SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For The Quarterly Period Ended JuneSeptember 30, 2022
| |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File Number
0-16759FIRST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Indiana | 35-1546989 | |||||||
(State or other jurisdiction | (I.R.S. Employer | |||||||
incorporation or organization) | Identification No.) | |||||||
| | |||||||
One First Financial Plaza, Terre Haute, IN | 47807 | |||||||
(Address of principal executive office) | (Zip Code) | |||||||
| | |||||||
(812) | 238-6000 | |||||||
( | |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | ||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.125 per share | | THFF | | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑þ No ☐¨.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑þ No ☐¨.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| | | | ||||||||
Large accelerated filer |
| Accelerated filer |
| ||||||||
Non-accelerated filer (Do not check if a smaller reporting company) |
| Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐ No ☑As of AugustNovember 1, 2022, the registrant had outstanding 12,031,12312,021,998 shares of common stock, without par value.
FORM 10-Q
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2
FIRST FINANCIAL CORPORATION
(Dollar amounts in thousands, except per share data)
June 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | 412,136 | $ | 682,807 | |||||||
Federal funds sold | 11,133 | 308 | |||||||||
Securities available-for-sale | 1,338,452 | 1,364,734 | |||||||||
Loans: | |||||||||||
Commercial | 1,707,105 | 1,674,066 | |||||||||
Residential | 670,641 | 664,509 | |||||||||
Consumer | 509,781 | 474,026 | |||||||||
2,887,527 | 2,812,601 | ||||||||||
(Less) plus: | |||||||||||
Net deferred loan (fees)/costs | 4,961 | 3,294 | |||||||||
Allowance for credit losses | (41,468) | (48,305) | |||||||||
2,851,020 | 2,767,590 | ||||||||||
Restricted stock | 15,620 | 16,200 | |||||||||
Accrued interest receivable | 16,701 | 16,946 | |||||||||
Premises and equipment, net | 69,022 | 69,522 | |||||||||
Bank-owned life insurance | 117,695 | 116,997 | |||||||||
Goodwill | 86,985 | 86,135 | |||||||||
Other intangible assets | 7,336 | 8,024 | |||||||||
Other real estate owned | 170 | 108 | |||||||||
Other assets | 80,378 | 45,728 | |||||||||
TOTAL ASSETS | $ | 5,006,648 | $ | 5,175,099 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ | 886,204 | $ | 914,933 | |||||||
Interest-bearing: | |||||||||||
Certificates of deposit exceeding the FDIC insurance limits | 60,311 | 74,015 | |||||||||
Other interest-bearing deposits | 3,436,742 | 3,420,621 | |||||||||
4,383,257 | 4,409,569 | ||||||||||
Short-term borrowings | 84,232 | 93,374 | |||||||||
Other borrowings | 15,912 | 15,937 | |||||||||
Other liabilities | 61,716 | 73,643 | |||||||||
TOTAL LIABILITIES | 4,545,117 | 4,592,523 | |||||||||
Shareholders’ equity | |||||||||||
Common stock, $0.125 stated value per share; | |||||||||||
Authorized shares-40,000,000 | |||||||||||
Issued shares-16,114,992 in 2022 and 16,096,313 in 2021 | |||||||||||
Outstanding shares-12,031,123 in 2022 and 12,629,893 in 2021 | 2,011 | 2,009 | |||||||||
Additional paid-in capital | 142,390 | 141,979 | |||||||||
Retained earnings | 589,169 | 559,139 | |||||||||
Accumulated other comprehensive income/(loss) | (126,630) | (2,426) | |||||||||
Less: Treasury shares at cost-4,083,869 in 2022 and 3,466,420 in 2021 | (145,409) | (118,125) | |||||||||
TOTAL SHAREHOLDERS’ EQUITY | 461,531 | 582,576 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 5,006,648 | $ | 5,175,099 |
| | | | | | | |
| | September 30, | | December 31, | | ||
|
| 2022 |
| 2021 | | ||
| | (unaudited) | | ||||
ASSETS |
| |
|
| |
| |
Cash and due from banks | | $ | 328,222 | | $ | 682,807 | |
Federal funds sold | |
| 8,223 | |
| 308 | |
Securities available-for-sale | |
| 1,331,985 | |
| 1,364,734 | |
Loans: | |
| | | | | |
Commercial | | | 1,717,265 | | | 1,674,066 | |
Residential | | | 676,400 | | | 664,509 | |
Consumer | | | 570,245 | | | 474,026 | |
| | | 2,963,910 | | | 2,812,601 | |
(Less) plus: | | | | | | | |
Net deferred loan (fees)/costs | | | 6,565 | | | 3,294 | |
Allowance for credit losses | | | (39,495) | | | (48,305) | |
| | | 2,930,980 | | | 2,767,590 | |
Restricted stock | |
| 15,372 | |
| 16,200 | |
Accrued interest receivable | |
| 19,128 | |
| 16,946 | |
Premises and equipment, net | |
| 68,113 | |
| 69,522 | |
Bank-owned life insurance | |
| 116,034 | |
| 116,997 | |
Goodwill | |
| 86,985 | |
| 86,135 | |
Other intangible assets | |
| 7,024 | |
| 8,024 | |
Other real estate owned | |
| 214 | |
| 108 | |
Other assets | |
| 97,059 | |
| 45,728 | |
TOTAL ASSETS | | $ | 5,009,339 | | $ | 5,175,099 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
|
| |
|
| |
Deposits: | |
|
| |
|
| |
Non-interest-bearing | | $ | 894,348 | | $ | 914,933 | |
Interest-bearing: | |
| | |
|
| |
Certificates of deposit exceeding the FDIC insurance limits | |
| 56,596 | |
| 74,015 | |
Other interest-bearing deposits | |
| 3,456,562 | |
| 3,420,621 | |
| |
| 4,407,506 | |
| 4,409,569 | |
Short-term borrowings | |
| 89,321 | |
| 93,374 | |
Other borrowings | |
| 9,593 | |
| 15,937 | |
Other liabilities | |
| 64,293 | |
| 73,643 | |
TOTAL LIABILITIES | |
| 4,570,713 | |
| 4,592,523 | |
Shareholders’ equity | |
|
| |
|
| |
Common stock, $0.125 stated value per share; Authorized shares-40,000,000 Issued shares-16,114,992 in 2022 and 16,096,313 in 2021 Outstanding shares-12,021,998 in 2022 and 12,629,893 in 2021 | |
| 2,011 | |
| 2,009 | |
Additional paid-in capital | |
| 142,596 | |
| 141,979 | |
Retained earnings | |
| 607,220 | |
| 559,139 | |
Accumulated other comprehensive income/(loss) | |
| (167,375) | |
| (2,426) | |
Less: Treasury shares at cost-4,092,994 in 2022 and 3,466,420 in 2021 | |
| (145,826) | |
| (118,125) | |
TOTAL SHAREHOLDERS’ EQUITY | |
| 438,626 | |
| 582,576 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 5,009,339 | | $ | 5,175,099 | |
See accompanying notes.
3
(Dollar amounts in thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||
Loans, including related fees | $ | 34,305 | $ | 31,966 | $ | 66,662 | $ | 63,823 | |||||||||||||||
Securities: | |||||||||||||||||||||||
Taxable | 6,048 | 3,355 | 10,631 | 6,434 | |||||||||||||||||||
Tax-exempt | 2,492 | 2,163 | 4,840 | 4,237 | |||||||||||||||||||
Other | 358 | 387 | 723 | 733 | |||||||||||||||||||
TOTAL INTEREST INCOME | 43,203 | 37,871 | 82,856 | 75,227 | |||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Deposits | 2,473 | 2,090 | 4,149 | 4,376 | |||||||||||||||||||
Short-term borrowings | 176 | 94 | 258 | 192 | |||||||||||||||||||
Other borrowings | 85 | 59 | 169 | 118 | |||||||||||||||||||
TOTAL INTEREST EXPENSE | 2,734 | 2,243 | 4,576 | 4,686 | |||||||||||||||||||
NET INTEREST INCOME | 40,469 | 35,628 | 78,280 | 70,541 | |||||||||||||||||||
Provision for credit losses | 750 | (2,196) | (5,800) | (1,744) | |||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION | |||||||||||||||||||||||
FOR CREDIT LOSSES | 39,719 | 37,824 | 84,080 | 72,285 | |||||||||||||||||||
NON-INTEREST INCOME: | |||||||||||||||||||||||
Trust and financial services | 1,300 | 1,313 | 2,672 | 2,618 | |||||||||||||||||||
Service charges and fees on deposit accounts | 7,079 | 6,015 | 13,733 | 11,610 | |||||||||||||||||||
Other service charges and fees | 222 | 406 | 328 | 822 | |||||||||||||||||||
Securities gains (losses), net | — | 258 | 5 | 106 | |||||||||||||||||||
Interchange income | 151 | 115 | 269 | 199 | |||||||||||||||||||
Loan servicing fees | 368 | 788 | 727 | 1,141 | |||||||||||||||||||
Gain on sales of mortgage loans | 603 | 1,450 | 1,265 | 2,843 | |||||||||||||||||||
Other | 547 | 586 | 5,009 | 886 | |||||||||||||||||||
TOTAL NON-INTEREST INCOME | 10,270 | 10,931 | 24,008 | 20,225 | |||||||||||||||||||
NON-INTEREST EXPENSE: | |||||||||||||||||||||||
Salaries and employee benefits | 15,668 | 16,031 | 33,010 | 31,708 | |||||||||||||||||||
Occupancy expense | 2,372 | 2,002 | 4,894 | 4,151 | |||||||||||||||||||
Equipment expense | 2,959 | 2,440 | 5,866 | 5,018 | |||||||||||||||||||
FDIC Expense | 542 | 287 | 970 | 585 | |||||||||||||||||||
Other | 9,133 | 7,236 | 17,278 | 14,173 | |||||||||||||||||||
TOTAL NON-INTEREST EXPENSE | 30,674 | 27,996 | 62,018 | 55,635 | |||||||||||||||||||
INCOME BEFORE INCOME TAXES | 19,315 | 20,759 | 46,070 | 36,875 | |||||||||||||||||||
Provision for income taxes | 3,702 | 4,145 | 9,533 | 7,384 | |||||||||||||||||||
NET INCOME | 15,613 | 16,614 | 36,537 | 29,491 | |||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||||
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes | (55,919) | 1,772 | (124,833) | (9,296) | |||||||||||||||||||
Change in funded status of post retirement benefits, net of taxes | 314 | 472 | 629 | 944 | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | (39,992) | $ | 18,858 | $ | (87,667) | $ | 21,139 | |||||||||||||||
PER SHARE DATA | |||||||||||||||||||||||
Basic and Diluted Earnings per Share | $ | 1.27 | $ | 1.24 | $ | 2.95 | $ | 2.19 | |||||||||||||||
Weighted average number of shares outstanding (in thousands) | 12,248 | 13,414 | 12,393 | 13,473 |
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
|
| 2022 |
| 2021 | | 2022 |
| 2021 | | ||||
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | ||||
INTEREST INCOME: |
| |
|
| |
| | |
|
| |
| |
Loans, including related fees | | $ | 38,021 | | $ | 31,937 | | $ | 104,683 | | $ | 95,760 | |
Securities: | |
|
| |
|
| |
|
| |
|
| |
Taxable | |
| 7,327 | |
| 3,627 | |
| 17,958 | |
| 10,061 | |
Tax-exempt | |
| 2,562 | |
| 2,234 | |
| 7,402 | |
| 6,471 | |
Other | |
| 336 | |
| 347 | |
| 1,059 | |
| 1,080 | |
TOTAL INTEREST INCOME | |
| 48,246 | |
| 38,145 | |
| 131,102 | |
| 113,372 | |
INTEREST EXPENSE: | |
|
| |
|
| |
|
| |
|
| |
Deposits | |
| 4,644 | |
| 1,959 | |
| 8,793 | |
| 6,335 | |
Short-term borrowings | |
| 418 | |
| 99 | |
| 676 | |
| 291 | |
Other borrowings | |
| 80 | |
| 59 | |
| 249 | |
| 177 | |
TOTAL INTEREST EXPENSE | |
| 5,142 | |
| 2,117 | |
| 9,718 | |
| 6,803 | |
NET INTEREST INCOME | |
| 43,104 | |
| 36,028 | |
| 121,384 | |
| 106,569 | |
Provision for credit losses | |
| 1,050 | |
| (1,500) | |
| (4,750) | |
| (3,244) | |
NET INTEREST INCOME AFTER PROVISION | |
| | |
| | | | | | | | |
FOR CREDIT LOSSES | |
| 42,054 | |
| 37,528 | |
| 126,134 | |
| 109,813 | |
NON-INTEREST INCOME: | |
| | |
| | |
| | |
| | |
Trust and financial services | |
| 1,015 | |
| 1,156 | |
| 3,687 | |
| 3,774 | |
Service charges and fees on deposit accounts | |
| 6,965 | |
| 6,421 | |
| 20,698 | |
| 18,031 | |
Other service charges and fees | |
| 160 | |
| 135 | |
| 488 | |
| 957 | |
Securities gains (losses), net | | | — | | | 5 | | | 5 | | | 111 | |
Interchange income | | | 149 | | | 224 | | | 418 | | | 423 | |
Loan servicing fees | |
| 457 | |
| 344 | |
| 1,184 | |
| 1,485 | |
Gain on sales of mortgage loans | |
| 440 | |
| 1,426 | |
| 1,705 | |
| 4,268 | |
Other | | | 2,954 | | | 1,381 | | | 7,963 | | | 2,268 | |
TOTAL NON-INTEREST INCOME | |
| 12,140 | |
| 11,092 | |
| 36,148 | |
| 31,317 | |
NON-INTEREST EXPENSE: | | | | | | | | | | | | | |
Salaries and employee benefits | |
| 15,943 | |
| 15,770 | |
| 48,953 | |
| 47,478 | |
Occupancy expense | |
| 2,525 | |
| 2,151 | |
| 7,419 | |
| 6,302 | |
Equipment expense | |
| 3,311 | |
| 2,177 | |
| 9,177 | |
| 7,195 | |
FDIC Expense | |
| 556 | |
| 313 | |
| 1,526 | |
| 898 | |
Other | |
| 9,169 | |
| 8,048 | |
| 26,447 | |
| 22,221 | |
TOTAL NON-INTEREST EXPENSE | |
| 31,504 | |
| 28,459 | |
| 93,522 | |
| 84,094 | |
INCOME BEFORE INCOME TAXES | |
| 22,690 | |
| 20,161 | |
| 68,760 | |
| 57,036 | |
Provision for income taxes | |
| 4,639 | |
| 4,063 | |
| 14,172 | |
| 11,447 | |
NET INCOME | |
| 18,051 | |
| 16,098 | |
| 54,588 | |
| 45,589 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
|
| |
|
| |
|
| |
|
| |
Change in unrealized gains/(losses) on securities, net of reclassifications and taxes | |
| (41,060) | |
| (2,985) | |
| (165,893) | |
| (12,281) | |
Change in funded status of post retirement benefits, net of taxes | |
| 315 | |
| 471 | |
| 944 | |
| 1,415 | |
COMPREHENSIVE INCOME (LOSS) | | $ | (22,694) | | $ | 13,584 | | $ | (110,361) | | $ | 34,723 | |
PER SHARE DATA | |
|
| |
|
| |
|
| |
|
| |
Basic and Diluted Earnings per Share | | $ | 1.50 | | $ | 1.24 | | $ | 4.45 | | $ | 3.42 | |
Weighted average number of shares outstanding (in thousands) | |
| 12,029 | |
| 13,019 | |
| 12,270 | |
| 13,320 | |
See accompanying notes.
