 | |||||||
(In thousands) | ||||||||
Land & land improvements | $ | 9,522 | $ | 8,909 | ||||
Buildings | 42,345 | 38,643 | ||||||
Furniture and equipment | 31,428 | 31,081 | ||||||
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|
|
| |||||
83,295 | 78,633 | |||||||
Less: Accumulated depreciation | (37,412 | ) | (35,518 | ) | ||||
|
|
|
| |||||
45,883 | 43,115 | |||||||
Construction in progress | 2,523 | 696 | ||||||
|
|
|
| |||||
Total premises and equipment | $ | 48,406 | $ | 43,811 | ||||
|
|
|
|
As of December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Land & land improvements | $ | 29,453 | $ | 29,065 | |||||||||||||
Buildings | 65,241 | 64,478 | |||||||||||||||
Furniture and equipment | 45,723 | 45,228 | |||||||||||||||
140,417 | 138,771 | ||||||||||||||||
Less: Accumulated depreciation | (53,704) | (50,125) | |||||||||||||||
86,713 | 88,646 | ||||||||||||||||
Construction in progress | 373 | 701 | |||||||||||||||
Total premises and equipment | $ | 87,086 | $ | 89,347 |
Intangible Assets
Intangible assets at$82,000. Depreciation expense for the years ended December 31, 20162018 and 20152017 was $6,104,000 and $5,686,000, respectively. Purchases of fixed assets during the years ended December 31, 2018 and 2017 totaled $7,435,000 and $15,164,000, respectively.
December 31, | ||||||||
2016 | 2015 | |||||||
(In thousands) | ||||||||
Core-deposit intangible | $ | 6,563 | $ | 5,894 | ||||
Goodwill | 64,311 | 63,462 | ||||||
|
|
|
| |||||
Total intangible assets | $ | 70,874 | $ | 69,356 | ||||
|
|
|
|
December 31, 2019 | December 31, 2018 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Core-deposit intangible | $ | 23,557 | $ | 29,280 | |||||||||||||
Goodwill | 220,872 | 220,972 | |||||||||||||||
Total intangible assets | $ | 244,429 | $ | 250,252 |
Deposits
Year ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 1,832,665 | $ | 1,760,580 | $ | 1,368,218 | $ | 1,275,745 | $ | 1,155,695 | |||||||||||||||||||||||||||||||||||||||||||
Interest-bearing demand | 1,242,274 | 1,252,366 | 971,459 | 887,625 | 853,961 | ||||||||||||||||||||||||||||||||||||||||||||||||
Savings | 1,851,549 | 1,921,324 | 1,364,518 | 1,397,036 | 1,281,540 | ||||||||||||||||||||||||||||||||||||||||||||||||
Time certificates, over $250,000 | 129,061 | 132,429 | 73,596 | 75,184 | 74,647 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other time certificates | 311,445 | 299,767 | 231,340 | 259,970 | 265,423 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 5,366,994 | $ | 5,366,466 | $ | 4,009,131 | $ | 3,895,560 | $ | 3,631,266 |
Long-Term Debt
See Note 16 to the consolidated financial statements at Item 8 of this report for information about the Company’s other borrowings, including long-term debt.
The Company does not hold any financial instruments that are not maintained in US dollars and is not party to any contracts that may be settled or repaid in a denomination other than US dollars.
The following table summarizes the projected effect on net interest income and net income due to changing interest rates as measured against a flat rate (no interest rate change) scenario over the succeeding twelve month period. The simulation results shown below assume no changes in the structure of the Company’s balance sheet over the twelve months being measured (a “flat” balance sheet scenario), and that deposit rates will track general interest rate changes by approximately 50%:
Interest Rate Risk Simulation of Net Interest Income and Net Income as of December 31, 2016
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In the simulation of market value of equity, the forecast balance sheet is processed against various interest rate scenarios. These various interest rate scenarios include a flat rate scenario, which assumes interest rates are unchanged in the future, and rate ramp and or shock scenarios including -200, -100, +100, and +200 basis points around the flat scenario. TheseAs of December 31, 2019 the overnight Federal funds rate, the rate primarily used in these interest rate shock scenarios, was less than 2.00%. Based on the historical nature of these rates in the United States not falling below zero, management believes that a shock scenario that reduces interest rates below zero would not provide meaningful results and therefor, have not been modeled. These scenarios assume that 1) interest rates increase or decrease immediatelyevenly (in a “shock”“ramp” fashion) over a twelve-month period and remain at the new levellevels beyond twelve months or 2) that interest rates change instantaneously (“shock”). The simulation results shown below assume no changes in the future.
structure of the Company’s balance sheet over the twelve months being measured.
Interest Rate Risk Simulationinstantaneous shock scenario over a twelve month period utilizing the Company's specific mix of Market Value of Equityinterest earning assets and interest bearing liabilities as of December 31, 2016
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2019.
Change in Interest Rates (Basis Points) | Estimated Change in Net Interest Income (NII) (as % of NII) | Estimated Change in Market Value of Equity (MVE) (as % of MVE) | |||||||||
+200 (shock) | 1.2 | % | 8.0 | % | |||||||
+100 (shock) | 0.8 | % | 5.5 | % | |||||||
+ 0 (flat) | — | — | |||||||||
-100 (shock) | (3.7) | % | (15.3) | % | |||||||
-200 (shock) | nm | nm |
repricing or maturing in each of a number of periods. Another aspect of these repricing characteristics is the relative magnitude of the repricing for each category of interest earning asset and interest-bearing liability given various changes in market interest rates. Gap analysis gives no indication of the relative magnitude of repricing given various changes in interest rates. Interest rate sensitivity management focuses on the maturity of assets and liabilities and their repricing during periods of changes in market interest rates. Interest rate sensitivity gaps are measured as the difference between the volumes of assets and liabilities in the Company’s current portfolio that are subject to repricing at various time horizons.
Interest Rate Sensitivity – December 31, 2016 (dollars in thousands) | Repricing within: | |||||||||||||||||||
Less than 3 months | 3 - 6 months | 6 - 12 months | 1 - 5 years | Over 5 years | ||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Cash at Federal Reserve and other banks | $ | 213,415 | — | — | — | — | ||||||||||||||
Securities | 31,665 | $ | 31,767 | $ | 65,055 | $ | 407,150 | $ | 617,132 | |||||||||||
Loans | 573,361 | 151,917 | 266,945 | 1,386,695 | 380,675 | |||||||||||||||
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Total interest-earning assets | 818,441 | 183,684 | 332,000 | 1,793,845 | 997,807 | |||||||||||||||
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Interest-bearing liabilities | ||||||||||||||||||||
Transaction deposits | 2,284,661 | — | — | — | — | |||||||||||||||
Time | 157,431 | 64,127 | 57,501 | 56,084 | 11 | |||||||||||||||
Other borrowings | 17,493 | — | — | — | — | �� | ||||||||||||||
Junior subordinated debt | 56,667 | — | — | — | — | |||||||||||||||
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Total interest-bearing liabilities | $ | 2,516,252 | $ | 64,127 | $ | 57,501 | $ | 56,084 | 11 | |||||||||||
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Interest sensitivity gap | $ | (1,697,811 | ) | $ | 119,557 | $ | 274,499 | $ | 1,737,761 | $ | 997,796 | |||||||||
Cumulative sensitivity gap | $ | (1,697,811 | ) | $ | (1,578,254 | ) | $ | (1,303,755 | ) | $ | 434,006 | $ | 1,431,802 | |||||||
As a percentage of earning assets: | ||||||||||||||||||||
Interest sensitivity gap | (41.2 | %) | 2.9 | % | 6.7 | % | 42.1 | % | 24.2 | % | ||||||||||
Cumulative sensitivity gap | (41.2 | %) | (38.3 | %) | (31.6 | %) | 10.5 | % | 34.7 | % |
As of December 31, 2018 | Repricing within: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Less than 3 months | 3 - 6 months | 6 - 12 months | 1 - 5 months | Over 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash at Federal Reserve and other banks | $ | 183,691 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||
Securities | 288,559 | 165,052 | 78,148 | 419,470 | 374,515 | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans | 822,776 | 233,234 | 480,486 | 2,304,387 | 466,483 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 1,295,026 | 398,286 | 558,634 | 2,723,857 | 840,998 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction deposits | 3,093,823 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Time | 125,686 | 92,895 | 121,569 | 100,352 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other borrowings | 18,454 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Junior subordinated debt | 57,232 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 3,295,195 | $ | 92,895 | $ | 121,569 | $ | 100,352 | 4 | ||||||||||||||||||||||||||||||||||||||||||||
Interest sensitivity gap | $ | (2,000,169) | $ | 305,391 | $ | 437,065 | $ | 2,623,505 | $ | 840,994 | |||||||||||||||||||||||||||||||||||||||||||
Cumulative sensitivity gap | $ | (2,000,169) | $ | (1,694,778) | $ | (1,257,713) | $ | 1,365,792 | $ | 2,206,786 | |||||||||||||||||||||||||||||||||||||||||||
As a percentage of earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest sensitivity gap | (34.4) | % | 5.3 | % | 7.5 | % | 45.1 | % | 14.5 | % | |||||||||||||||||||||||||||||||||||||||||||
Cumulative sensitivity gap | (34.4) | % | (29.1) | % | (21.6) | % | 23.5 | % | 37.9 | % |
offset partially with sales proceeds and maturity of investments totaling $166,339,000.
$106,161,000.
2018.
Amounts as of December 31, | ||||||||||||
(dollars in thousands) | 2016 | 2015 | 2014 | |||||||||
Time remaining until maturity: | ||||||||||||
Less than 3 months | $ | 116,791 | $ | 104,368 | $ | 66,199 | ||||||
3 months to 6 months | 31,984 | 31,327 | 36,166 | |||||||||
6 months to 12 months | 23,525 | 34,722 | 41,787 | |||||||||
More than 12 months | 26,850 | 26,747 | 36,488 | |||||||||
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Total | $ | 199,150 | $ | 197,164 | $ | 180,640 | ||||||
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Amounts as of December 31, | |||||||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Time remaining until maturity: | |||||||||||||||||||||||||||||
Less than 3 months | $ | 90,252 | $ | 70,473 | $ | 101,552 | |||||||||||||||||||||||
3 months to 6 months | 64,161 | 85,781 | 28,832 | ||||||||||||||||||||||||||
6 months to 12 months | 74,682 | 47,254 | 29,196 | ||||||||||||||||||||||||||
More than 12 months | 57,244 | 77,912 | 29,144 | ||||||||||||||||||||||||||
Total | $ | 286,339 | $ | 281,420 | $ | 188,724 |
Within One Year | After One But Within 5 Years | After 5 Years | Total | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Loans with predetermined interest rates: | ||||||||||||||||
Real estate mortgage | $ | 28,824 | $ | 81,996 | $ | 647,112 | $ | 757,932 | ||||||||
Consumer | 2,914 | 37,192 | 92,095 | 132,201 | ||||||||||||
Commercial | 7,806 | 82,812 | 14,583 | 105,201 | ||||||||||||
Real estate construction | 7,560 | 2,363 | 13,664 | 23,587 | ||||||||||||
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47,104 | 204,363 | 767,454 | 1,018,921 | |||||||||||||
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Loans with floating interest rates: | ||||||||||||||||
Real estate mortgage | 29,366 | 125,684 | 1,144,842 | 1,299,892 | ||||||||||||
Consumer | 3,956 | 1,812 | 224,334 | 230,102 | ||||||||||||
Commercial | 65,974 | 15,114 | 30,758 | 111,846 | ||||||||||||
Real estate construction | 15,138 | 8,123 | 75,571 | 98,832 | ||||||||||||
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114,434 | 150,733 | 1,475,505 | 1,740,672 | |||||||||||||
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Total loans | $ | 161,538 | $ | 355,096 | $ | 2,242,959 | $ | 2,759,593 | ||||||||
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2019:
Within One Year | After One But Within 5 Years | After 5 Years | Total | ||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Loans with predetermined interest rates: | |||||||||||||||||||||||||||||||||||||||||
Real estate mortgage | $ | 27,064 | $ | 219,324 | $ | 818,689 | $ | 1,065,077 | |||||||||||||||||||||||||||||||||
Consumer | 7,548 | 22,262 | 131,983 | 161,793 | |||||||||||||||||||||||||||||||||||||
Commercial | 4,464 | 103,677 | 29,770 | 137,911 | |||||||||||||||||||||||||||||||||||||
Real estate construction | 7,211 | 2,184 | 49,403 | 58,798 | |||||||||||||||||||||||||||||||||||||
Total loans with predetermined interest rates | 46,287 | 347,447 | 1,029,845 | 1,423,579 | |||||||||||||||||||||||||||||||||||||
Loans with floating interest rates: | |||||||||||||||||||||||||||||||||||||||||
Real estate mortgage | 36,562 | 245,430 | 1,981,221 | 2,263,213 | |||||||||||||||||||||||||||||||||||||
Consumer | 7,729 | 22,353 | 253,667 | 283,749 | |||||||||||||||||||||||||||||||||||||
Commercial | 89,560 | 17,324 | 38,912 | 145,796 | |||||||||||||||||||||||||||||||||||||
Real estate construction | 44,367 | 11,573 | 135,089 | 191,029 | |||||||||||||||||||||||||||||||||||||
Total loans with floating interest rates | 178,218 | 296,680 | 2,408,889 | 2,883,787 | |||||||||||||||||||||||||||||||||||||
Total loans | $ | 224,505 | $ | 644,127 | $ | 3,438,734 | $ | 4,307,366 |
Within One Year | After One Year but Through Five Years | After Five Years but Through Ten Years | After Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Amount Yield | Amount Yield | Amount Yield | Amount Yield | Amount Yield | ||||||||||||||||||||||||||||||||||||
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Securities Available for Sale | ||||||||||||||||||||||||||||||||||||||||
Obligations of US government corporations and agencies | $ | 1 | 5.97 | % | $ | 9,650 | 2.60 | % | $ | 13,266 | 3.70 | % | $ | 406,761 | 2.54 | % | $ | 429,678 | 2.58 | % | ||||||||||||||||||||
Obligations of states and political subdivisions | — | — | — | — | 1,866 | 5.75 | % | 115,751 | 4.96 | % | 117,617 | 4.97 | % | |||||||||||||||||||||||||||
Marketable equity securities | — | — | — | — | — | — | 2,938 | — | 2,938 | — | ||||||||||||||||||||||||||||||
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Total securities available for sale | $ | 1 | 2.97 | % | $ | 9,650 | 2.60 | % | $ | 15,132 | 3.96 | % | $ | 525,450 | 3.07 | % | $ | 550,233 | 3.08 | % | ||||||||||||||||||||
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Within One Year | After One Year but Through Five Years | After Five Years but Through Ten Years | After Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Amount Yield | Amount Yield | Amount Yield | Amount Yield | Amount Yield | ||||||||||||||||||||||||||||||||||||
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Securities Held to Maturity | ||||||||||||||||||||||||||||||||||||||||
Obligations of US government corporations and agencies | — | — | — | — | $ | 3,916 | 2.11 | % | $ | 584,066 | 2.70 | % | $ | 587,982 | 2.68 | % | ||||||||||||||||||||||||
Obligations of states and political subdivisions | — | — | $ | 1,177 | 4.13 | % | $ | 860 | 5.80 | % | 12,517 | 4.14 | % | 14,554 | 4.24 | % | ||||||||||||||||||||||||
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Total securities held to maturity | — | — | $ | 1,177 | 4.13 | % | $ | 4,776 | 2.77 | % | $ | 596,583 | 2.73 | % | $ | 602,536 | 2.72 | % | ||||||||||||||||||||||
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Within One Year | After One Year but Through Five Years | After Five Years but Through Ten Years | After Ten Years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of US government agencies | $ | — | — | % | $ | 10,241 | 3.00 | % | $ | 21,211 | 3.25 | % | $ | 441,528 | 2.67 | % | $ | 472,980 | 2.71 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 611 | 2.94 | % | 2,431 | 4.31 | % | 4,629 | 3.86 | % | 101,930 | 4.07 | % | 109,601 | 4.06 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | — | 2,532 | 6.14 | % | — | — | — | — | 2,532 | 6.14 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset backed securities | — | — | 65,899 | 1.67 | % | — | — | 299,126 | 2.11 | % | 365,025 | 2.03 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities available for sale | $ | 611 | 2.94 | % | $ | 81,103 | 3.72 | % | $ | 25,840 | 0.91 | % | $ | 842,584 | 2.63 | % | $ | 950,138 | 2.68 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of US government agencies | $ | — | — | % | $ | — | — | % | $ | 18,321 | 2.28 | % | $ | 343,464 | 2.68 | % | $ | 361,785 | 2.66 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 1,271 | 3.33 | % | — | — | 3,045 | 3.85 | % | 9,505 | 3.28 | % | 13,821 | 3.41 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities held to maturity | $ | 1,271 | 3.33 | % | $ | — | — | % | $ | 21,366 | 2.50 | % | $ | 352,969 | 2.69 | % | $ | 375,606 | 2.67 | % |
(dollars in thousands) | Total | Less than one year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Time deposits | $ | 335,154 | $ | 279,015 | $ | 35,374 | $ | 20,746 | $ | 19 | ||||||||||
Other collateralized borrowings, fixed rate of 0.05% payable on January 2, 2017 | 17,493 | 17,493 | — | — | — | |||||||||||||||
Junior subordinated: | ||||||||||||||||||||
TriCo Trust I(1) | 20,619 | — | — | — | 20,619 | |||||||||||||||
TriCo Trust II(2) | 20,619 | — | — | — | 20,619 | |||||||||||||||
North Valley Trust II(3) | 6,186 | — | — | — | 6,186 | |||||||||||||||
North Valley Trust III(4) | 5,155 | — | — | — | 5,155 | |||||||||||||||
North Valley Trust IV(5) | 10,310 | — | — | — | 10,310 | |||||||||||||||
Operating lease obligations | 11,751 | 3,320 | 4,447 | 2,288 | 1,696 | |||||||||||||||
Deferred compensation(6) | 4,694 | 835 | 1,624 | 1,325 | 910 | |||||||||||||||
Supplemental retirement plans(6) | 7,359 | 1,067 | 1,777 | 1,304 | 3,211 | |||||||||||||||
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Total contractual obligations | $ | 439,340 | $ | 301,730 | $ | 43,222 | $ | 25,663 | $ | 68,725 | ||||||||||
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(dollars in thousands) | Total | Less than one year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||||||||||
Time deposits | $ | 440,506 | $ | 340,150 | $ | 95,628 | $ | 4,724 | $ | 4 | |||||||||||||||||||
Other collateralized borrowings, fixed rate of 0.05% payable on January 2, 2020 | 18,454 | 18,454 | |||||||||||||||||||||||||||
Junior subordinated debt: | — | ||||||||||||||||||||||||||||
TriCo Trust I(1) | 20,619 | 20,619 | |||||||||||||||||||||||||||
TriCo Trust II(2) | 20,619 | 20,619 | |||||||||||||||||||||||||||
North Valley Trust II(3) | 5,215 | 5,215 | |||||||||||||||||||||||||||
North Valley Trust III(4) | 4,118 | 4,118 | |||||||||||||||||||||||||||
North Valley Trust IV(5) | 6,661 | 6,661 | |||||||||||||||||||||||||||
Operating lease obligations | 27,540 | 209 | 1,335 | 3,751 | 22,245 | ||||||||||||||||||||||||
Deferred compensation(6) | 2,238 | 674 | 868 | 352 | 344 | ||||||||||||||||||||||||
Supplemental retirement plans(6) | 17,996 | 1,481 | 2,512 | 2,453 | 11,550 | ||||||||||||||||||||||||
Total contractual obligations | $ | 563,966 | $ | 360,968 | $ | 100,343 | $ | 11,280 | $ | 91,375 |
Assets: Cash and due from banks Cash at Federal Reserve and other banks Cash and cash equivalents Investment securities: Available for sale Held to maturity Restricted equity securities Loans held for sale Loans Allowance for loan losses Total loans, net Foreclosed assets, net Premises and equipment, net Cash value of life insurance Accrued interest receivable Goodwill Other intangible assets, net Mortgage servicing rights Other assets Total assets Liabilities and Shareholders’ Equity: Liabilities: Deposits: Noninterest-bearing demand Interest-bearing Total deposits Accrued interest payable Reserve for unfunded commitments Other liabilities Other borrowings Junior subordinated debt Total liabilities Commitments and contingencies (Note 18) Shareholders’ equity: Common stock, no par value: 50,000,000 shares authorized; issued and outstanding: 22,867,802 at December 31, 2016 22,775,173 at December 31, 2015 Retained earnings Accumulated other comprehensive income (loss), net of tax Total shareholders’ equity Total liabilities and shareholders’ equity Interest and dividend income: Loans, including fees Debt securities: Taxable Tax exempt Dividends Interest bearing cash at Federal Reserve and other banks Total interest and dividend income Interest expense: Deposits Other borrowings Junior subordinated debt Total interest expense Net interest income Benefit from reversal of previously provided loan losses Net interest income after provision for loan losses Noninterest income: Service charges and fees Gain on sale of loans Commissions on sale ofnon-deposit investment products Increase in cash value of life insurance Other Total noninterest income Noninterest expense: Salaries and related benefits Other Total noninterest expense Income before income taxes Provision for income taxes Net income Earnings per share: Basic Diluted Net income Other comprehensive (loss) income, net of tax: Unrealized holding losses on securities arising during the period Change in minimum pension liability Change in joint beneficiary agreement liability Other comprehensive (loss) income Comprehensive income Shares of Common Stock Balance at December 31, 2013 Net income Other comprehensive loss Stock option vesting RSU vesting PSU vesting Stock options exercised Tax effect of stock options exercised Issuance of common stock Repurchase of common stock Dividends paid ($0.44 per share) Balance at December 31, 2014 Net income Other comprehensive income Stock option vesting RSU vesting PSU vesting Stock options exercised Tax effect of stock options exercised RSUs released Tax benefit from release of RSUs Repurchase of common stock Dividends paid ($0.52 per share) Balance at December 31, 2015 Net income Other comprehensive loss Stock option vesting RSU vesting PSU vesting Stock options exercised Tax effect of stock options exercised RSUs released Tax benefit from release of RSUs Repurchase of common stock Dividends paid ($0.60 per share) Balance at December 31, 2016 Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of premises and equipment, and amortization Amortization of intangible assets (Benefit from) provision for loan losses Amortization of investment securities premium, net Originations of loans for resale Proceeds from sale of loans originated for resale Gain on sale of loans Change in market value of mortgage servicing rights Provision for losses on foreclosed assets Gain on sale of foreclosed assets Provision for losses on fixed assets Loss (gain) on disposal of fixed assets Increase in cash value of life insurance Gain on life insurance death benefit Equity compensation vesting expense Equity compensation tax effect Deferred income tax expense (benefit) Change in: Reserve for unfunded commitments Interest receivable Interest payable Other assets and liabilities, net Net cash from operating activities Investing activities: Proceeds from maturities of securities available for sale Proceeds from sale of securities available for sale Purchases of securities available for sale Proceeds from maturities of securities held to maturity Purchases of securities held to maturity (Purchase) redemption of restricted equity securities, net Loan origination and principal collections, net Loans purchased Proceeds from sale of loans other than loans originated for resale Proceeds from sale of premises and equipment Improvement of foreclosed assets Proceeds from sale of other real estate owned Purchases of premises and equipment Cash received from acquisition, net Net cash used by investing activities Financing activities: Net increase in deposits Net change in other borrowings Equity compensation tax effect Repurchase of common stock Dividends paid Exercise of stock options Net cash from financing activities Net change in cash and cash equivalents Cash and cash equivalents and beginning of year Cash and cash equivalents at end of year Supplemental disclosure of noncash activities: Unrealized loss on securities available for sale Loans transferred to foreclosed assets Due to broker Market value of shares tenderedin-lieu of cash to pay for exercise of options and/or related taxes Supplemental disclosure of cash flow activity: Cash paid for interest expense Cash paid for income taxes Assets acquired in acquisition Liabilities assumed in acquisition CHANGES IN SHAREHOLDERS’ EQUITYPage 535454555657100101 At December 31, 2016 2015 (in thousands, except share data) $ 92,197 $ 94,305 213,415 209,156 305,612 303,461 550,233 404,885 602,536 726,530 16,956 16,956 2,998 1,873 2,759,593 2,522,937 (32,503 ) (36,011 ) 2,727,090 2,486,926 3,986 5,369 48,406 43,811 95,912 94,560 12,027 10,786 64,311 63,462 6,563 5,894 6,595 7,618 74,743 48,591 $ 4,517,968 $ 4,220,722 $ 1,275,745 $ 1,155,695 2,619,815 2,475,571 3,895,560 3,631,266 818 774 2,719 2,475 67,364 65,293 17,493 12,328 56,667 56,470 4,040,621 3,768,606 252,820 247,587 232,440 206,307 (7,913 ) (1,778 ) 477,347 452,116 $ 4,517,968 $ 4,220,722 At December 31,
2019At December 31,
2018Assets: Cash and due from banks $ 92,816 $ 119,781 Cash at Federal Reserve and other banks 183,691 107,752 Cash and cash equivalents 276,507 227,533 Investment securities: Marketable equity securities 2,960 2,874 Available for sale debt securities 950,138 1,115,036 Held to maturity debt securities 375,606 444,936 Restricted equity securities 17,250 17,250 Loans held for sale 5,265 3,687 Loans 4,307,366 4,022,014 Allowance for loan losses (30,616) (32,582) Total loans, net 4,276,750 3,989,432 Premises and equipment, net 87,086 89,347 Cash value of life insurance 117,823 117,318 Accrued interest receivable 18,897 19,412 Goodwill 220,872 220,972 Other intangible assets, net 23,557 29,280 Operating leases, right-of-use 27,879 — Other assets 70,591 75,364 Total assets $ 6,471,181 $ 6,352,441 Liabilities and Shareholders’ Equity: Liabilities: Deposits: Noninterest-bearing demand $ 1,832,665 $ 1,760,580 Interest-bearing 3,534,329 3,605,886 Total deposits 5,366,994 5,366,466 Accrued interest payable 2,407 1,997 Operating lease liability 27,540 — Other liabilities 91,984 83,724 Other borrowings 18,454 15,839 Junior subordinated debt 57,232 57,042 Total liabilities 5,564,611 5,525,068 Commitments and contingencies (Note 15) Shareholders’ equity: Preferred stock, 0 par value: 1,000,000 shares authorized; 0 issued and outstanding at December 31, 2019 and 2018 — — Common stock, 0 par value: 50,000,000 shares authorized; issued and outstanding: 30,523,824 and 30,417,223 at December 31, 2019 and 2018, respectively 543,998 541,762 Retained earnings 367,794 303,490 Accumulated other comprehensive loss, net of tax (5,222) (17,879) Total shareholders’ equity 906,570 827,373 Total liabilities and shareholders’ equity $ 6,471,181 $ 6,352,441 Years ended December 31, 2016 2015 2014 (in thousands, except per share data) $ 141,086 $ 131,836 $ 103,887 25,397 25,303 14,753 3,881 1,509 505 2,181 2,118 837 1,163 648 1,133 173,708 161,414 121,115 3,483 3,434 3,274 9 4 4 2,229 1,978 1,403 5,721 5,416 4,681 167,987 155,998 116,434 (5,970 ) (2,210 ) (4,045 ) 173,957 158,208 120,479 33,226 32,080 24,236 4,037 3,064 2,032 2,329 3,349 2,995 2,717 2,786 1,953 2,254 4,068 3,300 44,563 45,347 34,516 80,724 71,405 57,544 65,273 59,436 52,835 145,997 130,841 110,379 72,523 72,714 44,616 27,712 28,896 18,508 $ 44,811 $ 43,818 $ 26,108 $ 1.96 $ 1.93 $ 1.47 $ 1.94 $ 1.91 $ 1.46 Year ended December 31, 2019 2018 2017 Interest and dividend income: Loans, including fees $ 223,750 $ 186,117 $ 146,794 Investments: Taxable securities 39,810 33,997 27,772 Tax exempt securities 4,002 4,345 4,165 Dividends 1,285 1,705 1,324 Interest bearing cash at Federal Reserve and other banks 3,597 2,054 1,347 Total interest and dividend income 272,444 228,218 181,402 Interest expense: Deposits 11,716 6,996 3,958 Other borrowings 387 2,745 305 Junior subordinated debt 3,272 3,131 2,535 Total interest expense 15,375 12,872 6,798 Net interest income 257,069 215,346 174,604 Provision for (benefit from) loan losses (1,690) 2,583 89 Net interest income after provision for (benefit from) loan losses 258,759 212,763 174,515 Noninterest income: Service charges and fees 40,417 38,460 37,423 Commissions on sale of non-deposit investment products 2,877 3,151 2,729 Increase in cash value of life insurance 3,029 2,718 2,685 Gain on sale of loans 3,282 2,371 3,109 Gain on sale of investment securities 110 207 961 Other 3,805 2,154 2,545 Total noninterest income 53,520 49,061 49,452 Noninterest expense: Salaries and related benefits 106,065 93,942 82,930 Other 79,392 74,530 63,525 Total noninterest expense 185,457 168,472 146,455 Income before income taxes 126,822 93,352 77,512 Provision for income taxes 34,750 25,032 36,958 Net income $ 92,072 $ 68,320 $ 40,554 Earnings per share: Basic $ 3.02 $ 2.57 $ 1.77 Diluted $ 3.00 $ 2.54 $ 1.74 Years ended December 31, 2016 2015 2014 (in thousands, except per share data) $ 44,811 $ 43,818 $ 26,108 (6,384 ) (1,098 ) (94 ) 592 1,246 (4,114 ) (343 ) 277 148 (6,135 ) 425 (4,060 ) $ 38,676 $ 44,243 $ 22,048 The accompanying notes are an integral part of these unaudited consolidated financial statements.TRICO BANCSHARESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYYears Ended December 31, 2016, 2015 and 2014 Common
Stock Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total (in thousands, except share data) 16,076,662 $ 89,356 $ 159,733 $ 1,857 $ 250,946 26,108 26,108 (4,060 ) (4,060 ) 965 965 126 126 42 42 166,020 2,875 2,875 225 225 6,575,550 151,303 151,303 (103,268) (574 ) (1,977 ) (2,551 ) (7,807 ) (7,807 ) 22,714,964 $ 244,318 $ 176,057 $ (2,203 ) $ 418,172 43,818 43,818 425 425 734 734 457 457 179 179 154,500 3,116 3,116 (83 ) (83 ) 12,064 15 15 (106,355) (1,149 ) (1,719 ) (2,868 ) (11,849 ) (11,849 ) 22,775,173 $ 247,587 $ 206,307 $ (1,778 ) $ 452,116 44,811 44,811 (6,135 ) (6,135 ) 580 580 616 616 271 271 336,900 6,506 6,506 154 154 20,529 1 1 (264,800) (2,895 ) (4,983 ) (7,878 ) (13,695 ) (13,695 ) 22,867,802 $ 252,820 $ 232,440 $ (7,913 ) $ 477,347 Year ended 2019 2018 2017 Net income $ 92,072 $ 68,320 $ 40,554 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on available for sale securities arising during the period, after reclassifications 17,159 (12,434) 3,165 Change in minimum pension liability, after reclassifications (4,502) 388 (370) Change in joint beneficiary agreement liability — 426 (110) Other comprehensive income (loss) 12,657 (11,620) 2,685 Comprehensive income $ 104,729 $ 56,700 $ 43,239 CASH FLOWS Years Ended December 31, 2016 2015 2014 Operating activities: (in thousands) $ 44,811 $ 43,818 $ 26,108 6,474 5,906 5,735 1,377 1,157 446 (5,970 ) (2,210 ) (4,045 ) 4,926 3,458 970 (142,619 ) (111,640 ) (49,241 ) 144,062 115,469 49,394 (4,037 ) (3,064 ) (2,032 ) 2,184 701 1,301 140 502 208 (262 ) (991 ) (2,153 ) 782 — — 147 129 (49 ) (2,717 ) (2,786 ) (1,953 ) (238 ) (155 ) — 1,467 1,370 1,133 (155 ) 68 (225 ) 3,190 681 (993 ) 244 330 (395 ) (1,241 ) (1,511 ) (619 ) 44 (204 ) (67 ) (4,383 ) �� 3,789 3,894 48,226 54,817 27,417 71,684 33,552 24,016 — 2 14,130 (247,717 ) (341,303 ) — 121,666 93,784 34,172 — (146,100 ) (280,692 ) — — (2,415 ) (251,479 ) (244,018 ) (82,079 ) (22,503 ) — (32,017 ) 37,880 — — 1,682 8 121 — (195 ) (462 ) 4,010 5,449 9,762 (10,930 ) (5,489 ) (4,665 ) 156,316 — 141,405 (139,391 ) (604,310 ) (178,724 ) 103,063 250,843 167,984 5,165 3,052 2,941 155 (68 ) 225 (1,890 ) (412 ) (292 ) (13,695 ) (11,849 ) (7,807 ) 518 660 616 93,316 242,226 163,667 2,151 (307,267 ) 12,360 303,461 610,728 598,368 $ 305,612 $ 303,461 $ 610,728 $ (11,015 ) $ (1,895 ) $ (162 ) 2,505 5,240 5,291 — 17,072 — 5,988 2,868 2,551 5,677 5,620 4,641 27,575 24,315 22,685 161,231 — 978,682 161,231 — 827,372 Shares of
Common
StockCommon
StockRetained
EarningsAccumulated
Other
Comprehensive
Income (loss)Total Balance at January 1, 2017 22,867,802 $ 252,820 $ 232,440 $ (7,913) $ 477,347 Net income 40,554 40,554 Other comprehensive income 2,685 2,685 Stock option vesting 259 259 Service condition RSU vesting 895 895 Market plus service condition RSU vesting 432 432 Stock options exercised 145,850 2,621 2,621 Service condition RSUs released 30,896 — Tax benefit from release of service condition RSUs 18,805 — Repurchase of common stock (107,390) (1,191) (2,663) (3,854) Dividends paid ($0.66 per share) (15,131) (15,131) Balance at December 31, 2017 22,955,963 $ 255,836 $ 255,200 $ (5,228) $ 505,808 Net income 68,320 68,320 Adoption ASU 2016-01 (62) 62 — Adoption ASU 2018-02 1,093 (1,093) — Other comprehensive loss (11,620) (11,620) Stock option vesting 75 75 Service condition RSU vesting 1,017 1,017 Market plus service condition RSU vesting 370 370 Stock options exercised 100,400 1,704 1,704 Service condition RSUs released 35,060 — Market plus service condition RSUs released 25,512 — Issuance of common stock 7,405,277 284,437 284,437 Repurchase of common stock (104,989) (1,677) (2,292) (3,969) Dividends paid ($0.70 per share) (18,769) (18,769) Balance at December 31, 2018 30,417,223 $ 541,762 $ 303,490 $ (17,879) $ 827,373 Net income 92,072 92,072 Other comprehensive income 12,657 12,657 Service condition RSU vesting 1,161 1,161 Market plus service condition RSU vesting 493 493 Service condition RSUs released 33,060 — Market plus service condition RSUs released 22,237 — Stock options exercised 182,500 2,921 2,921 Issuance of common stock — Repurchase of common stock (131,196) (2,339) (2,769) (5,108) Dividends paid ($0.82 per share) (24,999) (24,999) Balance at December 31, 2019 30,523,824 $ 543,998 $ 367,794 $ (5,222) $ 906,570 Years ended December 31, 2019 2018 2017 Operating activities: Net income $ 92,072 $ 68,320 $ 40,554 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of premises and equipment, and amortization 6,915 7,014 6,787 Amortization of intangible assets 5,723 3,499 1,389 Provision for (benefit from) loan losses (1,690) 2,583 89 Amortization of investment securities premium, net 2,547 2,512 3,200 Gain on sale of investment securities (110) (207) (961) Originations of loans for resale (131,074) (84,245) (114,107) Proceeds from sale of loans originated for resale 131,689 86,988 114,788 Gain on sale of loans (3,282) (2,371) (3,109) Change in market value of mortgage servicing rights 1,811 146 718 (Reversal of) provision for losses on real estate owned (102) 89 162 Deferred income tax expense 1,692 2,600 12,473 Gain on sale or transfer of loans, to real estate owned (608) (408) (711) Operating lease payments (4,931) — — Loss on disposal of fixed assets 82 185 142 Increase in cash value of life insurance (3,029) (2,718) (2,685) Gain on life insurance death benefit (831) — (108) (Gain) loss on marketable equity securities (86) 64 — Equity compensation vesting expense 1,654 1,462 1,586 Change in: Interest receivable 515 (5,640) (1,745) Interest payable 410 1,067 112 Amortization of operating lease ROUA 4,592 — — Other assets and liabilities, net (1,153) 10,129 (3,193) Net cash from operating activities 102,806 91,069 55,381 Investing activities: Cash acquired in acquisition, net of consideration paid — 30,613 — Proceeds from maturities of securities available for sale 97,993 73,014 63,942 Proceeds from maturities of securities held to maturity 68,346 68,937 86,371 Proceeds from sale of available for sale securities 127,066 293,279 25,757 Purchases of securities available for sale (37,253) (436,678) (265,806) Net redemption of restricted equity securities — 7,429 — Loan origination and principal collections, net (286,339) (173,752) (259,404) Proceeds from sale of real estate owned 1,336 2,527 2,872 Proceeds from sale of premises and equipment — 63 3,338 Purchases of premises and equipment (4,293) (7,435) (15,164) Life insurance proceeds 3,355 — 649 Net cash from investing activities (29,789) (142,003) (357,445) Financing activities: Net change in deposits 528 365,400 113,571 Net change in other borrowings 2,615 (271,327) 104,673 Repurchase of common stock, net (2,196) (2,483) (1,629) Dividends paid (24,999) (18,769) (15,131) Exercise of stock options 9 218 396 Net cash from financing activities (24,043) 73,039 201,880 Net change in cash and cash equivalents 48,974 22,105 (100,184) Cash and cash equivalents at beginning of year 227,533 205,428 305,612 Cash and cash equivalents at end of year $ 276,507 $ 227,533 $ 205,428 Supplemental disclosure of noncash activities: Unrealized (loss) gain on securities available for sale $ 24,361 $ (17,627) $ 5,461 Loans transferred to foreclosed assets $ 1,249 $ 1,262 $ 1,563 Market value of shares tendered in-lieu of cash to pay for exercise of options and/or related taxes $ 5,108 $ 1,486 $ 2,225 Obligations incurred in conjunction with leased assets $ 156 $ — $ — Supplemental disclosure of cash flow activity: Cash paid for interest expense $ 14,965 $ 11,805 $ 5,609 Cash paid for income taxes $ 35,050 $ 14,525 $ 21,170 Assets acquired in acquisition and goodwill, net $ — $ 1,463,100 $ — Liabilities assumed in acquisition $ — $ 1,171,968 $ — 2016, 20152019, 2018 and 20142017
sheets.
Investment
trading during 2019 and 2018.
the years ended December 31, 2019, 2018 or 2017.
Both cash and stock dividends are reported as income when received.
specific reserve allocation within the allowance for loan losses.
During the three months ended September 30, 2015, the Company modified its methodology used to determine the allowance for home equity lines of credit that are about to exit their revolving period, or have recently entered into their amortization period and are now classified as home equity loans. This change in methodology increased the required allowance for such lines and loans by $859,000, and $459,000, respectively, and represents the increase in estimated incurred losses in these lines and loans as of September 30, 2015 due to higher required contractual principal and interest payments of such lines and loans.
individually.
is made.
Loans are also categorized as “covered” or “noncovered”. Covered loans refer to loans covered by a Federal Deposit Insurance Corporation (“FDIC”) loss sharing agreement. Noncovered loans refer to loans not covered by a FDIC loss sharing agreement.
Foreclosed Assets
Foreclosed assets include
Foreclosed assets acquired through FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement, and all assets acquired via foreclosure of covered loans are referred to as covered foreclosed assets. Covered foreclosed assets are reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered foreclosed assets at the loan’s carrying value, inclusive of the acquisition date fair value discount.
Covered foreclosed assets are initially recorded at estimated fair value less estimated costs to sell on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to noninterest expense, and will be mostly offset by noninterest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to noninterest expense with a corresponding charge to noninterest income for the portion of the recovery that is due to the FDIC.
REO.
The Company has an identifiable intangible
Impairment of Long-Lived Assets and Goodwill
might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.
As of December 31 of each year, goodwill is tested for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level. The Company may choose to first assess qualitative factors to determine
whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then goodwill is deemed not to be impaired. However, if the Company concludes otherwise, or if the Company elected not to first assess qualitative factors, then the Company performs the first step of atwo-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. Second, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Currently, and historically, the Company is comprised of only one reporting unit that operates within the business segment it has identified as “community banking”. Goodwill was not impaired as of December 31, 2016 because the fair value of the reporting unit exceeded its carrying value.
non-interest income.
impairment (if any).
Off-Balance Sheet Credit Related Financial Instruments
In
Geographical Descriptions
Forbased on the purposeunderlying portfolio value, which is subject to market conditions and asset flows. Advisory asset management fees are recognized quarterly and are based on the portfolio values at the end of describingeach quarter. Brokerage accounts are charged commissions at the geographical locationtime of a transaction and the commission schedule is based upon the type of security and quantity. In addition, revenues are earned from selling insurance and annuity policies. The amount of revenue earned is determined by the value and type of each instrument sold and is recognized at the time the policy or contract is written.
Recent
FASBStandards Adopted in 2019
FASB issued Accounting Standard Update (ASU)No. 2016-09, Compensation – Stock Compensation (Topic 718).ASU 2016-09, among other things, requires: (i) that all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement, (ii) the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur, (iii) an entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period, (iv) excess tax benefits should be classified along with other income tax cash flows as an operating activity, (v) an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur, (vi) the threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions, and (vii) cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity.ASU 2016-09 was effective for the Company on January 1, 2017 and willdid not have a significant impact on the Company’s consolidated financial statements.
statements in making informed decisions. The held-to-maturity (HTM) investment security portfolio consists of investment securities where payment performance has an implicit or explicit guarantee from the U.S. government and where no history of credit losses exist, management believes that indicators for zero loss are present and therefore, no loss reserves are anticipated to result from the adoption and implementation of the CECL standard for these assets. Management has separately evaluated its HTM investment securities from obligations of state and political subdivisions utilizing the historical loss data represented by similar securities over a period of time spanning nearly 50 years. Based on this evaluation, management has determined that the expected credit losses associated with these securities is less than significant for financial reporting purposes and therefore, no loss reserves are anticipated to result from the adoption and implementation of the CECL standard.
FASB issued ASUNo. 2017-01,Business Combinations – Clarifying the Definition of a Business (Topic 805).ASU 2017-01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business.ASU 2017-01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.ASU 2017-01 will be effective for us on January 1, 2018 and is not expected to have a significant impact on our financial statements.
FASB issued ASUNo. 2017-04, Intangibles – 2017-4,
The assets acquired and liabilities assumed in the acquisition of these branches were accounted for in accordance with ASC 805 “Business Combinations,” using the acquisition method of accounting andthat were recorded at their estimated fair values on the March 18, 2016 acquisition date and the results(in thousands).
FNB Bancorp July 6, 2018 | |||||
Fair value of consideration transferred: | |||||
Fair value of shares issued | $ | 284,437 | |||
Cash consideration | 6,695 | ||||
Total fair value of consideration transferred | 291,132 | ||||
Assets acquired: | |||||
Cash and cash equivalents | 37,308 | ||||
Securities available for sale | 335,667 | ||||
Restricted equity securities | 7,723 | ||||
Loans | 834,683 | ||||
Premises and equipment | 30,522 | ||||
Cash value of life insurance | 16,817 | ||||
Core deposit intangible | 27,605 | ||||
Other assets | 16,214 | ||||
Total assets acquired | 1,306,539 | ||||
Liabilities assumed: | |||||
Deposits | 991,935 | ||||
Other liabilities | 15,033 | ||||
Short-term borrowings—Federal Home Loan Bank | 165,000 | ||||
Total liabilities assumed | 1,171,968 | ||||
Total net assets acquired | 134,571 | ||||
Goodwill recognized | $ | 156,561 |
(in thousands) | March 18, 2016 | |||
Cash paid | $ | 3,204 | ||
Cost basis net assets acquired | — | |||
Fair value adjustments: | ||||
Loans | — | |||
Premises and Equipment | (309 | ) | ||
Core deposit intangible | (2,046 | ) | ||
|
| |||
Goodwill | $ | 849 | ||
|
|
As part of the acquisition of three branch banking offices from Bank of America, the Company performed a valuation of premises and equipment acquired. This valuation resulted in a $309,000 increase in the net bookbelow (in thousands):
FNB Bancorp July 6, 2018 | |||||
Value of stock consideration paid to FNB Bancorp Shareholders | $ | 284,437 | |||
Cash consideration | 6,695 | ||||
Less: | |||||
Cost basis net assets acquired | 114,030 | ||||
Fair value adjustments: | |||||
Investments | (1,081) | ||||
Loans | (22,390) | ||||
Premises and Equipment | 21,590 | ||||
Core deposit intangible | 27,327 | ||||
Deferred income taxes | (6,394) | ||||
Other | 1,489 | ||||
Goodwill | $ | 156,561 |
The Company recognized a core deposit intangible of $2,046,000 relatedincludes fair value adjustments to the acquisition of the core deposits. The recorded core deposit intangibles represented approximately 1.50% of the core deposits acquired and will be amortized over their estimated useful lives of 7 years.
A valuation of the time deposits acquired was also performedcertain loans that were not considered impaired (PNCI loans) as of the acquisition date. Time depositsThe fair value adjustments were split into similar pools baseddetermined using discounted contractual cash flows. As such, these loans were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans (PCI loans), which have shown evidence of credit deterioration since origination. The gross contractual amounts receivable and fair value for PNCI loans as of the acquisition date was $866,189,000 and $833,381,000, respectively. The gross contractual amounts receivable and fair value for PCI loans as of the acquisition date was $1,683,000 and $1,302,000, respectively. At the acquisition date, the Company was unable to estimate the expected contractual cash flows to be collected from the purchased credit impaired loans.
Year ended | |||||||||||||||||
December 31, 2018 | December 31, 2017 | ||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Summarized proforma income statement data: | |||||||||||||||||
Net interest income | $ | 242,793 | $ | 227,795 | |||||||||||||
(Provision for) benefit from loan losses | (2,180) | 271 | |||||||||||||||
Noninterest income | 51,152 | 53,881 | |||||||||||||||
Noninterest expense | (180,884) | (181,833) | |||||||||||||||
Income before taxes | 110,881 | 100,114 | |||||||||||||||
Income taxes | (30,337) | (47,352) | |||||||||||||||
Net income | $ | 80,544 | $ | 52,762 | |||||||||||||
Basic earnings per share | $ | 2.65 | $ | 1.74 | |||||||||||||
Diluted earnings per share | $ | 2.63 | $ | 1.72 |
the Company’s consolidated income statement from the July 6, 2018 acquisition date to December 31, 2018 because the operations of FNBB were substantially comingled with the operations of the Company as of the system conversion date of July 22, 2018.
December 31, 2016 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Securities Available for Sale | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 434,357 | $ | 1,949 | $ | (6,628 | ) | $ | 429,678 | |||||||
Obligations of states and political subdivisions | 121,746 | 267 | (4,396 | ) | 117,617 | |||||||||||
Marketable equity securities | 3,000 | — | (62 | ) | 2,938 | |||||||||||
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|
|
| |||||||||
Total securities available for sale | $ | 559,103 | $ | 2,216 | $ | (11,086 | ) | $ | 550,233 | |||||||
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| |||||||||
Securities Held to Maturity | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 587,982 | $ | 5,001 | $ | (4,199 | ) | $ | 588,784 | |||||||
Obligations of states and political subdivisions | 14,554 | 56 | (191 | ) | 14,419 | |||||||||||
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|
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|
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| |||||||||
Total securities held to maturity | $ | 602,536 | $ | 5,057 | $ | (4,390 | ) | $ | 603,203 | |||||||
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December 31, 2015 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Securities Available for Sale | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 312,917 | $ | 2,761 | $ | (1,996 | ) | $ | 313,682 | |||||||
Obligations of states and political subdivisions | 86,823 | 1,428 | (33 | ) | 88,218 | |||||||||||
Marketable equity securities | 3,000 | — | (15 | ) | 2,985 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities available for sale | $ | 402,740 | $ | 4,189 | $ | (2,044 | ) | $ | 404,885 | |||||||
|
|
|
|
|
|
|
| |||||||||
Securities Held to Maturity | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 711,994 | $ | 8,394 | $ | (2,882 | ) | $ | 717,506 | |||||||
Obligations of states and political subdivisions | 14,536 | 277 | (110 | ) | 14,703 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securities held to maturity | $ | 726,530 | $ | 8,671 | $ | (2,992 | ) | $ | 732,209 | |||||||
|
|
|
|
|
|
|
|
No
December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Debt Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 466,139 | $ | 7,261 | $ | (420) | $ | 472,980 | |||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 106,373 | 3,229 | (1) | 109,601 | |||||||||||||||||||||||||||||||||||||
Corporate bonds | 2,430 | 102 | — | 2,532 | |||||||||||||||||||||||||||||||||||||
Asset backed securities | 371,809 | 129 | (6,913) | 365,025 | |||||||||||||||||||||||||||||||||||||
Total debt securities available for sale | $ | 946,751 | $ | 10,721 | $ | (7,334) | $ | 950,138 | |||||||||||||||||||||||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | 361,785 | 6,072 | (480) | 367,377 | |||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 13,821 | 327 | — | 14,148 | |||||||||||||||||||||||||||||||||||||
Total debt securities held to maturity | $ | 375,606 | $ | 6,399 | $ | (480) | $ | 381,525 |
December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Debt Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 647,288 | $ | 771 | $ | (18,078) | $ | 629,981 | |||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 128,890 | 294 | (3,112) | 126,072 | |||||||||||||||||||||||||||||||||||||
Corporate bonds | 4,381 | 97 | — | 4,478 | |||||||||||||||||||||||||||||||||||||
Asset backed securities | 355,451 | 73 | (1,019) | 354,505 | |||||||||||||||||||||||||||||||||||||
Total debt securities available for sale | $ | 1,136,010 | $ | 1,235 | $ | (22,209) | $ | 1,115,036 | |||||||||||||||||||||||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 430,343 | $ | 327 | $ | (7,745) | $ | 422,925 | |||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 14,593 | 82 | (230) | 14,445 | |||||||||||||||||||||||||||||||||||||
Total debt securities held to maturity | $ | 444,936 | $ | 409 | $ | (7,975) | $ | 437,370 |
Investment Securities (In thousands) | Available for Sale | Held to Maturity | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year | $ | 1 | $ | 1 | — | — | ||||||||||
Due after one year through five years | 9,392 | 9,650 | $ | 1,177 | $ | 1,185 | ||||||||||
Due after five years through ten years | 14,548 | 15,132 | 4,776 | 4,762 | ||||||||||||
Due after ten years | 535,162 | 525,450 | 596,583 | 597,256 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 559,103 | $ | 550,233 | $ | 602,536 | $ | 603,203 | ||||||||
|
|
|
|
|
|
|
|
Debt Securities | Available for Sale | Held to Maturity | |||||||||||||||||||||||||||||||||
(In thousands) | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||||||||||||||||||||
Due in one year | $ | 607 | $ | 611 | $ | 1,271 | $ | 1,280 | |||||||||||||||||||||||||||
Due after one year through five years | 14,853 | 15,204 | — | — | |||||||||||||||||||||||||||||||
Due after five years through ten years | 91,635 | 91,739 | 21,366 | 21,639 | |||||||||||||||||||||||||||||||
Due after ten years | 839,656 | 842,584 | 352,969 | 358,606 | |||||||||||||||||||||||||||||||
Totals | $ | 946,751 | $ | 950,138 | $ | 375,606 | $ | 381,525 |
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
December 31, 2016 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 370,389 | $ | (6,628 | ) | — | — | $ | 370,389 | $ | (6,628 | ) | ||||||||||||
Obligations of states and political subdivisions | 90,825 | (4,396 | ) | — | — | 90,825 | (4,396 | ) | ||||||||||||||||
Marketable equity securities | 2,938 | (62 | ) | — | — | 2,938 | (62 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total securitiesavailable-for-sale | $ | 464,152 | $ | (11,086 | ) | — | — | $ | 464,152 | $ | (11,086 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Securities Held to Maturity: | ||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 280,497 | $ | (4,199 | ) | — | — | $ | 280,497 | $ | (4,199 | ) | ||||||||||||
Obligations of states and political subdivisions | 9,984 | (191 | ) | — | — | 9,984 | (191 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total securitiesheld-to-maturity | $ | 290,481 | $ | (4,390 | ) | — | — | $ | 290,481 | $ | (4,390 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
December 31, 2015 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 193,306 | $ | (1,996 | ) | — | — | $ | 193,306 | $ | (1,996 | ) | ||||||||||||
Obligations of states and political subdivisions | 6,469 | (33 | ) | — | — | 6,469 | (33 | ) | ||||||||||||||||
Marketable equity securities | 2,985 | (15 | ) | — | — | 2,985 | (15 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total securitiesavailable-for-sale | $ | 202,760 | $ | (2,044 | ) | — | — | $ | 202,760 | $ | (2,044 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Securities Held to Maturity: | ||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 198,481 | $ | (2,882 | ) | — | — | $ | 198,481 | $ | (2,882 | ) | ||||||||||||