4
Three Months Ended
September 30, 2022, and 2021
(Dollar amounts in thousands, except per share data)
(Unaudited)
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Total | ||||||||||||||||||||||||||||||
Balance, April 1, 2021 | $ | 2,008 | $ | 141,024 | $ | 533,980 | $ | (832) | $ | (78,068) | $ | 598,112 | |||||||||||||||||||||||
Net income | — | — | 16,614 | — | — | 16,614 | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | 2,244 | — | 2,244 | |||||||||||||||||||||||||||||
Omnibus Equity Incentive Plan | — | 216 | — | — | — | 216 | |||||||||||||||||||||||||||||
Treasury shares purchased (497,000 shares) | — | — | — | — | (22,024) | (22,024) | |||||||||||||||||||||||||||||
Cash dividends, $.53 per share | — | — | (6,999) | — | — | (6,999) | |||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | 2,008 | $ | 141,240 | $ | 543,595 | $ | 1,412 | $ | (100,092) | $ | 588,163 | |||||||||||||||||||||||
Balance, April 1, 2022 | $ | 2,010 | $ | 142,185 | $ | 580,063 | $ | (71,025) | $ | (127,789) | $ | 525,444 | |||||||||||||||||||||||
Net income | — | — | 15,613 | — | — | 15,613 | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | (55,605) | — | (55,605) | |||||||||||||||||||||||||||||
Omnibus Equity Incentive Plan | 1 | 205 | — | — | — | 206 | |||||||||||||||||||||||||||||
Treasury shares purchased (404,186 shares) | — | — | — | — | (17,620) | (17,620) | |||||||||||||||||||||||||||||
Cash dividends, $.54 per share | — | — | (6,507) | — | — | (6,507) | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | 2,011 | $ | 142,390 | $ | 589,169 | $ | (126,630) | $ | (145,409) | $ | 461,531 |
| | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| Accumulated |
| | |
|
| | |
| | | | | | | | | | | Other | | | | | | | |
| | Common | | Additional | | Retained | | Comprehensive | | Treasury | | | | |||||
| | Stock | | Capital | | Earnings | | Income/(Loss) | | Stock | | Total | ||||||
Balance, July 1, 2021 | | $ | 2,008 | | $ | 141,240 | | $ | 543,595 | | $ | 1,412 | | $ | (100,092) | | $ | 588,163 |
Net income | |
| — | |
| — | |
| 16,098 | |
| — | |
| — | |
| 16,098 |
Other comprehensive income (loss) | |
| — | |
| — | |
| — | |
| (2,514) | |
| — | |
| (2,514) |
Omnibus Equity Incentive Plan | |
| 1 | |
| 216 | |
| — | |
| — | |
| — | |
| 217 |
Treasury shares purchased (176,293 shares) | |
| — | |
| — | |
| — | |
| — | |
| (7,029) | |
| (7,029) |
Balance, September 30, 2021 | | $ | 2,009 | | $ | 141,456 | | $ | 559,693 | | $ | (1,102) | | $ | (107,121) | | $ | 594,935 |
| | | | | | | | | | | | | | | | | | |
Balance, July 1, 2022 | | $ | 2,011 | | $ | 142,390 | | $ | 589,169 | | $ | (126,630) | | $ | (145,409) | | $ | 461,531 |
Net income | |
| — | |
| — | |
| 18,051 | |
| — | |
| — | |
| 18,051 |
Other comprehensive income (loss) | |
| — | |
| — | |
| — | |
| (40,745) | |
| — | |
| (40,745) |
Omnibus Equity Incentive Plan | |
| — | |
| 206 | |
| — | |
| — | |
| — | |
| 206 |
Treasury shares purchased (9,125 shares) | |
| — | |
| — | |
| — | |
| — | |
| (417) | |
| (417) |
Cash dividends, $0 per share | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — |
Balance, September 30, 2022 | | $ | 2,011 | | $ | 142,596 | | $ | 607,220 | | $ | (167,375) | | $ | (145,826) | | $ | 438,626 |
See accompanying notes.
5
FIRST FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Nine Months Ended
September 30, 2022, and 2021
(Dollar amounts in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| Accumulated |
| | |
|
| | |
| | | | | | | | | | | Other | | | | | | | |
| | Common | | Additional | | Retained | | Comprehensive | | Treasury | | | | |||||
| | Stock | | Capital | | Earnings | | Income/(Loss) | | Stock | | Total | ||||||
Balance, January 1, 2021 | | $ | 2,007 | | $ | 140,820 | | $ | 521,103 | | $ | 9,764 | | $ | (76,702) | | $ | 596,992 |
Net income | |
| — | |
| — | |
| 45,589 | |
| — | |
| — | |
| 45,589 |
Other comprehensive income (loss) | |
| — | |
| — | |
| — | |
| (10,866) | |
| — | |
| (10,866) |
Omnibus Equity Incentive Plan | |
| 2 | |
| 636 | |
| — | |
| — | |
| — | |
| 638 |
Treasury shares purchased (707,734 shares) | |
| — | |
| — | |
| — | |
| — | |
| (30,419) | |
| (30,419) |
Cash dividends, $.53 per share | |
| — | |
| — | |
| (6,999) | |
| — | |
| — | |
| (6,999) |
Balance, September 30, 2021 | | $ | 2,009 | | $ | 141,456 | | $ | 559,693 | | $ | (1,102) | | $ | (107,121) | | $ | 594,935 |
| | | | | | | | | | | | | | | | | | |
Balance, January 1, 2022 | | $ | 2,009 | | $ | 141,979 | | $ | 559,139 | | $ | (2,426) | | $ | (118,125) | | $ | 582,576 |
Net income | |
| — | |
| — | |
| 54,588 | |
| — | |
| — | |
| 54,588 |
Other comprehensive income (loss) | |
| — | |
| — | |
| — | |
| (164,949) | |
| — | |
| (164,949) |
Omnibus Equity Incentive Plan | |
| 2 | |
| 617 | |
| — | |
| — | |
| — | |
| 619 |
Treasury shares purchased (626,574 shares) | |
| — | |
| — | |
| — | |
| — | |
| (27,701) | |
| (27,701) |
Cash dividends, $.54 per share | |
| — | |
| — | |
| (6,507) | |
| — | |
| — | |
| (6,507) |
Balance, September 30, 2022 | | $ | 2,011 | | $ | 142,596 | | $ | 607,220 | | $ | (167,375) | | $ | (145,826) | | $ | 438,626 |
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Total | ||||||||||||||||||||||||||||||
Balance, January 1, 2021 | $ | 2,007 | $ | 140,820 | $ | 521,103 | $ | 9,764 | $ | (76,702) | $ | 596,992 | |||||||||||||||||||||||
Net income | — | — | 29,491 | — | — | 29,491 | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | (8,352) | — | (8,352) | |||||||||||||||||||||||||||||
Omnibus Equity Incentive Plan | 1 | 420 | — | — | — | 421 | |||||||||||||||||||||||||||||
Treasury shares purchased (531,441 shares) | — | — | — | — | (23,390) | (23,390) | |||||||||||||||||||||||||||||
Cash dividends, $.53 per share | — | — | (6,999) | — | — | (6,999) | |||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | 2,008 | $ | 141,240 | $ | 543,595 | $ | 1,412 | $ | (100,092) | $ | 588,163 | |||||||||||||||||||||||
Balance, January 1, 2022 | $ | 2,009 | $ | 141,979 | $ | 559,139 | $ | (2,426) | $ | (118,125) | $ | 582,576 | |||||||||||||||||||||||
Net income | — | — | 36,537 | — | — | 36,537 | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | (124,204) | — | (124,204) | |||||||||||||||||||||||||||||
Omnibus Equity Incentive Plan | 2 | 411 | — | — | — | 413 | |||||||||||||||||||||||||||||
Treasury shares purchased (617,449 shares) | — | — | — | — | (27,284) | (27,284) | |||||||||||||||||||||||||||||
Cash dividends, $.54 per share | — | — | (6,507) | — | — | (6,507) | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | 2,011 | $ | 142,390 | $ | 589,169 | $ | (126,630) | $ | (145,409) | $ | 461,531 |
6
(Dollar amounts in thousands, except per share data)
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
(Unaudited) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Income | $ | 36,537 | $ | 29,491 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Net amortization (accretion) of premiums and discounts on investments | 3,609 | 4,080 | |||||||||
Provision for credit losses | (5,800) | (1,744) | |||||||||
Securities (gains) losses | (5) | (106) | |||||||||
Gain on sales of mortgage loans | (1,265) | (2,843) | |||||||||
(Gain) Loss on sale of other real estate | 19 | 16 | |||||||||
Restricted stock compensation | 413 | 421 | |||||||||
Depreciation and amortization | 3,100 | 3,142 | |||||||||
Other, net | (3,990) | (4,937) | |||||||||
NET CASH FROM OPERATING ACTIVITIES | 32,618 | 27,520 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from sales of securities available-for-sale | — | 9,369 | |||||||||
Calls, maturities and principal reductions on securities available-for-sale | 98,774 | 141,410 | |||||||||
Purchases of securities available-for-sale | (238,453) | (364,598) | |||||||||
Loans made to customers, net of repayment | (75,090) | 43,118 | |||||||||
Redemption of restricted stock | 1,617 | — | |||||||||
Purchase of restricted stock | (1,037) | (13) | |||||||||
Purchase of bank owned life insurance | — | (10,000) | |||||||||
Proceeds from sales of other real estate owned | 190 | 69 | |||||||||
Net change in federal funds sold | (10,825) | (215) | |||||||||
Additions to premises and equipment | (1,912) | (4,114) | |||||||||
NET CASH FROM INVESTING ACTIVITIES | (226,736) | (184,974) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net change in deposits | (25,624) | 232,953 | |||||||||
Net change in short-term borrowings | (9,142) | (17,536) | |||||||||
Maturities of other borrowings | (44) | — | |||||||||
Purchase of treasury stock | (27,284) | (23,390) | |||||||||
Dividends paid | (14,459) | (14,181) | |||||||||
NET CASH FROM FINANCING ACTIVITIES | (76,553) | 177,846 | |||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (270,671) | 20,392 | |||||||||
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD | 682,807 | 657,470 | |||||||||
CASH AND DUE FROM BANKS, END OF PERIOD | $ | 412,136 | $ | 677,862 |
| | | | | | | |
| | Nine Months Ended | | ||||
| | September 30, | | ||||
|
| 2022 |
| 2021 | | ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
| |
|
| |
| |
Net Income | | $ | 54,588 | | $ | 45,589 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
|
| |
| | |
Net amortization (accretion) of premiums and discounts on investments | |
| 5,174 | |
| 6,207 | |
Provision for credit losses | |
| (4,750) | |
| (3,244) | |
Securities (gains) losses | |
| (5) | |
| (111) | |
Gain on sales of mortgage loans | |
| (1,705) | |
| (4,268) | |
(Gain) Loss on sale of other real estate | |
| 26 | |
| 10 | |
Restricted stock compensation | |
| 619 | |
| 638 | |
Depreciation and amortization | |
| 4,615 | |
| 4,670 | |
Other, net | |
| (6,266) | |
| (6,583) | |
NET CASH FROM OPERATING ACTIVITIES | |
| 52,296 | |
| 42,908 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
|
| |
|
| |
Proceeds from sales of securities available-for-sale | |
| — | |
| 9,369 | |
Calls, maturities and principal reductions on securities available-for-sale | |
| 141,274 | |
| 198,613 | |
Purchases of securities available-for-sale | |
| (329,564) | |
| (479,007) | |
Proceeds from loans held for sale previously classified as portfolio loans | | | 12,802 | | | — | |
Loans made to customers, net of repayment | |
| (168,558) | |
| 135,691 | |
Redemption of restricted stock | |
| 1,871 | |
| — | |
Purchase of restricted stock | |
| (1,043) | |
| (25) | |
Purchase of bank owned life insurance | |
| — | |
| (10,000) | |
Proceeds from sales of other real estate owned | |
| 223 | |
| 237 | |
Net change in federal funds sold | |
| (7,915) | |
| (5,882) | |
Additions to premises and equipment | | | (2,206) | | | (4,547) | |
NET CASH FROM INVESTING ACTIVITIES | |
| (353,116) | |
| (155,551) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
|
| |
|
| |
Net change in deposits | |
| (1,150) | |
| 272,903 | |
Net change in short-term borrowings | |
| (4,053) | |
| (15,010) | |
Maturities of other borrowings | |
| (6,402) | |
| — | |
Proceeds from other borrowings | | | — | | | — | |
Purchase of treasury stock | |
| (27,701) | |
| (30,419) | |
Dividends paid | |
| (14,459) | |
| (14,181) | |
NET CASH FROM FINANCING ACTIVITIES | |
| (53,765) | |
| 213,293 | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | |
| (354,585) | |
| 100,650 | |
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD | |
| 682,807 | |
| 657,470 | |
CASH AND DUE FROM BANKS, END OF PERIOD | | $ | 328,222 | | $ | 758,120 | |
See accompanying notes.
7
The accompanying JuneSeptember 30, 2022 and 2021 consolidated financial statements are unaudited. The December 31, 2021 consolidated financial statements are as reported in the First Financial Corporation (the “Corporation”) 2021 annual report. The information presented does not include all information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The following notes should be read together with notes to the consolidated financial statements included in the 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2021.
1.Significant Accounting Policies
The significant accounting policies followed by the Corporation and its subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments which are, in the opinion of management, necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated financial statements and are of a normal recurring nature. The Corporation reports financial information for only 1one segment, banking. Some items in the prior year financials were reclassified to conform to the current presentation.
The Omnibus Equity Incentive Plan is a long-term incentive plan that was designed to align the interests of participants with the interests of shareholders. Under the plan, awards may be made based on certain performance measures. The grants are made in restricted stock units that are subject to a vesting schedule. These shares vest over 3 years in increments of 33%, 33%, and 34% respectively. For the sixnine months ended 2022 and 2021, 18,679 and 21,159 shares were awarded, respectively. These shares had a grant date value of $847 thousand and $885 thousand for 2022 and 2021, vest over three years, and their grant is not subject to future performance measures. Outstanding shares are increased at the award date for the total shares awarded.
The following table presents the activity of the allowance for credit losses by portfolio segment for the three months ended JuneSeptember 30.
Allowance for Credit Losses: | June 30, 2022 | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||||||
Beginning balance | $ | 17,300 | $ | 13,235 | $ | 9,662 | $ | 319 | $ | 40,516 | ||||||||||||||||||||||
Provision for credit losses | (1,392) | 895 | 1,319 | (72) | 750 | |||||||||||||||||||||||||||
Loans charged-off | (370) | (56) | (1,985) | — | (2,411) | |||||||||||||||||||||||||||
Recoveries | 931 | 94 | 1,588 | — | 2,613 | |||||||||||||||||||||||||||
Ending Balance | $ | 16,469 | $ | 14,168 | $ | 10,584 | $ | 247 | $ | 41,468 |
Allowance for Credit Losses: | June 30, 2021 | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||||||
Beginning balance | $ | 13,739 | $ | 18,839 | $ | 11,058 | $ | 164 | $ | 43,800 | ||||||||||||||||||||||
Provision for credit losses | (1,058) | (928) | (260) | 50 | (2,196) | |||||||||||||||||||||||||||
Loans charged-off | (113) | (243) | (795) | — | (1,151) | |||||||||||||||||||||||||||
Recoveries | 149 | 169 | 985 | — | 1,303 | |||||||||||||||||||||||||||
Ending Balance | $ | 12,717 | $ | 17,837 | $ | 10,988 | $ | 214 | $ | 41,756 |
| | | | | | | | | | | | | | | |
Allowance for Credit Losses: |
| | | | September 30, 2022 | | | | |||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Unallocated | | Total | |||||
Beginning balance | | $ | 16,469 | | $ | 14,168 | | $ | 10,584 | | $ | 247 | | $ | 41,468 |
Provision for credit losses | |
| (1,403) | |
| 297 | |
| 2,199 | |
| (43) | |
| 1,050 |
Loans charged-off | |
| (2,406) | |
| (57) | |
| (3,190) | |
| — | |
| (5,653) |
Recoveries | |
| 634 | |
| 55 | |
| 1,941 | |
| — | |
| 2,630 |
Ending Balance | | $ | 13,294 | | $ | 14,463 | | $ | 11,534 | | $ | 204 | | $ | 39,495 |
| | | | | | | | | | | | | | | |
Allowance for Credit Losses: |
| | |
| September 30, 2021 |
|
| | |||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Unallocated | | Total | |||||
Beginning balance | | $ | 15,693 | | $ | 17,837 | | $ | 10,988 | | $ | 214 | | $ | 44,732 |
Provision for credit losses | |
| (531) | |
| (1,387) | |
| 173 | |
| 245 | |
| (1,500) |
Loans charged-off | |
| (313) | |
| (61) | |
| (1,240) | |
| — | |
| (1,614) |
Recoveries | |
| 182 | |
| 130 | |
| 1,032 | |
| — | |
| 1,344 |
Ending Balance | | $ | 15,031 | | $ | 16,519 | | $ | 10,953 | | $ | 459 | | $ | 42,962 |
The following table presents the activity of the allowance for credit losses by portfolio segment for the sixnine months ended JuneSeptember 30.
| | | | | | | | | | | | | | | |
Allowance for Credit Losses: |
| | | | September 30, 2022 | | | | |||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Unallocated | | Total | |||||
Beginning balance | | $ | 18,883 | | $ | 18,316 | | $ | 10,721 | | $ | 385 | | $ | 48,305 |
Provision for credit losses | |
| (3,835) | |
| (3,952) | |
| 3,218 | |
| (181) | |
| (4,750) |
Loans charged -off | |
| (3,659) | |
| (579) | |
| (7,080) | |
| — | |
| (11,318) |
Recoveries | |
| 1,905 | |
| 678 | |
| 4,675 | |
| — | |
| 7,258 |
Allowance for Credit Losses: | June 30, 2022 | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||||||
Beginning balance | $ | 18,883 | $ | 18,316 | $ | 10,721 | $ | 385 | $ | 48,305 | ||||||||||||||||||||||
Provision for credit losses | (2,432) | (4,249) | 1,019 | (138) | (5,800) | |||||||||||||||||||||||||||
Loans charged -off | (1,253) | (522) | (3,890) | — | (5,665) | |||||||||||||||||||||||||||
Recoveries | 1,271 | 623 | 2,734 | — | 4,628 | |||||||||||||||||||||||||||
Ending Balance | $ | 16,469 | $ | 14,168 | $ | 10,584 | $ | 247 | $ | 41,468 |
8
Allowance for Credit Losses: | June 30, 2021 | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Unallocated | Total | |||||||||||||||||||||||||||
Beginning balance | $ | 13,925 | $ | 19,142 | $ | 11,009 | $ | — | $ | 44,076 | ||||||||||||||||||||||
Provision for credit losses | (1,536) | (1,190) | 768 | 214 | (1,744) | |||||||||||||||||||||||||||
Loans charged -off | (299) | (431) | (2,759) | — | (3,489) | |||||||||||||||||||||||||||
Recoveries | 627 | 316 | 1,970 | — | 2,913 | |||||||||||||||||||||||||||
Ending Balance | $ | 12,717 | $ | 17,837 | $ | 10,988 | $ | 214 | $ | 41,756 |
Ending Balance | | $ | 13,294 | | $ | 14,463 | | $ | 11,534 | | $ | 204 | | $ | 39,495 |
| | | | | | | | | | | | | | | |
Allowance for Credit Losses: |
| | |
| September 30, 2021 |
|
| | |||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Unallocated | | Total | |||||
Beginning balance | | $ | 16,901 | | $ | 19,142 | | $ | 11,009 | | $ | — | | $ | 47,052 |
Provision for credit losses | |
| (2,067) | |
| (2,577) | |
| 941 | |
| 459 | |
| (3,244) |
Loans charged -off | |
| (612) | |
| (492) | |
| (3,999) | |
| — | |
| (5,103) |
Recoveries | |
| 809 | |
| 446 | |
| 3,002 | |
| — | |
| 4,257 |
Ending Balance | | $ | 15,031 | | $ | 16,519 | | $ | 10,953 | | $ | 459 | | $ | 42,962 |
The tables below present the recorded investment in non-performing loans by class of loans.
| | | | | | | | | |
|
| September 30, 2022 | |||||||
| | Loans Past | | | | | Nonaccrual | ||
| | Due Over | | | | | With No | ||
| | 90 Days Still | | | | | Allowance | ||
(Dollar amounts in thousands) | | Accruing | | Nonaccrual | | For Credit Loss | |||
Commercial | | | | | | | | | |
Commercial & Industrial | | $ | 242 | | $ | 1,647 | | $ | 322 |
Farmland | |
| — | |
| 287 | |
| 272 |
Non Farm, Non Residential | |
| — | |
| 2,456 | |
| 2,443 |
Agriculture | |
| — | |
| 393 | |
| 361 |
All Other Commercial | |
| 15 | |
| 28 | |
| — |
Residential | | | | | | | | | |
First Liens | |
| 480 | |
| 1,599 | |
| — |
Home Equity | |
| — | |
| 140 | |
| — |
Junior Liens | |
| 95 | |
| 263 | |
| — |
Multifamily | |
| — | |
| 204 | |
| — |
All Other Residential | |
| — | |
| 108 | |
| — |
Consumer | | | | | | | | | |
Motor Vehicle | |
| 402 | |
| 1,492 | |
| — |
All Other Consumer | |
| 1 | |
| 530 | |
| — |
TOTAL | | $ | 1,235 | | $ | 9,147 | | $ | 3,398 |
| | | | | | | | | |
|
| December 31, 2021 | |||||||
| | Loans Past | | | | | Nonaccrual | ||
| | Due Over | | | | | With No | ||
| | 90 Days Still | | | | | Allowance | ||
(Dollar amounts in thousands) | | Accruing | | Nonaccrual | | For Credit Loss | |||
Commercial |
| |
|
| |
|
| |
|
Commercial & Industrial | | $ | 14 | | $ | 1,950 | | $ | 1,662 |
Farmland | |
| — | |
| 15 | |
| — |
Non Farm, Non Residential | |
| — | |
| 2,911 | |
| 2,898 |
Agriculture | |
| — | |
| 111 | |
| — |
All Other Commercial | |
| — | |
| 4 | |
| — |
Residential | |
|
| |
|
| |
|
|
First Liens | |
| 346 | |
| 2,339 | |
| 33 |
Home Equity | |
| — | |
| 84 | |
| — |
Junior Liens | |
| 89 | |
| 294 | |
| — |
Multifamily | |
| — | |
| 225 | |
| — |
All Other Residential | |
| — | |
| 107 | |
| — |
Consumer | |
|
| |
|
| |
|
|
Motor Vehicle | |
| 94 | |
| 864 | |
| — |
All Other Consumer | |
| — | |
| 686 | |
| — |
TOTAL | | $ | 543 | | $ | 9,590 | | $ | 4,593 |
June 30, 2022 | ||||||||||||||||||||
Loans Past Due Over 90 Days Still | Nonaccrual With No Allowance | |||||||||||||||||||
(Dollar amounts in thousands) | Accruing | Nonaccrual | For Credit Loss | |||||||||||||||||
Commercial | ||||||||||||||||||||
Commercial & Industrial | $ | — | $ | 734 | $ | 322 | ||||||||||||||
Farmland | — | 304 | — | |||||||||||||||||
Non Farm, Non Residential | — | 2,521 | 2,508 | |||||||||||||||||
Agriculture | — | 451 | — | |||||||||||||||||
All Other Commercial | — | 4 | — | |||||||||||||||||
Residential | ||||||||||||||||||||
First Liens | 755 | 1,687 | 5 | |||||||||||||||||
Home Equity | 75 | 85 | — | |||||||||||||||||
Junior Liens | 106 | 208 | — | |||||||||||||||||
Multifamily | — | 241 | — | |||||||||||||||||
All Other Residential | — | 113 | — | |||||||||||||||||
Consumer | ||||||||||||||||||||
Motor Vehicle | 68 | 1,426 | — | |||||||||||||||||
All Other Consumer | 3 | 609 | — | |||||||||||||||||
TOTAL | $ | 1,007 | $ | 8,383 | $ | 2,835 |
9
December 31, 2021 | ||||||||||||||||||||
Loans Past Due Over 90 Days Still | Nonaccrual With No Allowance | |||||||||||||||||||
(Dollar amounts in thousands) | Accruing | Nonaccrual | For Credit Loss | |||||||||||||||||
Commercial | ||||||||||||||||||||
Commercial & Industrial | $ | 14 | $ | 1,950 | $ | 1,662 | ||||||||||||||
Farmland | — | 15 | — | |||||||||||||||||
Non Farm, Non Residential | — | 2,911 | 2,898 | |||||||||||||||||
Agriculture | — | 111 | — | |||||||||||||||||
All Other Commercial | — | 4 | — | |||||||||||||||||
Residential | ||||||||||||||||||||
First Liens | 346 | 2,339 | 33 | |||||||||||||||||
Home Equity | — | 84 | — | |||||||||||||||||
Junior Liens | 89 | 294 | — | |||||||||||||||||
Multifamily | — | 225 | — | |||||||||||||||||
All Other Residential | — | 107 | — | |||||||||||||||||
Consumer | ||||||||||||||||||||
Motor Vehicle | 94 | 864 | — | |||||||||||||||||
All Other Consumer | — | 686 | — | |||||||||||||||||
TOTAL | $ | 543 | $ | 9,590 | $ | 4,593 |
The following tables present the amortized cost basis of collateral dependent loans by class of loans:
| | | | | | |
|
| September 30, 2022 | ||||
| | Collateral Type | ||||
(Dollar amounts in thousands) | | Real Estate | | Other | ||
Commercial |
| |
|
| |
|
Commercial & Industrial | | $ | 5,656 | | $ | 142 |
Farmland | |
| 3,561 | |
| — |
Non Farm, Non Residential | |
| 5,555 | |
| — |
Agriculture | |
| — | |
| 361 |
All Other Commercial | |
| — | |
| — |
Residential | |
|
| |
|
|
First Liens | |
| — | |
| — |
Home Equity | |
| — | |
| — |
Junior Liens | |
| — | |
| — |
Multifamily | |
| — | |
| — |
All Other Residential | |
| 906 | |
| — |
Consumer | |
|
| |
|
|
Motor Vehicle | |
| — | |
| — |
All Other Consumer | |
| — | |
| — |
Total | | $ | 15,678 | | $ | 503 |
| | | | | | |
| | December 31, 2021 | ||||
| | Collateral Type | ||||
(Dollar amounts in thousands) |
| Real Estate |
| Other | ||
Commercial |
| |
|
| |
|
Commercial & Industrial | | $ | 17,734 | | $ | 720 |
Farmland | |
| 3,669 | |
| — |
Non Farm, Non Residential | |
| 6,135 | |
| — |
Agriculture | |
| — | |
| — |
All Other Commercial | |
| — | |
| — |
Residential | |
|
| |
|
|
First Liens | |
| 33 | |
| — |
Home Equity | |
| — | |
| — |
Junior Liens | |
| — | |
| — |
Multifamily | |
| 935 | |
| — |
All Other Residential | |
| — | |
| — |
Consumer | |
|
| |
|
|
Motor Vehicle | |
| — | |
| — |
All Other Consumer | |
| — | |
| — |
Total | | $ | 28,506 | | $ | 720 |
10
June 30, 2022 | |||||||||||||||||
Collateral Type | |||||||||||||||||
(Dollar amounts in thousands) | Real Estate | Other | |||||||||||||||
Commercial | |||||||||||||||||
Commercial & Industrial | $ | 5,891 | $ | 323 | |||||||||||||
Farmland | 3,330 | ||||||||||||||||
Non Farm, Non Residential | 13,460 | ||||||||||||||||
Agriculture | — | — | |||||||||||||||
All Other Commercial | — | — | |||||||||||||||
Residential | |||||||||||||||||
First Liens | 5 | — | |||||||||||||||
Home Equity | — | — | |||||||||||||||
Junior Liens | — | — | |||||||||||||||
Multifamily | 916 | — | |||||||||||||||
All Other Residential | — | — | |||||||||||||||
Consumer | |||||||||||||||||
Motor Vehicle | — | — | |||||||||||||||
All Other Consumer | — | — | |||||||||||||||
Total | $ | 23,602 | $ | 323 |
December 31, 2021 | |||||||||||||||||
Collateral Type | |||||||||||||||||
(Dollar amounts in thousands) | Real Estate | Other | |||||||||||||||
Commercial | |||||||||||||||||
Commercial & Industrial | $ | 17,734 | $ | 720 | |||||||||||||
Farmland | 3,669 | ||||||||||||||||
Non Farm, Non Residential | 6,135 | ||||||||||||||||
Agriculture | — | — | |||||||||||||||
All Other Commercial | — | — | |||||||||||||||
Residential | |||||||||||||||||
First Liens | 33 | — | |||||||||||||||
Home Equity | — | — | |||||||||||||||
Junior Liens | — | — | |||||||||||||||
Multifamily | 935 | — | |||||||||||||||
All Other Residential | — | — | |||||||||||||||
Consumer | |||||||||||||||||
Motor Vehicle | — | — | |||||||||||||||
All Other Consumer | — | — | |||||||||||||||
Total | $ | 28,506 | $ | 720 |
The following tables presents the aging of the recorded investment in loans by past due category and class of loans.