Obligations of states and political subdivisions | 497 | (11 | ) | $ | 1,121 | $ | (99 | ) | 1,618 | (110 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total securitiesheld-to-maturity | $ | 198,978 | $ | (2,893 | ) | $ | 1,121 | $ | (99 | ) | $ | 200,099 | $ | (2,992 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 36,709 | $ | (309) | $ | 23,852 | $ | (111) | $ | 60,561 | $ | (420) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 778 | (1) | — | — | 778 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset backed securities | 237,463 | (4,535) | 99,981 | (2,378) | 337,444 | (6,913) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities available for sale | $ | 274,950 | $ | (4,845) | $ | 123,833 | $ | (2,489) | $ | 398,783 | $ | (7,334) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 18,813 | $ | (142) | $ | 62,952 | $ | (338) | $ | 81,765 | $ | (480) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities held to maturity | $ | 18,813 | $ | (142) | $ | 62,952 | $ | (338) | $ | 81,765 | $ | (480) |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2018 | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 171,309 | $ | (3,588) | $ | 394,630 | $ | (14,490) | $ | 565,939 | $ | (18,078) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 63,738 | (1,541) | 20,719 | (1,571) | 84,457 | (3,112) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset backed securities | 101,386 | (1,019) | — | — | 101,386 | (1,019) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 336,433 | $ | (6,148) | $ | 415,349 | $ | (16,061) | $ | 751,782 | $ | (22,209) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of U.S. government agencies | $ | 223,810 | $ | (2,619) | $ | 158,648 | $ | (5,126) | $ | 382,458 | $ | (7,745) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 5,786 | (114) | 4,042 | (116) | 9,828 | (230) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities held to maturity | $ | 229,596 | $ | (2,733) | $ | 162,690 | $ | (5,242) | $ | 392,286 | $ | (7,975) |
Marketable equity
December 31, 2016 | ||||||||||||||||||||
PCI - | PCI - | |||||||||||||||||||
Originated | PNCI | Cash basis | Other | Total | ||||||||||||||||
Mortgage loans on real estate: | ||||||||||||||||||||
Residential1-4 family | $ | 229,609 | $ | 78,935 | — | $ | 1,363 | $ | 309,907 | |||||||||||
Commercial | 1,484,420 | 250,037 | — | 13,460 | 1,747,917 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total mortgage loan on real estate | 1,714,029 | 328,972 | — | 14,823 | 2,057,824 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Home equity lines of credit | 263,590 | 21,765 | 2,983 | 1,377 | 289,715 | |||||||||||||||
Home equity loans | 37,074 | 3,618 | — | 1,130 | 41,822 | |||||||||||||||
Other | 28,167 | 2,534 | — | 65 | 30,766 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total consumer loans | 328,831 | 27,917 | 2,983 | 2,572 | 362,303 | |||||||||||||||
Commercial | 200,735 | 12,321 | — | 3,991 | 217,047 | |||||||||||||||
Construction: | ||||||||||||||||||||
Residential | 54,613 | 141 | — | 675 | 55,429 | |||||||||||||||
Commercial | 58,119 | 8,871 | — | — | 66,990 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total construction | 112,732 | 9,012 | — | 675 | 122,419 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loans, net of deferred loan fees and discounts | $ | 2,356,327 | $ | 378,222 | $ | 2,983 | $ | 22,061 | $ | 2,759,593 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total principal balance of loans owed, net of charge-offs | $ | 2,363,243 | $ | 388,139 | $ | 8,280 | $ | 25,650 | $ | 2,785,312 | ||||||||||
Unamortized net deferred loan fees | (6,916 | ) | — | — | — | (6,916 | ) | |||||||||||||
Discounts to principal balance of loans owed, net of charge-offs | — | (9,917 | ) | (5,297 | ) | (3,589 | ) | (18,803 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loans, net of unamortized deferred loan fees and discounts | $ | 2,356,327 | $ | 378,222 | $ | 2,983 | $ | 22,061 | $ | 2,759,593 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Noncovered loans | $ | 2,356,327 | $ | 378,222 | $ | 2,983 | $ | 18,885 | $ | 2,756,417 | ||||||||||
Covered loans | — | — | — | 3,176 | 3,176 | |||||||||||||||
Total loans, net of unamortized deferred loan fees and discounts | $ | 2,356,327 | $ | 378,222 | $ | 2,983 | $ | 22,061 | $ | 2,759,593 | ||||||||||
Allowance for loan losses | $ | (28,141 | ) | $ | (1,665 | ) | $ | (17 | ) | $ | (2,680 | ) | $ | (32,503 | ) |
Note 4 – Loans (continued)
A summary
December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Originated | PNCI | PCI | Total | ||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 373,101 | $ | 134,994 | $ | 1,413 | $ | 509,508 | |||||||||||||||||||||||||||||||||
Commercial | 2,221,217 | 592,244 | 5,321 | 2,818,782 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,594,318 | 727,238 | 6,734 | 3,328,290 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 299,454 | 34,057 | 789 | 334,300 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 25,343 | 2,829 | 414 | 28,586 | |||||||||||||||||||||||||||||||||||||
Other | 67,896 | 14,758 | 2 | 82,656 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 392,693 | 51,644 | 1,205 | 445,542 | |||||||||||||||||||||||||||||||||||||
Commercial | 262,581 | 18,649 | 2,477 | 283,707 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 191,681 | 11,285 | — | 202,966 | |||||||||||||||||||||||||||||||||||||
Commercial | 46,422 | 439 | — | 46,861 | |||||||||||||||||||||||||||||||||||||
Total construction | 238,103 | 11,724 | — | 249,827 | |||||||||||||||||||||||||||||||||||||
Total loans, net of deferred loan fees and discounts | $ | 3,487,695 | $ | 809,255 | $ | 10,416 | $ | 4,307,366 | |||||||||||||||||||||||||||||||||
Total principal balance of loans owed, net of charge-offs | $ | 3,496,622 | $ | 838,425 | $ | 16,678 | $ | 4,351,725 | |||||||||||||||||||||||||||||||||
Unamortized net deferred loan fees | (8,927) | — | — | (8,927) | |||||||||||||||||||||||||||||||||||||
Discounts to principal balance of loans owed, net of charge-offs | — | (29,170) | (6,262) | (35,432) | |||||||||||||||||||||||||||||||||||||
Total loans, net of deferred loan fees and discounts | $ | 3,487,695 | $ | 809,255 | $ | 10,416 | $ | 4,307,366 | |||||||||||||||||||||||||||||||||
Allowance for loan losses | $ | (30,110) | $ | (500) | $ | (6) | $ | (30,616) |
December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Originated | PNCI | PCI | Total | ||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 343,796 | $ | 169,792 | $ | 1,674 | $ | 515,262 | |||||||||||||||||||||||||||||||||
Commercial | 1,910,981 | 708,401 | 8,456 | 2,627,838 | |||||||||||||||||||||||||||||||||||||
Total mortgage loan on real estate | 2,254,777 | 878,193 | 10,130 | 3,143,100 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 284,453 | 40,957 | 1,167 | 326,577 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 32,660 | 3,585 | 439 | 36,684 | |||||||||||||||||||||||||||||||||||||
Other | 34,020 | 21,659 | 42 | 55,721 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 351,133 | 66,201 | 1,648 | 418,982 | |||||||||||||||||||||||||||||||||||||
Commercial | 228,635 | 45,468 | 2,445 | 276,548 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 90,703 | 30,593 | — | 121,296 | |||||||||||||||||||||||||||||||||||||
Commercial | 56,208 | 5,880 | — | 62,088 | |||||||||||||||||||||||||||||||||||||
Total construction | 146,911 | 36,473 | — | 183,384 | |||||||||||||||||||||||||||||||||||||
Total loans, net of deferred loan fees and discounts | $ | 2,981,456 | $ | 1,026,335 | $ | 14,223 | $ | 4,022,014 | |||||||||||||||||||||||||||||||||
Total principal balance of loans owed, net of charge-offs | $ | 2,991,324 | $ | 1,062,655 | $ | 21,265 | $ | 4,075,244 | |||||||||||||||||||||||||||||||||
Unamortized net deferred loan fees | (9,868) | — | — | (9,868) | |||||||||||||||||||||||||||||||||||||
Discounts to principal balance of loans owed, net of charge-offs | — | (36,320) | (7,042) | (43,362) | |||||||||||||||||||||||||||||||||||||
Total loans, net of unamortized deferred loan fees and discounts | $ | 2,981,456 | $ | 1,026,335 | $ | 14,223 | $ | 4,022,014 | |||||||||||||||||||||||||||||||||
Allowance for loan losses | $ | (31,793) | $ | (667) | $ | (122) | $ | (32,582) |
Year ended December 31, | ||||||||
2016 | 2015 | |||||||
Change in accretable yield: | ||||||||
Balance at beginning of period | $ | 13,255 | $ | 14,159 | ||||
Accretion to interest income | (4,011 | ) | (6,323 | ) | ||||
Reclassification (to) from nonaccretable difference | 1,104 | 5,419 | ||||||
|
|
|
| |||||
Balance at end of period | $ | 10,348 | $ | 13,255 | ||||
|
|
|
|
Year ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Change in accretable yield: | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | 6,059 | $ | 6,137 | $ | 7,670 | |||||||||||||||||||||||
Accretion to interest income | (852) | (787) | (2,809) | ||||||||||||||||||||||||||
Reclassification from non-accretable difference | 1,012 | 709 | 1,276 | ||||||||||||||||||||||||||
Balance at end of period | $ | 6,219 | $ | 6,059 | $ | 6,137 |
Allowance for Loan Losses - Year Ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Beginning balance | $ | 2,507 | $ | 11,443 | $ | 11,253 | $ | 3,138 | — | $ | 688 | $ | 5,271 | $ | 899 | $ | 812 | $ | 36,011 | |||||||||||||||||||||
Charge-offs | (321 | ) | (827 | ) | (585 | ) | (219 | ) | — | (823 | ) | (455 | ) | — | — | (3,230 | ) | |||||||||||||||||||||||
Recoveries | 880 | 920 | 2,317 | 590 | — | 449 | 404 | 54 | 78 | 5,692 | ||||||||||||||||||||||||||||||
(Benefit) provision | (679 | ) | 369 | (5,941 | ) | (892 | ) | — | 308 | 611 | 464 | (210 | ) | (5,970 | ) | |||||||||||||||||||||||||
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Ending balance | $ | 2,387 | $ | 11,905 | $ | 7,044 | $ | 2,617 | — | $ | 622 | $ | 5,831 | $ | 1,417 | $ | 680 | $ | 32,503 | |||||||||||||||||||||
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Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Individ. evaluated for impairment | $ | 249 | $ | 127 | $ | 410 | $ | 102 | — | $ | 28 | $ | 1,130 | — | — | $ | 2,046 | |||||||||||||||||||||||
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Loans pooled for evaluation | $ | 1,952 | $ | 10,329 | $ | 6,618 | $ | 2,451 | — | $ | 594 | $ | 3,765 | $ | 1,371 | $ | 680 | $ | 27,760 | |||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 186 | $ | 1,449 | $ | 17 | $ | 64 | — | — | $ | 936 | $ | 45 | — | $ | 2,697 | |||||||||||||||||||||||
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Loans, net of unearned fees - As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 309,907 | $ | 1,747,917 | $ | 289,715 | $ | 41,822 | — | $ | 30,766 | $ | 217,047 | $ | 55,429 | $ | 66,990 | $ | 2,759,593 | |||||||||||||||||||||
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Individ. evaluated for impairment | $ | 3,785 | $ | 15,748 | $ | 3,196 | $ | 1,150 | — | $ | 154 | $ | 4,096 | $ | 11 | — | $ | 28,140 | ||||||||||||||||||||||
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Loans pooled for evaluation | $ | 304,759 | $ | 1,718,709 | $ | 282,159 | $ | 39,542 | — | $ | 30,547 | $ | 208,960 | $ | 54,743 | $ | 66,990 | $ | 2,706,409 | |||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 1,363 | $ | 13,460 | $ | 4,360 | $ | 1,130 | — | $ | 65 | $ | 3,991 | $ | 675 | — | $ | 25,044 | ||||||||||||||||||||||
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Allowance for Loan Losses - Year Ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans Indirect | Consum. | C&I | Resid. | Comm. | Total | |||||||||||||||||||||||||||||||
Beginning balance | $ | 3,086 | $ | 9,227 | $ | 15,676 | $ | 1,797 | $ | 9 | $ | 719 | $ | 4,226 | $ | 1,434 | $ | 411 | $ | 36,585 | ||||||||||||||||||||
Charge-offs | (224 | ) | — | (694 | ) | (242 | ) | (4 | ) | (972 | ) | (680 | ) | — | — | (2,816 | ) | |||||||||||||||||||||||
Recoveries | 204 | 243 | 666 | 252 | 42 | 500 | 677 | 1,728 | 140 | 4,452 | ||||||||||||||||||||||||||||||
(Benefit) provision | (559 | ) | 1,973 | (4,395 | ) | 1,331 | (47 | ) | 441 | 1,048 | (2,263 | ) | 261 | (2,210 | ) | |||||||||||||||||||||||||
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Ending balance | $ | 2,507 | $ | 11,443 | $ | 11,253 | $ | 3,138 | — | $ | 688 | $ | 5,271 | $ | 899 | $ | 812 | $ | 36,011 | |||||||||||||||||||||
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Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Individ. evaluated for impairment | $ | 335 | $ | 395 | $ | 605 | $ | 294 | — | $ | 74 | $ | 1,187 | — | — | $ | 2,890 | |||||||||||||||||||||||
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Loans pooled for evaluation | $ | 2,112 | $ | 9,596 | $ | 10,423 | $ | 2,844 | — | $ | 614 | $ | 2,983 | $ | 844 | $ | 812 | $ | 30,228 | |||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 60 | $ | 1,452 | $ | 225 | — | — | — | $ | 1,101 | $ | 55 | — | $ | 2,893 | ||||||||||||||||||||||||
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Loans, net of unearned fees - As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 314,265 | $ | 1,497,567 | $ | 322,492 | $ | 40,362 | — | $ | 32,429 | $ | 194,913 | $ | 46,135 | $ | 74,774 | $ | 2,522,937 | |||||||||||||||||||||
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Individ. evaluated for impairment | $ | 6,767 | $ | 32,407 | $ | 5,747 | $ | 1,731 | — | $ | 288 | $ | 2,671 | $ | 4 | $ | 490 | $ | 50,105 | |||||||||||||||||||||
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Loans pooled for evaluation | $ | 305,353 | $ | 1,442,100 | $ | 309,007 | $ | 37,004 | — | $ | 32,077 | $ | 187,393 | $ | 45,410 | $ | 74,284 | $ | 2,432,628 | |||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 2,145 | $ | 23,060 | $ | 7,738 | $ | 1,627 | — | $ | 64 | $ | 4,849 | $ | 721 | — | $ | 40,204 | ||||||||||||||||||||||
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Note 5 – Allowance for Loan Losses (continued)
Allowance for Loan Losses - Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans Indirect | Consum. | C&I | Resid. | Comm. | Total | |||||||||||||||||||||||||||||||
Beginning balance | $ | 3,154 | $ | 9,700 | $ | 16,375 | $ | 1,208 | $ | 66 | $ | 589 | $ | 4,331 | $ | 1,559 | $ | 1,263 | $ | 38,245 | ||||||||||||||||||||
Charge-offs | (171 | ) | (110 | ) | (1,094 | ) | (29 | ) | (3 | ) | (599 | ) | (479 | ) | (4 | ) | (69 | ) | (2,558 | ) | ||||||||||||||||||||
Recoveries | 2 | 540 | 960 | 34 | 86 | 495 | 1,268 | 1,377 | 181 | 4,943 | ||||||||||||||||||||||||||||||
(Benefit) provision | 101 | (903 | ) | (565 | ) | 584 | (140 | ) | 234 | (894 | ) | (1,498 | ) | (964 | ) | (4,045 | ) | |||||||||||||||||||||||
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Ending balance | $ | 3,086 | $ | 9,227 | $ | 15,676 | $ | 1,797 | $ | 9 | $ | 719 | $ | 4,226 | $ | 1,434 | $ | 411 | $ | 36,585 | ||||||||||||||||||||
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Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Individ. evaluated for impairment | $ | 974 | $ | 410 | $ | 1,974 | $ | 284 | — | $ | 142 | $ | 423 | $ | 60 | — | $ | 4,267 | ||||||||||||||||||||||
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Loans pooled for evaluation | $ | 1,915 | $ | 8,408 | $ | 13,251 | $ | 1,513 | $ | 9 | $ | 572 | $ | 2,569 | $ | 332 | $ | 322 | $ | 28,891 | ||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 197 | $ | 409 | $ | 451 | — | — | $ | 5 | $ | 1,234 | $ | 1,042 | $ | 89 | $ | 3,427 | ||||||||||||||||||||||
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Loans, net of unearned fees - As of December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Ending balance: | ||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 279,420 | $ | 1,335,939 | $ | 352,584 | $ | 31,314 | $ | 112 | $ | 33,074 | $ | 174,945 | $ | 38,618 | $ | 36,518 | $ | 2,282,524 | ||||||||||||||||||||
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Individ. evaluated for impairment | $ | 7,188 | $ | 41,932 | $ | 6,968 | $ | 1,279 | $ | 18 | $ | 323 | $ | 1,757 | $ | 2,683 | $ | 99 | $ | 62,247 | ||||||||||||||||||||
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Loans pooled for evaluation | $ | 268,227 | $ | 1,263,090 | $ | 336,595 | $ | 29,266 | $ | 94 | $ | 32,677 | $ | 165,753 | $ | 35,260 | $ | 36,419 | $ | 2,167,381 | ||||||||||||||||||||
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Loans acquired with deteriorated credit quality | $ | 4,005 | $ | 30,917 | $ | 9,021 | $ | 770 | — | $ | 74 | $ | 7,435 | $ | 675 | — | $ | 52,897 | ||||||||||||||||||||||
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Allowance for Loan Losses - December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Beginning Balance | Charge-offs | Recoveries | Provision (benefit) | Ending Balance | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,676 | $ | (2) | $ | 54 | $ | (422) | $ | 2,306 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 12,944 | (746) | 1,528 | (1,731) | 11,995 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 15,620 | (748) | 1,582 | (2,153) | 14,301 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 6,042 | — | 504 | (974) | 5,572 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,540 | (3) | 431 | (1,357) | 611 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 793 | (765) | 321 | 1,246 | 1,595 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 8,375 | (768) | 1,256 | (1,085) | 7,778 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 6,090 | (2,123) | 525 | 657 | 5,149 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 1,834 | — | — | 1,236 | 3,070 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 663 | — | — | (345) | 318 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 2,497 | — | — | 891 | 3,388 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 32,582 | $ | (3,639) | $ | 3,363 | $ | (1,690) | $ | 30,616 |
Allowance for Loan Losses – As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total allowance for loan losses | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,257 | $ | 49 | $ | — | $ | 2,306 | |||||||||||||||||||||||||||||||||
Commercial | 11,917 | 78 | — | 11,995 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 14,174 | 127 | — | 14,301 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 5,451 | 115 | 6 | 5,572 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 567 | 44 | — | 611 | |||||||||||||||||||||||||||||||||||||
Other | 1,576 | 19 | — | 1,595 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 7,594 | 178 | 6 | 7,778 | |||||||||||||||||||||||||||||||||||||
Commercial | 4,519 | 630 | — | 5,149 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 3,070 | — | — | 3,070 | |||||||||||||||||||||||||||||||||||||
Commercial | 318 | — | — | 318 | |||||||||||||||||||||||||||||||||||||
Total construction | 3,388 | — | — | 3,388 | |||||||||||||||||||||||||||||||||||||
Total | $ | 29,675 | $ | 935 | $ | 6 | $ | 30,616 |
Loans, Net of Unearned fees – As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total loans, net of unearned fees | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 503,021 | $ | 5,074 | $ | 1,413 | $ | 509,508 | |||||||||||||||||||||||||||||||||
Commercial | 2,804,812 | 8,649 | 5,321 | 2,818,782 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 3,307,833 | 13,723 | 6,734 | 3,328,290 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 331,437 | 2,074 | 789 | 334,300 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 26,522 | 1,650 | 414 | 28,586 | |||||||||||||||||||||||||||||||||||||
Other | 82,514 | 140 | 2 | 82,656 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 440,473 | 3,864 | 1,205 | 445,542 | |||||||||||||||||||||||||||||||||||||
Commercial | 278,900 | 2,330 | 2,477 | 283,707 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 202,966 | — | — | 202,966 | |||||||||||||||||||||||||||||||||||||
Commercial | 46,861 | — | — | 46,861 | |||||||||||||||||||||||||||||||||||||
Total construction | 249,827 | — | — | 249,827 | |||||||||||||||||||||||||||||||||||||
Total | $ | 4,277,033 | $ | 19,917 | $ | 10,416 | $ | 4,307,366 |
Allowance for Loan Losses – Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Beginning Balance | Charge-offs | Recoveries | Provision (benefit) | Ending Balance | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,317 | $ | (77) | $ | — | $ | 436 | $ | 2,676 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 11,441 | (15) | 68 | 1,450 | 12,944 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 13,758 | (92) | 68 | 1,886 | 15,620 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 5,800 | (277) | 846 | (327) | 6,042 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,841 | (24) | 297 | (574) | 1,540 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 586 | (783) | 288 | 702 | 793 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 8,227 | (1,084) | 1,431 | (199) | 8,375 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 6,512 | (1,188) | 541 | 225 | 6,090 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 1,184 | — | — | 650 | 1,834 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 642 | — | — | 21 | 663 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 1,826 | — | — | 671 | 2,497 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 30,323 | $ | (2,364) | $ | 2,040 | $ | 2,583 | $ | 32,582 |
Allowance for Loan Losses – As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total allowance for loan losses | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,620 | $ | 56 | $ | — | $ | 2,676 | |||||||||||||||||||||||||||||||||
Commercial | 12,737 | 91 | 116 | 12,944 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 15,357 | 147 | 116 | 15,620 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 5,838 | 198 | 6 | 6,042 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 1,486 | 54 | — | 1,540 | |||||||||||||||||||||||||||||||||||||
Other | 779 | 14 | — | 793 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 8,103 | 266 | 6 | 8,375 | |||||||||||||||||||||||||||||||||||||
Commercial | 4,309 | 1,781 | — | 6,090 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 1,834 | — | — | 1,834 | |||||||||||||||||||||||||||||||||||||
Commercial | 663 | — | — | 663 | |||||||||||||||||||||||||||||||||||||
Total construction | 2,497 | — | — | 2,497 | |||||||||||||||||||||||||||||||||||||
Total | $ | 30,266 | $ | 2,194 | $ | 122 | $ | 32,582 |
Loans, Net of Unearned fees – As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total allowance for loan losses | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 509,267 | $ | 4,321 | $ | 1,674 | $ | 515,262 | |||||||||||||||||||||||||||||||||
Commercial | 2,606,819 | 12,563 | 8,456 | 2,627,838 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 3,116,086 | 16,884 | 10,130 | 3,143,100 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 322,764 | 2,646 | 1,167 | 326,577 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 33,142 | 3,103 | 439 | 36,684 | |||||||||||||||||||||||||||||||||||||
Other | 55,483 | 196 | 42 | 55,721 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 411,389 | 5,945 | 1,648 | 418,982 | |||||||||||||||||||||||||||||||||||||
Commercial | 268,885 | 5,218 | 2,445 | 276,548 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 121,296 | — | — | 121,296 | |||||||||||||||||||||||||||||||||||||
Commercial | 62,088 | — | — | 62,088 | |||||||||||||||||||||||||||||||||||||
Total construction | 183,384 | — | — | 183,384 | |||||||||||||||||||||||||||||||||||||
Total | $ | 3,979,744 | $ | 28,047 | $ | 14,223 | $ | 4,022,014 |
Allowance for Loan Losses – Year Ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Beginning Balance | Charge-offs | Recoveries | Provision (benefit) | Ending Balance | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,748 | $ | (60) | $ | — | $ | (371) | $ | 2,317 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 11,517 | (186) | 397 | (287) | 11,441 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 14,265 | (246) | 397 | (658) | 13,758 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 7,044 | (98) | 698 | (1,844) | 5,800 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 2,644 | (332) | 242 | (713) | 1,841 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 622 | (1,186) | 375 | 775 | 586 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 10,310 | (1,616) | 1,315 | (1,782) | 8,227 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 5,831 | (1,444) | 428 | 1,697 | 6,512 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 1,417 | (1,104) | — | 871 | 1,184 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 680 | — | 1 | (39) | 642 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 2,097 | (1,104) | 1 | 832 | 1,826 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 32,503 | $ | (4,410) | $ | 2,141 | $ | 89 | $ | 30,323 |
Allowance for Loan Losses – As of December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total allowance for loan losses | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,932 | $ | 230 | $ | 155 | $ | 2,317 | |||||||||||||||||||||||||||||||||
Commercial | 11,351 | 30 | 60 | 11,441 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 13,283 | 260 | 215 | 13,758 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 5,356 | 427 | 17 | 5,800 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 1,734 | 107 | — | 1,841 | |||||||||||||||||||||||||||||||||||||
Other | 529 | 57 | — | 586 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 7,619 | 591 | 17 | 8,227 | |||||||||||||||||||||||||||||||||||||
Commercial | 4,624 | 1,848 | 40 | 6,512 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 1,184 | — | — | 1,184 | |||||||||||||||||||||||||||||||||||||
Commercial | 642 | — | — | 642 | |||||||||||||||||||||||||||||||||||||
Total construction | 1,826 | — | — | 1,826 | |||||||||||||||||||||||||||||||||||||
Total | $ | 27,352 | $ | 2,699 | $ | 272 | $ | 30,323 |
Loans, Net of Unearned fees – As of December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | Loans pooled for evaluation | Individually evaluated for impairment | Loans acquired with deteriorated credit quality | Total Loans | |||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 378,743 | $ | 5,298 | $ | 1,385 | $ | 385,426 | |||||||||||||||||||||||||||||||||
Commercial | 1,892,422 | 13,911 | 8,563 | 1,914,896 | |||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,271,165 | 19,209 | 9,948 | 2,300,322 | |||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 283,502 | 2,688 | 2,498 | 288,688 | |||||||||||||||||||||||||||||||||||||
Home equity loans | 41,076 | 1,470 | 485 | 43,031 | |||||||||||||||||||||||||||||||||||||
Other | 24,853 | 257 | 45 | 25,155 | |||||||||||||||||||||||||||||||||||||
Total consumer loans | 349,431 | 4,415 | 3,028 | 356,874 | |||||||||||||||||||||||||||||||||||||
Commercial | 213,358 | 4,470 | 2,584 | 220,412 | |||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||
Residential | 67,790 | 140 | — | 67,930 | |||||||||||||||||||||||||||||||||||||
Commercial | 69,627 | — | — | 69,627 | |||||||||||||||||||||||||||||||||||||
Total construction | 137,417 | 140 | — | 137,557 | |||||||||||||||||||||||||||||||||||||
Total | $ | 2,971,371 | $ | 28,234 | $ | 15,560 | $ | 3,015,165 |
Note 5
the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention.