| | | | | | | | | | | | | | | | | | |
|
| September 30, 2022 | ||||||||||||||||
| | | | | | | | 90 Days | | | | | | | | | | |
| | 30-59 Days | | 60-89 Days | | and Greater | | Total | |
| | |
| | ||||
(Dollar amounts in thousands) |
| Past Due |
| Past Due |
| Past Due |
| Past Due |
| Current |
| Total | ||||||
Commercial |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Commercial & Industrial | | $ | 2,437 | | $ | 217 | | $ | 1,267 | | $ | 3,921 | | $ | 677,656 | | $ | 681,577 |
Farmland | |
| — | |
| — | |
| 272 | |
| 272 | |
| 128,175 | |
| 128,447 |
Non Farm, Non Residential | |
| 312 | |
| 80 | |
| — | |
| 392 | |
| 359,662 | |
| 360,054 |
Agriculture | |
| — | |
| — | |
| — | |
| — | |
| 120,903 | |
| 120,903 |
All Other Commercial | |
| 301 | |
| — | |
| 30 | |
| 331 | |
| 434,394 | |
| 434,725 |
Residential | |
| | |
| | |
| | |
|
| |
| | |
|
|
First Liens | |
| 935 | |
| 1,056 | |
| 1,038 | |
| 3,029 | |
| 329,304 | |
| 332,333 |
Home Equity | |
| 616 | |
| 40 | |
| 102 | |
| 758 | |
| 63,834 | |
| 64,592 |
Junior Liens | |
| 257 | |
| 29 | |
| 241 | |
| 527 | |
| 56,214 | |
| 56,741 |
Multifamily | |
| 467 | |
| 99 | |
| — | |
| 566 | |
| 193,728 | |
| 194,294 |
All Other Residential | |
| — | |
| 38 | |
| — | |
| 38 | |
| 30,169 | |
| 30,207 |
Consumer | |
| | |
| | |
| | |
|
| |
| | |
|
|
Motor Vehicle | |
| 10,129 | |
| 2,088 | |
| 853 | |
| 13,070 | |
| 525,363 | |
| 538,433 |
All Other Consumer | |
| 273 | |
| 56 | |
| 3 | |
| 332 | |
| 33,713 | |
| 34,045 |
TOTAL | | $ | 15,727 | | $ | 3,703 | | $ | 3,806 | | $ | 23,236 | | $ | 2,953,115 | | $ | 2,976,351 |
| | | | | | | | | | | | | | | | | | |
|
| December 31, 2021 | ||||||||||||||||
| | | | | | | | 90 Days | | | | | | | | | | |
| | 30-59 Days | | 60-89 Days | | and Greater | | Total | |
| | |
| | ||||
(Dollar amounts in thousands) |
| Past Due |
| Past Due |
| Past Due |
| Past Due |
| Current |
| Total | ||||||
Commercial |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Commercial & Industrial | | $ | 1,132 | | $ | 388 | | $ | 1,614 | | $ | 3,134 | | $ | 693,949 | | $ | 697,083 |
Farmland | |
| 57 | |
| — | |
| — | |
| 57 | |
| 141,189 | |
| 141,246 |
Non Farm, Non Residential | |
| 62 | |
| — | |
| — | |
| 62 | |
| 361,174 | |
| 361,236 |
Agriculture | |
| 90 | |
| 42 | |
| 89 | |
| 221 | |
| 141,682 | |
| 141,903 |
All Other Commercial | |
| 390 | |
| — | |
| — | |
| 390 | |
| 340,076 | |
| 340,466 |
Residential | |
| | |
| | |
| | |
|
| |
| | |
|
|
First Liens | |
| 4,686 | |
| 680 | |
| 949 | |
| 6,315 | |
| 336,064 | |
| 342,379 |
Home Equity | |
| 131 | |
| 24 | |
| 58 | |
| 213 | |
| 62,085 | |
| 62,298 |
Junior Liens | |
| 179 | |
| 120 | |
| 283 | |
| 582 | |
| 50,048 | |
| 50,630 |
Multifamily | |
| 342 | |
| 146 | |
| — | |
| 488 | |
| 178,849 | |
| 179,337 |
All Other Residential | |
| 284 | |
| 291 | |
| — | |
| 575 | |
| 30,843 | |
| 31,418 |
Consumer | |
| | |
| | |
| | |
|
| |
| | |
|
|
Motor Vehicle | |
| 7,633 | |
| 1,105 | |
| 486 | |
| 9,224 | |
| 433,095 | |
| 442,319 |
All Other Consumer | |
| 192 | |
| 37 | |
| — | |
| 229 | |
| 33,425 | |
| 33,654 |
TOTAL | | $ | 15,178 | | $ | 2,833 | | $ | 3,479 | | $ | 21,490 | | $ | 2,802,479 | | $ | 2,823,969 |
June 30, 2022 | ||||||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days and Greater | Total | |||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Past Due | Past Due | Past Due | Past Due | Current | Total | ||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||
Commercial & Industrial | $ | 4,641 | $ | 616 | $ | 114 | $ | 5,371 | $ | 688,504 | $ | 693,875 | ||||||||||||||||||||||||||
Farmland | 116 | 56 | 289 | 461 | 125,314 | 125,775 | ||||||||||||||||||||||||||||||||
Non Farm, Non Residential | 374 | 14 | — | 388 | 374,629 | 375,017 | ||||||||||||||||||||||||||||||||
Agriculture | — | — | — | — | 117,755 | 117,755 | ||||||||||||||||||||||||||||||||
All Other Commercial | 75 | 117 | — | 192 | 401,242 | 401,434 | ||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||
First Liens | 1,062 | 857 | 1,174 | 3,093 | 330,319 | 333,412 | ||||||||||||||||||||||||||||||||
Home Equity | 147 | 190 | 114 | 451 | 62,484 | 62,935 | ||||||||||||||||||||||||||||||||
Junior Liens | 213 | 108 | 189 | 510 | 53,079 | 53,589 | ||||||||||||||||||||||||||||||||
Multifamily | 68 | 67 | — | 135 | 191,493 | 191,628 | ||||||||||||||||||||||||||||||||
All Other Residential | — | — | — | — | 30,769 | 30,769 | ||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||
Motor Vehicle | 10,431 | 1,650 | 550 | 12,631 | 465,968 | 478,599 | ||||||||||||||||||||||||||||||||
All Other Consumer | 238 | 50 | 20 | 308 | 33,027 | 33,335 | ||||||||||||||||||||||||||||||||
TOTAL | $ | 17,365 | $ | 3,725 | $ | 2,450 | $ | 23,540 | $ | 2,874,583 | $ | 2,898,123 |
11
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days and Greater | Total | |||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Past Due | Past Due | Past Due | Past Due | Current | Total | ||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||
Commercial & Industrial | $ | 1,132 | $ | 388 | $ | 1,614 | $ | 3,134 | $ | 693,949 | $ | 697,083 | ||||||||||||||||||||||||||
Farmland | 57 | — | — | 57 | 141,189 | 141,246 | ||||||||||||||||||||||||||||||||
Non Farm, Non Residential | 62 | — | — | 62 | 361,174 | 361,236 | ||||||||||||||||||||||||||||||||
Agriculture | 90 | 42 | 89 | 221 | 141,682 | 141,903 | ||||||||||||||||||||||||||||||||
All Other Commercial | 390 | — | — | 390 | 340,076 | 340,466 | ||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||
First Liens | 4,686 | 680 | 949 | 6,315 | 336,064 | 342,379 | ||||||||||||||||||||||||||||||||
Home Equity | 131 | 24 | 58 | 213 | 62,085 | 62,298 | ||||||||||||||||||||||||||||||||
Junior Liens | 179 | 120 | 283 | 582 | 50,048 | 50,630 | ||||||||||||||||||||||||||||||||
Multifamily | 342 | 146 | — | 488 | 178,849 | 179,337 | ||||||||||||||||||||||||||||||||
All Other Residential | 284 | 291 | — | 575 | 30,843 | 31,418 | ||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||
Motor Vehicle | 7,633 | 1,105 | 486 | 9,224 | 433,095 | 442,319 | ||||||||||||||||||||||||||||||||
All Other Consumer | 192 | 37 | — | 229 | 33,425 | 33,654 | ||||||||||||||||||||||||||||||||
TOTAL | $ | 15,178 | $ | 2,833 | $ | 3,479 | $ | 21,490 | $ | 2,802,479 | $ | 2,823,969 |
During the three and sixnine months ended JuneSeptember 30, 2022 and 2021, the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDRs.
2022 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Total | ||||||||||||||||||||||
April 1, | $ | 407 | $ | 3,445 | $ | 690 | $ | 4,542 | ||||||||||||||||||
Added/(Disposed) | 305 | 101 | (679) | (273) | ||||||||||||||||||||||
Charged Off | — | — | — | — | ||||||||||||||||||||||
Payments | (40) | (72) | (11) | (123) | ||||||||||||||||||||||
June 30, | $ | 672 | $ | 3,474 | $ | — | $ | 4,146 |
2022 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Total | ||||||||||||||||||||||
January 1, | $ | 407 | $ | 3,686 | $ | 706 | $ | 4,799 | ||||||||||||||||||
Added/(Disposed) | 305 | 128 | (611) | (178) | ||||||||||||||||||||||
Charged Off | — | — | — | — | ||||||||||||||||||||||
Payments | (40) | (340) | (95) | (475) | ||||||||||||||||||||||
June 30, | $ | 672 | $ | 3,474 | $ | — | $ | 4,146 |
2021 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Total | ||||||||||||||||||||||
April 1, | — | 3,888 | 576 | 4,464 | ||||||||||||||||||||||
Added | — | 113 | 74 | 187 | ||||||||||||||||||||||
Charged Off | — | (27) | (32) | (59) | ||||||||||||||||||||||
Payments | — | (70) | (62) | (132) | ||||||||||||||||||||||
June 30, | — | 3,904 | 556 | 4,460 |
2021 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Commercial | Residential | Consumer | Total | ||||||||||||||||||||||
January 1, | — | 3,589 | 617 | 4,206 | ||||||||||||||||||||||
Added | — | 491 | 122 | 613 | ||||||||||||||||||||||
Charged Off | — | (27) | (75) | (102) | ||||||||||||||||||||||
Payments | — | (149) | (108) | (257) | ||||||||||||||||||||||
June 30, | — | 3,904 | 556 | 4,460 |
| | | | | | | | | | | | |
| | 2022 | ||||||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Total | ||||
July 1, | | $ | 672 | | $ | 3,474 | | $ | — | | $ | 4,146 |
Added/(Disposed) | |
| — | |
| — | |
| — | |
| — |
Charged Off | |
| — | |
| — | |
| — | |
| — |
Payments | |
| (19) | |
| (180) | |
| — | |
| (199) |
September 30, | | $ | 653 | | $ | 3,294 | | $ | — | | $ | 3,947 |
| | | | | | | | | | | | |
| | 2022 | ||||||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Total | ||||
January 1, | | $ | 407 | | $ | 3,686 | | $ | 706 | | $ | 4,799 |
Added/(Disposed) | |
| 305 | |
| 128 | |
| (611) | |
| (178) |
Charged Off | |
| — | |
| — | |
| — | |
| — |
Payments | |
| (59) | |
| (520) | |
| (95) | |
| (674) |
September 30, | | $ | 653 | | $ | 3,294 | | $ | — | | $ | 3,947 |
| | | | | | | | | | | | |
| | 2021 | ||||||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Total | ||||
July 1, | | | — | | | 3,904 | | | 556 | | | 4,460 |
Added | | | — | | | — | | | 172 | | | 172 |
Charged Off | | | — | | | — | | | — | | | — |
Payments | | | — | | | (91) | | | (52) | | | (143) |
September 30, | | | — | | | 3,813 | | | 676 | | | 4,489 |
| | | | | | | | | | | | |
| | 2021 | ||||||||||
(Dollar amounts in thousands) | | Commercial | | Residential | | Consumer | | Total | ||||
January 1, | | | — | | | 3,589 | | | 617 | | | 4,206 |
Added | |
| — | | | 491 | | | 294 | | | 785 |
Charged Off | |
| — | | | (27) | | | (75) | | | (102) |
Payments | |
| — | | | (240) | | | (160) | | | (400) |
September 30, | | | — | | | 3,813 | | | 676 | | | 4,489 |
Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modification in 2022 or 2021 resulted in the permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from twelve months to five years. Modifications involving an extension of the maturity date were for periods ranging from twelve months to ten years. Troubled debt restructurings during the three months ended JuneSeptember 30, 2022 and 2021 did not result in any material charge-offs or additional provision expense.
The Corporation has no allocations of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of JuneSeptember 30, 2022 and 2021. The Corporation has not committed to lend additional amounts as of JuneSeptember 30, 2022 and 2021 to customers with outstanding loans that are classified as troubled debt restructurings. None of the charge-offs during the three and sixnine months ended JuneSeptember 30, 2022 and 2021 were of restructurings that had occurred in the previous 12 months.
12
The CARES Act included a provision that permitted a financial institution to elect to suspend temporarily troubled debt restructuring accounting under ASC Subtopic 310-40 in certain circumstances (“section 4013”). To be eligible under section 4013, a loan modification must have been (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020. In response to this section of the CARES Act, the federal
Credit Quality Indicators:
The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial loans, with an outstanding balance greater than $100 thousand. Any consumer loans outstanding to a borrower who had commercial loans analyzed will be similarly risk rated. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings:
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
Substandard: Loans classified as substandard are inadequately protected by the current net worth and debt service capacity of the borrower or of any pledged collateral. These loans have a well-defined weakness or weaknesses which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the institution will sustain some future loss if the deficiencies are not corrected.
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those graded substandard, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values.
Furthermore, non-homogeneous loans which were not individually analyzed, but are 90+90+ days past due or on non-accrual are classified as substandard. Loans included in homogeneous pools, such as residential or consumer may be classified as substandard due to 90+90+ days delinquency, non-accrual status, bankruptcy, or loan restructuring.
13
The following tables present the commercial loan portfolio by risk category:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | September 30, 2022 | ||||||||||||||||||||||
| | | Term Loans at Amortized Cost Basis by Origination Year | | Revolving | | | | |||||||||||||||||
| |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| Prior |
| Loans |
| Total | ||||||||
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and Industrial | Pass | | $ | 118,289 | | $ | 143,777 | | $ | 57,461 | | $ | 63,594 | | $ | 28,655 | | $ | 110,184 | | $ | 106,028 | | $ | 627,988 |
| Special Mention | |
| 1,635 | |
| 2,954 | |
| 413 | |
| 611 | |
| 3,516 | |
| 4,065 | |
| 288 | | $ | 13,482 |
| Substandard | |
| 718 | |
| 752 | |
| 2,621 | |
| 1,228 | |
| 2,096 | |
| 6,573 | |
| 11,148 | | $ | 25,136 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 9,694 | |
| 1,588 | |
| 913 | |
| 560 | |
| 211 | |
| 112 | |
| — | | $ | 13,078 |
| Subtotal | | $ | 130,336 | | $ | 149,071 | | $ | 61,408 | | $ | 65,993 | | $ | 34,478 | | $ | 120,934 | | $ | 117,464 | | $ | 679,684 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Farmland | Pass | | $ | 13,583 | | $ | 23,014 | | $ | 9,382 | | $ | 10,191 | | $ | 10,752 | | $ | 50,206 | | $ | 267 | | $ | 117,395 |
| Special Mention | |
| — | |
| — | |
| 1,164 | |
| 882 | |
| — | |
| 3,796 | |
| — | | $ | 5,842 |
| Substandard | |
| — | |
| — | |
| 461 | |
| 272 | |
| 55 | |
| 2,332 | |
| — | | $ | 3,120 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 20 | |
| — | | $ | 20 |
| Subtotal | | $ | 13,583 | | $ | 23,014 | | $ | 11,007 | | $ | 11,345 | | $ | 10,807 | | $ | 56,354 | | $ | 267 | | $ | 126,377 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non Farm, Non Residential | Pass | | $ | 70,604 | | $ | 76,794 | | $ | 35,195 | | $ | 19,915 | | $ | 31,852 | | $ | 114,737 | | $ | 1,757 | | $ | 350,854 |
| Special Mention | |
| — | |
| — | |
| — | |
| 931 | |
| — | |
| 370 | |
| — | | $ | 1,301 |
| Substandard | |
| — | |
| — | |
| — | |
| 521 | |
| — | |
| 6,436 | |
| — | | $ | 6,957 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 286 | |
| — | | $ | 286 |
| Subtotal | | $ | 70,604 | | $ | 76,794 | | $ | 35,195 | | $ | 21,367 | | $ | 31,852 | | $ | 121,829 | | $ | 1,757 | | $ | 359,398 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Agriculture | Pass | | $ | 7,934 | | $ | 9,730 | | $ | 8,381 | | $ | 8,855 | | $ | 1,987 | | $ | 19,173 | | $ | 56,124 | | $ | 112,184 |
| Special Mention | |
| 89 | |
| — | |
| 10 | |
| 5 | |
| — | |
| 712 | |
| 3,450 | | $ | 4,266 |
| Substandard | |
| — | |
| — | |
| — | |
| 430 | |
| 1,370 | |
| 384 | |
| — | | $ | 2,184 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 75 | |
| 42 | |
| 86 | |
| 67 | |
| 30 | |
| — | |
| — | | $ | 300 |
| Subtotal | | $ | 8,098 | | $ | 9,772 | | $ | 8,477 | | $ | 9,357 | | $ | 3,387 | | $ | 20,269 | | $ | 59,574 | | $ | 118,934 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Commercial | Pass | | $ | 117,094 | | $ | 74,954 | | $ | 89,027 | | $ | 20,029 | | $ | 29,456 | | $ | 87,301 | | $ | 3,240 | | $ | 421,101 |
| Special Mention | |
| 24 | |
| — | |
| — | |
| 11 | |
| — | |
| 11,070 | |
| — | | $ | 11,105 |
| Substandard | |
| — | |
| 15 | |
| — | |
| — | |
| — | |
| 22 | |
| 10 | | $ | 47 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 17 | |
| 84 | |
| — | |
| — | |
| 31 | |
| 487 | |
| — | | $ | 619 |
| Subtotal | | $ | 117,135 | | $ | 75,053 | | $ | 89,027 | | $ | 20,040 | | $ | 29,487 | | $ | 98,880 | | $ | 3,250 | | $ | 432,872 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Residential |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | |
|
Multifamily >5 Residential | Pass | | $ | 58,035 | | $ | 33,076 | | $ | 46,842 | | $ | 12,212 | | $ | 5,087 | | $ | 34,770 | | $ | 932 | | $ | 190,954 |
| Special Mention | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 90 | |