Credit Quality Indicators – As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Originated loans: | ||||||||||||||||||||||||||||||||||||||||
Pass | $ | 224,988 | $ | 1,457,128 | $ | 258,024 | $ | 34,299 | — | $ | 27,542 | $ | 190,902 | $ | 54,602 | $ | 57,808 | $ | 2,305,293 | |||||||||||||||||||||
Special mention | 2,225 | 15,108 | 2,518 | 891 | — | 385 | 6,133 | — | 311 | 27,571 | ||||||||||||||||||||||||||||||
Substandard | 2,396 | 12,184 | 3,048 | 1,884 | — | 240 | 3,700 | 11 | — | 23,463 | ||||||||||||||||||||||||||||||
Loss | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Total originated | $ | 229,609 | $ | 1,484,420 | $ | 263,590 | $ | 37,074 | — | $ | 28,167 | $ | 200,735 | $ | 54,613 | $ | 58,119 | $ | 2,356,327 | |||||||||||||||||||||
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PNCI loans: | ||||||||||||||||||||||||||||||||||||||||
Pass | $ | 75,600 | $ | 236,740 | $ | 20,442 | $ | 3,492 | — | $ | 2,437 | $ | 12,320 | $ | 141 | $ | 8,871 | $ | 360,043 | |||||||||||||||||||||
Special mention | 1,849 | 6,057 | 509 | 41 | — | 92 | 1 | — | — | 8,549 | ||||||||||||||||||||||||||||||
Substandard | 1,486 | 7,240 | 814 | 85 | — | 5 | — | — | — | 9,630 | ||||||||||||||||||||||||||||||
Loss | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Total PNCI | $ | 78,935 | $ | 250,037 | $ | 21,765 | $ | 3,618 | — | $ | 2,534 | $ | 12,321 | $ | 141 | $ | 8,871 | $ | 378,222 | |||||||||||||||||||||
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PCI loans | $ | 1,363 | $ | 13,460 | $ | 4,360 | $ | 1,130 | — | $ | 65 | $ | 3,991 | $ | 675 | — | $ | 25,044 | ||||||||||||||||||||||
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Total loans | $ | 309,907 | $ | 1,747,917 | $ | 289,715 | $ | 41,822 | — | $ | 30,766 | $ | 217,047 | $ | 55,429 | $ | 66,990 | $ | 2,759,593 | |||||||||||||||||||||
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Credit Quality Indicators – As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Originated loans: | ||||||||||||||||||||||||||||||||||||||||
Pass | $ | 199,837 | $ | 1,118,868 | $ | 275,251 | $ | 31,427 | — | $ | 28,339 | $ | 166,559 | $ | 31,440 | $ | 66,285 | $ | 1,918,006 | |||||||||||||||||||||
Special mention | 2,018 | 10,321 | 2,494 | 1,027 | — | 415 | 1,037 | 334 | — | 17,646 | ||||||||||||||||||||||||||||||
Substandard | 5,730 | 34,454 | 7,674 | 2,263 | — | 244 | 2,724 | 4 | — | 53,093 | ||||||||||||||||||||||||||||||
Loss | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Total originated | $ | 207,585 | $ | 1,163,643 | $ | 285,419 | $ | 34,717 | — | $ | 28,998 | $ | 170,320 | $ | 31,778 | $ | 66,285 | $ | 1,988,745 | |||||||||||||||||||||
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PNCI loans: | ||||||||||||||||||||||||||||||||||||||||
Pass | $ | 102,895 | $ | 293,935 | $ | 27,378 | $ | 3,789 | — | $ | 3,164 | $ | 19,666 | $ | 13,636 | $ | 8,489 | $ | 472,952 | |||||||||||||||||||||
Special mention | 600 | 10,795 | 445 | 80 | — | 74 | — | — | — | 11,994 | ||||||||||||||||||||||||||||||
Substandard | 1,040 | 6,134 | 1,512 | 149 | — | 129 | 78 | — | — | 9,042 | ||||||||||||||||||||||||||||||
Loss | — | — | — | �� | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Total PNCI | $ | 104,535 | $ | 310,864 | $ | 29,335 | $ | 4,018 | — | $ | 3,367 | $ | 19,744 | $ | 13,636 | $ | 8,489 | $ | 493,988 | |||||||||||||||||||||
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PCI loans | $ | 2,145 | $ | 23,060 | $ | 7,738 | $ | 1,627 | — | $ | 64 | $ | 4,849 | $ | 721 | — | $ | 40,204 | ||||||||||||||||||||||
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Total loans | $ | 314,265 | $ | 1,497,567 | $ | 322,492 | $ | 40,362 | — | $ | 32,429 | $ | 194,913 | $ | 46,135 | $ | 74,774 | $ | 2,522,937 | |||||||||||||||||||||
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Credit Quality Indicators Originated Loans – As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful / Loss | Total Originated Loans | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 366,149 | $ | 2,497 | $ | 4,455 | $ | — | $ | 373,101 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 2,185,961 | 24,485 | 10,771 | — | 2,221,217 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,552,110 | 26,982 | 15,226 | — | 2,594,318 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 293,432 | 3,332 | 2,690 | — | 299,454 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 22,318 | 1,192 | 1,833 | — | 25,343 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 67,422 | 373 | 101 | — | 67,896 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 383,172 | 4,897 | 4,624 | — | 392,693 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 254,554 | 3,826 | 4,201 | 262,581 | |||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 191,434 | — | 247 | — | 191,681 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 46,105 | 317 | — | — | 46,422 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 237,539 | 317 | 247 | — | 238,103 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 3,427,375 | $ | 36,022 | $ | 24,298 | $ | — | $ | 3,487,695 |
Credit Quality Indicators PNCI Loans – As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful / Loss | Total PNCI Loans | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 131,820 | $ | 2,217 | $ | 957 | $ | — | $ | 134,994 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 584,829 | 573 | 6,842 | — | 592,244 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 716,649 | 2,790 | 7,799 | — | 727,238 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 32,096 | 857 | 1,104 | — | 34,057 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 2,774 | — | 55 | — | 2,829 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 14,390 | 346 | 22 | — | 14,758 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 49,260 | 1,203 | 1,181 | — | 51,644 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 18,602 | 1 | 46 | — | 18,649 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 7,083 | 4,202 | — | — | 11,285 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 439 | — | — | — | 439 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 7,522 | 4,202 | — | — | 11,724 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 792,033 | $ | 8,196 | $ | 9,026 | $ | — | $ | 809,255 |
Credit Quality Indicators Originated Loans – As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful / Loss | Total Originated Loans | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 337,189 | $ | 1,724 | $ | 4,883 | $ | — | $ | 343,796 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 1,861,627 | 33,483 | 15,871 | — | 1,910,981 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,198,816 | 35,207 | 20,754 | — | 2,254,777 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 279,491 | 2,309 | 2,653 | — | 284,453 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 29,289 | 1,054 | 2,317 | — | 32,660 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 33,606 | 341 | 73 | — | 34,020 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 342,386 | 3,704 | 5,043 | — | 351,133 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 217,126 | 6,127 | 5,382 | — | 228,635 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 90,412 | 32 | 259 | — | 90,703 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 55,863 | 345 | — | — | 56,208 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 146,275 | 377 | 259 | — | 146,911 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 2,904,603 | $ | 45,415 | $ | 31,438 | $ | — | $ | 2,981,456 |
Credit Quality Indicators PNCI Loans – As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful / Loss | Total PNCI Loans | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 167,908 | $ | 1,086 | $ | 798 | $ | — | $ | 169,792 | |||||||||||||||||||||||||||||||||||||||||||
Commercial | 701,868 | 3,085 | 3,448 | — | 708,401 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 869,776 | 4,171 | 4,246 | — | 878,193 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 38,780 | 1,124 | 1,053 | — | 40,957 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 3,413 | 74 | 98 | — | 3,585 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 21,481 | 173 | 5 | — | 21,659 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 63,674 | 1,371 | 1,156 | — | 66,201 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 45,027 | 321 | 120 | — | 45,468 | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 30,593 | — | — | — | 30,593 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 5,880 | — | — | — | 5,880 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 36,473 | — | — | — | 36,473 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,014,950 | $ | 5,863 | $ | 5,522 | $ | — | $ | 1,026,335 |
Note 5 – Allowance for Loan Losses (continued)
Analysis of Past Due and Nonaccrual Originated Loans – As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Originated loan balance: | ||||||||||||||||||||||||||||||||||||||||
Past due: | ||||||||||||||||||||||||||||||||||||||||
30-59 Days | $ | 552 | $ | 317 | $ | 754 | $ | 646 | — | $ | 16 | $ | 1,148 | $ | 921 | — | $ | 4,354 | ||||||||||||||||||||||
60-89 Days | 139 | 1,517 | — | 395 | — | 30 | 84 | — | $ | 421 | 2,586 | |||||||||||||||||||||||||||||
> 90 Days | — | 216 | 687 | 184 | — | 15 | 634 | 11 | — | 1,747 | ||||||||||||||||||||||||||||||
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Total past due | $ | 691 | $ | 2,050 | $ | 1,441 | $ | 1,225 | — | $ | 61 | $ | 1,866 | $ | 932 | $ | 421 | $ | 8,687 | |||||||||||||||||||||
Current | 228,918 | 1,482,370 | 262,149 | 35,849 | — | 28,106 | 198,869 | 53,681 | 57,698 | 2,347,640 | ||||||||||||||||||||||||||||||
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Total orig. loans | $ | 229,609 | $ | 1,484,420 | $ | 263,590 | $ | 37,074 | — | $ | 28,167 | $ | 200,735 | $ | 54,613 | $ | 58,119 | $ | 2,356,327 | |||||||||||||||||||||
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> 90 Days and still accruing | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Nonaccrual loans | $ | 255 | $ | 7,736 | $ | 1,211 | $ | 718 | — | $ | 33 | $ | 2,930 | $ | 11 | — | $ | 12,894 | ||||||||||||||||||||||
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The following table shows the ending balance of current, past due, and nonaccrual PNCI loans by loan category as of the date indicated:
Analysis of Past Due and Nonaccrual PNCI Loans – As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
PNCI loan balance: | ||||||||||||||||||||||||||||||||||||||||
Past due: | ||||||||||||||||||||||||||||||||||||||||
30-59 Days | $ | 1,510 | $ | 73 | $ | 274 | $ | 39 | — | — | — | — | — | $ | 1,896 | |||||||||||||||||||||||||
60-89 Days | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
> 90 Days | 21 | 81 | 589 | 13 | — | — | — | — | — | 704 | ||||||||||||||||||||||||||||||
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Total past due | $ | 1,531 | $ | 154 | $ | 863 | $ | 52 | — | — | — | — | — | $ | 2,600 | |||||||||||||||||||||||||
Current | 77,404 | 249,883 | 20,902 | 3,566 | — | $ | 2,534 | $ | 12,321 | $ | 141 | $ | 8,871 | 375,622 | ||||||||||||||||||||||||||
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Total PNCI loans | $ | 78,935 | $ | 250,037 | $ | 21,765 | $ | 3,618 | — | $ | 2,534 | $ | 12,321 | $ | 141 | $ | 8,871 | $ | 378,222 | |||||||||||||||||||||
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> 90 Days and still accruing | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Nonaccrual loans | $ | 194 | $ | 1,826 | $ | 742 | $ | 67 | — | $ | 5 | — | — | — | $ | 2,834 | ||||||||||||||||||||||||
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Note 5 – Allowance for Loan Losses (continued)
Analysis of Originated Past Due Loans - As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 30-59 days | 60-89 days | > 90 days | Total Past Due Loans | Current | Total | > 90 Days and Still Accruing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 60 | $ | 65 | $ | 1,957 | $ | 2,082 | $ | 371,019 | $ | 373,101 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 30 | 136 | 293 | 459 | 2,220,758 | 2,221,217 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 90 | 201 | 2,250 | 2,541 | 2,591,777 | 2,594,318 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | — | 93 | 712 | 805 | 298,649 | 299,454 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 36 | 216 | 132 | 384 | 24,959 | 25,343 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 120 | — | 4 | 124 | 67,772 | 67,896 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 156 | 309 | 848 | 1,313 | 391,380 | 392,693 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 604 | 297 | 9 | 910 | 261,671 | 262,581 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | 191,681 | 191,681 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | 46,422 | 46,422 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | —�� | — | — | — | 238,103 | 238,103 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total originated loans | $ | 850 | $ | 807 | $ | 3,107 | $ | 4,764 | $ | 3,482,931 | $ | 3,487,695 | $ | — |
Analysis of PNCI Past Due Loans - As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 30-59 days | 60-89 days | > 90 days | Total Past Due Loans | Current | Total | > 90 Days and Still Accruing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | — | $ | 305 | $ | — | $ | 305 | $ | 134,689 | $ | 134,994 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 268 | — | 2,137 | 2,405 | 589,839 | 592,244 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 268 | 305 | 2,137 | 2,710 | 724,528 | 727,238 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 87 | 260 | 243 | 590 | 33,467 | 34,057 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 51 | — | — | 51 | 2,778 | 2,829 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | 19 | 19 | 14,739 | 14,758 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 138 | 260 | 262 | 660 | 50,984 | 51,644 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | 51 | 51 | 18,598 | 18,649 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | 11,285 | 11,285 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | 439 | 439 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | 11,724 | 11,724 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total PNCI loans | $ | 406 | $ | 565 | $ | 2,450 | $ | 3,421 | $ | 805,834 | $ | 809,255 | $ | 19 |
Analysis of Originated Past Due Loans - As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 30-59 days | 60-89 days | > 90 days | Total Past Due Loans | Current | Total | > 90 Days and Still Accruing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,675 | $ | 132 | $ | 478 | $ | 2,285 | $ | 341,511 | $ | 343,796 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 431 | 1,200 | 296 | 1,927 | 1,909,054 | 1,910,981 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,106 | 1,332 | 774 | 4,212 | 2,250,565 | 2,254,777 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 908 | 47 | 609 | 1,564 | 282,889 | 284,453 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,043 | 24 | 214 | 1,281 | 31,379 | 32,660 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 298 | 17 | — | 315 | 33,705 | 34,020 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 2,249 | 88 | 823 | 3,160 | 347,973 | 351,133 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 1,053 | 579 | 1,247 | 2,879 | 225,756 | 228,635 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 209 | — | — | 209 | 90,494 | 90,703 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | 56,208 | 56,208 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 209 | — | — | 209 | 146,702 | 146,911 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 5,617 | $ | 1,999 | $ | 2,844 | $ | 10,460 | $ | 2,970,996 | $ | 2,981,456 | $ | — |
Analysis of PNCI Past Due Loans - As of December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 30-59 days | 60-89 days | > 90 days | Total Past Due Loans | Current | Total | > 90 Days and Still Accruing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,009 | $ | 133 | $ | 156 | $ | 1,298 | $ | 168,494 | $ | 169,792 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 1,646 | 1,136 | 1,082 | 3,864 | 704,537 | 708,401 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 2,655 | 1,269 | 1,238 | 5,162 | 873,031 | 878,193 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 304 | 35 | 237 | 576 | 40,381 | 40,957 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 74 | — | — | 74 | 3,511 | 3,585 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 160 | — | — | 160 | 21,499 | 21,659 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 538 | 35 | 237 | 810 | 65,391 | 66,201 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 678 | 145 | 113 | 936 | 44,532 | 45,468 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | 30,593 | 30,593 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | 5,880 | 5,880 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | 36,473 | 36,473 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 3,871 | $ | 1,449 | $ | 1,588 | $ | 6,908 | $ | 1,019,427 | $ | 1,026,335 | $ | — |
Analysis of Past Due and Nonaccrual Originated Loans – As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Originated loan balance: | ||||||||||||||||||||||||||||||||||||||||
Past due: | ||||||||||||||||||||||||||||||||||||||||
30-59 Days | $ | 791 | $ | 200 | $ | 1,033 | $ | 402 | — | $ | 12 | $ | 2,197 | — | — | $ | 4,635 | |||||||||||||||||||||||
60-89 Days | — | 491 | 324 | 341 | — | 40 | — | — | — | 1,196 | ||||||||||||||||||||||||||||||
> 90 Days | 271 | 3,425 | 520 | 82 | — | 19 | 24 | — | — | 4,341 | ||||||||||||||||||||||||||||||
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Total past due | $ | 1,062 | $ | 4,116 | $ | 1,877 | $ | 825 | — | $ | 71 | $ | 2,221 | — | — | $ | 10,172 | |||||||||||||||||||||||
Current | 206,523 | 1,159,527 | 283,542 | 33,892 | — | 28,927 | 168,099 | — | — | 1,978,573 | ||||||||||||||||||||||||||||||
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Total orig. loans | $ | 207,585 | $ | 1,163,643 | $ | 285,419 | $ | 34,717 | — | $ | 28,998 | $ | 170,320 | $ | 31,778 | $ | 66,285 | $ | 1,988,745 | |||||||||||||||||||||
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> 90 Days and still accruing | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Nonaccrual loans | $ | 3,045 | $ | 14,196 | $ | 3,379 | $ | 1,195 | — | $ | 21 | $ | 976 | $ | 12 | — | $ | 22,824 | ||||||||||||||||||||||
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The following table shows
Non Accrual Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2019 | As of December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Originated | PNCI | Total | Originated | PNCI | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 3,547 | $ | 876 | $ | 4,423 | $ | 3,244 | $ | 334 | $ | 3,578 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 2,702 | 2,403 | 5,105 | 9,263 | 1,468 | 10,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 6,249 | 3,279 | 9,528 | 12,507 | 1,802 | 14,309 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,254 | 548 | 1,802 | 1,429 | 885 | 2,314 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,181 | 31 | 1,212 | 1,722 | 47 | 1,769 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 29 | 2 | 31 | 3 | 4 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 2,464 | 581 | 3,045 | 3,154 | 936 | 4,090 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 2,038 | 51 | 2,089 | 3,755 | 120 | 3,875 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total non accrual loans | $ | 10,751 | $ | 3,911 | $ | 14,662 | $ | 19,416 | $ | 2,858 | $ | 22,274 |
Analysis of Past Due and Nonaccrual PNCI Loans – As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
PNCI loan balance: | ||||||||||||||||||||||||||||||||||||||||
Past due: | ||||||||||||||||||||||||||||||||||||||||
30-59 Days | $ | 3,106 | $ | 4,037 | $ | 92 | $ | 23 | — | — | $ | 1 | — | — | $ | 7,259 | ||||||||||||||||||||||||
60-89 Days | — | — | — | — | — | $ | 13 | — | — | — | 13 | |||||||||||||||||||||||||||||
> 90 Days | 58 | 748 | 275 | 71 | — | 10 | — | — | $ | 490 | 1,652 | |||||||||||||||||||||||||||||
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Total past due | $ | 3,164 | $ | 4,785 | $ | 367 | $ | 94 | — | $ | 23 | $ | 1 | — | $ | 490 | $ | 8,924 | ||||||||||||||||||||||
Current | 101,371 | 306,079 | 28,968 | 3,924 | — | 3,344 | 19,743 | $ | 13,636 | 7,999 | 485,064 | |||||||||||||||||||||||||||||
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Total PNCI loans | $ | 104,535 | $ | 310,864 | $ | 29,335 | $ | 4,018 | — | $ | 3,367 | $ | 19,744 | $ | 13,636 | $ | 8,489 | $ | 493,988 | |||||||||||||||||||||
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> 90 Days and still accruing | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Nonaccrual loans | $ | 348 | $ | 3,742 | $ | 676 | $ | 109 | — | $ | 33 | — | — | $ | 490 | $ | 5,398 | |||||||||||||||||||||||
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years ended December 31, 2019, 2018, and 2017 was $162,000, $989,000, and $18,000, respectively.
Impaired Originated Loans – As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 1,691 | $ | 13,144 | $ | 1,480 | $ | 598 | — | $ | 15 | $ | 762 | $ | 11 | — | $ | 17,701 | ||||||||||||||||||||||
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Unpaid principal | $ | 1,699 | $ | 13,488 | $ | 1,561 | $ | 922 | — | $ | 29 | $ | 926 | $ | 16 | — | $ | 18,641 | ||||||||||||||||||||||
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Average recorded Investment | $ | 2,788 | $ | 20,126 | $ | 2,221 | $ | 773 | $ | 1 | $ | 16 | $ | 669 | $ | 7 | — | $ | 26,601 | |||||||||||||||||||||
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Interest income Recognized | $ | 83 | $ | 581 | $ | 40 | $ | 4 | — | $ | 1 | $ | 48 | — | — | $ | 757 | |||||||||||||||||||||||
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With an allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 1,372 | $ | 646 | $ | 430 | $ | 485 | — | $ | 18 | $ | 3,334 | — | — | $ | 6,285 | |||||||||||||||||||||||
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Unpaid principal | $ | 1,372 | $ | 646 | $ | 440 | $ | 487 | — | $ | 19 | $ | 3,385 | — | — | $ | 6,349 | |||||||||||||||||||||||
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Related allowance | $ | 170 | $ | 19 | $ | 110 | $ | 102 | — | $ | 13 | $ | 1,130 | — | — | $ | 1,544 | |||||||||||||||||||||||
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Average recorded Investment | $ | 1,689 | $ | 1,032 | $ | 1,077 | $ | 579 | — | $ | 9 | $ | 2,714 | — | — | $ | 7,100 | |||||||||||||||||||||||
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Interest income Recognized | $ | 56 | $ | 37 | $ | 9 | $ | 25 | — | $ | 2 | $ | 77 | — | — | $ | 206 | |||||||||||||||||||||||
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Note 5 – Allowance for Loan Losses (continued)
Impaired PNCI Loans – As of December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 463 | $ | 1,826 | $ | 735 | $ | 67 | — | $ | 3 | — | — | — | $ | 3,094 | ||||||||||||||||||||||||
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Unpaid principal | $ | 486 | $ | 2,031 | $ | 746 | $ | 74 | — | $ | 4 | — | — | — | $ | 3,341 | ||||||||||||||||||||||||
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Average recorded Investment | $ | 669 | $ | 1,479 | $ | 594 | $ | 69 | — | $ | 18 | $ | 1 | — | $ | 245 | $ | 3,075 | ||||||||||||||||||||||
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Interest income Recognized | $ | 7 | — | $ | 9 | $ | 1 | — | — | — | — | — | $ | 17 | ||||||||||||||||||||||||||
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With an allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 259 | $ | 132 | $ | 551 | — | — | $ | 118 | — | — | — | $ | 1,060 | |||||||||||||||||||||||||
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Unpaid principal | $ | 259 | $ | 132 | $ | 551 | — | — | $ | 118 | — | — | — | $ | 1,060 | |||||||||||||||||||||||||
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Related allowance | $ | 79 | $ | 108 | $ | 300 | — | — | $ | 15 | — | — | — | $ | 502 | |||||||||||||||||||||||||
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Average recorded Investment | $ | 130 | $ | 1,440 | $ | 579 | $ | 19 | — | $ | 176 | — | — | — | $ | 2,344 | ||||||||||||||||||||||||
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Interest income Recognized | $ | 10 | $ | 7 | $ | 27 | — | — | $ | 5 | — | — | — | $ | 49 | |||||||||||||||||||||||||
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Impaired Originated Loans – As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 3,886 | $ | 27,109 | $ | 2,963 | $ | 947 | — | $ | 20 | $ | 576 | $ | 4 | — | $ | 35,505 | ||||||||||||||||||||||
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Unpaid principal | $ | 5,998 | $ | 29,678 | $ | 6,079 | $ | 1,349 | — | $ | 35 | $ | 688 | $ | 65 | — | $ | 43,892 | ||||||||||||||||||||||
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Average recorded Investment | $ | 3,586 | $ | 32,793 | $ | 2,982 | $ | 848 | — | $ | 29 | $ | 494 | $ | 1,202 | $ | 50 | $ | 41,984 | |||||||||||||||||||||
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Interest income Recognized | $ | 81 | $ | 893 | $ | 23 | $ | 5 | — | — | $ | 29 | — | — | $ | 1,031 | ||||||||||||||||||||||||
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With an allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 2,006 | $ | 1,418 | $ | 1,724 | $ | 674 | — | $ | 1 | $ | 2,094 | — | — | $ | 7,917 | |||||||||||||||||||||||
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Unpaid principal | $ | 2,073 | $ | 1,453 | $ | 1,904 | $ | 701 | — | $ | 1 | $ | 2,117 | — | — | $ | 8,249 | |||||||||||||||||||||||
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Related allowance | $ | 335 | $ | 146 | $ | 525 | $ | 256 | — | $ | 1 | $ | 1,187 | — | — | $ | 2,450 | |||||||||||||||||||||||
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Average recorded Investment | $ | 2,365 | $ | 2,180 | $ | 2,455 | $ | 589 | — | $ | 23 | $ | 1,716 | $ | 141 | — | $ | 9,469 | ||||||||||||||||||||||
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Interest income Recognized | $ | 49 | $ | 74 | $ | 31 | $ | 26 | — | — | $ | 122 | — | — | $ | 302 | ||||||||||||||||||||||||
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Impaired PNCI Loans – As of December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | 875 | $ | 1,132 | $ | 454 | $ | 71 | — | $ | 33 | $ | 1 | — | $ | 490 | $ | 3,056 | ||||||||||||||||||||||
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Unpaid principal | $ | 908 | $ | 1,248 | $ | 505 | $ | 73 | — | $ | 52 | $ | 1 | — | $ | 490 | $ | 3,277 | ||||||||||||||||||||||
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Average recorded Investment | $ | 609 | $ | 749 | $ | 400 | $ | 48 | — | $ | 35 | $ | 4 | — | $ | 245 | $ | 2,090 | ||||||||||||||||||||||
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Interest income Recognized | $ | 31 | $ | 32 | $ | 3 | $ | 2 | — | $ | 1 | — | — | $ | 18 | $ | 87 | |||||||||||||||||||||||
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With an allowance recorded: | ||||||||||||||||||||||||||||||||||||||||
Recorded investment | — | $ | 2,748 | $ | 606 | $ | 39 | — | $ | 234 | — | — | — | $ | 3,627 | |||||||||||||||||||||||||
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Unpaid principal | — | $ | 2,858 | $ | 612 | $ | 40 | — | $ | 234 | — | — | — | $ | 3,744 | |||||||||||||||||||||||||
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Related allowance | — | $ | 248 | $ | 80 | $ | 39 | — | $ | 73 | — | — | — | $ | 440 | |||||||||||||||||||||||||
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Average recorded Investment | $ | 417 | $ | 1,447 | $ | 521 | $ | 19 | — | $ | 227 | — | — | — | $ | 2,631 | ||||||||||||||||||||||||
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Interest income Recognized | — | $ | 149 | $ | 14 | — | — | $ | 11 | — | — | — | $ | 174 | ||||||||||||||||||||||||||
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Note 5 – Allowance for Loan Losses (continued)
At
Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 4,836 | $ | 3,434 | $ | 764 | $ | 4,198 | $ | 49 | $ | 4,388 | $ | 71 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 6,543 | 4,401 | 1,845 | 6,246 | 78 | 9,343 | 86 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 11,379 | 7,835 | 2,609 | 10,444 | 127 | 13,731 | 157 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,315 | 1,267 | 1 | 1,268 | 1 | 1,679 | 35 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,895 | 1,278 | 234 | 1,512 | 42 | 1,839 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 47 | 3 | 25 | 28 | 7 | 33 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 3,257 | 2,548 | 260 | 2,808 | 50 | 3,551 | 42 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 2,612 | 1,463 | 816 | 2,279 | 579 | 3,746 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 17,248 | $ | 11,846 | $ | 3,685 | $ | 15,531 | $ | 756 | $ | 21,028 | $ | 211 |
Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 945 | $ | 876 | $ | — | $ | 876 | $ | — | $ | 605 | $ | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 2,405 | 2,403 | — | 2,403 | — | 1,935 | 146 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 3,350 | 3,279 | — | 3,279 | — | 2,540 | 155 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 862 | 395 | 411 | 806 | 114 | 905 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 159 | 20 | 118 | 138 | 2 | 189 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 112 | 59 | 53 | 112 | 12 | 111 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 1,133 | 474 | 582 | 1,056 | 128 | 1,205 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 59 | — | 51 | 51 | 51 | 86 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,542 | $ | 3,753 | $ | 633 | $ | 4,386 | $ | 179 | $ | 3,831 | $ | 161 |
Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 4,594 | $ | 3,663 | $ | 308 | $ | 3,971 | $ | 56 | $ | 3,517 | $ | 90 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 13,081 | 10,676 | 1,765 | 12,441 | 42 | 13,115 | 137 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 17,675 | 14,339 | 2,073 | 16,412 | 98 | 16,632 | 227 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,900 | 1,749 | 111 | 1,860 | 71 | 1,885 | 43 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 2,374 | 1,892 | 65 | 1,957 | 2 | 1,520 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 3 | — | 3 | 3 | 3 | 17 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 4,277 | 3,641 | 179 | 3,820 | 76 | 3,422 | 68 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 5,433 | 2,924 | 2,287 | 5,211 | 1,774 | 4,654 | 91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | 5 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | 5 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 27,385 | $ | 20,904 | $ | 4,539 | $ | 25,443 | $ | 1,948 | $ | 24,713 | $ | 386 |
Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 375 | $ | 334 | $ | — | $ | 334 | $ | — | $ | 529 | $ | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 3,110 | 1,468 | — | 1,468 | — | 1,713 | 183 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 3,485 | 1,802 | — | 1,802 | — | 2,242 | 188 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,027 | 587 | 367 | 954 | 127 | 1,120 | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 252 | 47 | 197 | 244 | 101 | 155 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 106 | 21 | 85 | 106 | 11 | 114 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 1,385 | 655 | 649 | 1,304 | 239 | 1,389 | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 120 | 113 | 7 | 120 | 7 | 60 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,990 | $ | 2,570 | $ | 656 | $ | 3,226 | $ | 246 | $ | 3,691 | $ | 207 |
Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 4,023 | $ | 2,058 | $ | 1,881 | $ | 3,939 | $ | 230 | $ | 3,501 | $ | 143 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 14,186 | 13,101 | 810 | 13,911 | 30 | 13,851 | 645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 18,209 | 15,159 | 2,691 | 17,850 | 260 | 17,352 | 788 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,581 | 1,093 | 401 | 1,494 | 111 | 1,702 | 47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1,627 | 1,107 | 198 | 1,305 | 10 | 1,193 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 55 | 4 | 3 | 7 | 3 | 20 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 3,263 | 2,204 | 602 | 2,806 | 124 | 2,915 | 71 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 4,566 | 575 | 3,895 | 4,470 | 1,848 | 4,283 | 184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 140 | 140 | — | 140 | — | 76 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 140 | 140 | — | 140 | — | 76 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 26,178 | $ | 18,078 | $ | 7,188 | $ | 25,266 | $ | 2,232 | $ | 24,626 | $ | 1,052 |
Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unpaid principal balance | Recorded investment with no related allowance | Recorded investment with related allowance | Total recorded investment | Related allowance | Average recorded investment | Interest income recognized | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,404 | $ | 1,359 | $ | — | $ | 1,359 | $ | — | $ | 1,041 | $ | 24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | 979 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 1,404 | 1,359 | — | 1,359 | — | 2,020 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1,216 | 591 | 603 | 1,194 | 316 | 1,240 | 48 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 178 | 44 | 121 | 165 | 97 | 117 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 250 | — | 250 | 250 | 54 | 186 | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 1,644 | 635 | 974 | 1,609 | 467 | 1,543 | 65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,048 | $ | 1,994 | $ | 974 | $ | 2,968 | $ | 467 | $ | 3,563 | $ | 89 |
At December 31, 2015, $29,269,0002019, 2018, or 2017.