| — | | $ | 90 |
| Substandard | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 1,301 | |
| — | | $ | 1,301 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| — | |
| 1,129 | |
| — | |
| — | |
| — | |
| 267 | |
| — | | $ | 1,396 |
| Subtotal | | $ | 58,035 | | $ | 34,205 | | $ | 46,842 | | $ | 12,212 | | $ | 5,087 | | $ | 36,428 | | $ | 932 | | $ | 193,741 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | Pass | | $ | 385,539 | | $ | 361,345 | | $ | 246,288 | | $ | 134,796 | | $ | 107,789 | | $ | 416,371 | | $ | 168,348 | | $ | 1,820,476 |
| Special Mention | |
| 1,748 | |
| 2,954 | |
| 1,587 | |
| 2,440 | |
| 3,516 | |
| 20,103 | |
| 3,738 | | $ | 36,086 |
| Substandard | |
| 718 | |
| 767 | |
| 3,082 | |
| 2,451 | |
| 3,521 | |
| 17,048 | |
| 11,158 | | $ | 38,745 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 9,786 | |
| 2,843 | |
| 999 | |
| 627 | |
| 272 | |
| 1,172 | |
| — | | $ | 15,699 |
Total commercial loans | | | $ | 397,791 | | $ | 367,909 | | $ | 251,956 | | $ | 140,314 | | $ | 115,098 | | $ | 454,694 | | $ | 183,244 | | $ | 1,911,006 |
June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans at Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Pass | $81,025 | $149,492 | $61,094 | $65,887 | $31,721 | $109,210 | $140,793 | $639,222 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 1,489 | 3,165 | 206 | 4,123 | 2,847 | 4,263 | 72 | $16,165 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | 424 | 1,497 | 447 | 2,648 | 6,096 | 14,596 | $25,708 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | 52 | — | — | — | $52 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 6,798 | 1,879 | 1,085 | 736 | 270 | 146 | — | $10,914 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $89,312 | $154,960 | $63,882 | $71,245 | $37,486 | $119,715 | $155,461 | $692,061 | ||||||||||||||||||||||||||||||||||||||||||||||||
Farmland | Pass | $7,471 | $23,441 | $10,308 | $10,610 | $11,128 | $52,240 | $290 | $115,488 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | 1,191 | 882 | — | 3,922 | — | $5,995 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | 289 | 56 | 2,261 | — | $2,606 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | 76 | — | $76 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | — | — | — | — | — | 20 | — | $20 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $7,471 | $23,441 | $11,499 | $11,781 | $11,184 | $58,519 | $290 | $124,185 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non Farm, Non Residential | Pass | $53,042 | $78,738 | $32,040 | $21,975 | $32,250 | $125,503 | $8,012 | $351,560 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | 941 | — | 376 | — | $1,317 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | 1,738 | — | 543 | 2,408 | 16,476 | — | $21,165 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | — | — | — | — | — | 311 | — | $311 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $53,042 | $80,476 | $32,040 | $23,459 | $34,658 | $142,666 | $8,012 | $374,353 | ||||||||||||||||||||||||||||||||||||||||||||||||
Agriculture | Pass | $5,818 | $10,025 | $8,730 | $9,156 | $1,996 | $19,726 | $53,576 | $109,027 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 89 | — | 10 | 5 | — | 799 | 3,736 | $4,639 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | 597 | — | 393 | 1,370 | $2,360 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 79 | 101 | 89 | 75 | 32 | — | — | $376 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $5,986 | $10,126 | $8,829 | $9,833 | $2,028 | $20,918 | $58,682 | $116,402 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Commercial | Pass | $97,758 | $64,636 | $82,886 | $20,245 | $29,738 | $89,207 | $3,282 | $387,752 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | — | — | 11,171 | — | $11,171 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | — | 462 | 8 | — | $470 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 18 | 85 | — | — | 33 | 575 | — | $711 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $97,776 | $64,721 | $82,886 | $20,245 | $30,233 | $100,961 | $3,282 | $400,104 | ||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily >5 Residential | Pass | $50,963 | $31,102 | $44,676 | $12,281 | $5,191 | $37,204 | $951 | $182,368 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | — | — | 6,406 | — | $6,406 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | — | — | 964 | — | $964 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | — | 1,137 | — | — | — | 267 | — | $1,404 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $50,963 | $32,239 | $44,676 | $12,281 | $5,191 | $44,841 | $951 | $191,142 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | Pass | $296,077 | $357,434 | $239,734 | $140,154 | $112,024 | $433,090 | $206,904 | $1,785,417 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 1,578 | 3,165 | 1,407 | 5,951 | 2,847 | 26,937 | 3,808 | $45,693 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | 2,162 | 1,497 | 1,876 | 5,574 | 26,198 | 15,966 | $53,273 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | 52 | — | 76 | — | $128 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 6,895 | 3,202 | 1,174 | 811 | 335 | 1,319 | — | $13,736 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | $304,550 | $365,963 | $243,812 | $148,844 | $120,780 | $487,620 | $226,678 | $1,898,247 |
14
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2021 | ||||||||||||||||||||||
| | | Term Loans at Amortized Cost Basis by Origination Year | | Revolving | | | | |||||||||||||||||
| |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| 2017 |
| Prior |
| Loans |
| Total | ||||||||
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and Industrial | Pass | | $ | 163,588 | | $ | 71,271 | | $ | 80,668 | | $ | 40,441 | | $ | 37,739 | | $ | 113,887 | | $ | 111,594 | | $ | 619,188 |
| Special Mention | |
| 7,561 | |
| 393 | |
| 1,841 | |
| 5,375 | |
| 263 | |
| 4,523 | |
| 7,482 | | $ | 27,438 |
| Substandard | |
| 4,521 | |
| 896 | |
| 348 | |
| 5,148 | |
| 2,325 | |
| 7,934 | |
| 2,648 | | $ | 23,820 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 21,134 | |
| 1,610 | |
| 959 | |
| 466 | |
| 189 | |
| 140 | |
| — | | $ | 24,498 |
| Subtotal | | $ | 196,804 | | $ | 74,170 | | $ | 83,816 | | $ | 51,430 | | $ | 40,516 | | $ | 126,484 | | $ | 121,724 | | $ | 694,944 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Farmland | Pass | | $ | 25,673 | | $ | 12,060 | | $ | 13,111 | | $ | 13,246 | | $ | 11,049 | | $ | 49,158 | | $ | 1,418 | | $ | 125,715 |
| Special Mention | |
| — | |
| 1,191 | |
| 914 | |
| — | |
| 342 | |
| 3,247 | |
| — | | $ | 5,694 |
| Substandard | |
| 3,455 | |
| 444 | |
| — | |
| 326 | |
| 558 | |
| 2,876 | |
| — | | $ | 7,659 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Subtotal | | $ | 29,128 | | $ | 13,695 | | $ | 14,025 | | $ | 13,572 | | $ | 11,949 | | $ | 55,281 | | $ | 1,418 | | $ | 139,068 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non Farm, Non Residential | Pass | | $ | 81,203 | | $ | 37,971 | | $ | 24,716 | | $ | 32,775 | | $ | 54,732 | | $ | 97,241 | | $ | 10,548 | | $ | 339,186 |
| Special Mention | |
| — | |
| — | |
| 1,103 | |
| 182 | |
| 1,948 | |
| 1,996 | |
| — | | $ | 5,229 |
| Substandard | |
| — | |
| — | |
| 910 | |
| — | |
| 1,440 | |
| 13,391 | |
| — | | $ | 15,741 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 402 | |
| — | | $ | 402 |
| Subtotal | | $ | 81,203 | | $ | 37,971 | | $ | 26,729 | | $ | 32,957 | | $ | 58,120 | | $ | 113,030 | | $ | 10,548 | | $ | 360,558 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Agriculture | Pass | | $ | 14,426 | | $ | 10,386 | | $ | 10,135 | | $ | 2,585 | | $ | 4,932 | | $ | 15,755 | | $ | 68,937 | | $ | 127,156 |
| Special Mention | |
| — | |
| — | |
| 1,000 | |
| — | |
| 537 | |
| 271 | |
| 5,257 | | $ | 7,065 |
| Substandard | |
| — | |
| 20 | |
| 216 | |
| — | |
| 46 | |
| 485 | |
| 4,828 | | $ | 5,595 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 110 | |
| 120 | |
| 131 | |
| 55 | |
| 1 | |
| — | |
| — | | $ | 417 |
| Subtotal | | $ | 14,536 | | $ | 10,526 | | $ | 11,482 | | $ | 2,640 | | $ | 5,516 | | $ | 16,511 | | $ | 79,022 | | $ | 140,233 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Commercial | Pass | | $ | 77,821 | | $ | 69,117 | | $ | 33,231 | | $ | 36,495 | | $ | 53,479 | | $ | 58,819 | | $ | 3,488 | | $ | 332,450 |
| Special Mention | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 6,106 | |
| — | | $ | 6,106 |
| Substandard | |
| 72 | |
| — | |
| 25 | |
| 475 | |
| — | |
| 9 | |
| — | | $ | 581 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 89 | |
| — | |
| — | |
| 37 | |
| — | |
| — | |
| — | | $ | 126 |
| Subtotal | | $ | 77,982 | | $ | 69,117 | | $ | 33,256 | | $ | 37,007 | | $ | 53,479 | | $ | 64,934 | | $ | 3,488 | | $ | 339,263 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Residential |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Multifamily >5 Residential | Pass | | $ | 37,244 | | $ | 63,312 | | $ | 16,037 | | $ | 7,471 | | $ | 5,370 | | $ | 35,284 | | $ | 1,434 | | $ | 166,152 |
| Special Mention | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 10,282 | |
| — | | $ | 10,282 |
| Substandard | |
| — | |
| — | |
| — | |
| — | |
| — | |
| 958 | |
| — | | $ | 958 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 1,149 | |
| — | |
| — | |
| — | |
| 44 | |
| 384 | |
| — | | $ | 1,577 |
| Subtotal | | $ | 38,393 | | $ | 63,312 | | $ | 16,037 | | $ | 7,471 | | $ | 5,414 | | $ | 46,908 | | $ | 1,434 | | $ | 178,969 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | Pass | | $ | 399,955 | | $ | 264,117 | | $ | 177,898 | | $ | 133,013 | | $ | 167,301 | | $ | 370,144 | | $ | 197,419 | | $ | 1,709,847 |
| Special Mention | |
| 7,561 | |
| 1,584 | |
| 4,858 | |
| 5,557 | |
| 3,090 | |
| 26,425 | |
| 12,739 | | $ | 61,814 |
| Substandard | |
| 8,048 | |
| 1,360 | |
| 1,499 | |
| 5,949 | |
| 4,369 | |
| 25,653 | |
| 7,476 | | $ | 54,354 |
| Doubtful | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | | $ | — |
| Not Rated | |
| 22,482 | |
| 1,730 | |
| 1,090 | |
| 558 | |
| 234 | |
| 926 | |
| — | | $ | 27,020 |
Total commercial loans | | | $ | 438,046 | | $ | 268,791 | | $ | 185,345 | | $ | 145,077 | | $ | 174,994 | | $ | 423,148 | | $ | 217,634 | | $ | 1,853,035 |
15
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans at Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior | Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Pass | $163,588 | $71,271 | $80,668 | $40,441 | $37,739 | $113,887 | $111,594 | $619,188 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 7,561 | 393 | 1,841 | 5,375 | 263 | 4,523 | 7,482 | $27,438 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | 4,521 | 896 | 348 | 5,148 | 2,325 | 7,934 | 2,648 | $23,820 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 21,134 | 1,610 | 959 | 466 | 189 | 140 | — | $24,498 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $196,804 | $74,170 | $83,816 | $51,430 | $40,516 | $126,484 | $121,724 | $694,944 | ||||||||||||||||||||||||||||||||||||||||||||||||
Farmland | Pass | $25,673 | $12,060 | $13,111 | $13,246 | $11,049 | $49,158 | $1,418 | $125,715 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | 1,191 | 914 | — | 342 | 3,247 | — | $5,694 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | 3,455 | 444 | — | 326 | 558 | 2,876 | — | $7,659 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $29,128 | $13,695 | $14,025 | $13,572 | $11,949 | $55,281 | $1,418 | $139,068 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non Farm, Non Residential | Pass | $81,203 | $37,971 | $24,716 | $32,775 | $54,732 | $97,241 | $10,548 | $339,186 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | 1,103 | 182 | 1,948 | 1,996 | — | $5,229 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | 910 | — | 1,440 | 13,391 | — | $15,741 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | — | — | — | — | — | 402 | — | $402 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $81,203 | $37,971 | $26,729 | $32,957 | $58,120 | $113,030 | $10,548 | $360,558 | ||||||||||||||||||||||||||||||||||||||||||||||||
Agriculture | Pass | $14,426 | $10,386 | $10,135 | $2,585 | $4,932 | $15,755 | $68,937 | $127,156 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | 1,000 | — | 537 | 271 | 5,257 | $7,065 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | 20 | 216 | — | 46 | 485 | 4,828 | $5,595 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 110 | 120 | 131 | 55 | 1 | — | — | $417 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $14,536 | $10,526 | $11,482 | $2,640 | $5,516 | $16,511 | $79,022 | $140,233 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Commercial | Pass | $77,821 | $69,117 | $33,231 | $36,495 | $53,479 | $58,819 | $3,488 | $332,450 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | — | — | 6,106 | — | $6,106 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | 72 | — | 25 | 475 | — | 9 | — | $581 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 89 | — | — | 37 | — | — | — | $126 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $77,982 | $69,117 | $33,256 | $37,007 | $53,479 | $64,934 | $3,488 | $339,263 | ||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily >5 Residential | Pass | $37,244 | $63,312 | $16,037 | $7,471 | $5,370 | $35,284 | $1,434 | $166,152 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | — | — | 10,282 | — | $10,282 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | — | — | 958 | — | $958 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 1,149 | — | — | — | 44 | 384 | — | $1,577 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $38,393 | $63,312 | $16,037 | $7,471 | $5,414 | $46,908 | $1,434 | $178,969 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | Pass | $399,955 | $264,117 | $177,898 | $133,013 | $167,301 | $370,144 | $197,419 | $1,709,847 | |||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 7,561 | 1,584 | 4,858 | 5,557 | 3,090 | 26,425 | 12,739 | $61,814 | ||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | 8,048 | 1,360 | 1,499 | 5,949 | 4,369 | 25,653 | 7,476 | $54,354 | ||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Not Rated | 22,482 | 1,730 | 1,090 | 558 | 234 | 926 | — | $27,020 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial loans | $438,046 | $268,791 | $185,345 | $145,077 | $174,994 | $423,148 | $217,634 | $1,853,035 |
The Corporation evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, based primarily on the aging status of the loan and payment activity. Accordingly, loans on non-accrual status, loans past due 90 days or more and still accruing interest, and loans modified under troubled debt restructurings are considered to be nonperforming for purposes of credit quality evaluation. The following table presents the balance of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| September 30, 2022 | ||||||||||||||||||||||
| | | Term Loans at Amortized Cost Basis by Origination Year | | Revolving | | | | |||||||||||||||||
| |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| Prior |
| Loans |
| Total | ||||||||
Residential |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
First Liens | Performing | | $ | 53,596 | | $ | 68,418 | | $ | 42,892 | | $ | 17,521 | | $ | 20,943 | | $ | 122,753 | | $ | 3,201 | | $ | 329,324 |
| Non-performing | |
| — | |
| — | |
| — | |
| 33 | |
| 64 | |
| 2,068 | |
| — | | $ | 2,165 |
| Subtotal | | $ | 53,596 | | $ | 68,418 | | $ | 42,892 | | $ | 17,554 | | $ | 21,007 | | $ | 124,821 | | $ | 3,201 | | $ | 331,489 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Home Equity | Performing | | $ | 1,823 | | $ | — | | $ | 8 | | $ | 115 | | $ | 90 | | $ | 1,074 | | $ | 61,175 | | $ | 64,285 |
| Non-performing | |
| — | |
| — | |
| 79 | |
| — | |
| 15 | |
| 45 | |
| — | | $ | 139 |
| Subtotal | | $ | 1,823 | | $ | — | | $ | 87 | | $ | 115 | | $ | 105 | | $ | 1,119 | | $ | 61,175 | | $ | 64,424 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Junior Liens | Performing | | $ | 16,412 | | $ | 11,274 | | $ | 7,963 | | $ | 6,220 | | $ | 5,877 | | $ | 6,783 | | $ | 1,737 | | $ | 56,266 |