TDR Information for the Year Ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Number | 3 | 5 | 9 | 1 | — | 2 | 4 | — | — | 24 | ||||||||||||||||||||||||||||||
Pre-mod outstanding principal balance | $ | 650 | $ | 423 | $ | 707 | $ | 105 | — | $ | 27 | $ | 77 | — | — | $ | 1,989 | |||||||||||||||||||||||
Post-mod outstanding principal balance | $ | 656 | $ | 461 | $ | 709 | $ | 105 | — | $ | 27 | $ | 77 | — | — | $ | 2,035 | |||||||||||||||||||||||
Financial impact due to TDR taken as additional provision | $ | 50 | $ | 46 | $ | 205 | — | — | $ | 2 | $ | 23 | — | — | $ | 326 | ||||||||||||||||||||||||
Number that defaulted during the period | 2 | — | 1 | — | — | — | — | — | — | 3 | ||||||||||||||||||||||||||||||
Recorded investment of TDRs that defaulted during the period | $ | 101 | — | $ | 229 | — | — | — | — | — | — | $ | 330 | |||||||||||||||||||||||||||
Financial impact due to the default of previous TDR taken as charge-offs or additional provisions | — | — | — | — | — | — | — | — | — | — |
TDR Information for the Year Ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
RE Mortgage | Home Equity | Auto | Other | Construction | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Resid. | Comm. | Lines | Loans | Indirect | Consum. | C&I | Resid. | Comm. | Total | ||||||||||||||||||||||||||||||
Number | 4 | 5 | 2 | 2 | — | 2 | 8 | — | — | 23 | ||||||||||||||||||||||||||||||
Pre-mod outstanding principal balance | $ | 800 | $ | 1,518 | $ | 301 | $ | 315 | — | $ | 89 | $ | 956 | — | — | $ | 3,979 | |||||||||||||||||||||||
Post-mod outstanding principal balance | $ | 801 | $ | 1,517 | $ | 301 | $ | 321 | — | $ | 89 | $ | 944 | — | — | $ | 3,973 | |||||||||||||||||||||||
Financial impact due to TDR taken as additional provision | $ | 8 | $ | (5 | ) | — | $ | 38 | — | $ | 5 | $ | 405 | — | — | $ | 451 | |||||||||||||||||||||||
Number that defaulted during the period | 4 | 2 | 3 | 1 | — | — | — | — | — | 10 | ||||||||||||||||||||||||||||||
Recorded investment of TDRs that defaulted during the period | $ | 221 | $ | 280 | $ | 182 | $ | 53 | — | — | — | — | — | $ | 736 | |||||||||||||||||||||||||
Financial impact due to the default of previous TDR taken as charge-offs or additional provisions | — | — | — | $ | (9 | ) | — | — | — | — | — | $ | (9 | ) |
TDR Information for the Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Number | Pre-mod outstanding principal balance | Post-mod outstanding principal balance | Financial impact due to TDR taken as additional provision | Number that defaulted during the period | Recorded investment of TDRs that defaulted during the period | Financial impact due to the default of previous TDR taken as charge- offs or additional provisions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | 3 | $ | 659 | $ | 662 | $ | 30 | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 2 | 60 | 67 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 5 | 719 | 729 | 30 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1 | 65 | 68 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 2 | 149 | 147 | 29 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 3 | 214 | 215 | 29 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 10 | 1,918 | 1,885 | — | 1 | 7 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 18 | $ | 2,851 | $ | 2,829 | $ | 59 | 1 | $ | 7 | $ | — |
TDR Information for the Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Number | Pre-mod outstanding principal balance | Post-mod outstanding principal balance | Financial impact due to TDR taken as additional provision | Number that defaulted during the period | Recorded investment of TDRs that defaulted during the period | Financial impact due to the default of previous TDR taken as charge- offs or additional provisions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | 1 | $ | 156 | $ | 156 | $ | — | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 7 | 1,782 | 1,779 | 491 | 1 | 169 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 8 | 1,938 | 1,935 | 491 | 1 | 169 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 1 | 133 | 138 | — | 2 | 248 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 2 | 599 | 599 | (35) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 3 | 732 | 737 | (35) | 2 | 248 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 6 | 1,098 | 1,083 | 325 | 3 | 148 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 17 | $ | 3,768 | $ | 3,755 | $ | 781 | 6 | $ | 565 | $ | — |
TDR Information for the Year Ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Number | Pre-mod outstanding principal balance | Post-mod outstanding principal balance | Financial impact due to TDR taken as additional provision | Number that defaulted during the period | Recorded investment of TDRs that defaulted during the period | Financial impact due to the default of previous TDR taken as charge- offs or additional provisions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans on real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | 1 | $ | 939 | $ | 939 | $ | 169 | 2 | $ | 223 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 8 | 3,721 | 3,695 | (111) | 1 | 219 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total mortgage loans on real estate | 9 | 4,660 | 4,634 | 58 | 3 | 442 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity lines of credit | 3 | 187 | 187 | 27 | 1 | 127 | (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity loans | 1 | 252 | 252 | — | 1 | 55 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 1 | 14 | 14 | 11 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer loans | 5 | 453 | 453 | 38 | 2 | 182 | (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 11 | 1,854 | 1,747 | 37 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | 1 | 144 | 144 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total construction | 1 | 144 | 144 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 26 | $ | 7,111 | $ | 6,978 | $ | 133 | 5 | $ | 624 | $ | (5) |
Note 5 – Allowance for Loan Losses (continued)
Real Estate Owned
Year ended December 31, 2016 | Year ended December 31, 2015 | |||||||||||||||||||||||
Noncovered | Covered | Total | Noncovered | Covered | Total | |||||||||||||||||||
Beginning balance, net | $ | 5,369 | — | $ | 5,369 | $ | 4,449 | $ | 445 | $ | 4,894 | |||||||||||||
Additions/transfers from loans | 2,282 | $ | 223 | 2,505 | 5,880 | (445 | ) | 5,435 | ||||||||||||||||
Dispositions/sales | (3,748 | ) | — | (3,748 | ) | (4,458 | ) | — | (4,458 | ) | ||||||||||||||
Valuation adjustments | (140 | ) | — | (140 | ) | (502 | ) | — | (502 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ending balance, net | $ | 3,763 | $ | 223 | $ | 3,986 | $ | 5,369 | — | $ | 5,369 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ending valuation allowance | $ | (314 | ) | — | $ | (314 | ) | $ | (572 | ) | — | $ | (572 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ending number of foreclosed assets | 14 | 1 | 15 | 26 | — | 26 | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Proceeds from sale of foreclosed assets | $ | 4,010 | — | $ | 4,010 | $ | 5,449 | — | $ | 5,449 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gain on sale of foreclosed assets | $ | 262 | — | $ | 262 | $ | 991 | — | $ | 991 | ||||||||||||||
|
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|
|
|
|
Year ended December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Beginning balance, net | $ | 2,280 | $ | 3,226 | |||||||||||||
Additions/transfers from loans | 1,249 | 1,262 | |||||||||||||||
Dispositions/sales | (1,090) | (2,119) | |||||||||||||||
Valuation adjustments | 102 | (89) | |||||||||||||||
Ending balance, net | $ | 2,541 | $ | 2,280 | |||||||||||||
Ending valuation allowance | $ | (139) | $ | (116) | |||||||||||||
Ending number of foreclosed assets | 6 | 11 | |||||||||||||||
Proceeds from sale of real estate owned | $ | 1,336 | $ | 2,527 | |||||||||||||
Gain on sale of real estate owned | $ | 246 | $ | 408 |
Premises and equipment were comprised of:
December 31, | December 31, | |||||||
2016 | 2015 | |||||||
(In thousands) | ||||||||
Land & land improvements | $ | 9,522 | $ | 8,909 | ||||
Buildings | 42,345 | 38,643 | ||||||
Furniture and equipment | 31,428 | 31,081 | ||||||
|
|
|
| |||||
83,295 | 78,633 | |||||||
Less: Accumulated depreciation | (37,412 | ) | (35,518 | ) | ||||
|
|
|
| |||||
45,883 | 43,115 | |||||||
Construction in progress | 2,523 | 696 | ||||||
|
|
|
| |||||
Total premises and equipment | $ | 48,406 | $ | 43,811 | ||||
|
|
|
|
As of December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Land and land improvements | $ | 29,453 | $ | 29,065 | |||||||||||||
Buildings | 65,241 | 64,478 | |||||||||||||||
Furniture and equipment | 45,723 | 45,228 | |||||||||||||||
140,417 | 138,771 | ||||||||||||||||
Less: Accumulated depreciation | (53,704) | (50,125) | |||||||||||||||
86,713 | 88,646 | ||||||||||||||||
Construction in progress | 373 | 701 | |||||||||||||||
Total premises and equipment | $ | 87,086 | $ | 89,347 |
Year ended December 31, | ||||||||
2016 | 2015 | |||||||
Beginning balance | $ | 94,560 | $ | 92,337 | ||||
Increase in cash value of life insurance | 2,717 | 2,786 | ||||||
Death benefit receivable in excess of cash value | 238 | 155 | ||||||
Death benefit receivable | (1,603 | ) | (718 | ) | ||||
|
|
|
| |||||
Ending balance | $ | 95,912 | $ | 94,560 | ||||
|
|
|
| |||||
End of period death benefit | $ | 165,669 | $ | 166,299 | ||||
Number of policies owned | 185 | 187 | ||||||
Insurance companies used | 14 | 14 | ||||||
Current and former employees and directors covered | 58 | 59 |
As of December 31, 2016, the Bank was the owner and beneficiary of 185 life insurance policies, issued by 14 life insurance companies, covering 58 current and former employees and directors. These life insurance policies are recorded on the Company’s financial statements at their reported cash (surrender) values. As a result of current tax law and the nature of these policies, the Bank records any increase in cash value of these policies as nontaxable noninterest income. If the Bank decided to surrender any of the policies prior to the death of the insured, such surrender may result in a tax expense related to thelife-to-date cumulative increase in cash value of the policy. If the Bank retains such policies until the death of the insured, the Bank would receive nontaxable proceeds from the insurance company equal to the death benefit of the policies. The Bank has entered into Joint Beneficiary Agreements (JBAs) with certain of the insured that for certain of the policies provide some level of sharing of the death benefit, less the cash surrender value, among the Bank and the beneficiaries of the insured upon the receipt of death benefits. See Note 15 of these consolidated financial statements for additional information on JBAs.
Year ended December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Beginning balance | $ | 117,318 | $ | 97,783 | |||||||||||||
Acquired policies from business combination | — | 16,817 | |||||||||||||||
Increase in cash value of life insurance | 3,029 | 2,718 | |||||||||||||||
Gain on death benefit | 831 | — | |||||||||||||||
Insurance proceeds receivable reclassified to other assets | (3,355) | — | |||||||||||||||
Ending balance | $ | 117,823 | $ | 117,318 | |||||||||||||
End of period death benefit | $ | 199,084 | $ | 200,249 | |||||||||||||
Number of policies owned | 189 | 196 | |||||||||||||||
Insurance companies used | 14 | 14 | |||||||||||||||
Current and former employees and directors covered | 63 | 66 |
December 31, | December 31, | |||||||||||||||
(Dollar in Thousands) | 2016 | Additions | Reductions | 2015 | ||||||||||||
Goodwill | $ | 64,311 | $ | 849 | — | $ | 63,462 | |||||||||
|
|
|
|
|
|
|
|
(in thousands) | December 31, 2019 | Additions | Reductions | December 31, 2018 | |||||||||||||||||||
Goodwill | $ | 220,872 | $ | — | $ | (100) | $ | 220,972 |
December 31, | Reductions/ | Fully | December 31, | |||||||||||||||||
(Dollar in Thousands) | 2016 | Additions | Amortization | Depreciated | 2015 | |||||||||||||||
Core deposit intangibles | $ | 10,120 | $ | 2,046 | — | — | $ | 8,074 | ||||||||||||
Accumulated amortization | (3,557 | ) | — | $ | (1,377 | ) | — | (2,180 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Core deposit intangibles, net | $ | 6,563 | $ | 2,046 | $ | (1,377 | ) | — | $ | 5,894 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(in thousands) | December 31, 2019 | Additions | Reductions/ Amortization | December 31, 2018 | |||||||||||||||||||
Core deposit intangibles | $ | 37,163 | $ | — | $ | — | $ | 37,163 | |||||||||||||||
Accumulated amortization | (13,606) | — | (5,723) | (7,883) | |||||||||||||||||||
Core deposit intangibles, net | $ | 23,557 | — | $ | (5,723) | $ | 29,280 |
Estimated Core Deposit | ||||
Years Ended | Intangible Amortization | |||
2017 | $ | 1,389 | ||
2018 | 1,324 | |||
2019 | 1,228 | |||
2020 | 1,228 | |||
2021 | 969 | |||
Thereafter | 425 |
Years Ended | Estimated CDI Amortization | ||||
2020 | $ | 5,723 | |||
2021 | 5,465 | ||||
2022 | 4,776 | ||||
2023 | 4,269 | ||||
2024 | 2,482 | ||||
Thereafter | 842 | ||||
$ | 23,557 |
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Balance at beginning of period | $ | 7,618 | $ | 7,378 | $ | 6,165 | ||||||
Acquisition | — | — | 1,944 | |||||||||
Originations | 1,161 | 941 | 570 | |||||||||
Change in fair value | (2,184 | ) | (701 | ) | (1,301 | ) | ||||||
|
|
|
|
|
| |||||||
Balance at end of period | $ | 6,595 | $ | 7,618 | $ | 7,378 | ||||||
|
|
|
|
|
| |||||||
Contractually specified servicing fees, late fees and ancillary fees earned | $ | 2,065 | $ | 2,164 | $ | 1,869 | ||||||
Balance of loans serviced at: | ||||||||||||
Beginning of period | $ | 817,917 | $ | 840,288 | $ | 680,197 | ||||||
End of period | $ | 816,623 | $ | 817,917 | $ | 840,288 | ||||||
Weighted-average prepayment speed (CPR) | 8.8 | % | 9.8 | % | 12.0 | % | ||||||
Weighted-average discount rate | 14.0 | % | 10.0 | % | 10.0 | % |
Year ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Balance at beginning of period | $ | 7,098 | $ | 6,687 | $ | 6,595 | |||||||||||||||||||||||
Additions | 913 | 557 | 810 | ||||||||||||||||||||||||||
Change in fair value | (1,811) | (146) | (718) | ||||||||||||||||||||||||||
Balance at end of period | $ | 6,200 | $ | 7,098 | $ | 6,687 | |||||||||||||||||||||||
Contractually specified servicing fees, late fees and ancillary fees earned | $ | 1,917 | $ | 2,038 | $ | 2,076 | |||||||||||||||||||||||
Balance of loans serviced at: | |||||||||||||||||||||||||||||
Beginning of period | $ | 785,138 | $ | 811,065 | $ | 816,623 | |||||||||||||||||||||||
End of period | $ | 767,662 | $ | 785,138 | $ | 811,065 | |||||||||||||||||||||||
Period end: | |||||||||||||||||||||||||||||
Weighted-average prepayment speed (CPR) | 6.2 | % | 7.6 | % | 8.9 | % | |||||||||||||||||||||||
Weighted-average discount rate | 12.0 | % | 12.0 | % | 13.0 | % |
A summary- Leases
Year ended December 31, 2019 | |||||
Operating lease cost | $ | 5,228 | |||
Short-term lease cost | 262 | ||||
Variable lease cost | (29) | ||||
Sublease income | (131) | ||||
Total lease cost | $ | 5,330 |
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows for operating leases | $ | 4,931 | |||
ROUA obtained in exchange for operating lease liabilities | $ | 32,162 |
Weighted-average remaining lease term | 9.3 years | ||||
Weighted-average discount rate | 3.2 | % |
Year ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Beginning balance | $ | (521 | ) | $ | (349 | ) | $ | 206 | ||||
Effect of actual covered losses (recoveries) and increase (decrease) in estimated future covered losses | (412 | ) | (93 | ) | (853 | ) | ||||||
Change in estimated “true up” liability | (86 | ) | (71 | ) | (100 | ) | ||||||
Reimbursable (revenue) expenses, net | 2 | 4 | 85 | |||||||||
Payments made (received) | 273 | (12 | ) | 313 | ||||||||
|
|
|
|
|
| |||||||
Ending balance | $ | (744 | ) | $ | (521 | ) | $ | (349 | ) | |||
|
|
|
|
|
| |||||||
Amount of indemnification asset (liability) recorded in other assets | $ | (60 | ) | $ | 77 | $ | (349 | ) | ||||
Amount of indemnification liability recorded in other liabilities | (684 | ) | (598 | ) | — | |||||||
|
|
|
|
|
| |||||||
Ending balance | $ | (744 | ) | $ | (521 | ) | $ | (349 | ) | |||
|
|
|
|
|
|
Periods ending December 31, | |||||
2020 | $ | 4,388 | |||
2021 | 4,235 | ||||
2022 | 3,896 | ||||
2023 | 3,216 | ||||
2024 | 2,937 | ||||
Thereafter | 13,745 | ||||
32,417 | |||||
Discount for present value of expected cash flows | (4,877) | ||||
Lease liability at December 31, 2019 | $ | 27,540 |
Other assets were comprised of (in thousands):
As of December 31, | ||||||||
2016 | 2015 | |||||||
Deferred tax asset, net (Note 22) | $ | 36,199 | $ | 36,440 | ||||
Prepaid expense | 3,045 | 3,062 | ||||||
Software | 2,039 | 1,290 | ||||||
Advanced compensation | 249 | 673 | ||||||
Capital Trusts | 1,702 | 1,696 | ||||||
Investment in Low Housing Tax Credit Funds | 18,465 | 4,223 | ||||||
Life insurance proceeds receivable | 2,120 | — | ||||||
Prepaid Taxes | 6,460 | — | ||||||
Premises held for sale | 2,896 | — | ||||||
Miscellaneous other assets | 1,568 | 1,207 | ||||||
|
|
|
| |||||
Total other assets | $ | 74,743 | $ | 48,591 | ||||
|
|
|
|
Note 13 – Deposits
December 31, | ||||||||
2016 | 2015 | |||||||
Noninterest-bearing demand | $ | 1,275,745 | $ | 1,155,695 | ||||
Interest-bearing demand | 887,625 | 853,961 | ||||||
Savings | 1,397,036 | 1,281,540 | ||||||
Time certificates, over $250,000 | 75,184 | 74,647 | ||||||
Other time certificates | 259,970 | 265,423 | ||||||
|
|
|
| |||||
Total deposits | $ | 3,895,560 | $ | 3,631,266 | ||||
|
|
|
|
December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Noninterest-bearing demand | $ | 1,832,665 | $ | 1,760,580 | |||||||||||||
Interest-bearing demand | 1,242,274 | 1,252,366 | |||||||||||||||
Savings | 1,851,549 | 1,921,324 | |||||||||||||||
Time certificates, $250,000 and over | 129,061 | 132,429 | |||||||||||||||
Other time certificates | 311,445 | 299,767 | |||||||||||||||
Total deposits | $ | 5,366,994 | $ | 5,366,466 |
Scheduled | ||||
Maturities | ||||
2017 | $ | 279,015 | ||
2018 | 26,097 | |||
2019 | 9,277 | |||
2020 | 10,611 | |||
2021 | 10,135 | |||
Thereafter | 19 | |||
|
| |||
Total | $ | 335,154 | ||
|
|
Note 14 – Reserve for Unfunded Commitments
The following tables summarize the activity in reserve for unfunded commitments for the periods indicated (dollars in thousands):
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Balance at beginning of period | $ | 2,475 | $ | 2,145 | $ | 2,415 | ||||||
Acquisitions | — | — | 125 | |||||||||
Provision for losses – | ||||||||||||
Unfunded commitments | 244 | 330 | (395 | ) | ||||||||
|
|
|
|
|
| |||||||
Balance at end of period | $ | 2,719 | $ | 2,475 | $ | 2,145 | ||||||
|
|
|
|
|
|
Note 15 – Other Liabilities
Other liabilities were comprised
Scheduled maturities | |||||
2020 | $ | 340,150 | |||
2021 | 57,076 | ||||
2022 | 38,552 | ||||
2023 | 2,798 | ||||
2024 | 1,924 | ||||
Thereafter | 6 | ||||
Total | $ | 440,506 |
December 31, | ||||||||
2016 | 2015 | |||||||
(in thousands) | ||||||||
Other collateralized borrowings, fixed rate, as of December 31, 2016 of 0.05%, payable on January 2, 2017 | $ | 17,493 | $ | 12,328 | ||||
|
|
|
| |||||
Total other borrowings | $ | 17,493 | $ | 12,328 | ||||
|
|
|
|
The Company did not enter into any other borrowings or repurchase agreements during 2016 or 2015.
The Company had $17,493,000 and $12,328,000 of other collateralized borrowings at December 31, 2016 and 2015, respectively.
December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Other collateralized borrowings, fixed rate, as of December 31, 2019 and 2018 of 0.05%, payable on January 2, 2020 and 2019, respectively | $ | 18,454 | $ | 15,839 | |||||||||||||
Total other borrowings | $ | 18,454 | $ | 15,839 |
Note 17 – Junior Subordinated Debt (continued)
System until only five years remain until their scheduled maturity.
Subordinated Debt Series | Maturity Date | Face Value | Coupon Rate | As of December 31, 2016 | ||||||||||||||||
(Variable) | Current | Recorded | ||||||||||||||||||
3 mo. LIBOR + | Coupon Rate | Book Value | ||||||||||||||||||
TriCo Cap Trust I | 10/7/2033 | $ | 20,619 | 3.05 | % | 3.93 | % | $ | 20,619 | |||||||||||
TriCo Cap Trust II | 7/23/2034 | 20,619 | 2.55 | % | 3.43 | % | 20,619 | |||||||||||||
North Valley Trust II | 4/24/2033 | 6,186 | 3.25 | % | 4.14 | % | 5,095 | |||||||||||||
North Valley Trust III | 4/24/2034 | 5,155 | 2.80 | % | 3.68 | % | 4,005 | |||||||||||||
North Valley Trust IV | 3/15/2036 | 10,310 | 1.33 | % | 2.29 | % | 6,329 | |||||||||||||
|
|
|
| |||||||||||||||||
$ | 62,889 | $ | 56,667 | |||||||||||||||||
|
|
|
|
Coupon Rate (Variable) 3 mo. LIBOR + | As of December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||
Subordinated Debt Series | Maturity Date | Face Value | Current Coupon Rate | Recorded Book Value | Recorded Book Value | |||||||||||||||||||||||||||||||||||||||
TriCo Cap Trust I | 10/7/2033 | $ | 20,619 | 3.05 | % | 5.04 | % | $ | 20,619 | $ | 20,619 | |||||||||||||||||||||||||||||||||
TriCo Cap Trust II | 7/23/2034 | 20,619 | 2.55 | % | 4.48 | % | 20,619 | 20,619 | ||||||||||||||||||||||||||||||||||||
North Valley Trust II | 4/24/2033 | 6,186 | 3.25 | % | 5.16 | % | 5,215 | 5,174 | ||||||||||||||||||||||||||||||||||||
North Valley Trust III | 4/24/2034 | 5,155 | 2.80 | % | 4.73 | % | 4,118 | 4,079 | ||||||||||||||||||||||||||||||||||||
North Valley Trust IV | 3/15/2036 | 10,310 | 1.33 | % | 3.22 | % | 6,661 | 6,551 | ||||||||||||||||||||||||||||||||||||
$ | 62,889 | $ | 57,232 | $ | 57,042 |
Lease Commitments—The Company leases 44 sites undernon-cancelable operating leases. The leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The Company currently does not have any capital leases. At December 31, 2016, future minimum commitments undernon-cancelable operating leases with initial or remaining terms of one year or more are as follows:
Operating Leases | ||||
(in thousands) | ||||
2017 | $ | 3,320 | ||
2018 | 2,523 | |||
2019 | 1,924 | |||
2020 | 1,325 | |||
2021 | 963 | |||
Thereafter | 1,696 | |||
|
| |||
Future minimum lease payments | $ | 11,751 | ||
|
|
Rent expense under operating leases was $6,082,000 in 2016, $6,241,000 in 2015, and $4,786,000 in 2014. Rent expense was offset by rent income of $220,000 in 2016, $217,000 in 2015, and $225,000 in 2014.
Note 18 – Commitments and Contingencies (continued)
December 31, | December 31, | |||||||
(in thousands) | 2016 | 2015 | ||||||
Financial instruments whose amounts represent risk: | ||||||||
Commitments to extend credit: | ||||||||
Commercial loans | $ | 220,836 | $ | 196,399 | ||||
Consumer loans | 406,855 | 394,278 | ||||||
Real estate mortgage loans | 42,184 | 42,793 | ||||||
Real estate construction loans | 97,399 | 71,846 | ||||||
Standby letters of credit | 12,763 | 8,330 | ||||||
Deposit account overdraft privilege | 98,583 | 94,473 |
December 31, | |||||||||||||||||
(in thousands) | 2019 | 2018 | |||||||||||||||
Financial instruments whose amounts represent risk: | |||||||||||||||||
Commitments to extend credit: | |||||||||||||||||
Commercial loans | $ | 363,793 | $ | 306,191 | |||||||||||||
Consumer loans | 533,576 | 496,575 | |||||||||||||||
Real estate mortgage loans | 188,959 | 140,292 | |||||||||||||||
Real estate construction loans | 222,998 | 248,996 | |||||||||||||||
Standby letters of credit | 12,014 | 11,346 | |||||||||||||||
Deposit account overdraft privilege | 110,402 | 111,956 |
In addition to this, on January 20, 2015, a then-current Personal Banker at one of the Bank’sin-store branches filed a First Amended Complaint against the Bank and the Company in Sacramento County Superior Court, alleging causes of action related to wage statement violations. As part of the Complaint Plaintiff is seeking to represent a class of current and former exempt andnon-exempt employees who worked for the Company and/or the Bank during the time period of December 12, 2013 to October 21, 2016. The Company and the Bank responded to the First Amended Complaint by denying the charges and engaging in written discovery with Plaintiff. The parties then engaged innon-binding mediation of the action during the third quarter of 2016 as well.
As part of the mediations, which took place concurrently, the Bank agreed in principal to settle the two matters. In connection with the settlement and in consideration of a full release of all claims raised in both the actions, the Bank has agreed to pay up to $1.9 million though the actual cost of the settlement will depend on the number of claims submitted by the members of the purported classes. As a result, the Bank estimates the actual cost of the settlement may be approximately $1,450,000, and recorded such estimate. The settlement is subject to customary conditions, including court approval following notice to the members of the purported classes. Provided the parties can agree on the language to be included in the settlement agreement and then enter into a stipulation regarding the settlement, court hearings will be scheduled where the court will consider the terms of the settlement. But it should be noted there are no assurances the court will approve the settlement even if the parties enter into such a stipulation.
Neither the Company nor its subsidiaries are a party to any other pending legal proceedings that are material, nor is their property the subject of any other material pending legal proceeding at this time. All other legal proceedings are routine and arise out of the ordinary course of the Bank’s business. None of those proceedings are currently expected to have a material adverse impact upon the Company’s and the Bank’s business, their consolidated financial position nor their operations in any material amount not already accrued, after taking into consideration any applicable insurance.
Note 18 – Commitments and Contingencies (continued)
Oversight.
There were 0 shares of common stock repurchased under the 2007 Repurchase Plan during 2019 or 2017.
In May 2001,Plan, though all awards under the Company adopted2009 Plan that were outstanding as of its expiration continue to be governed by the TriCo Bancshares 2001 Stock Option Plan (2001 Plan) covering officers, employees, directors of,terms, conditions and consultants to, the Company. Under the 2001 Plan, the option exercise price cannot be less than the fair market value of the Common Stock at the date of grant exceptprocedures set forth in the case of substitute options. Options for the 20012009 Plan expire on the tenth anniversary of the grant date. Vesting schedulesand any applicable award agreement. There were no new grants issued under the 20012009 Plan are determined individually for each grant. Asduring 2019 and as of December 31, 2016, 110,3502019, 160,500 options for the purchase of common shares and 60,747 RSUs were outstanding under the 2001 Plan. As of May 2009, as a result of the shareholder approval of the 2009 Plan, no new options may be granted under the 2001 Plan.
outstanding.
Weighted | ||||||||||||
Average | ||||||||||||
Number | Option Price | Exercise | ||||||||||
of Shares | per Share | Price | ||||||||||
Outstanding at December 31, 2015 | 948,350 | $ | 12.63 to $25.91 | $ | 17.94 | |||||||
Options granted | — | — to — | — | |||||||||
Options exercised | (336,900 | ) | $ | 14.54 to $25.91 | $ | 19.31 | ||||||
Options forfeited | (19,200 | ) | $ | 14.76 to $23.21 | $ | 19.14 | ||||||
Outstanding at December 31, 2016 | 592,250 | $ | 12.63 to $23.21 | $ | 17.12 |
Number of Shares | Option Price per Share | Weighted Average Exercise Price | |||||||||||||||
Outstanding at January 1, 2018 | 446,400 | $12.63 to $23.21 | $ | 16.84 | |||||||||||||
Options granted | — | — | — | ||||||||||||||
Options exercised | (100,400) | $12.63 to $23.21 | $ | 16.97 | |||||||||||||
Options forfeited | (3,000) | $23.21 | $ | 23.21 | |||||||||||||
Outstanding at December 31, 2018 | 343,000 | $12.63 to $23.21 | $ | 16.67 | |||||||||||||
Options granted | — | — | — | ||||||||||||||
Options exercised | (182,500) | $12.63 to $19.46 | $ | 16.00 | |||||||||||||
Options forfeited | — | — | $ | — | |||||||||||||
Outstanding at December 31, 2019 | 160,500 | $12.63 to $23.21 | $ | 17.60 |
Currently | Currently Not | Total | ||||||||||
Exercisable | Exercisable | Outstanding | ||||||||||
Number of options | 520,650 | 71,600 | 592,250 | |||||||||
Weighted average exercise price | $ | 16.91 | $ | 18.64 | $ | 17.12 | ||||||
Intrinsic value (in thousands) | $ | 8,991 | $ | 1,112 | $ | 10,103 | ||||||
Weighted average remaining contractual term (yrs.) | 4.1 | 6.3 | 4.3 |
The 71,6002019:
Currently Exercisable | Currently Not Exercisable | Total Outstanding | |||||||||||||||
Number of options | 160,500 | — | 160,500 | ||||||||||||||
Weighted average exercise price | $ | 17.60 | $ | — | $ | 17.60 | |||||||||||
Intrinsic value (in thousands) | $ | 3,726 | $ | — | $ | 3,726 | |||||||||||
Weighted average remaining contractual term (yrs.) | 2.75 | 0 | 2.75 |
the three year period ended December 31, 2019.
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Intrinsic value of options exercised | $ | 3,483,000 | $ | 969,000 | $ | 1,209,000 | ||||||
Fair value of options that vested | $ | 580,000 | $ | 734,000 | $ | 965,000 | ||||||
Total compensation costs for options recognized in income | $ | 580,000 | $ | 734,000 | $ | 965,000 | ||||||
Total tax benefit recognized in income related to compensation costs for options | $ | 244,000 | $ | 380,000 | $ | 378,000 | ||||||
Weighted average fair value of grants (per option) | n/a | n/a | $ | 8.17 |
Note 20—Stock Options
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Intrinsic value of options exercised | $ | 4,169,000 | $ | 2,109,000 | $ | 2,657,000 | |||||||||||||||||||||||
Fair value of options that vested | $ | — | $ | 75,000 | $ | 259,000 | |||||||||||||||||||||||
Total compensation costs for options recognized in expense | $ | — | $ | 75,000 | $ | 259,000 | |||||||||||||||||||||||
Total tax benefit recognized in income related to compensation costs for options | $ | — | $ | 22,000 | $ | 109,000 | |||||||||||||||||||||||
Excess tax benefit recognized in income | $ | 1,233,000 | $ | 623,000 | $ | 600,000 |
The fair value of the Company’s stock option grants is estimated on the measurement date, which, for2017, the Company is the date of grant. The fair value of stock options is estimated using the Black-Scholes option-pricing model. The Company estimated expected market price volatility and expected term of the options based on historical data and other factors. The weighted-average assumptions used to determine the fair value of options granted are detailed in the table below:
Year Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Assumptions used to value option grants: | ||||||||||||
Average expected terms (years) | n/a | n/a | 6.3 | |||||||||
Volatility | n/a | n/a | 42.1 | % | ||||||||
Annual rate of dividends | n/a | n/a | 1.90 | % | ||||||||
Discount rate | n/a | n/a | 1.69 | % |
0 options.
Service Condition Vesting RSUs | Market Plus Service Condition Vesting RSUs | |||||||||||||||
Number of RSUs | Weighted Average Fair Date of Grant | Number of RSUs | Weighted Average Fair Value on Date of Grant | |||||||||||||
Outstanding at December 31, 2015 | 46,286 | 32,097 | ||||||||||||||
RSUs granted | 47,020 | $ | 28.01 | 19,402 | $ | 24.41 | ||||||||||
RSUs added through dividend credits | 1,292 | — | ||||||||||||||
RSUs released | (20,529 | ) | — | |||||||||||||
RSUs forfeited/expired | (5,619 | ) | (4,073 | ) | ||||||||||||
Outstanding at December 31, 2016 | 68,450 | 47,426 |
Service Condition Vesting RSUs | Market Plus Service Condition Vesting RSUs | ||||||||||||||||||||||||||||||||||
Number of RSUs | Weighted Average Fair Value on Date of Grant | Number of RSUs | Weighted Average Fair Value on Date of Grant | ||||||||||||||||||||||||||||||||
Outstanding at January 1, 2019 | 66,947 | 45,536 | |||||||||||||||||||||||||||||||||
RSUs granted | 35,273 | $ | 37.41 | 22,899 | $ | 31.60 | |||||||||||||||||||||||||||||
Additional market plus service condition RSUs vested | — | 7,414 | |||||||||||||||||||||||||||||||||
RSUs added through dividend credits | 1,314 | — | |||||||||||||||||||||||||||||||||
RSUs released through vesting | (33,060) | (22,237) | |||||||||||||||||||||||||||||||||
RSUs forfeited/expired | (1,877) | (2,300) | |||||||||||||||||||||||||||||||||
Outstanding at December 31, 2019 | 68,597 | 51,312 |
RSUs during 2019 or 2018.
2018.
Year Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Total compensation costs for RSUs recognized in income: | ||||||||||||
Service condition vesting RSUs | $ | 616,000 | $ | 458,000 | $ | 126,000 | ||||||
Market plus service condition vesting RSUs | $ | 271,000 | $ | 179,000 | $ | 42,000 |
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Total compensation costs recognized in income | |||||||||||||||||||||||||||||
Service condition vesting RSUs | $ | 1,161,237 | $ | 1,017,000 | $ | 895,000 | |||||||||||||||||||||||
Market plus service condition vesting RSUs | $ | 493,000 | $ | 370,000 | $ | 432,000 | |||||||||||||||||||||||
Excess tax benefit recognized in income | |||||||||||||||||||||||||||||
Service condition vesting RSUs | $ | 141,000 | $ | 104,000 | $ | 131,000 | |||||||||||||||||||||||
Market plus service condition vesting RSUs | $ | 146,000 | $ | 191,000 | $ | 175,000 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Service charges on deposit accounts | $ | 14,365 | $ | 14,276 | $ | 11,811 | ||||||
ATM and interchange fees | 15,859 | 13,364 | 9,651 | |||||||||
Other service fees | 3,121 | 2,977 | 2,206 | |||||||||
Mortgage banking service fees | 2,065 | 2,164 | 1,869 | |||||||||
Change in value of mortgage servicing rights | (2,184 | ) | (701 | ) | (1,301 | ) | ||||||
|
|
|
|
|
| |||||||
Total service charges and fees | 33,226 | 32,080 | 24,236 | |||||||||
|
|
|
|
|
| |||||||
Gain on sale of loans | 4,037 | 3,064 | 2,032 | |||||||||
Commissions on sale ofnon-deposit investment products | 2,329 | 3,349 | 2,995 | |||||||||
Increase in cash value of life insurance | 2,717 | 2,786 | 1,953 | |||||||||
Change in indemnification asset | (493 | ) | (207 | ) | (856 | ) | ||||||
Gain on sale of foreclosed assets | 262 | 991 | 2,153 | |||||||||
Sale of customer checks | 408 | 492 | 450 | |||||||||
Lease brokerage income | 711 | 712 | 504 | |||||||||
Gain (loss) on disposal of fixed assets | (147 | ) | (129 | ) | 49 | |||||||
Gain on life insurance death benefit | 238 | 155 | — | |||||||||
Other | 1,275 | 2,054 | 1,000 | |||||||||
|
|
|
|
|
| |||||||
Total other noninterest income | 11,337 | 13,267 | 10,280 | |||||||||
|
|
|
|
|
| |||||||
Total noninterest income | $ | 44,563 | $ | 45,347 | $ | 34,516 | ||||||
|
|
|
|
|
|
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
ATM and interchange fees | $ | 20,639 | $ | 18,249 | $ | 16,727 | |||||||||||||||||||||||
Service charges on deposit accounts | 16,657 | 15,467 | 16,056 | ||||||||||||||||||||||||||
Other service fees | 3,015 | 2,852 | 3,282 | ||||||||||||||||||||||||||
Mortgage banking service fees | 1,917 | 2,038 | 2,076 | ||||||||||||||||||||||||||
Change in value of mortgage loan servicing rights | (1,811) | (146) | (718) | ||||||||||||||||||||||||||
Total service charges and fees | 40,417 | 38,460 | 37,423 | ||||||||||||||||||||||||||
Commissions on sale of non-deposit investment products | 2,877 | 3,151 | 2,729 | ||||||||||||||||||||||||||
Increase in cash value of life insurance | 3,029 | 2,718 | 2,685 | ||||||||||||||||||||||||||
Gain on sale of loans | 3,282 | 2,371 | 3,109 | ||||||||||||||||||||||||||
Lease brokerage income | 878 | 678 | 782 | ||||||||||||||||||||||||||
Sale of customer checks | 529 | 449 | 372 | ||||||||||||||||||||||||||
Gain on sale of investment securities | 110 | 207 | 961 | ||||||||||||||||||||||||||
Gain (loss) on marketable equity securities | 86 | (64) | — | ||||||||||||||||||||||||||
Other | 2,312 | 1,091 | 1,391 | ||||||||||||||||||||||||||
Total other noninterest income | 13,103 | 10,601 | 12,029 | ||||||||||||||||||||||||||
Total noninterest income | $ | 53,520 | $ | 49,061 | $ | 49,452 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Base salaries, net of deferred loan origination costs | $ | 53,169 | $ | 46,822 | $ | 39,342 | ||||||
Incentive compensation | 8,872 | 6,964 | 5,068 | |||||||||
Benefits and other compensation costs | 18,683 | 17,619 | 13,134 | |||||||||
|
|
|
|
|
| |||||||
Total salaries and benefits expense | 80,724 | 71,405 | 57,544 | |||||||||
|
|
|
|
|
| |||||||
Occupancy | 10,139 | 10,126 | 8,203 | |||||||||
Equipment | 6,597 | 5,997 | 4,514 | |||||||||
Data processing and software | 8,846 | 7,670 | 6,512 | |||||||||
Assessments | 2,105 | 2,572 | 2,107 | |||||||||
ATM & POS network charges | 4,999 | 4,190 | 2,996 | |||||||||
Advertising | 3,829 | 3,992 | 2,413 | |||||||||
Professional fees | 5,409 | 4,545 | 3,888 | |||||||||
Telecommunications | 2,749 | 3,007 | 2,870 | |||||||||
Postage | 1,603 | 1,296 | 949 | |||||||||
Courier service | 998 | 1,154 | 1,055 | |||||||||
Foreclosed assets expense | 266 | 490 | 528 | |||||||||
Intangible amortization | 1,377 | 1,157 | 446 | |||||||||
Operational losses | 1,564 | 737 | 764 | |||||||||
Provision for foreclosed asset losses | 140 | 502 | 208 | |||||||||
Change in reserve for unfunded commitments | 244 | 330 | (395 | ) | ||||||||
Legal settlement | 1,450 | — | — | |||||||||
Merger & acquisition expense | 784 | 586 | 4,858 | |||||||||
Miscellaneous other | 12,174 | 11,085 | 10,919 | |||||||||
|
|
|
|
|
| |||||||
Total other noninterest expense | 65,273 | 59,436 | 52,835 | |||||||||
|
|
|
|
|
| |||||||
Total noninterest expense | $ | 145,997 | $ | 130,841 | $ | 110,379 | ||||||
|
|
|
|
|
| |||||||
Merger and acquisition expense: | ||||||||||||
Base salaries, net of loan origination costs | $ | 187 | — | — | ||||||||
Incentive compensation | — | — | $ | 1,174 | ||||||||
Benefits and other compensation costs | — | — | 94 | |||||||||
Data processing and software | — | $ | 108 | 475 | ||||||||
Professional fees | 342 | 120 | 2,390 | |||||||||
Other | 255 | 358 | 725 | |||||||||
|
|
|
|
|
| |||||||
Total merger expense | $ | 784 | $ | 586 | $ | 4,858 | ||||||
|
|
|
|
|
|
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Base salaries, net of deferred loan origination costs | $ | 70,218 | $ | 62,422 | $ | 54,589 | |||||||||||||||||||||||
Incentive compensation | 13,106 | 11,147 | 9,227 | ||||||||||||||||||||||||||
Benefits and other compensation costs | 22,741 | 20,373 | 19,114 | ||||||||||||||||||||||||||
Total salaries and benefits expense | 106,065 | 93,942 | 82,930 | ||||||||||||||||||||||||||
Occupancy | 14,893 | 12,139 | 10,894 | ||||||||||||||||||||||||||
Data processing and software | 13,517 | 11,021 | 10,448 | ||||||||||||||||||||||||||
Equipment | 7,022 | 6,651 | 7,141 | ||||||||||||||||||||||||||
ATM and POS network charges | 5,447 | 5,271 | 4,752 | ||||||||||||||||||||||||||
Merger and acquisition expense | — | 5,227 | 530 | ||||||||||||||||||||||||||
Advertising | 5,633 | 4,578 | 4,101 | ||||||||||||||||||||||||||
Professional fees | 3,754 | 3,546 | 3,745 | ||||||||||||||||||||||||||
Intangible amortization | 5,723 | 3,499 | 1,389 | ||||||||||||||||||||||||||
Telecommunications | 3,190 | 3,023 | 2,713 | ||||||||||||||||||||||||||
Regulatory assessments and insurance | 1,188 | 1,906 | 1,676 | ||||||||||||||||||||||||||
Courier service | 1,308 | 1,287 | 1,035 | ||||||||||||||||||||||||||
Operational losses | 986 | 1,260 | 1,394 | ||||||||||||||||||||||||||
Postage | 1,258 | 1,154 | 1,296 | ||||||||||||||||||||||||||
Gain on sale of real estate owned | (246) | (408) | (711) | ||||||||||||||||||||||||||
Loss on disposal of fixed assets | 82 | 185 | 142 | ||||||||||||||||||||||||||
Other miscellaneous expense | 15,637 | 14,191 | 12,980 | ||||||||||||||||||||||||||
Total other noninterest expense | 79,392 | 74,530 | 63,525 | ||||||||||||||||||||||||||
Total noninterest expense | $ | 185,457 | $ | 168,472 | $ | 146,455 |
2016 | 2015 | 2014 | ||||||||||
(in thousands) | ||||||||||||
Current tax expense | ||||||||||||
Federal | $ | 17,401 | $ | 21,076 | $ | 14,485 | ||||||
State | 7,121 | 7,139 | 5,016 | |||||||||
|
|
|
|
|
| |||||||
$ | 24,522 | 28,215 | 19,501 | |||||||||
|
|
|
|
|
| |||||||
Deferred tax expense (benefit) | ||||||||||||
Federal | 2,735 | 408 | (794 | ) | ||||||||
State | 455 | 273 | (199 | ) | ||||||||
|
|
|
|
|
| |||||||
3,190 | 681 | (993 | ) | |||||||||
|
|
|
|
|
| |||||||
Total tax expense | $ | 27,712 | $ | 28,896 | $ | 18,508 | ||||||
|
|
|
|
|
|
follows (in thousands):
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Current tax expense | |||||||||||||||||||||||||||||
Federal | $ | 20,403 | $ | 13,109 | $ | 17,835 | |||||||||||||||||||||||
State | 12,655 | 9,323 | 6,650 | ||||||||||||||||||||||||||
$ | 33,058 | 22,432 | 24,485 | ||||||||||||||||||||||||||
Deferred tax expense | |||||||||||||||||||||||||||||
Federal | 695 | 1,842 | 11,418 | ||||||||||||||||||||||||||
State | 997 | 758 | 1,055 | ||||||||||||||||||||||||||
1,692 | 2,600 | 12,473 | |||||||||||||||||||||||||||
Total tax expense | $ | 34,750 | $ | 25,032 | $ | 36,958 |
Taxes recorded directly
low income housing tax credit investments.
Year ended December 31, | 2016 | 2015 | 2014 | |||||||||
(in thousands) | ||||||||||||
Tax credits and other tax benefits – decrease in tax expense | $ | (954 | ) | $ | (354 | ) | — | |||||
Depreciation – increase in tax expense | $ | 757 | $ | 277 | — |
Prior to 2015, the Company had no investments in Qualified Affordable Housing Projects.
indicated (in thousands):
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Tax credits and other tax benefits – decrease in tax expense | $ | (2,546) | $ | (1,993) | $ | (1,753) | |||||||||||||||||||||||
Amortization – increase in tax expense | $ | 2,705 | $ | 1,814 | $ | 1,611 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes, net of federal tax benefit | 6.8 | 6.6 | 7.0 | |||||||||
Tax-exempt interest on municipal obligations | (1.8 | ) | (0.7 | ) | (0.4 | ) | ||||||
Tax-exempt life insurance related income | (1.3 | ) | (1.3 | ) | (1.5 | ) | ||||||
Low income housing tax credit benefits | (1.3 | ) | (0.4 | ) | — | |||||||
Low income housing tax credit amortization | 0.8 | —�� | — | |||||||||
Non-deductible joint beneficiary agreement expense | 0.1 | 0.1 | 0.2 | |||||||||
Non-deductible merger expense | — | — | 1.0 | |||||||||
Other | (0.1 | ) | 0.4 | 0.2 | ||||||||
|
|
|
|
|
| |||||||
Effective Tax Rate | 38.2 | % | 39.7 | % | 41.5 | % | ||||||
|
|
|
|
|
|
Note 22 – Income Taxes (continued)
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Federal statutory income tax rate | 21.0 | % | 21.0 | % | 35.0 | % | |||||||||||||||||||||||
State income taxes, net of federal tax benefit | 7.9 | 8.6 | 6.9 | ||||||||||||||||||||||||||
Tax Cuts and Jobs Act impact of federal rate change | — | — | 9.6 | ||||||||||||||||||||||||||
Tax-exempt interest on municipal obligations | (0.7) | (1.0) | (1.9) | ||||||||||||||||||||||||||
Tax-exempt life insurance related income | (0.6) | (0.6) | (1.3) | ||||||||||||||||||||||||||
Low income housing tax credits | (2.3) | (2.2) | (2.3) | ||||||||||||||||||||||||||
Low income housing tax credit amortization | 2.1 | 2.0 | 2.1 | ||||||||||||||||||||||||||
Equity compensation | (0.4) | (0.4) | (1.1) | ||||||||||||||||||||||||||
Non-deductible merger expenses | — | 0.2 | 0.2 | ||||||||||||||||||||||||||
Other | 0.4 | (0.8) | 0.5 | ||||||||||||||||||||||||||
Effective Tax Rate | 27.4 | % | 26.8 | % | 47.7 | % |
2016 | 2015 | |||||||
(in thousands) | ||||||||
Deferred tax assets: | ||||||||
Allowance for losses and reserve for unfunded commitments | $ | 14,809 | $ | 16,182 | ||||
Deferred compensation | 2,743 | 2,827 | ||||||
Accrued pension liability | 9,220 | 8,597 | ||||||
Accrued bonus | 1,727 | 1,326 | ||||||
Other accrued expenses | 781 | 143 | ||||||
Unfunded status of the supplemental retirement plans | 1,982 | 2,411 | ||||||
State taxes | 2,257 | 2,297 | ||||||
Share based compensation | 2,063 | 2,701 | ||||||
Nonaccrual interest | 408 | 1,979 | ||||||
OREO write downs | 132 | 241 | ||||||
Indemnification asset | 313 | 219 | ||||||
Acquisition cost basis | 3,996 | 5,118 | ||||||
Unrealized loss on securities | 3,730 | — | ||||||
Tax credits | 491 | 491 | ||||||
Net operating loss carryforwards | 3,354 | 5,252 | ||||||
Other | 981 | 889 | ||||||
|
|
|
| |||||
Total deferred tax assets | 48,987 | 50,673 | ||||||
|
|
|
| |||||
Deferred tax liabilities: | ||||||||
Securities income | (1,362 | ) | (1,362 | ) | ||||
Unrealized gain on securities | — | (902 | ) | |||||
Depreciation | (3,032 | ) | (2,654 | ) | ||||
Merger related fixed asset valuations | (54 | ) | (54 | ) | ||||
Securities accretion | (478 | ) | (485 | ) | ||||
Mortgage servicing rights valuation | (2,710 | ) | (3,118 | ) | ||||
Core deposit intangible | (1,813 | ) | (2,331 | ) | ||||
Junior subordinated debt | (2,616 | ) | (2,699 | ) | ||||
Prepaid expenses and other | (723 | ) | (628 | ) | ||||
|
|
|
| |||||
Total deferred tax liability | (12,788 | ) | (14,233 | ) | ||||
|
|
|
| |||||
Net deferred tax asset | $ | 36,199 | $ | 36,440 | ||||
|
|
|
|
indicated (in thousands):
December 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Allowance for losses and reserve for unfunded commitments | $ | 9,871 | $ | 10,394 | |||||||||||||
Deferred compensation | 2,342 | 2,780 | |||||||||||||||
Accrued pension liability | 3,309 | 9,734 | |||||||||||||||
Other accrued expenses | 1,678 | 1,175 | |||||||||||||||
Additional unfunded status of the supplemental retirement plans | 9,868 | 1,420 | |||||||||||||||
Operating lease liability | 8,142 | — | |||||||||||||||
State taxes | 2,441 | 1,864 | |||||||||||||||
Share based compensation | 803 | 1,132 | |||||||||||||||
Nonaccrual interest | 649 | 814 | |||||||||||||||
Acquisition cost basis | 4,556 | 6,714 | |||||||||||||||
Unrealized loss on securities | — | 6,201 | |||||||||||||||
Tax credits | 576 | 623 | |||||||||||||||
Net operating loss carryforwards | 1,578 | 2,442 | |||||||||||||||
Other | 348 | 423 | |||||||||||||||
Total deferred tax assets | 46,161 | 45,716 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Securities income | (762) | (1,020) | |||||||||||||||
Depreciation | (6,109) | (5,572) | |||||||||||||||
Right of use asset | (8,242) | — | |||||||||||||||
Merger related fixed asset valuations | (30) | (26) | |||||||||||||||
Securities accretion | (560) | (426) | |||||||||||||||
Mortgage servicing rights valuation | (1,813) | (2,073) | |||||||||||||||
Unrealized gain on securities | (1,001) | — | |||||||||||||||
Core deposit intangible | (6,453) | (8,234) | |||||||||||||||
Junior subordinated debt | (1,672) | (1,729) | |||||||||||||||
Prepaid expenses and other | (469) | (582) | |||||||||||||||
Total deferred tax liability | (27,111) | (19,662) | |||||||||||||||
Net deferred tax asset | $ | 19,050 | $ | 26,054 |
2019.
As part
(in thousands) | UTB | Interest/Penalties | Total | |||||||||
As of December 31, 2015 | $ | 168 | $ | 14 | $ | 182 | ||||||
Lapse of the applicable statute of limitations | (54 | ) | (7 | ) | (61 | ) | ||||||
|
|
|
|
|
| |||||||
As of December 31, 2016 | $ | 114 | 7 | 121 | ||||||||
|
|
|
|
|
|
During the years ended December 31, 20162019 and December 31, 20152018 the Company recognized nodid not recognize and significant amounts related to interest and penalties related toassociated with taxes. The Company files income tax returns in the U.S. federal jurisdiction, and California. With few exceptions, the Company is no longer subject to U.S. federal and state/local income tax examinations by tax authorities for years before 20132016 and 2012,2015, respectively.
Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustments to income that would result from assumed issuance. Potential common shares that may be issued by the Company relate solely from outstanding stock options, and are determined using the treasury stock method.
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Net income (in thousands) | $ | 44,811 | $ | 43,818 | $ | 26,108 | ||||||
|
|
|
|
|
| |||||||
(number of shares in thousands) | ||||||||||||
Average number of common shares outstanding | 22,814 | 22,750 | 17,716 | |||||||||
Effect of dilutive stock options | 273 | 248 | 207 | |||||||||
|
|
|
|
|
| |||||||
Average number of common shares outstanding used to calculate diluted earnings per share | 23,087 | 22,998 | 17,923 | |||||||||
|
|
|
|
|
|
Based on an average of quarterly computations, there were 13,825, 20,625, and 95,600 options and restricted stock units excluded from the computation of annual diluted earnings per share for the years ended December 31, 2016, 2015 and 2014, respectively, because the effect of these options and restricted stock units were antidilutive.
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Net income | $ | 92,072 | $ | 68,320 | $ | 40,554 | |||||||||||||||||||||||
Average number of common shares outstanding | 30,478 | 26,593 | 22,912 | ||||||||||||||||||||||||||
Effect of dilutive stock options and restricted stock | 167 | 287 | 338 | ||||||||||||||||||||||||||
Average number of common shares outstanding used to calculate diluted earnings per share | 30,645 | 26,880 | 23,250 | ||||||||||||||||||||||||||
Options excluded from diluted earnings per share because the effect of these options was antidilutive | — | 10,056 | — |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(in thousands) | ||||||||||||
Unrealized holding losses on available for sale securities before reclassifications | $ | (11,015 | ) | $ | (1,895 | ) | $ | (162 | ) | |||
Amounts reclassified out of accumulated other comprehensive income | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Unrealized holding losses on available for sale securities after reclassifications | (11,015 | ) | (1,895 | ) | (162 | ) | ||||||
Tax effect | 4,631 | 797 | 68 | |||||||||
|
|
|
|
|
| |||||||
Unrealized holding losses on available for sale securities, net of tax | (6,384 | ) | (1,098 | ) | (94 | ) | ||||||
|
|
|
|
|
| |||||||
Change in unfunded status of the supplemental retirement plans before reclassifications | 511 | 1,384 | (7,253 | ) | ||||||||
Amounts reclassified out of accumulated other comprehensive income: | ||||||||||||
Amortization of prior service cost | (40 | ) | (57 | ) | 138 | |||||||
Amortization of actuarial losses | 550 | 823 | 17 | |||||||||
|
|
|
|
|
| |||||||
Total amounts reclassified out of accumulated other comprehensive income | 510 | 766 | 155 | |||||||||
|
|
|
|
|
| |||||||
Change in unfunded status of the supplemental retirement plans after reclassifications | 1,021 | 2,150 | (7,098 | ) | ||||||||
Tax effect | (429 | ) | (904 | ) | 2,984 | |||||||
|
|
|
|
|
| |||||||
Change in unfunded status of the supplemental retirement plans, net of tax | 592 | 1,246 | (4,114 | ) | ||||||||
|
|
|
|
|
| |||||||
Change in joint beneficiary agreement liability before reclassifications | (343 | ) | 277 | 148 | ||||||||
Amounts reclassified out of accumulated other comprehensive income | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Change in joint beneficiary agreement liability after reclassifications | (343 | ) | 277 | 148 | ||||||||
Tax effect | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Change in joint beneficiary agreement liability, net of tax | (343 | ) | 277 | 148 | ||||||||
|
|
|
|
|
| |||||||
Total other comprehensive income (loss) | $ | (6,135 | ) | $ | 425 | $ | (4,060 | ) | ||||
|
|
|
|
|
|
Note 24 – Comprehensive Income (continued)
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Unrealized holding gains (losses) on available for sale securities before reclassifications | $ | 24,471 | $ | (17,057) | $ | 6,422 | |||||||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income: | |||||||||||||||||||||||||||||
Realized gains on debt securities | (110) | (207) | (961) | ||||||||||||||||||||||||||
Adoption ASU 2016-01 | — | 62 | — | ||||||||||||||||||||||||||
Adoption ASU 2018-02 | — | (425) | — | ||||||||||||||||||||||||||
Total amounts reclassified out of accumulated other comprehensive income | (110) | (570) | (961) | ||||||||||||||||||||||||||
Unrealized holding gains (losses) on available for sale securities after reclassifications | 24,361 | (17,627) | 5,461 | ||||||||||||||||||||||||||
Tax effect | (7,202) | 5,193 | (2,296) | ||||||||||||||||||||||||||
Unrealized holding gains (losses) on available for sale securities, net of tax | 17,159 | (12,434) | 3,165 | ||||||||||||||||||||||||||
Change in unfunded status of the supplemental retirement plans before reclassifications | (6,745) | 762 | (1,016) | ||||||||||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income: | |||||||||||||||||||||||||||||
Amortization of prior service cost | (54) | (54) | (12) | ||||||||||||||||||||||||||
Amortization of actuarial losses | 408 | 510 | 390 | ||||||||||||||||||||||||||
Adoption ASU 2018-02 | — | (668) | — | ||||||||||||||||||||||||||
Total amounts reclassified out of accumulated other comprehensive income | 354 | (212) | 378 | ||||||||||||||||||||||||||
Change in unfunded status of the supplemental retirement plans after reclassifications | (6,391) | 550 | (638) | ||||||||||||||||||||||||||
Tax effect | 1,889 | (162) | 268 | ||||||||||||||||||||||||||
Change in unfunded status of the supplemental retirement plans, net of tax | (4,502) | 388 | (370) | ||||||||||||||||||||||||||
Change in joint beneficiary agreement liability before reclassifications | — | 426 | (110) | ||||||||||||||||||||||||||
Tax effect | — | — | — | ||||||||||||||||||||||||||
Change in unfunded status of the supplemental retirement plans, net of tax | — | 426 | (110) | ||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | 12,657 | $ | (11,620) | $ | 2,685 |
December 31, | ||||||||
2016 | 2015 | |||||||
(in thousands) | ||||||||
Net unrealized gains on available for sale securities | $ | (8,870 | ) | $ | 2,145 | |||
Tax effect | 3,729 | (902 | ) | |||||
|
|
|
| |||||
Unrealized holding gains on available for sale securities, net of tax | (5,141 | ) | 1,243 | |||||
|
|
|
| |||||
Unfunded status of the supplemental retirement plans | (4,714 | ) | (5,735 | ) | ||||
Tax effect | 1,982 | 2,411 | ||||||
|
|
|
| |||||
Unfunded status of the supplemental retirement plans, net of tax | (2,732 | ) | (3,324 | ) | ||||
|
|
|
| |||||
Joint beneficiary agreement liability | (40 | ) | 303 | |||||
Tax effect | — | — | ||||||
|
|
|
| |||||
Joint beneficiary agreement liability, net of tax | (40 | ) | 303 | |||||
|
|
|
| |||||
Accumulated other comprehensive loss | $ | (7,913 | ) | $ | (1,778 | ) | ||
|
|
|
|
Year Ended December 31, | |||||||||||||||||
(in thousands) | 2019 | 2018 | |||||||||||||||
Net unrealized gain (loss) on available for sale securities | $ | 3,387 | (20,974) | ||||||||||||||
Tax effect | (1,001) | 6,201 | |||||||||||||||
Unrealized holding loss on available for sale securities, net of tax | 2,386 | (14,773) | |||||||||||||||
Unfunded status of the supplemental retirement plans | (11,193) | (4,802) | |||||||||||||||
Tax effect | 3,309 | 1,420 | |||||||||||||||
Unfunded status of the supplemental retirement plans, net of tax | (7,884) | (3,382) | |||||||||||||||
Joint beneficiary agreement liability, net of tax | 276 | 276 | |||||||||||||||
Accumulated other comprehensive loss | $ | (5,222) | $ | (17,879) |
ended:
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
401(k) Plan benefits expense | $ | 1,119 | $ | 879 | $ | 776 | |||||||||||||||||||||||
401(k) Plan contributions made by the Company | $ | 1,003 | $ | 872 | $ | 767 |
Contributions are made to the plan at the discretion of the Board of Directors. Expenses related to the Company’s ESOP, included in benefits and other compensation costs under salaries and benefits expense, and contributions to the plan for the years ended were:
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
ESOP benefits expense | $ | 2,500 | $ | 1,887 | $ | 2,149 | |||||||||||||||||||||||
ESOP contributions made by the Company | $ | 1,875 | $ | 1,952 | $ | 2,073 |
the following table:
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Deferred compensation earnings credits included in non-interest expense | $ | 363 | $ | 462 | $ | 478 |
Note 25 – Retirement Plans (continued)
December 31, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Transition obligation | $ | 7 | $ | 7 | ||||
Prior service cost | (75 | ) | (115 | ) | ||||
Net actuarial loss | 4,782 | 5,843 | ||||||
|
|
|
| |||||
Amount included in accumulated other comprehensive loss | 4,714 | 5,735 | ||||||
Deferred tax benefit | (1,982 | ) | (2,411 | ) | ||||
|
|
|
| |||||
Amount included in accumulated other comprehensive loss, net of tax | $ | 2,732 | $ | 3,324 | ||||
|
|
|
|
2020.