| Non-performing | |
| — | |
| — | |
| 26 | |
| 65 | |
| 74 | |
| 192 | |
| — | | $ | 357 |
| Subtotal | | $ | 16,412 | | $ | 11,274 | | $ | 7,989 | | $ | 6,285 | | $ | 5,951 | | $ | 6,975 | | $ | 1,737 | | $ | 56,623 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Residential | Performing | | $ | 9,348 | | $ | 13,341 | | $ | 4,450 | | $ | 1,322 | | $ | 503 | | $ | 1,051 | | $ | — | | $ | 30,015 |
| Non-performing | |
| — | |
| — | |
| — | |
| 50 | |
| 38 | |
| 20 | |
| — | | $ | 108 |
| Subtotal | | $ | 9,348 | | $ | 13,341 | | $ | 4,450 | | $ | 1,372 | | $ | 541 | | $ | 1,071 | | $ | — | | $ | 30,123 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Motor Vehicle | Performing | | $ | 251,757 | | $ | 132,338 | | $ | 100,690 | | $ | 34,889 | | $ | 11,308 | | $ | 3,552 | | $ | 6 | | $ | 534,540 |
| Non-performing | |
| 306 | |
| 694 | |
| 426 | |
| 247 | |
| 60 | |
| 39 | |
| — | | $ | 1,772 |
| Subtotal | | $ | 252,063 | | $ | 133,032 | | $ | 101,116 | | $ | 35,136 | | $ | 11,368 | | $ | 3,591 | | $ | 6 | | $ | 536,312 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Consumer | Performing | | $ | 11,785 | | $ | 9,216 | | $ | 4,804 | | $ | 1,502 | | $ | 506 | | $ | 884 | | $ | 4,702 | | $ | 33,399 |
| Non-performing | |
| 28 | |
| 269 | |
| 132 | |
| 69 | |
| 19 | |
| 15 | |
| 2 | | $ | 534 |
| Subtotal | | $ | 11,813 | | $ | 9,485 | | $ | 4,936 | | $ | 1,571 | | $ | 525 | | $ | 899 | | $ | 4,704 | | $ | 33,933 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | Performing | | $ | 344,721 | | $ | 234,587 | | $ | 160,807 | | $ | 61,569 | | $ | 39,227 | | $ | 136,097 | | $ | 70,821 | | $ | 1,047,829 |
| Non-performing | |
| 334 | |
| 963 | |
| 663 | |
| 464 | |
| 270 | |
| 2,379 | |
| 2 | | $ | 5,075 |
Total other loans | | | $ | 345,055 | | $ | 235,550 | | $ | 161,470 | | $ | 62,033 | | $ | 39,497 | | $ | 138,476 | | $ | 70,823 | | $ | 1,052,904 |
June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans at Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First Liens | Performing | $41,977 | $68,440 | $43,841 | $19,263 | $21,173 | $133,208 | $2,121 | $330,023 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | — | 34 | 66 | 2,419 | — | $2,519 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $41,977 | $68,440 | $43,841 | $19,297 | $21,239 | $135,627 | $2,121 | $332,542 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home Equity | Performing | $1,411 | $862 | $8 | $122 | $129 | $1,284 | $58,829 | $62,645 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | 80 | — | 15 | 50 | 15 | $160 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $1,411 | $862 | $88 | $122 | $144 | $1,334 | $58,844 | $62,805 | ||||||||||||||||||||||||||||||||||||||||||||||||
Junior Liens | Performing | $10,470 | $12,055 | $8,695 | $6,818 | $6,395 | $7,667 | $1,064 | $53,164 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | 66 | — | 74 | 173 | — | $313 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $10,470 | $12,055 | $8,761 | $6,818 | $6,469 | $7,840 | $1,064 | $53,477 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Residential | Performing | $6,103 | $15,578 | $4,997 | $1,375 | $598 | $1,911 | $0 | $30,562 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | — | 52 | 39 | 22 | — | $113 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $6,103 | $15,578 | $4,997 | $1,427 | $637 | $1,933 | $0 | $30,675 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Motor Vehicle | Performing | $145,103 | $150,683 | $116,862 | $42,134 | $14,775 | $5,561 | $— | $475,118 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 65 | 541 | 475 | 253 | 63 | 52 | — | $1,449 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $145,168 | $151,224 | $117,337 | $42,387 | $14,838 | $5,613 | $— | $476,567 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Consumer | Performing | $7,956 | $10,825 | $5,678 | $1,920 | $626 | $1,022 | $4,571 | $32,598 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 19 | 285 | 202 | 66 | 23 | 17 | 4 | $616 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $7,975 | $11,110 | $5,880 | $1,986 | $649 | $1,039 | $4,575 | $33,214 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | Performing | $213,020 | $258,443 | $180,081 | $71,632 | $43,696 | $150,653 | $66,585 | $984,110 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 84 | 826 | 823 | 405 | 280 | 2,733 | 19 | $5,170 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total other loans | $213,104 | $259,269 | $180,904 | $72,037 | $43,976 | $153,386 | $66,604 | $989,280 |
16
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans at Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior | Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First Liens | Performing | $86,224 | $49,633 | $22,262 | $24,377 | $26,437 | $126,828 | $3,061 | $338,822 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | 35 | 69 | 160 | 2,421 | — | $2,685 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $86,224 | $49,633 | $22,297 | $24,446 | $26,597 | $129,249 | $3,061 | $341,507 | ||||||||||||||||||||||||||||||||||||||||||||||||
Home Equity | Performing | $757 | $9 | $152 | $719 | $62 | $1,332 | $59,059 | $62,090 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | 25 | — | — | 3 | 57 | — | $85 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $757 | $34 | $152 | $719 | $65 | $1,389 | $59,059 | $62,175 | ||||||||||||||||||||||||||||||||||||||||||||||||
Junior Liens | Performing | $13,255 | $10,189 | $8,124 | $7,888 | $4,158 | $5,554 | $968 | $50,136 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | 6 | 64 | 97 | 119 | 94 | — | $380 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $13,255 | $10,195 | $8,188 | $7,985 | $4,277 | $5,648 | $968 | $50,516 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Residential | Performing | $20,218 | $6,665 | $1,697 | $662 | $883 | $1,092 | $0 | $31,217 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | — | — | 55 | 43 | — | 27 | — | $125 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $20,218 | $6,665 | $1,752 | $705 | $883 | $1,119 | $0 | $31,342 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Motor Vehicle | Performing | $188,675 | $155,156 | $60,676 | $23,367 | $9,307 | $2,384 | $— | $439,565 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 199 | 373 | 191 | 109 | 43 | 23 | — | $938 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $188,874 | $155,529 | $60,867 | $23,476 | $9,350 | $2,407 | $— | $440,503 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Consumer | Performing | $14,924 | $8,225 | $3,119 | $948 | $304 | $1,121 | $4,194 | $32,835 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 342 | 181 | 107 | 35 | 18 | 3 | 2 | $688 | ||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $15,266 | $8,406 | $3,226 | $983 | $322 | $1,124 | $4,196 | $33,523 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | Performing | $324,053 | $229,877 | $96,030 | $57,961 | $41,151 | $138,311 | $67,282 | $954,665 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-performing | 541 | 585 | 452 | 353 | 343 | 2,625 | 2 | $4,901 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total other loans | $324,594 | $230,462 | $96,482 | $58,314 | $41,494 | $140,936 | $67,284 | $959,566 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| December 31, 2021 | ||||||||||||||||||||||
| | | Term Loans at Amortized Cost Basis by Origination Year | | Revolving | | | | |||||||||||||||||
| |
| 2021 |
| 2020 |
| 2019 |
| 2018 |
| 2017 |
| Prior |
| Loans |
| Total | ||||||||
Residential |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
First Liens | Performing | | $ | 86,224 | | $ | 49,633 | | $ | 22,262 | | $ | 24,377 | | $ | 26,437 | | $ | 126,828 | | $ | 3,061 | | $ | 338,822 |
| Non-performing | |
| — | |
| — | |
| 35 | |
| 69 | |
| 160 | |
| 2,421 | |
| — | | $ | 2,685 |
| Subtotal | | $ | 86,224 | | $ | 49,633 | | $ | 22,297 | | $ | 24,446 | | $ | 26,597 | | $ | 129,249 | | $ | 3,061 | | $ | 341,507 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Home Equity | Performing | | $ | 757 | | $ | 9 | | $ | 152 | | $ | 719 | | $ | 62 | | $ | 1,332 | | $ | 59,059 | | $ | 62,090 |
| Non-performing | |
| — | |
| 25 | |
| — | |
| — | |
| 3 | |
| 57 | |
| — | | $ | 85 |
| Subtotal | | $ | 757 | | $ | 34 | | $ | 152 | | $ | 719 | | $ | 65 | | $ | 1,389 | | $ | 59,059 | | $ | 62,175 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Junior Liens | Performing | | $ | 13,255 | | $ | 10,189 | | $ | 8,124 | | $ | 7,888 | | $ | 4,158 | | $ | 5,554 | | $ | 968 | | $ | 50,136 |
| Non-performing | |
| — | |
| 6 | |
| 64 | |
| 97 | |
| 119 | |
| 94 | |
| — | | $ | 380 |
| Subtotal | | $ | 13,255 | | $ | 10,195 | | $ | 8,188 | | $ | 7,985 | | $ | 4,277 | | $ | 5,648 | | $ | 968 | | $ | 50,516 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Residential | Performing | | $ | 20,218 | | $ | 6,665 | | $ | 1,697 | | $ | 662 | | $ | 883 | | $ | 1,092 | | $ | — | | $ | 31,217 |
| Non-performing | |
| — | |
| — | |
| 55 | |
| 43 | |
| — | |
| 27 | |
| — | | $ | 125 |
| Subtotal | | $ | 20,218 | | $ | 6,665 | | $ | 1,752 | | $ | 705 | | $ | 883 | | $ | 1,119 | | $ | — | | $ | 31,342 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Motor Vehicle | Performing | | $ | 188,675 | | $ | 155,156 | | $ | 60,676 | | $ | 23,367 | | $ | 9,307 | | $ | 2,384 | | $ | — | | $ | 439,565 |
| Non-performing | |
| 199 | |
| 373 | |
| 191 | |
| 109 | |
| 43 | |
| 23 | |
| — | | $ | 938 |
| Subtotal | | $ | 188,874 | | $ | 155,529 | | $ | 60,867 | | $ | 23,476 | | $ | 9,350 | | $ | 2,407 | | $ | — | | $ | 440,503 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Consumer | Performing | | $ | 14,924 | | $ | 8,225 | | $ | 3,119 | | $ | 948 | | $ | 304 | | $ | 1,121 | | $ | 4,194 | | $ | 32,835 |
| Non-performing | |
| 342 | |
| 181 | |
| 107 | |
| 35 | |
| 18 | |
| 3 | |
| 2 | | $ | 688 |
| Subtotal | | $ | 15,266 | | $ | 8,406 | | $ | 3,226 | | $ | 983 | | $ | 322 | | $ | 1,124 | | $ | 4,196 | | $ | 33,523 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | Performing | | $ | 324,053 | | $ | 229,877 | | $ | 96,030 | | $ | 57,961 | | $ | 41,151 | | $ | 138,311 | | $ | 67,282 | | $ | 954,665 |
| Non-performing | |
| 541 | |
| 585 | |
| 452 | |
| 353 | |
| 343 | |
| 2,625 | |
| 2 | | $ | 4,901 |
Total other loans | | | $ | 324,594 | | $ | 230,462 | | $ | 96,482 | | $ | 58,314 | | $ | 41,494 | | $ | 140,936 | | $ | 67,284 | | $ | 959,566 |
The amortized cost and fair value of the Corporation’s investments are shown below. All securities are classified as available-for-sale.
| | | | | | | | | | | | |
|
| September 30, 2022 | ||||||||||
| | Amortized | | Unrealized | | Unrealized | | | | |||
(Dollar amounts in thousands) | | Cost |
| Gains |
| Losses |
| Fair Value | ||||
U.S. Government agencies | | $ | 117,925 | | $ | 26 | | $ | (11,670) | | $ | 106,281 |
Mortgage Backed Securities - residential | | | 725,085 | | | 22 | | | (106,138) | | | 618,969 |
Mortgage Backed Securities - commercial |
| | 11,763 |
| | — |
| | (454) |
| | 11,309 |
Collateralized mortgage obligations |
| | 230,237 |
| | — |
| | (23,877) |
| | 206,360 |
State and municipal obligations |
| | 399,040 |
| | 100 |
| | (50,325) |
| | 348,815 |
Municipal taxable |
| | 39,326 |
| | 40 |
| | (6,760) |
| | 32,606 |
U.S. Treasury |
| | 2,084 |
| | — |
| | (28) |
| | 2,056 |
Collateralized debt obligations |
| | — |
| | 3,111 |
| | — |
| | 3,111 |
Other securities |
| | 2,478 |
| | — |
| | — |
| | 2,478 |
TOTAL | | $ | 1,527,938 | | $ | 3,299 | | $ | (199,252) | | $ | 1,331,985 |
June 30, 2022 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Government agencies | $ | 117,937 | $ | 39 | $ | (7,979) | $ | 109,997 | ||||||||||||||||||
Mortgage Backed Securities - residential | 691,702 | 88 | (78,592) | 613,198 | ||||||||||||||||||||||
Mortgage Backed Securities - commercial | 9,108 | — | (147) | 8,961 | ||||||||||||||||||||||
Collateralized mortgage obligations | 223,190 | 25 | (17,095) | 206,120 | ||||||||||||||||||||||
State and municipal obligations | 395,179 | 1,090 | (37,893) | 358,376 | ||||||||||||||||||||||
Municipal taxable | 38,435 | 10 | (5,044) | 33,401 | ||||||||||||||||||||||
U.S. Treasury | 2,084 | — | (9) | 2,075 | ||||||||||||||||||||||
Collateralized debt obligations | — | 3,087 | — | 3,087 | ||||||||||||||||||||||
Other securities | 3,237 | — | — | 3,237 | ||||||||||||||||||||||
TOTAL | $ | 1,480,872 | $ | 4,339 | $ | (146,759) | $ | 1,338,452 |
17
December 31, 2021 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Government agencies | $ | 118,176 | $ | 2,688 | $ | (741) | $ | 120,123 | ||||||||||||||||||
Mortgage Backed Securities-residential | 628,920 | 4,387 | (6,879) | 626,428 | ||||||||||||||||||||||
Mortgage Backed Securities-commercial | 15,480 | 191 | — | 15,671 | ||||||||||||||||||||||
Collateralized mortgage obligations | 175,501 | 1,272 | (1,768) | 175,005 | ||||||||||||||||||||||
State and municipal obligations | 362,843 | 17,833 | (578) | 380,098 | ||||||||||||||||||||||
Municipal taxable | 38,445 | 396 | (215) | 38,626 | ||||||||||||||||||||||
U.S. Treasury | 205 | — | (1) | 204 | ||||||||||||||||||||||
Collateralized debt obligations | — | 3,359 | — | 3,359 | ||||||||||||||||||||||
Other securities | 5,220 | — | — | 5,220 | ||||||||||||||||||||||
TOTAL | $ | 1,344,790 | $ | 30,126 | $ | (10,182) | $ | 1,364,734 |
| | | | | | | | | | | | |
|
| December 31, 2021 | ||||||||||
| | Amortized | | Unrealized | | Unrealized | | | | |||
(Dollar amounts in thousands) | | Cost |
| Gains |
| Losses |
| Fair Value | ||||
U.S. Government agencies | | $ | 118,176 | | $ | 2,688 | | $ | (741) | | $ | 120,123 |
Mortgage Backed Securities-residential | | | 628,920 | | | 4,387 | | | (6,879) | | | 626,428 |
Mortgage Backed Securities-commercial |
| | 15,480 |
| | 191 |
| | — |
| | 15,671 |
Collateralized mortgage obligations |
| | 175,501 |
| | 1,272 |
| | (1,768) |
| | 175,005 |
State and municipal obligations |
| | 362,843 |
| | 17,833 |
| | (578) |
| | 380,098 |
Municipal taxable |
| | 38,445 |
| | 396 |
| | (215) |
| | 38,626 |
U.S. Treasury |
| | 205 |
| | — |
| | (1) |
| | 204 |
Collateralized debt obligations |
| | — |
| | 3,359 |
| | — |
| | 3,359 |
Other securities | | | 5,220 | | | — | | | — | | | 5,220 |
TOTAL | | $ | 1,344,790 | | $ | 30,126 | | $ | (10,182) | | $ | 1,364,734 |
Contractual maturities of debt securities at JuneSeptember 30, 2022 were as follows.
Available-for-Sale | ||||||||||||||
Amortized | Fair | |||||||||||||
(Dollar amounts in thousands) | Cost | Value | ||||||||||||
Due in one year or less | $ | 16,521 | $ | 16,540 | ||||||||||
Due after one but within five years | 45,794 | 45,110 | ||||||||||||
Due after five but within ten years | 82,851 | 79,055 | ||||||||||||
Due after ten years | 411,706 | 369,468 | ||||||||||||
556,872 | 510,173 | |||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | 924,000 | 828,279 | ||||||||||||
TOTAL | $ | 1,480,872 | $ | 1,338,452 |
| | | | | | |
|
| Available-for-Sale | ||||
| | Amortized | | Fair | ||
(Dollar amounts in thousands) |
| Cost |
| Value | ||
Due in one year or less | | $ | 14,709 | | $ | 14,645 |
Due after one but within five years | | | 45,896 | | | 44,462 |
Due after five but within ten years |
| | 88,156 |
| | 81,746 |
Due after ten years |
| | 412,092 |
| | 354,494 |
|
| | 560,853 |
| | 495,347 |
Mortgage-backed securities and collateralized mortgage obligations |
| | 967,085 |
| | 836,638 |
TOTAL | | $ | 1,527,938 | | $ | 1,331,985 |
There were zero and $5 thousand in gross gains and zero in losses from investment sales/calls realized by the Corporation for the three and sixnine months ended JuneSeptember 30, 2022. For the three and sixnine months ended JuneSeptember 30, 2021 there were $258$5 thousand and $263$268 thousand in gross gains and zero and $157 thousand in losses on sales/calls of investment securities.