December 31, | |||||||||||||||||
(in thousands) | 2019 | 2018 | |||||||||||||||
Transition obligation | $ | 1 | $ | 3 | |||||||||||||
Prior service cost | (141) | (194) | |||||||||||||||
Net actuarial loss | 11,333 | 4,993 | |||||||||||||||
Amount included in accumulated other comprehensive loss | 11,193 | 4,802 | |||||||||||||||
Deferred tax benefit | (3,309) | (1,420) | |||||||||||||||
Amount included in accumulated other comprehensive loss, net of tax | $ | 7,884 | $ | 3,382 |
December 31, | ||||||||
2016 | 2015 | |||||||
(in thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | (26,184 | ) | $ | (26,798 | ) | ||
Acquisition | — | — | ||||||
Service cost | (1,042 | ) | (1,023 | ) | ||||
Interest cost | (1,025 | ) | (957 | ) | ||||
Actuarial (loss)/gain | 511 | 1,382 | ||||||
Benefits paid | 1,095 | 1,212 | ||||||
|
|
|
| |||||
Benefit obligation at end of year | $ | (26,645 | ) | $ | (26,184 | ) | ||
|
|
|
| |||||
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | $ | — | $ | — | ||||
|
|
|
| |||||
Fair value of plan assets at end of year | $ | — | $ | — | ||||
|
|
|
| |||||
Funded status | $ | (26,645 | ) | $ | (26,184 | ) | ||
Unrecognized net obligation existing at January 1, 1986 | 7 | 7 | ||||||
Unrecognized net actuarial loss | 4,782 | 5,843 | ||||||
Unrecognized prior service cost | (75 | ) | (115 | ) | ||||
Accumulated other comprehensive income | (4,714 | ) | (5,735 | ) | ||||
|
|
|
| |||||
Accrued benefit cost | $ | (26,645 | ) | $ | (26,184 | ) | ||
|
|
|
| |||||
Accumulated benefit obligation | $ | (25,241 | ) | $ | (24,469 | ) |
December 31, | |||||||||||||||||
(in thousands) | 2019 | 2018 | |||||||||||||||
Change in benefit obligation: | |||||||||||||||||
Benefit obligation at beginning of year | $ | (29,196) | $ | (28,472) | |||||||||||||
Service cost | (879) | (973) | |||||||||||||||
Interest cost | (1,131) | (949) | |||||||||||||||
Actuarial (loss)/gain | (6,747) | 92 | |||||||||||||||
Plan amendments | — | — | |||||||||||||||
Benefits paid | 1,216 | 1,106 | |||||||||||||||
Benefit obligation at end of year | $ | (36,737) | $ | (29,196) | |||||||||||||
Change in plan assets: | |||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | — | |||||||||||||
Fair value of plan assets at end of year | $ | — | $ | — | |||||||||||||
Funded status | $ | (36,737) | $ | (29,196) | |||||||||||||
Unrecognized net obligation existing at January 1, 1986 | 1 | 3 | |||||||||||||||
Unrecognized net actuarial loss | 11,333 | 4,993 | |||||||||||||||
Unrecognized prior service cost | (141) | (194) | |||||||||||||||
Accumulated other comprehensive income | (11,193) | (4,802) | |||||||||||||||
Accrued benefit cost | $ | (36,737) | $ | (29,196) | |||||||||||||
Accumulated benefit obligation | $ | (35,981) | $ | (27,544) |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(in thousands) | ||||||||||||
Net pension cost included the following components: | ||||||||||||
Service cost-benefits earned during the period | $ | 1,042 | $ | 1,023 | $ | 652 | ||||||
Interest cost on projected benefit obligation | 1,025 | 957 | 739 | |||||||||
Amortization of net obligation at transition | 2 | 2 | 2 | |||||||||
Amortization of prior service cost | (41 | ) | (57 | ) | 138 | |||||||
Recognized net actuarial loss | 549 | 823 | 16 | |||||||||
|
|
|
|
|
| |||||||
Net periodic pension cost | $ | 2,577 | $ | 2,748 | $ | 1,547 | ||||||
|
|
|
|
|
|
Note 25 – Retirement Plans (continued)
Year Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Net pension cost included the following components: | |||||||||||||||||||||||||||||
Service cost-benefits earned during the period | $ | 879 | $ | 973 | $ | 941 | |||||||||||||||||||||||
Interest cost on projected benefit obligation | 1,131 | 949 | 991 | ||||||||||||||||||||||||||
Amortization of net obligation at transition | 2 | 2 | 2 | ||||||||||||||||||||||||||
Amortization of prior service cost | (54) | (54) | (12) | ||||||||||||||||||||||||||
Recognized net actuarial loss | 408 | 510 | 390 | ||||||||||||||||||||||||||
Net periodic pension cost | $ | 2,366 | $ | 2,380 | $ | 2,312 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Discount rate used to calculate benefit obligation | 3.80 | % | 4.00 | % | 3.65 | % | ||||||
Discount rate used to calculate net periodic pension cost | 3.80 | % | 4.00 | % | 3.65 | % | ||||||
Average annual increase in executive compensation | 2.50 | % | 2.50 | % | 2.50 | % | ||||||
Average annual increase in director compensation | 2.50 | % | 2.50 | % | 2.50 | % |
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Discount rate used to calculate benefit obligation | 2.82 | % | 3.96 | % | 3.40 | % | |||||||||||||||||||||||
Discount rate used to calculate net periodic pension cost | 3.96 | % | 3.40 | % | 3.80 | % | |||||||||||||||||||||||
Average annual increase in executive compensation | 3.25 | % | 3.25 | % | 3.25 | % | |||||||||||||||||||||||
Average annual increase in director compensation | — | % | — | % | — | % |
Years Ended | Expected Benefit Payments to Participants | Estimated Company Contributions | ||||||
(in thousands) | ||||||||
2017 | $ | 1,067 | $ | 1,067 | ||||
2018 | 958 | 958 | ||||||
2019 | 823 | 823 | ||||||
2020 | 701 | 701 | ||||||
2021 | 520 | 520 | ||||||
2022-2026 | $ | 3,212 | $ | 3,212 |
Expected Benefit Payments to Participants | Estimated Company Contributions | ||||||||||||||||
(in thousands) | |||||||||||||||||
2020 | $ | 1,555 | $ | 1,555 | |||||||||||||
2021 | 2,128 | 2,128 | |||||||||||||||
2022 | 2,179 | 2,179 | |||||||||||||||
2023 | 2,179 | 2,179 | |||||||||||||||
2024 | 2,191 | 2,193 | |||||||||||||||
2025-2029 | 10,956 | 10,956 |
Balance December 31, 2014 | 3,132 | |||
Advances/new loans | 3,098 | |||
Removed/payments | (2,029 | ) | ||
|
| |||
Balance December 31, 2015 | $ | 4,201 | ||
Advances/new loans | 730 | |||
Removed/payments | (2,499 | ) | ||
|
| |||
Balance December 31, 2016 | $ | 2,432 | ||
|
|
Until the end
Balance January 1, 2017 | $ | 2,148 | |||
Advances/new loans | 8,854 | ||||
Removed/payments | (1,799) | ||||
Balance December 31, 2018 | 9,203 | ||||
Advances/new loans | 9,032 | ||||
Removed/payments | (8,114) | ||||
Balance December 31, 2019 | $ | 10,121 |
Fair value at December 31, 2016 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 429,678 | — | $ | 429,678 | — | ||||||||||
Obligations of states and political subdivisions | 117,617 | — | 117,617 | — | ||||||||||||
Marketable equity securities | 2,938 | $ | 2,938 | — | — | |||||||||||
Mortgage servicing rights | 6,595 | — | — | $ | 6,595 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets measured at fair value | $ | 556,828 | $ | 2,938 | $ | 547,295 | $ | 6,595 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Fair value at December 31, 2015 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | 313,682 | — | $ | 313,682 | — | ||||||||||
Obligations of states and political subdivisions | 88,218 | — | 88,218 | — | ||||||||||||
Marketable equity securities | 2,985 | $ | 2,985 | — | — | |||||||||||
Mortgage servicing rights | 7,618 | — | — | $ | 7,618 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets measured at fair value | $ | 412,503 | $ | 2,985 | $ | 401,900 | $ | 7,618 | ||||||||
|
|
|
|
|
|
|
|
Note 27 – Fair Value Measurement (continued)
Fair value at December 31, 2019 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Marketable equity securities | $ | 2,960 | $ | 2,960 | $ | — | $ | — | |||||||||||||||
Debt securities available for sale: | |||||||||||||||||||||||
Obligations of U.S. government agencies | 472,980 | — | 472,980 | — | |||||||||||||||||||
Obligations of states and political subdivisions | 109,601 | — | 109,601 | — | |||||||||||||||||||
Corporate bonds | 2,532 | — | 2,532 | — | |||||||||||||||||||
Asset backed securities | 365,025 | — | 365,025 | — | |||||||||||||||||||
Loans held for sale | 5,265 | — | 5,265 | — | |||||||||||||||||||
Mortgage servicing rights | 6,200 | — | — | 6,200 | |||||||||||||||||||
Total assets measured at fair value | $ | 964,563 | $ | 2,960 | $ | 955,403 | $ | 6,200 |
Fair value at December 31, 2018 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Marketable equity securities | $ | 2,874 | $ | 2,874 | $ | — | $ | — | |||||||||||||||
Debt securities available for sale: | |||||||||||||||||||||||
Obligations of U.S. government agencies | 629,981 | — | 629,981 | — | |||||||||||||||||||
Obligations of states and political subdivisions | 126,072 | — | 126,072 | — | |||||||||||||||||||
Corporate bonds | 4,478 | — | 4,478 | — | |||||||||||||||||||
Asset backed securities | 354,505 | — | 354,505 | — | |||||||||||||||||||
Loans held for sale | 3,687 | — | 3,687 | — | |||||||||||||||||||
Mortgage servicing rights | 7,098 | — | — | 7,098 | |||||||||||||||||||
Total assets measured at fair value | $ | 1,128,695 | $ | 2,874 | $ | 1,118,723 | $ | 7,098 |
2018.
Year ended December 31, | Ending Balance | Transfers into (out of) Level 3 | Change Included in Earnings | Issuances | Beginning Balance | |||||||||||||||
2016: Mortgage servicing rights | $ | 6,595 | — | $ | (2,184 | ) | $ | 1,161 | $ | 7,618 | ||||||||||
2015: Mortgage servicing rights | $ | 7,618 | — | $ | (701 | ) | $ | 941 | $ | 7,378 |
Year ended December 31, | Beginning Balance | Transfers into (out of) Level 3 | Change Included in Earnings | Issuances | Ending Balance | |||||||||||||||||||||||||||
2019: Mortgage servicing rights | $ | 7,098 | — | $ | (1,811) | $ | 913 | $ | 6,200 | |||||||||||||||||||||||
2018: Mortgage servicing rights | $ | 6,687 | — | $ | (146) | $ | 557 | $ | 7,098 | |||||||||||||||||||||||
2017: Mortgage servicing rights | $ | 6,595 | — | $ | (718) | $ | 810 | $ | 6,687 |
December 31, 2019 | Fair Value (in thousands) | Valuation Technique | Unobservable Inputs | Range, Weighted Average | ||||||||||||||||||||||
Mortgage Servicing Rights | $ | Discounted cash flow | Constant prepayment rate | |||||||||||||||||||||||
December 31, 2018 | Discount rate | 12%-13%, 12% | ||||||||||||||||||||||||
Mortgage Servicing Rights | $7,098 | Discounted cash flow | Constant prepayment rate | 6.2%-42.0%, 11.0% | ||||||||||||||||||||||
Discount rate |
Year ended December 31, 2016 | Total | Level 1 | Level 2 | Level 3 | Total Gains (Losses) | |||||||||||||||
Fair value: | ||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 1,107 | — | — | $ | 1,107 | $ | (409 | ) | |||||||||||
Foreclosed assets | 2,253 | 2,253 | (86 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets measured at fair value | $ | 3,360 | — | — | $ | 3,360 | $ | (495 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Year ended December 31, 2015 | Total | Level 1 | Level 2 | Level 3 | Total Gains (Losses) | |||||||||||||||
Fair value: | ||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 4,649 | — | — | $ | 4,649 | $ | (663 | ) | |||||||||||
Foreclosed assets | 1,839 | 1,839 | (418 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets measured at fair value | $ | 6,488 | — | — | $ | 6,488 | $ | (1,081 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019 | Total | Level 1 | Level 2 | Level 3 | Total Gains (Losses) | |||||||||||||||||||||||||||
Fair value: | ||||||||||||||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 1,055 | — | — | $ | 1,055 | $ | (652) | ||||||||||||||||||||||||
Real estate owned | 417 | — | — | 417 | (27) | |||||||||||||||||||||||||||
Total assets measured at fair value | $ | 1,472 | — | — | $ | 1,472 | $ | (679) |
Year ended December 31, 2018 | Total | Level 1 | Level 2 | Level 3 | Total Gains (Losses) | |||||||||||||||||||||||||||
Fair value: | ||||||||||||||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 281 | — | — | $ | 281 | $ | (294) | ||||||||||||||||||||||||
Real estate owned | 1,311 | — | — | 1,311 | (8) | |||||||||||||||||||||||||||
Total assets measured at fair value | $ | 1,592 | — | — | $ | 1,592 | $ | (302) |
0.
Note 27 – Fair Value Measurement (continued)
December 31, 2019 | Fair Value (in thousands) | Valuation Technique | Unobservable Inputs | Range, Weighted Average | ||||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 1,055 | Sales comparison approach Income approach | Adjustment for differences between comparable sales; Capitalization rate | Not meaningful; N/A | |||||||||||||||||||||
Real estate owned (Residential) | $ | 417 | Sales comparison approach | Adjustment for differences between comparable sales | Not meaningful; N/A | |||||||||||||||||||||
December 31, 2018 | Fair Value (in thousands) | Valuation Technique | Unobservable Inputs | Range, Weighted Average | ||||||||||||||||||||||
Impaired Originated & PNCI loans | $ | 281 | Sales comparison approach Income approach | Adjustment for differences between comparable sales Capitalization rate | (74%)—23%; (19.76%) N/A | |||||||||||||||||||||
Real estate owned (Residential) |
| 693 |
|
|
| |||||||||||||||||||||
| Sales comparison approach | Adjustment for differences between comparable sales | (47%)—39%; (3.13%) | |||||||||||||||||||||||
Real estate owned (Commercial) | $ |
| ||||||||||||||||||||||||
| Sales comparison approach | Adjustment for differences | ||||||||||||||||||||||||
| between comparable sales |
| ||||||||||||||||||||||||
| ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||
| ||||||||||||||||||||||||||
|
In addition to the methods and assumptions used to estimate the fair value of each class of financial instrument noted above, the following methods and assumptions were used to estimate the fair value of other classes of financial instruments for which it is practical to estimate the fair value.
Short-term Instruments—Cash and due from banks, fed funds purchased and sold, interest receivable and payable, and short-term borrowings are considered short-term instruments. For these short-term instruments their carrying amount approximates their fair value.
Securities held to maturity—The fair value of securities held to maturity is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in activeover-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. The Company had no securities held to maturity classified as Level 3 during any of the periods covered in these financial statements.
Restricted Equity Securities—It is not practical to determine the fair value of restricted equity securities due to restrictions placed on their transferability.
Originated and PNCI loans—The fair value of variable rate originated and PNCI loans is the current carrying value. The interest rates on these originated and PNCI loans are regularly adjusted to market rates. The fair value of other types of fixed rate originated and PNCI loans is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities. The allowance for loan losses is a reasonable estimate of the valuation allowance needed to adjust computed fair values for credit quality of certain originated and PNCI loans in the portfolio.
PCI Loans—PCI loans are measured at estimated fair value on the date of acquisition. Carrying value is calculated as the present value of expected cash flows and approximates fair value.
FDIC Indemnification Asset—The fair value of the FDIC indemnification asset is based on the discounted value of expected future cash flows under the loss-share agreement.
Deposit Liabilities—The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. These values do not consider the estimated fair value of the Company’s core deposit intangible, which is a significant unrecognized asset of the Company. The fair value of time deposits and other borrowings is based on the discounted value of contractual cash flows.
Other Borrowings—The fair value of other borrowings is calculated based on the discounted value of the contractual cash flows using current rates at which such borrowings can currently be obtained.
Note 27 – Fair Value Measurement (continued)
Junior Subordinated Debentures—The fair value of junior subordinated debentures is estimated using a discounted cash flow model. The future cash flows of these instruments are extended to the next available redemption date or maturity date as appropriate based upon the spreads of recent issuances or quotes from brokers for comparable bank holding companies compared to the contractual spread of each junior subordinated debenture measured at fair value.
Commitments to Extend Credit and Standby Letters of Credit—The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counter parties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligation with the counter parties at the reporting date.
Fair values for financial instruments are management’s estimates of the values at which the instruments could be exchanged in a transaction between willing parties. These estimates are subjective and may vary significantly from amounts that would be realized in actual transactions. In addition, other significant assets are not considered financial assets including, any mortgage banking operations, deferred tax assets, and premises and equipment. Further, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on the fair value estimates and have not been considered in any of these estimates.
December 31, 2016 | December 31, 2015 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Financial assets: | ||||||||||||||||
Level 1 inputs: | ||||||||||||||||
Cash and due from banks | $ | 92,197 | $ | 92,197 | $ | 94,305 | $ | 94,305 | ||||||||
Cash at Federal Reserve and other banks | 213,415 | 213,415 | 209,156 | 209,156 | ||||||||||||
Level 2 inputs: | ||||||||||||||||
Securities held to maturity | 602,536 | 603,203 | 726,530 | 732,208 | ||||||||||||
Restricted equity securities | 16,956 | N/A | 16,596 | N/A | ||||||||||||
Loans held for sale | 2,998 | 2,998 | 1,873 | 1,873 | ||||||||||||
Level 3 inputs: | ||||||||||||||||
Loans, net | 2,727,090 | 2,763,473 | 2,486,926 | 2,555,297 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Level 2 inputs: | ||||||||||||||||
Deposits | 3,895,560 | 3,893,941 | 3,631,266 | 3,630,129 | ||||||||||||
Other borrowings | 17,493 | 17,493 | 12,328 | 12,328 | ||||||||||||
Level 3 inputs: | ||||||||||||||||
Junior subordinated debt | $ | 56,667 | $ | 49,033 | $ | 56,470 | $ | 44,527 | ||||||||
Contract | Fair | Contract | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Off-balance sheet: | ||||||||||||||||
Level 3 inputs: | ||||||||||||||||
Commitments | $ | 767,274 | $ | 7,673 | $ | 705,316 | $ | 7,053 | ||||||||
Standby letters of credit | $ | 12,763 | $ | 128 | $ | 8,330 | $ | 83 | ||||||||
Overdraft privilege commitments | $ | 98,583 | $ | 986 | $ | 94,473 | $ | 945 |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||||
Level 1 inputs: | |||||||||||||||||||||||||||||||||||
Cash and due from banks | $ | 92,816 | $ | 92,816 | $ | 119,781 | $ | 119,781 | |||||||||||||||||||||||||||
Cash at Federal Reserve and other banks | 183,691 | 183,691 | 107,752 | 107,752 | |||||||||||||||||||||||||||||||
Level 2 inputs: | |||||||||||||||||||||||||||||||||||
Securities held to maturity | 375,606 | 381,525 | 444,936 | 437,370 | |||||||||||||||||||||||||||||||
Restricted equity securities | 17,250 | N/A | 17,250 | N/A | |||||||||||||||||||||||||||||||
Level 3 inputs: | |||||||||||||||||||||||||||||||||||
Loans, net | 4,276,750 | 4,263,064 | 3,989,432 | 4,006,986 | |||||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||||
Level 2 inputs: | |||||||||||||||||||||||||||||||||||
Deposits | 5,366,994 | 5,365,921 | 5,366,466 | 5,362,173 | |||||||||||||||||||||||||||||||
Other borrowings | 18,454 | 18,454 | 15,839 | 15,839 | |||||||||||||||||||||||||||||||
Level 3 inputs: | |||||||||||||||||||||||||||||||||||
Junior subordinated debt | 57,232 | 56,297 | 57,042 | 62,610 |
Contract Amount | Fair Value | Contract Amount | Fair Value | ||||||||||||||||||||
Off-balance sheet: | |||||||||||||||||||||||
Level 3 inputs: | |||||||||||||||||||||||
Commitments | $ | 1,309,326 | $ | 13,093 | $ | 1,192,054 | $ | 11,921 | |||||||||||||||
Standby letters of credit | 12,014 | 120 | 11,346 | 113 | |||||||||||||||||||
Overdraft privilege commitments | 110,402 | 1,104 | 111,956 | 1,120 |
December 31, | ||||||||
2016 | 2015 | |||||||
Assets | (in thousands) | |||||||
Cash and Cash equivalents | $ | 2,802 | $ | 2,565 | ||||
Investment in Tri Counties Bank | 529,907 | 504,655 | ||||||
Other assets | 1,711 | 1,714 | ||||||
|
|
|
| |||||
Total assets | $ | 534,420 | $ | 508,934 | ||||
|
|
|
| |||||
Liabilities and shareholders’ equity | ||||||||
Other liabilities | $ | 406 | $ | 348 | ||||
Junior subordinated debt | 56,667 | 56,470 | ||||||
|
|
|
| |||||
Total liabilities | 57,073 | 56,818 | ||||||
|
|
|
| |||||
Shareholders’ equity: | ||||||||
Common stock, no par value: authorized 50,000,000 shares; issued and outstanding 22,867,802 and 22,775,173 shares, respectively | 252,820 | 247,587 | ||||||
Retained earnings | 232,440 | 206,307 | ||||||
Accumulated other comprehensive loss, net | (7,913 | ) | (1,778 | ) | ||||
|
|
|
| |||||
Total shareholders’ equity | 477,347 | 452,116 | ||||||
|
|
|
| |||||
Total liabilities and shareholders’ equity | $ | 534,420 | $ | 508,934 | ||||
|
|
|
|
December 31, 2019 | December 31, 2018 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 5,008 | $ | 2,374 | |||||||||||||
Investment in Tri Counties Bank | 957,544 | 880,907 | |||||||||||||||
Other assets | 1,765 | 1,723 | |||||||||||||||
Total assets | $ | 964,317 | $ | 885,004 | |||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||
Other liabilities | $ | 515 | $ | 589 | |||||||||||||
Junior subordinated debt | 57,232 | 57,042 | |||||||||||||||
Total liabilities | 57,747 | 57,631 | |||||||||||||||
Shareholders’ equity: | |||||||||||||||||
Preferred stock, 0 par value: 1,000,000 shares authorized, 0 issued and outstanding at December 31, 2019 and 2018 | — | — | |||||||||||||||
Common stock, 0 par value: authorized 50,000,000 shares; issued and outstanding 30,523,824 and 30,417,223 shares at December 31, 2019 and 2018, respectively | 543,998 | 541,762 | |||||||||||||||
Retained earnings | 367,794 | 303,490 | |||||||||||||||
Accumulated other comprehensive loss, net | (5,222) | (17,879) | |||||||||||||||
Total shareholders’ equity | 906,570 | 827,373 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 964,317 | $ | 885,004 |
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(in thousands) | ||||||||||||
Interest expense | $ | (2,229 | ) | $ | (1,977 | ) | $ | (1,403 | ) | |||
Administration expense | (725 | ) | (814 | ) | (2,720 | ) | ||||||
|
|
|
|
|
| |||||||
Loss before equity in net income of Tri Counties Bank | (2,954 | ) | (2,791 | ) | (4,123 | ) | ||||||
Equity in net income of Tri Counties Bank: | ||||||||||||
Distributed | 16,758 | 13,304 | 8,270 | |||||||||
Undistributed | 29,764 | 32,131 | 20,720 | |||||||||
Income tax benefit | 1,243 | 1,174 | 1,241 | |||||||||
|
|
|
|
|
| |||||||
Net income | $ | 44,811 | $ | 43,818 | $ | 26,108 | ||||||
|
|
|
|
|
|
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Interest expense | $ | (3,272) | $ | (3,131) | $ | (2,535) | |||||||||||||||||||||||
Administration expense | (877) | (1,489) | (915) | ||||||||||||||||||||||||||
Loss before equity in net income of Tri Counties Bank | (4,149) | (4,620) | (3,450) | ||||||||||||||||||||||||||
Equity in net income of Tri Counties Bank: | |||||||||||||||||||||||||||||
Distributed | 32,669 | 26,432 | 19,236 | ||||||||||||||||||||||||||
Undistributed | 62,326 | 45,315 | 23,359 | ||||||||||||||||||||||||||
Income tax benefit | 1,226 | 1,193 | 1,409 | ||||||||||||||||||||||||||
Net income | $ | 92,072 | $ | 68,320 | $ | 40,554 |
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(in thousands) | ||||||||||||
Net income | $ | 44,811 | $ | 43,818 | $ | 26,108 | ||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||
Unrealized holding (losses) gains on securities arising during the period | (6,384 | ) | (1,098 | ) | (94 | ) | ||||||
Change in minimum pension liability | 592 | 1,246 | (4,114 | ) | ||||||||
Change in joint beneficiary agreement liability | (343 | ) | 277 | 148 | ||||||||
|
|
|
|
|
| |||||||
Other comprehensive (loss) income | (6,135 | ) | 425 | (4,060 | ) | |||||||
|
|
|
|
|
| |||||||
Net income | $ | 38,676 | $ | 44,243 | $ | 22,048 | ||||||
|
|
|
|
|
|
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Net income | $ | 92,072 | $ | 68,320 | $ | 40,554 | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||||
Increase (decrease) in unrealized gains on available for sale securities arising during the period | 17,159 | (12,434) | 3,165 | ||||||||||||||||||||||||||
Change in minimum pension liability | (4,502) | 388 | (370) | ||||||||||||||||||||||||||
Change in joint beneficiary agreement liablity | — | 426 | (110) | ||||||||||||||||||||||||||
Other comprehensive income (loss) | 12,657 | (11,620) | 2,685 | ||||||||||||||||||||||||||
Comprehensive income | $ | 104,729 | $ | 56,700 | $ | 43,239 |
Years ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Operating activities: | (in thousands) | |||||||||||
Net income | $ | 44,811 | $ | 43,818 | $ | 26,108 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Undistributed equity in earnings of Tri Counties Bank | (29,764 | ) | (32,131 | ) | (20,720 | ) | ||||||
Equity compensation vesting expense | 1,467 | 1,370 | 1,133 | |||||||||
Equity compensation tax effect | (155 | ) | 68 | (225 | ) | |||||||
Net change in other assets and liabilities | (1,210 | ) | (1,120 | ) | 671 | |||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 15,149 | 12,005 | 6,967 | |||||||||
Investing activities: None | ||||||||||||
Financing activities: | ||||||||||||
Issuance of common stock through option exercise | 518 | 660 | 616 | |||||||||
Equity compensation tax effect | 155 | (68 | ) | 225 | ||||||||
Repurchase of common stock | (1,890 | ) | (412 | ) | (292 | ) | ||||||
Cash dividends paid — common | (13,695 | ) | (11,849 | ) | (7,807 | ) | ||||||
|
|
|
|
|
| |||||||
Net cash used for financing activities | (14,912 | ) | (11,669 | ) | (7,258 | ) | ||||||
|
|
|
|
|
| |||||||
(decrease) increase in cash and cash equivalents | 237 | 336 | (291 | ) | ||||||||
Cash and cash equivalents at beginning of year | 2,565 | 2,229 | 2,520 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at end of year | $ | 2,802 | $ | 2,565 | $ | 2,229 | ||||||
|
|
|
|
|
|
Year Ended December 31, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||||||||
Net income | $ | 92,072 | $ | 68,320 | $ | 40,554 | |||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||
Undistributed equity in earnings of Tri Counties Bank | (62,326) | (45,315) | (23,359) | ||||||||||||||||||||||||||
Equity compensation vesting expense | 1,654 | 1,462 | 1,586 | ||||||||||||||||||||||||||
Net change in other assets and liabilities | (1,580) | (4,983) | (1,295) | ||||||||||||||||||||||||||
Net cash provided by operating activities | 29,820 | 19,484 | 17,486 | ||||||||||||||||||||||||||
Investing activities: None | |||||||||||||||||||||||||||||
Financing activities: | |||||||||||||||||||||||||||||
Issuance of common stock through option exercise | 9 | 218 | 396 | ||||||||||||||||||||||||||
Repurchase of common stock | (2,196) | (2,483) | (1,629) | ||||||||||||||||||||||||||
Cash dividends paid — common | (24,999) | (18,769) | (15,131) | ||||||||||||||||||||||||||
Net cash used for financing activities | (27,186) | (21,034) | (16,364) | ||||||||||||||||||||||||||
Net change in cash and cash equivalents | 2,634 | (1,550) | 1,122 | ||||||||||||||||||||||||||
Cash and cash equivalents at beginning of year | 2,374 | 3,924 | 2,802 | ||||||||||||||||||||||||||
Cash and cash equivalents at end of year | $ | 5,008 | $ | 2,374 | $ | 3,924 | |||||||||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1, and common equity Tier 1capital to risk-weighted assets, and of Tier 1 capital to average assets.