The following tables show the securities’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at JuneSeptember 30, 2022 and December 31, 2021.
| | | | | | | | | | | | | | | | | | |
|
| September 30, 2022 | ||||||||||||||||
| | Less Than 12 Months |
| More Than 12 Months |
| Total | ||||||||||||
| | | | | Unrealized | | | | | Unrealized | | | | | Unrealized | |||
(Dollar amounts in thousands) | | Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | ||||||
U.S. Government agencies | | $ | 83,013 | | $ | (6,952) | | $ | 22,164 | | $ | (4,718) | | $ | 105,177 | | $ | (11,670) |
Mortgage Backed Securities - Residential |
| | 364,927 |
| | (48,470) |
| | 252,690 |
| | (57,668) |
| | 617,617 |
| | (106,138) |
Mortgage Backed Securities - Commercial | | | 11,309 | | | (454) | | | — | | | — | | | 11,309 | | | (454) |
Collateralized mortgage obligations |
| | 153,183 |
| | (14,893) |
| | 43,137 |
| | (8,984) |
| | 196,320 |
| | (23,877) |
State and municipal obligations |
| | 280,127 |
| | (35,118) |
| | 38,129 |
| | (15,207) |
| | 318,256 |
| | (50,325) |
Municipal taxable |
| | 25,851 |
| | (5,218) |
| | 5,715 |
| | (1,542) |
| | 31,566 |
| | (6,760) |
U.S. Treasury |
| | 2,056 |
| | (28) |
| | — |
| | — |
| | 2,056 |
| | (28) |
Total temporarily impaired securities | | $ | 920,466 | | $ | (111,133) | | $ | 361,835 | | $ | (88,119) | | $ | 1,282,301 | | $ | (199,252) |
June 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Less Than 12 Months | More Than 12 Months | Total | ||||||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||||||||||||||||||||||||
U.S. Government agencies | $ | 97,256 | $ | (7,293) | $ | 4,068 | $ | (686) | $ | 101,324 | $ | (7,979) | ||||||||||||||||||||||||||
Mortgage Backed Securities - Residential | 451,262 | (50,476) | 158,530 | (28,116) | 609,792 | (78,592) | ||||||||||||||||||||||||||||||||
Mortgage Backed Securities - Commercial | 8,961 | (147) | — | — | 8,961 | (147) | ||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 164,325 | (13,798) | 21,350 | (3,297) | 185,675 | (17,095) | ||||||||||||||||||||||||||||||||
State and municipal obligations | 251,392 | (35,790) | 6,668 | (2,103) | 258,060 | (37,893) | ||||||||||||||||||||||||||||||||
Municipal taxable | 29,346 | (4,542) | 2,545 | (502) | 31,891 | (5,044) | ||||||||||||||||||||||||||||||||
U.S. Treasury | 2,075 | (9) | — | — | 2,075 | (9) | ||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | 1,004,617 | $ | (112,055) | $ | 193,161 | $ | (34,704) | $ | 1,197,778 | $ | (146,759) |
18
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Less Than 12 Months | More Than 12 Months | Total | ||||||||||||||||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||||||||||||||||||||||||
U.S. Government agencies | $ | 48,939 | $ | (739) | $ | 146 | $ | (2) | $ | 49,085 | $ | (741) | ||||||||||||||||||||||||||
Mortgage Backed Securities - Residential | 436,726 | (5,281) | 60,807 | (1,598) | 497,533 | (6,879) | ||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 73,530 | (1,327) | 12,505 | (441) | 86,035 | (1,768) | ||||||||||||||||||||||||||||||||
State and municipal obligations | 54,040 | (578) | — | — | 54,040 | (578) | ||||||||||||||||||||||||||||||||
Municipal taxable | 15,048 | (195) | 729 | (20) | 15,777 | (215) | ||||||||||||||||||||||||||||||||
U.S. Treasury | 204 | (1) | — | — | 204 | (1) | ||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | 628,487 | $ | (8,121) | $ | 74,187 | $ | (2,061) | $ | 702,674 | $ | (10,182) |
| | | | | | | | | | | | | | | | | | |
|
| December 31, 2021 | ||||||||||||||||
| | Less Than 12 Months |
| More Than 12 Months |
| Total | ||||||||||||
| | | | | Unrealized | | | | | Unrealized | | | | | Unrealized | |||
(Dollar amounts in thousands) |
| Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | ||||||
U.S. Government agencies | | $ | 48,939 | | $ | (739) | | $ | 146 | | $ | (2) | | $ | 49,085 | | $ | (741) |
Mortgage Backed Securities - Residential | | | 436,726 | | | (5,281) | | | 60,807 | | | (1,598) | | | 497,533 | | | (6,879) |
Collateralized mortgage obligations |
| | 73,530 |
| | (1,327) |
| | 12,505 |
| | (441) |
| | 86,035 |
| | (1,768) |
State and municipal obligations | | | 54,040 | | | (578) | | | — | | | — | | | 54,040 | | | (578) |
Municipal taxable |
| | 15,048 |
| | (195) |
| | 729 |
| | (20) |
| | 15,777 |
| | (215) |
U.S. Treasury |
| | 204 |
| | (1) |
| | — |
| | — |
| | 204 |
| | (1) |
Total temporarily impaired securities | | $ | 628,487 | | $ | (8,121) | | $ | 74,187 | | $ | (2,061) | | $ | 702,674 | | $ | (10,182) |
Management evaluates securities for impairment related to credit losses at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for impairment related to credit losses by segregating the portfolio into two general segments.
In evaluating for impairment, management considers the reason for the decline, the extent of the decline, the duration of the decline and whether the Corporation intends to sell a security or is more likely than not to be required to sell a security before recovery of its amortized cost. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the security'ssecurity’s amortized cost is written down to fair value through income. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes.
Gross unrealized losses on investment securities were $146.8$199.3 million as of JuneSeptember 30, 2022 and $10.2 million as of December 31, 2021. Management believes these losses represent negative adjustments to market value relative to the interest rate environment reflecting the increase in market rates and not losses related to the creditworthiness of the issuer. The portfolio contains primarily government agency, agency backed mortgage backed securities (“MBS”), and collateralized mortgage obligations (“CMO”), which are issued by government sponsored enterprises and are backed by the full faith and credit of the United States government. Secondarily, the Corporation invests in municipal securities issued by state and local governments. Of these, the majority are either insured or contain state enhancements. On the remaining, credit is monitored by the investment committee. Based upon our review of the issuers, we do not believe these investments to be other than temporarily impaired. Management does not intend to sell these securities and it is not more likely than not that we will be required to sell them before their anticipated recovery.
The table below presents a rollforward of the credit losses recognized in earnings for the three and sixnine month periods ended JuneSeptember 30, 2022 and 2021:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(Dollar amounts in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Beginning balance | $ | 2,974 | $ | 2,974 | $ | 2,974 | $ | 2,974 | ||||||||||||||||||
Reductions for securities called during the period | — | — | — | — | ||||||||||||||||||||||
Ending balance | $ | 2,974 | $ | 2,974 | $ | 2,974 | $ | 2,974 |
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
(Dollar amounts in thousands) |
| 2022 |
| 2021 | | 2022 |
| 2021 | | ||||
Beginning balance | | $ | — | | $ | 2,974 | | $ | — | | $ | 2,974 | |
Reductions for securities called during the period |
| | — |
| | — | | | — |
| | — | |
Ending balance | | $ | — | | $ | 2,974 | | $ | — | | $ | 2,974 | |
4.Fair Value
FASB ASC No. 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1: Quoted prices (unadjusted) of identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
19
Level 2: Significant other observable inputs other than Level I prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The fair value of most securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).
For those securities that cannot be priced using quoted market prices or observable inputs a Level 3 valuation is determined. These securities are primarily trust preferred securities, which are priced using Level 3 due to current market illiquidity and certain investments in state and municipal securities. The fair value of the trust preferred securities is obtained from a third party provider without adjustment. As described previously, management obtains values from other pricing sources to validate the Standard & Poors pricing that they currently utilize. The fair value of state and municipal obligations are derived by comparing the securities to current market rates plus an appropriate credit spread to determine an estimated value. Illiquidity spreads are then considered. Credit reviews are performed on each of the issuers. The significant unobservable inputs used in the fair value measurement of the Corporation’s state and municipal obligations are credit spreads related to specific issuers. Significantly higher credit spread assumptions would result in significantly lower fair value measurement. Conversely, significantly lower credit spreads would result in a significantly higher fair value measurements.
The fair value of derivatives is based on valuation models using observable market data as of the measurement date (Level 2 inputs).
| | | | | | | | | | | | |
| | September 30, 2022 | ||||||||||
| | Fair Value Measurements Using | ||||||||||
| | Significant Unobservable Inputs (Level 3) | ||||||||||
(Dollar amounts in thousands) |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
U.S. Government agencies | | $ | — | | $ | 106,281 | | $ | — | | $ | 106,281 |
Mortgage Backed Securities-residential | |
| — | |
| 618,969 | |
| — | |
| 618,969 |
Mortgage Backed Securities-commercial | |
| — | |
| 11,309 | |
| — | |
| 11,309 |
Collateralized mortgage obligations | |
| — | |
| 206,360 | |
| — | |
| 206,360 |
State and municipal | |
| — | |
| 347,270 | |
| 1,545 | |
| 348,815 |
Municipal taxable | |
| — | |
| 32,606 | |
| — | |
| 32,606 |
U.S. Treasury | |
| — | |
| 2,056 | |
| — | |
| 2,056 |
Collateralized debt obligations | |
| — | |
| — | |
| 3,111 | |
| 3,111 |
Other securities | |
| — | |
| — | |
| 2,478 | |
| 2,478 |
TOTAL | | $ | — | | $ | 1,324,851 | | $ | 7,134 | | $ | 1,331,985 |
Derivative Assets | | | | | | 3,555 | |
|
| |
|
|
Derivative Liabilities | | | | |
| (3,555) | |
|
| |
|
|
| | | | | | | | | | | | |
|
| December 31, 2021 | ||||||||||
| | Fair Value Measurements Using | ||||||||||
| | Significant Unobservable Inputs (Level 3) | ||||||||||
(Dollar amounts in thousands) |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
U.S. Government agencies | | $ | — | | $ | 120,123 | | $ | — | | $ | 120,123 |
Mortgage Backed Securities-residential | | | — | | | 626,428 | | | — | | | 626,428 |
Mortgage Backed Securities-commercial |
| | — |
| | 15,671 |
| | — |
| | 15,671 |
Collateralized mortgage obligations |
| | — |
| | 175,005 |
| | — |
| | 175,005 |
State and municipal |
| | — |
| | 378,203 |
| | 1,895 |
| | 380,098 |
Municipal taxable |
| | — |
| | 38,626 |
| | — |
| | 38,626 |
U.S. Treasury |
| | — |
| | 204 |
| | — |
| | 204 |
Collateralized debt obligations |
| | — |
| | — |
| | 3,359 |
| | 3,359 |
Other securities | | | — | | | 3,477 | | | 1,743 | | | 5,220 |
TOTAL | | $ | — | | $ | 1,357,737 | | $ | 6,997 | | $ | 1,364,734 |
Derivative Assets | | | | | | 1,030 | |
|
| |
|
|
Derivative Liabilities | | | | |
| (1,030) | |
|
| |
|
|
20
June 30, 2022 | ||||||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
U.S. Government agencies | $ | — | $ | 109,997 | $ | — | $ | 109,997 | ||||||||||||||||||
Mortgage Backed Securities-residential | — | 613,198 | — | 613,198 | ||||||||||||||||||||||
Mortgage Backed Securities-commercial | — | 8,961 | — | 8,961 | ||||||||||||||||||||||
Collateralized mortgage obligations | — | 206,120 | — | 206,120 | ||||||||||||||||||||||
State and municipal | — | 356,831 | 1,545 | 358,376 | ||||||||||||||||||||||
Municipal taxable | — | 33,401 | — | 33,401 | ||||||||||||||||||||||
U.S. Treasury | — | 2,075 | — | 2,075 | ||||||||||||||||||||||
Collateralized debt obligations | — | — | 3,087 | 3,087 | ||||||||||||||||||||||
Other securities | — | 1,743 | 1,494 | 3,237 | ||||||||||||||||||||||
TOTAL | $ | — | $ | 1,332,326 | $ | 6,126 | $ | 1,338,452 | ||||||||||||||||||
Derivative Assets | 1,564 | |||||||||||||||||||||||||
Derivative Liabilities | (1,564) |
December 31, 2021 | ||||||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
U.S. Government agencies | $ | — | $ | 120,123 | $ | — | $ | 120,123 | ||||||||||||||||||
Mortgage Backed Securities-residential | — | 626,428 | — | 626,428 | ||||||||||||||||||||||
Mortgage Backed Securities-commercial | — | 15,671 | — | 15,671 | ||||||||||||||||||||||
Collateralized mortgage obligations | — | 175,005 | — | 175,005 | ||||||||||||||||||||||
State and municipal | — | 378,203 | 1,895 | 380,098 | ||||||||||||||||||||||
Municipal taxable | — | 38,626 | — | 38,626 | ||||||||||||||||||||||
U.S. Treasury | — | 204 | — | 204 | ||||||||||||||||||||||
Collateralized debt obligations | — | — | 3,359 | 3,359 | ||||||||||||||||||||||
Other securities | — | 3,477 | 1,743 | 5,220 | ||||||||||||||||||||||
TOTAL | $ | — | $ | 1,357,737 | $ | 6,997 | $ | 1,364,734 | ||||||||||||||||||
Derivative Assets | 1,030 | |||||||||||||||||||||||||
Derivative Liabilities | (1,030) |
The tables below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and sixnine months ended JuneSeptember 30, 2022 and the year ended December 31, 2021.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||
(Dollar amounts in thousands) | State and municipal obligations | Collateralized debt obligations | Other securities | Total | |||||||||||||||||||
Beginning balance, April 1 | $ | 1,545 | $ | 3,531 | $ | 1,743 | $ | 6,819 | |||||||||||||||
Total realized/unrealized gains or losses | |||||||||||||||||||||||
Included in earnings | — | — | — | — | |||||||||||||||||||
Included in other comprehensive income | — | (444) | — | (444) | |||||||||||||||||||
Transfers | — | — | — | — | |||||||||||||||||||
Settlements | — | — | (249) | (249) | |||||||||||||||||||
Ending balance, June 30 | $ | 1,545 | $ | 3,087 | $ | 1,494 | $ | 6,126 |
Six Months Ended June 30, 2022 | |||||||||||||||||||||||
(Dollar amounts in thousands) | State and municipal obligations | Collateralized debt obligations | Other securities | Total | |||||||||||||||||||
Beginning balance, January 1 | $ | 1,895 | $ | 3,359 | $ | 1,743 | $ | 6,997 | |||||||||||||||
Total realized/unrealized gains or losses | |||||||||||||||||||||||
Included in earnings | — | — | — | — | |||||||||||||||||||
Included in other comprehensive income | — | (272) | — | (272) | |||||||||||||||||||
Transfers | — | — | — | — | |||||||||||||||||||
Settlements | (350) | — | (249) | (599) | |||||||||||||||||||
Ending balance, June 30 | $ | 1,545 | $ | 3,087 | $ | 1,494 | $ | 6,126 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | State and municipal obligations | Collateralized debt obligations | Other securities | Total | ||||||||||||||||||||||
Beginning balance, January 1 | $ | 1,895 | $ | 3,136 | $ | — | $ | 5,031 | ||||||||||||||||||
Total realized/unrealized gains or losses | ||||||||||||||||||||||||||
Included in earnings | — | — | — | — | ||||||||||||||||||||||
Included in other comprehensive income | — | 223 | — | 223 | ||||||||||||||||||||||
Purchases | — | — | 1,743 | 1,743 | ||||||||||||||||||||||
Settlements | — | — | — | — | ||||||||||||||||||||||
Ending balance, December 31 | $ | 1,895 | $ | 3,359 | $ | 1,743 | $ | 6,997 |
| | | | | | | | | | | | |
|
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||
| | Three Months Ended | ||||||||||
| | September 30, 2022 | ||||||||||
|
| State and |
| | |
| | |
| | | |
| | municipal | | Collateralized | | | | | | |||
(Dollar amounts in thousands) |
| obligations |
| debt obligations |
| Other securities |
| Total | ||||
Beginning balance, July 1 | | $ | 1,545 | | $ | 3,087 | | $ | 1,494 | | $ | 6,126 |
Total realized/unrealized gains or losses | |
| | | | | | | | |
|
|
Included in earnings | |
| — | |
| — | |
| — | |
| — |
Included in other comprehensive income | |
| — | |
| 24 | |
| — | |
| 24 |
Transfers | |
| — | |
| — | |
| 984 | |
| 984 |
Settlements | |
| — | |
| — | |
| — | |
| — |
Ending balance, September 30 | | $ | 1,545 | | $ | 3,111 | | $ | 2,478 | | $ | 7,134 |
| | | | | | | | | | | | |
| | Nine Months Ended | ||||||||||
| | September 30, 2022 | ||||||||||
|
| State and |
| | |
| | |
| | | |
| | municipal | | Collateralized | | | | | | |||
(Dollar amounts in thousands) |
| obligations |
| debt obligations |
| Other securities |
| Total | ||||
Beginning balance, January 1 | | $ | 1,895 | | $ | 3,359 | | $ | 1,743 | | $ | 6,997 |
Total realized/unrealized gains or losses | |
| | | | | | | | |
|
|
Included in earnings | |
| — | |
| — | |
| — | |
| — |
Included in other comprehensive income | |
| — | |
| (248) | |
| — | |
| (248) |
Transfers | |
| — | |
| — | |
| 984 | |
| 984 |
Settlements | |
| (350) | |
| — | |
| (249) | |
| (599) |
Ending balance, September 30 | | $ | 1,545 | | $ | 3,111 | | $ | 2,478 | | $ | 7,134 |
| | | | | | | | | | | | |
|
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||
| | Year Ended | ||||||||||
| | December 31, 2021 | ||||||||||
| | State and | | | | | | | | | | |
| | municipal | | Collateralized | | | | | | | ||
(Dollar amounts in thousands) |
| obligations |
| debt obligations |
| Other securities | | Total | ||||
Beginning balance, January 1 | | $ | 1,895 | | $ | 3,136 | | $ | — | | $ | 5,031 |
Total realized/unrealized gains or losses |
| |
|
| |
|
| |
| | |
|
Included in earnings |
| | — |
| | — |
| | — | | | — |
Included in other comprehensive income |
| | — |
| | 223 |
| | — | | | 223 |
Purchases |
| | — |
| | — |
| | 1,743 | | | 1,743 |
Settlements |
| | — |
| | — |
| | — | | | — |
Ending balance, December 31 | | $ | 1,895 | | $ | 3,359 | | $ | 1,743 | | $ | 6,997 |
The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at JuneSeptember 30, 2022.