The following tables presents actual and required capital ratios Management believes as of December 31, 2016 and 2015 for2019, the Company and the Bank under Basel III Capital Rules. The minimum capital amounts presented include the minimum required capital levels as of December 31, 2016 and 2015 based on thephased-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fullyphased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
Minimum Capital | Minimum Capital | Required to be | ||||||||||||||||||||||||||||||
Required – Basel III | Required – Basel III | Considered Well | ||||||||||||||||||||||||||||||
Actual | Phase-in Schedule | Fully Phased In | Capitalized | |||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
As of December 31, 2016: | ||||||||||||||||||||||||||||||||
Total Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 503,283 | 14.65 | % | $ | 274,862 | 8.00 | % | $ | 360,756 | 10.50 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 500,876 | 14.59 | % | $ | 274,725 | 8.00 | % | $ | 360,577 | 10.50 | % | $ | 343,407 | 10.00 | % | ||||||||||||||||
Tier 1 Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 468,061 | 13.62 | % | $ | 206,147 | 6.00 | % | $ | 292,041 | 8.50 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 465,654 | 13.56 | % | $ | 206,044 | 6.00 | % | $ | 291,896 | 8.50 | % | $ | 274,725 | 8.00 | % | ||||||||||||||||
Common equity Tier 1 Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 414,632 | 12.07 | % | $ | 154,610 | 4.50 | % | $ | 240,504 | 7.00 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 465,654 | 13.56 | % | $ | 154,533 | 4.50 | % | $ | 240,385 | 7.00 | % | $ | 223,214 | 6.50 | % | ||||||||||||||||
Tier 1 Capital (to Average Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 468,061 | 10.62 | % | $ | 176,346 | 4.00 | % | $ | 176,346 | 4.00 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 465,654 | 10.56 | % | $ | 176,341 | 4.00 | % | $ | 176,341 | 4.00 | % | $ | 220,426 | 5.00 | % | ||||||||||||||||
As of December 31, 2015: | ||||||||||||||||||||||||||||||||
Total Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 474,436 | 15.09 | % | $ | 251,555 | 8.00 | % | $ | 330,165 | 10.50 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 473,327 | 15.06 | % | $ | 251,418 | 8.00 | % | $ | 329,985 | 10.50 | % | $ | 314,272 | 10.00 | % | ||||||||||||||||
Tier 1 Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 435,950 | 13.86 | % | $ | 188,666 | 6.00 | % | $ | 267,277 | �� | 8.50 | % | N/A | N/A | |||||||||||||||||
Tri Counties Bank | $ | 434,841 | 13.84 | % | $ | 188,563 | 6.00 | % | $ | 267,131 | 8.50 | % | $ | 251,418 | 8.00 | % | ||||||||||||||||
Common equity Tier 1 Capital | ||||||||||||||||||||||||||||||||
(to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 385,747 | 12.27 | % | $ | 141,499 | 4.50 | % | $ | 220,110 | 7.00 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 434,841 | 13.84 | % | $ | 141,422 | 4.50 | % | $ | 219,990 | 7.00 | % | $ | 204,277 | 6.50 | % | ||||||||||||||||
Tier 1 Capital (to Average Assets): | ||||||||||||||||||||||||||||||||
Consolidated | $ | 435,950 | 10.79 | % | $ | 161,562 | 4.00 | % | $ | 161,562 | 4.00 | % | N/A | N/A | ||||||||||||||||||
Tri Counties Bank | $ | 434,841 | 10.76 | % | $ | 161,601 | 4.00 | % | $ | 161,601 | 4.00 | % | $ | 202,002 | 5.00 | % |
As of December 31, 2016, capital levels at the Company and the Bank exceedmeet all capital adequacy requirements under the Basel III Capital Rules on a fullyphased-in basis. Also, at December 31, 2016 and 2015, the most recent regulation notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.
to which they are subject.
Actual | Required for Capital Adequacy Purposes | Required to be Considered Well Capitalized Under Prompt Corrective Action Regulations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2019: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 753,200 | 15.07 | % | $ | 524,944 | 10.50 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 748,660 | 14.98 | % | $ | 524,759 | 10.50 | % | $ | 499,770 | 10.00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 719,809 | 14.40 | % | $ | 424,955 | 8.50 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 715,269 | 14.31 | % | $ | 424,805 | 8.50 | % | $ | 399,816 | 8.00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 Capital (to Risk Weighted Assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 664,296 | 13.29 | % | $ | 349,963 | 7.00 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 715,269 | 14.31 | % | $ | 349,839 | 7.00 | % | $ | 324,851 | 6.50 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 719,809 | 11.55 | % | $ | 249,343 | 4.00 | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 715,269 | 11.47 | % | $ | 249,337 | 4.00 | % | $ | 311,672 | 5.00 | % |
Actual | Required for Capital Adequacy Purposes | Required to be Considered Well Capitalized Under Prompt Corrective Action Regulations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 682,419 | 14.40 | % | $ | 497,486 | 10.50 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 680,624 | 14.37 | % | $ | 497,305 | 10.50 | % | $ | 473,624 | 10.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 647,262 | 13.66 | % | $ | 402,727 | 8.50 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 645,467 | 13.63 | % | $ | 402,581 | 8.50 | % | $ | 378,899 | 8.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 Capital (to Risk Weighted Assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 591,933 | 12.49 | % | $ | 331,658 | 7.00 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 645,467 | 13.63 | % | $ | 331,537 | 7.00 | % | $ | 307,856 | 6.50 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 647,262 | 10.68 | % | $ | 242,452 | 4.00 | % | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri Counties Bank | $ | 645,467 | 10.65 | % | $ | 242,447 | 4.00 | % | $ | 303,059 | 5.00 | % |
2016 Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||
Loans: | ||||||||||||||||
Discount accretion PCI – cash basis | $ | 483 | $ | 777 | $ | 426 | $ | 269 | ||||||||
Discount accretion PCI – other | 658 | 569 | 415 | (45 | ) | |||||||||||
Discount accretion PNCI | 637 | 883 | 1,459 | 868 | ||||||||||||
All other loan interest income | 34,463 | 33,540 | 32,038 | 33,646 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loan interest income | 36,241 | 35,769 | 34,338 | 34,738 | ||||||||||||
Debt securities, dividends and interest bearing cash at Banks (not FTE) | 8,374 | 7,940 | 8,252 | 8,056 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total interest income | 44,615 | 43,709 | 42,590 | 42,794 | ||||||||||||
Interest expense | 1,460 | 1,439 | 1,430 | 1,392 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income | 43,155 | 42,270 | 41,160 | 41,402 | ||||||||||||
(Benefit from reversal of) provision for loan losses | (1,433 | ) | 3,973 | ) | (773 | ) | 209 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income after provision for loan losses | 44,588 | 46,243 | 41,933 | 41,193 | ||||||||||||
Noninterest income | 12,462 | 11,066 | 11,245 | 9,790 | ||||||||||||
Noninterest expense | 36,563 | 37,416 | 38,267 | 33,751 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income taxes | 20,487 | 19,893 | 14,911 | 17,232 | ||||||||||||
Income tax expense | 7,954 | 7,694 | 5,506 | 6,558 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 12,533 | $ | 12,199 | $ | 9,405 | $ | 10,674 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Per common share: | ||||||||||||||||
Net income (diluted) | $ | 0.54 | $ | 0.53 | $ | 0.41 | $ | 0.46 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||||||
|
|
|
|
|
|
|
|
2015 Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||
Loans: | ||||||||||||||||
Discount accretion PCI – cash basis | $ | 302 | $ | 445 | $ | 404 | $ | 172 | ||||||||
Discount accretion PCI – other | 1,392 | 1,090 | 907 | 1,274 | ||||||||||||
Discount accretion PNCI | 573 | 1,590 | 822 | 1,348 | ||||||||||||
All other loan interest income | 32,571 | 30,689 | 29,886 | 28,371 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loan interest income | 34,838 | 33,814 | 32,019 | 31,165 | ||||||||||||
Debt securities, dividends and interest bearing cash at banks (not FTE) | 7,652 | 7,518 | 7,848 | 6,560 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total interest income | 42,490 | 41,332 | 39,867 | 37,725 | ||||||||||||
Interest expense | 1,349 | 1,339 | 1,346 | 1,382 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income | 41,141 | 39,993 | 38,521 | 36,343 | ||||||||||||
(Benefit from) provision for loan losses | (908 | ) | (866 | ) | (633 | ) | 197 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income after provision for loan losses | 42,049 | 40,859 | 39,154 | 36,146 | ||||||||||||
Noninterest income | 11,445 | 11,642 | 12,080 | 10,180 | ||||||||||||
Noninterest expense | 34,684 | 31,439 | 32,436 | 32,282 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income taxes | 18,810 | 21,062 | 18,798 | 14,044 | ||||||||||||
Income tax expense | 7,388 | 8,368 | 7,432 | 5,708 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 11,422 | $ | 12,694 | $ | 11,366 | $ | 8,336 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Per common share: | ||||||||||||||||
Net income (diluted) | $ | 0.50 | $ | 0.55 | $ | 0.49 | $ | 0.36 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends | $ | 0.15 | $ | 0.13 | $ | 0.13 | $ | 0.11 | ||||||||
|
|
|
|
|
|
|
|
2019 Quarters Ended | |||||||||||||||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||
Discount accretion | $ | 2,218 | $ | 2,360 | $ | 1,904 | $ | 1,655 | |||||||||||||||||||||||||||||||||
All other loan interest income | 54,644 | 54,639 | 53,587 | 52,743 | |||||||||||||||||||||||||||||||||||||
Total loan interest income | 56,862 | 56,999 | 55,491 | 54,398 | |||||||||||||||||||||||||||||||||||||
Debt securities, dividends and interest bearing cash at banks | 11,056 | 11,890 | 12,689 | 13,059 | |||||||||||||||||||||||||||||||||||||
Total interest income | 67,918 | 68,889 | 68,180 | 67,457 | |||||||||||||||||||||||||||||||||||||
Interest expense | 3,722 | 4,201 | 3,865 | 3,587 | |||||||||||||||||||||||||||||||||||||
Net interest income | 64,196 | 64,688 | 64,315 | 63,870 | |||||||||||||||||||||||||||||||||||||
(Benefit from reversal of) provision for loan losses | (298) | (329) | 537 | (1,600) | |||||||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 64,494 | 65,017 | 63,778 | 65,470 | |||||||||||||||||||||||||||||||||||||
Noninterest income | 14,186 | 14,108 | 13,423 | 11,803 | |||||||||||||||||||||||||||||||||||||
Noninterest expense | 46,964 | 46,344 | 46,697 | 45,452 | |||||||||||||||||||||||||||||||||||||
Income before income taxes | 31,716 | 32,781 | 30,504 | 31,821 | |||||||||||||||||||||||||||||||||||||
Income tax expense | 8,826 | 9,386 | 7,443 | 9,095 | |||||||||||||||||||||||||||||||||||||
Net income | $ | 22,890 | $ | 23,395 | $ | 23,061 | $ | 22,726 | |||||||||||||||||||||||||||||||||
Per common share: | |||||||||||||||||||||||||||||||||||||||||
Net income (diluted) | $ | 0.75 | $ | 0.76 | $ | 0.75 | $ | 0.74 | |||||||||||||||||||||||||||||||||
Dividends | $ | 0.22 | $ | 0.22 | $ | 0.19 | $ | 0.19 |
2018 Quarters Ended | |||||||||||||||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||
Discount accretion | $ | 1,982 | $ | 2,098 | $ | 559 | $ | 632 | |||||||||||||||||||||||||||||||||
All other loan interest income | 53,680 | 51,004 | 38,745 | 37,417 | |||||||||||||||||||||||||||||||||||||
Total loan interest income | 55,662 | 53,102 | 39,304 | 38,049 | |||||||||||||||||||||||||||||||||||||
Debt securities, dividends and interest bearing cash at banks | 12,403 | 11,452 | 9,174 | 9,072 | |||||||||||||||||||||||||||||||||||||
Total interest income | 68,065 | 64,554 | 48,478 | 47,121 | |||||||||||||||||||||||||||||||||||||
Interest expense | 4,063 | 4,065 | 2,609 | 2,135 | |||||||||||||||||||||||||||||||||||||
Net interest income | 64,002 | 60,489 | 45,869 | 44,986 | |||||||||||||||||||||||||||||||||||||
Provision for (benefit from reversal of provision for) loan losses | 806 | 2,651 | (638) | (236) | |||||||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 63,196 | 57,838 | 46,507 | 45,222 | |||||||||||||||||||||||||||||||||||||
Noninterest income | 12,634 | 12,186 | 12,174 | 12,290 | |||||||||||||||||||||||||||||||||||||
Noninterest expense | 45,285 | 47,378 | 37,870 | 38,162 | |||||||||||||||||||||||||||||||||||||
Income before income taxes | 30,545 | 22,646 | 20,811 | 19,350 | |||||||||||||||||||||||||||||||||||||
Income tax expense | 7,334 | 6,476 | 5,782 | 5,440 | |||||||||||||||||||||||||||||||||||||
Net income | $ | 23,211 | $ | 16,170 | $ | 15,029 | $ | 13,910 | |||||||||||||||||||||||||||||||||
Per common share: | |||||||||||||||||||||||||||||||||||||||||
Net income (diluted) | $ | 0.76 | $ | 0.53 | $ | 0.65 | $ | 0.60 | |||||||||||||||||||||||||||||||||
Dividends | $ | 0.19 | $ | 0.17 | $ | 0.17 | $ | 0.17 |
2019.
Crowe Horwath
/s/ Richard P. Smith | ||
Richard P. Smith | ||
President and Chief Executive Officer |
/s/ | ||
Peter G. Wiese Executive Vice President and Chief Financial Officer | ||
March 2, 2020 |
March 14, 2017
of
Chico, California
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
/s/ Crowe Horwathfinancial statements. We believe that our audit provide a reasonable basis for our opinion.
2016,2019, the end of the period covered by this Annual Report on Form10-K, the Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined inRule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer each concluded that as of December 31, 2016,2019, the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in this Annual Report on Form10-K was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and instructions for Form10-K.100103 of this report and is incorporated herein by reference. The effectiveness of the Company’s internal control over financial reporting as of December 31, 20162019 has been audited by Crowe HorwathMoss Adams LLP, an independent registered public accounting firm, as stated in its report, which is set forth on page 101104 and 105 of this report and is incorporated herein by reference.2016,2019, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
20162019 was so disclosed.
20172020 annual meeting of shareholders, which will be filed with the Commission pursuant to Regulation 14A or included in an amendment to this Form10-K.
2017annual2020 annual meeting of shareholders, which will be filed with the Commission pursuant to Regulation 14A or included in an amendment to this Form10-K.
20172020 annual meeting of shareholders, which will be filed with the Commission pursuant to Regulation 14A or included in an amendment to this Form10-K.
20172020 annual meeting of shareholders, which will be filed with the Commission pursuant to Regulation 14A or included in an amendment to this Form10-K.
20172020 annual meeting of shareholders, which will be filed with the Commission pursuant to Regulation 14A or included in an amendment to this Form10-K.
/s/ Richard P. Smith /s/ Richard P. Smith /s/ /s/ Donald J. Amaral /s/ Thomas G. Atwood(a)Documents filed as part of this report:1.All Financial Statements.2.Financial statement schedules.3.Exhibits.(b)Exhibits filed:(c)Financial statement schedules filed:Date: March 14, 20172, 2020 TRICO BANCSHARES By: By:Richard P. Smith, President and Chief Executive Officer Date: March 14, 20172, 2020Richard P. Smith, President, Chief Executive
Officer and Director (Principal Executive Officer)Date: March 14, 20172, 2020Thomas J. ReddishThomas J. Reddish,Peter G. Wiese, Executive Vice President and Chief FinancialOfficer (Principal
(Principal Financial and Accounting Officer)Date: March 14, 20172, 2020Donald J. Amaral, Director Date: March 14, 20172, 2020Thomas G. Atwood, Director Date: March 2, 2020 /s/ William J. Casey William J. Casey, Director and Chairman of the Board Date: March 14, 2017/s/ Craig S. ComptonCraig S. Compton, DirectorDate: March 14, 2017/s/ L. Gage ChryslerL. Gage Chrysler, DirectorDate: March 14, 2017/s/ Cory W. GieseCory W. Giese, DirectorDate: March 14, 2017/s/ John S.A. HasbrookJohn S.A. Hasbrook, DirectorDate: March 14, 2017/s/ Patrick A. KilkennyPatrick A. Kilkenny, DirectorDate: March 14, 2017/s/ Michael W. KoehnenMichael W. Koehnen, DirectorDate: March 14, 2017/s/ Martin A. MarianiMartin A. Mariani, DirectorDate: March 14, 2017/s/ W. Virginia WalkerW. Virginia Walker, DirectorEXHIBIT INDEXExhibit No.Date: March 2, 2020Exhibit/s/ Craig S. ComptonCraig S. Compton, Director 3.1Date: March 2, 2020 /s/ L. Gage Chrysler L. Gage Chrysler, Director Date: March 2, 2020 /s/ Kirsten E. Garen Kirsten E. Garen, Director Date: March 2, 2020 /s/ Cory W. Giese Cory W. Giese, Director Date: March 2, 2020 /s/ John S.A. Hasbrook John S.A. Hasbrook, Director Date: March 2, 2020 /s/ Margaret L. Kane Margaret L. Kane, Director Date: March 2, 2020 /s/ Michael W. Koehnen Michael W. Koehnen, Director Date: March 2, 2020 /s/ Martin A. Mariani Martin A. Mariani, Director Date: March 2, 2020 /s/ Thomas C. McGraw Thomas C. McGraw, Director Date: March 2, 2020 /s/ Kimberley H. Vogel Kimberley H. Vogel, Director Date: March 2, 2020 /s/ W. Virginia Walker W. Virginia Walker, Director Exhibit No. Exhibit Agreement and Plan of Merger and Reorganization, dated as of January 21, 2014 by and between TriCo Bancshares and North Valley Bancorp (incorporated by reference to Exhibit 2.1 to TriCo’s Current Report on Form 8-K filed on January 21, 2014). Agreement and Plan of Reorganization dated as of December 11, 2017, by and between TriCo Bancshares and FNB Bancorp (incorporated by reference to Exhibit 2.1 to TriCo’s Current Report on Form 8-K filed on December 11, 2017). Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to TriCo’s Current Report on Form8-K filed on March 17, 2009). 3.2Bylaws of TriCo, as amended (incorporated by reference to Exhibit 3.1 to TriCo’s Current Report on Form8-K filed February 17, 2011). 4.1 4.1Instruments defining the rights of holders of the long-term debt securities of the TriCo and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of RegulationS-K. TriCo hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request. TriCo Bancshares securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 Form of Change of Control Agreement among TriCo, Tri Counties Bank and each of Dan Bailey, Craig Carney, John Fleshood, Richard O’Sullivan, and Thomas Reddish (incorporated by reference to Exhibit 10.210.1 to TriCo’s Current Report on Form8-K filed on July 23, 2013).10.2*TriCo’s 2001 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.7 to TriCo’s Quarterly Report on Form10-Q for the quarter ended June 30, 2005). 10.3*TriCo’s 2009 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to TriCo’s Current Report on Form8-K filed April 3, 2013). 10.4*Amended Employment Agreement between TriCo and Richard Smith dated as of March 28, 2013 (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed April 3, 2013). 10.5*Transaction Bonus Agreement between TriCo Bancshares and Richard P. Smith dated as of August 7, 2014 (incorporated by reference to Exhibit 10.4 to TriCo’s Form8-K filed on August 13, 2014). 10.6*Tri Counties Bank Executive Deferred Compensation Plan restated April 1, 1992, and January 1, 2005 (incorporated by reference to Exhibit 10.9 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2005). 10.7*Tri Counties Bank Deferred Compensation Plan for Directors effective January 1, 2005 (incorporated by reference to Exhibit 10.10 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2005). 10.8*2005 Tri Counties Bank Deferred Compensation Plan for Executives and Directors effective January 1, 2005 (incorporated by reference to Exhibit 10.11 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2005). 10.9*Tri Counties Bank Supplemental Retirement Plan for Directors dated September 1, 1987, as restated January 1, 2001, and amended and restated January 1, 2004 (incorporated by reference to Exhibit 10.12 to TriCo’s Quarterly Report on Form10-Q for the quarter ended June 30, 2004). 10.10*2004 TriCo Bancshares Supplemental Retirement Plan for Directors effective January 1, 2004 (incorporated by reference to Exhibit 10.13 to TriCo’s Quarterly Report on Form10-Q for the quarter ended June 30, 2004). 10.11*Tri Counties Bank Supplemental Executive Retirement Plan effective September 1, 1987, as amended and restated January 1, 2004 (incorporated by reference to Exhibit 10.14 to TriCo’s Quarterly Report on Form10-Q for the quarter ended June 30, 2004). 10.12*2004 TriCo Bancshares Supplemental Executive Retirement Plan effective January 1, 2004 (incorporated by reference to Exhibit 10.15 to TriCo’s Quarterly Report on Form10-Q for the quarter ended June 30, 2004). 10.13*Form of Joint Beneficiary Agreement effective March 31, 2003 between Tri Counties Bank and each of George Barstow, Dan Bay, Ron Bee, Craig Carney, Robert Elmore, Greg Gill, Richard Miller, Richard O’Sullivan, Thomas Reddish, Jerald Sax, and Richard Smith (incorporated by reference to Exhibit 10.14 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2003). 10.14*Form of Joint Beneficiary Agreement effective March 31, 2003 between Tri Counties Bank and each of Don Amaral, William Casey, Craig Compton, John Hasbrook, Michael Koehnen, Donald Murphy, Carroll Taresh, and Alex Vereschagin (incorporated by reference to Exhibit 10.15 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2003). 10.15*Form of Tri Counties Bank Executive Long Term Care Agreement effective June 10, 2003 between Tri Counties Bank and each of Craig Carney, Richard Miller, Richard O’Sullivan, and Thomas Reddish (incorporated by reference to Exhibit 10.16 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2003). Form of Tri Counties Bank Director Long Term Care Agreement effective June 10, 2003 between Tri Counties Bank and each of Don Amaral, William Casey, Craig Compton, John Hasbrook, Michael Koehnen, Carroll Taresh, and Alex Vereschagin (incorporated by reference to Exhibit 10.17 to TriCo’s Quarterly Report on Form10-Q for the quarter ended September 30, 2003). 10.17*Form of Indemnification Agreement between TriCo and its directors and executive officers (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed September 10, 2013). 10.18*Form of Indemnification Agreement between Tri Counties Bank its directors and executive officers (incorporated by reference to Exhibit 10.2 to TriCo’s Current Report on Form8-K filed September 10, 2013). 10.19*Form of Stock Option, AgreementStock Appreciation Right, Restricted Stock Unit Award, and Performance Share Award Agreements, and Notice of Grant Noticeof Stock Option pursuant to TriCo’s 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.110.19 to TriCo’s CurrentAnnual Report on Form8-K filed May 25, 2010) 10-K for the year ended December 31, 2017).10.20*Form of Restricted Stock Unit Agreement and Grant Notice forNon-Employee Executives pursuant to TriCo’s 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed November 14, 2014). Item 6– Exhibits (continued)10.21*Form of Restricted Stock Unit Agreement and Grant Notice for Directors pursuant to TriCo’s 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed November 14, 2014). 10.22*Form of Performance Award Agreement and Grant Notice pursuant to TriCo’s 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to TriCo’s Current Report on Form8-K filed August 13, 2014). 10.23*John Fleshood Offer Letter dated November 3, 2016 (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed on November 30, 2016). 10.24*Amendment to John Fleshood Offer Letter dated December 19, 2016 (incorporated by reference to Exhibit 10.1 to TriCo’s Current Report on Form8-K filed on November 30, 2016). Peter Wiese Offer Letter dated August 9, 2018 (incorporated by reference to Exhibit 10.1 to TriCo’s current report on Form 8-K filed on August 9, 2018). 21.1TriCo's 2019 Equity Incentive Plan Form of Restricted Stock Unit Agreement and Grant Notice for Non-employee Directors pursuant to TriCo's 2019 Equity Incentive plan (incorporated by reference to Exhibit 99.1 of TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019). Form of Restricted Stock Unit Agreement and Grant Notice for Employees pursuant to TriCo's 2019 Equity Incentive plan (incorporated by reference to Exhibit 99.2 of TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019). Form of Performance Award Agreement and Grant Notice pursuant to TriCo's 2019 Equity Incentive plan (incorporated by reference to Exhibit 99.1 of TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019). List of Subsidiaries 23.1Consent of Moss Adams LLP, Independent Registered Public Accounting Firm’s ConsentFirmConsent of Crowe LLP, Independent Registered Public Accounting Firm Rule13a-14(a)/15d-14(a) Certification of CEO 31.2Rule13a-14(a)/15d-14(a) Certification of CFO 32.1Section 1350 Certification of CEO 32.2Section 1350 Certification of CFO 101.INS 101.INSXBRL Instance Document 101.SCH 101.SCHXBRL Taxonomy Extension Schema Document 101.CAL 101.CALXBRL Taxonomy Extension Calculation Linkbase Document 101.LAB 101.LABXBRL Taxonomy Extension Label Linkbase Document 101.PRE 101.PREXBRL Taxonomy Extension Presentation Linkbase Document 101.DEF 101.DEFXBRL Taxonomy Extension Definition Linkbase Document *Management contract or compensatory plan or arrangement106