| | | | | | | | | | |
(Dollar amounts in thousands) |
| Fair Value |
| Valuation Technique(s) |
| Unobservable Input(s) |
| Range |
| |
State and municipal obligations | | $ | 1,545 |
| Discounted cash flow |
| Discount rate |
| 3.73%-4.44 | % |
Collateralized debt obligations | | $ | 3,111 |
| Discounted cash flow |
| Discount rate |
| 2.67 | % |
Other securities | | $ | 2,478 |
| Discounted cash flow |
| Discount rate |
| 0.04%-3.35 | % |
Collateral dependent loans | | $ | 5,172 |
| Discounted cash flow |
| Discount rate for age of appraisal and market conditions |
| 0.00%-50.00 | % |
(Dollar amounts in thousands) | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | ||||||||||||||||||||||
State and municipal obligations | $ | 1,545 | Discounted cash flow | Discount rate | 3.73%-4.44% | |||||||||||||||||||||
Collateralized debt obligations | $ | 3,087 | Discounted cash flow | Discount rate | 2.67% | |||||||||||||||||||||
Other securities | $ | 1,494 | Discounted cash flow | Discount rate | 0.65%-1.15% | |||||||||||||||||||||
Collateral dependent loans | $ | 11,525 | Discounted cash flow | Discount rate for age of appraisal and market conditions | 0.00%-50.00% |
21
The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at December 31, 2021.
(Dollar amounts in thousands) | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | ||||||||||||||||||||||
State and municipal obligations | $ | 1,895 | Discounted cash flow | Discount rate | 3.41%-4.44% | |||||||||||||||||||||
Collateralized debt obligations | $ | 3,359 | Discounted cash flow | Discount rate | 1.83% | |||||||||||||||||||||
Other securities | $ | 1,743 | Discounted cash flow | Discount rate | 0.65%-1.40% | |||||||||||||||||||||
Collateral dependent loans | 12,839 | Discounted cash flow | Discount rate for age of appraisal and market conditions | 0.00%-50.00% |
| | | | | | | | | | |
(Dollar amounts in thousands) |
| Fair Value |
| Valuation Technique(s) |
| Unobservable Input(s) |
| Range |
| |
State and municipal obligations | | $ | 1,895 |
| Discounted cash flow |
| Discount rate |
| 3.41%-4.44 | % |
Collateralized debt obligations | | $ | 3,359 |
| Discounted cash flow |
| Discount rate |
| 1.83 | % |
Other securities | | $ | 1,743 |
| Discounted cash flow |
| Discount rate |
| 0.65%-1.40 | % |
Collateral dependent loans | | | 12,839 |
| Discounted cash flow |
| Discount rate for age of appraisal and market conditions |
| 0.00%-50.00 | % |
Fair value is measured based on the value of the collateral securing those loans, and is determined using several methods. Generally the fair value of real estate is determined based on appraisals by qualified licensed appraisers. Appraisals for real estate generally use three methods to derive value: cost, sales or market comparison and income approach. The cost method bases value on the cost to replace current property. The market comparison evaluates the sales price of similar properties in the same market area. The income approach considers net operating income generated by the property and the investor’s required return. The final fair value is based on a reconciliation of these three approaches. If an appraisal is not available, the fair value may be determined by using a cash flow analysis, a broker’s opinion of value, the net present value of future cash flows, or an observable market price from an active market. Fair value of other real estate is based upon the current appraised values of the properties as determined by qualified licensed appraisers and the Company’s judgment of other relevant market conditions. Appraisals are obtained annually and reductions in value are recorded as a valuation through a charge to expense. The primary unobservable input used by management in estimating fair value are additional discounts to the appraised value to consider market conditions and the age of the appraisal, which are based on management’s past experience in resolving these types of properties. These discounts range from 0% to 50%. Values for non-real estate collateral, such as business equipment, are based on appraisals performed by qualified licensed appraisers or the customers financial statements. Values for non real estate collateral use much higher discounts than real estate collateral. Other real estate and individually evaluated loans carried at fair value are primarily comprised of smaller balance properties.
The carrying amounts and estimated fair value of financial instruments at JuneSeptember 30, 2022 and December 31, 2021, are shown below. Carrying amount is the estimated fair value for cash and due from banks, federal funds sold, short-term borrowings, accrued interest receivable and payable, demand deposits, short-term debt and variable-rate loans or deposits that reprice frequently and fully. Security fair values were described previously. For fixed-rate, collectively evaluated loans or deposits, variable rate loans or deposits with infrequent repricing or repricing limits, and for longer-term borrowings, fair value is based on discounted cash flows using current market rates applied to the estimated life and considering credit risk. The valuation of individually evaluated loans was described previously. Loan fair value estimates represent an exit price. Fair values of loans held for sale are based on market bids on the loans or similar loans. It was not practicable to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its transferability. Fair value of debt is based on current rates for similar financing. The fair value of off-balance sheet items is not considered material.
| | | | | | | | | | | | | | | |
|
| September 30, 2022 | |||||||||||||
| | Carrying | | Fair Value | |||||||||||
(Dollar amounts in thousands) |
| Value |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Cash and due from banks | | $ | 328,222 | | $ | 29,207 | | $ | 299,015 | | $ | — | | $ | 328,222 |
Federal funds sold | | | 8,223 | | | — | | | 8,223 | | | — | | | 8,223 |
Securities available-for-sale | |
| 1,331,985 | |
| — | |
| 1,324,851 | |
| 7,134 | |
| 1,331,985 |
Restricted stock | |
| 15,372 | |
| n/a |
| | n/a |
| | n/a |
| | n/a |
Loans, net | |
| 2,930,980 | |
| — | |
| — | |
| 2,591,866 | |
| 2,591,866 |
Accrued interest receivable | |
| 19,128 | |
| — | |
| 6,785 | |
| 12,343 | |
| 19,128 |
Deposits | |
| (4,407,506) | |
| — | |
| (4,389,442) | |
| — | |
| (4,389,442) |
Short-term borrowings | |
| (89,321) | |
| — | |
| (89,321) | |
| — | |
| (89,321) |
Other borrowings | |
| (9,593) | |
| — | |
| (8,827) | |
| — | |
| (8,827) |
Accrued interest payable | |
| (479) | |
| — | |
| (479) | |
| — | |
| (479) |
22
June 30, 2022 | ||||||||||||||||||||||||||||||||
Carrying | Fair Value | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Cash and due from banks | $ | 412,136 | $ | 25,623 | $ | 386,513 | $ | — | $ | 412,136 | ||||||||||||||||||||||
Federal funds sold | 11,133 | — | 11,133 | — | 11,133 | |||||||||||||||||||||||||||
Securities available-for-sale | 1,338,452 | — | 1,332,326 | 6,126 | 1,338,452 | |||||||||||||||||||||||||||
Restricted stock | 15,620 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||
Loans, net | 2,851,020 | — | — | 2,613,980 | 2,613,980 | |||||||||||||||||||||||||||
Accrued interest receivable | 16,701 | — | 6,338 | 10,363 | 16,701 | |||||||||||||||||||||||||||
Deposits | (4,383,257) | — | (4,390,916) | — | (4,390,916) | |||||||||||||||||||||||||||
Short-term borrowings | (84,232) | — | (84,232) | — | (84,232) | |||||||||||||||||||||||||||
Other borrowings | (15,912) | — | (15,446) | — | (15,446) | |||||||||||||||||||||||||||
Accrued interest payable | (543) | — | (543) | — | (543) |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Carrying | Fair Value | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Cash and due from banks | $ | 682,807 | $ | 24,901 | $ | 657,906 | $ | — | $ | 682,807 | ||||||||||||||||||||||
Federal funds sold | 308 | — | 308 | — | 308 | |||||||||||||||||||||||||||
Securities available-for-sale | 1,364,734 | — | 1,357,737 | 6,997 | 1,364,734 | |||||||||||||||||||||||||||
Restricted stock | 16,200 | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||
Loans, net | 2,767,590 | — | — | 2,682,257 | 2,682,257 | |||||||||||||||||||||||||||
Accrued interest receivable | 16,946 | — | 4,709 | 12,237 | 16,946 | |||||||||||||||||||||||||||
Deposits | (4,409,569) | — | (4,418,117) | — | (4,418,117) | |||||||||||||||||||||||||||
Short-term borrowings | (93,374) | — | (93,374) | — | (93,374) | |||||||||||||||||||||||||||
Other borrowings | (15,937) | — | (16,483) | — | (16,483) | |||||||||||||||||||||||||||
Accrued interest payable | (687) | — | (687) | — | (687) |
| | | | | | | | | | | | | | | |
|
| December 31, 2021 | |||||||||||||
| | Carrying | | Fair Value | |||||||||||
(Dollar amounts in thousands) |
| Value |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Cash and due from banks | | $ | 682,807 | | $ | 24,901 | | $ | 657,906 | | $ | — | | $ | 682,807 |
Federal funds sold | | | 308 | | | — | | | 308 | | | — | | | 308 |
Securities available-for-sale |
| | 1,364,734 |
| | — |
| | 1,357,737 |
| | 6,997 |
| | 1,364,734 |
Restricted stock |
| | 16,200 |
| | n/a |
| | n/a |
| | n/a |
| | n/a |
Loans, net |
| | 2,767,590 |
| | — |
| | — |
| | 2,682,257 |
| | 2,682,257 |
Accrued interest receivable |
| | 16,946 |
| | — |
| | 4,709 |
| | 12,237 |
| | 16,946 |
Deposits |
| | (4,409,569) |
| | — |
| | (4,418,117) |
| | — |
| | (4,418,117) |
Short-term borrowings |
| | (93,374) |
| | — |
| | (93,374) |
| | — |
| | (93,374) |
Other borrowings |
| | (15,937) |
| | — |
| | (16,483) |
| | — |
| | (16,483) |
Accrued interest payable |
| | (687) |
| | — |
| | (687) |
| | — |
| | (687) |
5.Short-Term Borrowings
Period–end short-term borrowings were comprised of the following:
(Dollar amounts in thousands) | June 30, 2022 | December 31, 2021 | ||||||||||||
Federal Funds Purchased | $ | 2,350 | $ | 3,275 | ||||||||||
Repurchase Agreements | 81,882 | 90,099 | ||||||||||||
$ | 84,232 | $ | 93,374 |
| | | | | | | |
(Dollar amounts in thousands) | | September 30, 2022 |
| December 31, 2021 | | ||
Federal Funds Purchased | | $ | 3,350 | | $ | 3,275 | |
Repurchase Agreements | |
| 85,971 | |
| 90,099 | |
| | $ | 89,321 | | $ | 93,374 | |
The Corporation enters into sales of securities under agreements to repurchase. The amounts received under these agreements represent short-term borrowings and are reflected as a liability in the consolidated balance sheets. The securities underlying these agreements are included in investment securities in the consolidated balance sheets. The Corporation has no control over the market value of the securities, which fluctuates due to market conditions. However, the Corporation is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. The Corporation manages this risk by maintaining an unpledged securities portfolio that it believes is sufficient to cover a decline in the market value of the securities sold under agreements to repurchase.
Collateral pledged to repurchase agreements by remaining maturity are as follows:
June 30, 2022 | ||||||||||||||||||||||||||||||||
Repurchase Agreements | Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Overnight and continuous | Up to 30 days | 30 - 90 days | Greater than 90 days | Total | |||||||||||||||||||||||||||
Mortgage Backed Securities - Residential and Collateralized Mortgage Obligations | $ | 76,142 | $ | 150 | $ | 143 | $ | 5,447 | $ | 81,882 |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Repurchase Agreements | Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Overnight and continuous | Up to 30 days | 30 - 90 days | Greater than 90 days | Total | |||||||||||||||||||||||||||
Mortgage Backed Securities - Residential and Collateralized Mortgage Obligations | $ | 83,576 | $ | — | $ | 5,816 | $ | 707 | $ | 90,099 |
| | | | | | | | | | | | | | | |
|
| September 30, 2022 | |||||||||||||
Repurchase Agreements |
| Remaining Contractual Maturity of the Agreements | |||||||||||||
| | Overnight | | | | | | | | Greater | | | | ||
|
| and |
| Up to 30 |
| 30 - 90 |
| than 90 |
| | | ||||
(Dollar amounts in thousands) |
| continuous |
| days |
| days |
| days |
| Total | |||||
Mortgage Backed Securities - Residential and Collateralized | | $ | 81,431 | | $ | — | | $ | — | | $ | 4,540 | | $ | 85,971 |
| | | | | | | | | | | | | | | |
|
| December 31, 2021 | |||||||||||||
Repurchase Agreements | | Remaining Contractual Maturity of the Agreements | |||||||||||||
| | Overnight | | | | | | | | Greater | | | | ||
| | and | | Up to 30 | | 30 - 90 | | than 90 | | | | ||||
(Dollar amounts in thousands) |
| continuous |
| days |
| days |
| days |
| Total | |||||
Mortgage Backed Securities - Residential and Collateralized | | $ | 83,576 | | $ | — | | $ | 5,816 | | $ | 707 | | $ | 90,099 |
6.Components of Net Periodic Benefit Cost
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | Pension Benefits | Post-Retirement Health Benefits | Pension Benefits | Post-Retirement Health Benefits | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Service cost | $ | 298 | $ | 338 | $ | 9 | $ | 11 | $ | 595 | $ | 677 | $ | 17 | $ | 22 | ||||||||||||||||||||||||||||||||||
Interest cost | 707 | 658 | 27 | 25 | 1,413 | 1,316 | 55 | 51 | ||||||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | (1,228) | (1,179) | — | — | (2,455) | (2,357) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net amortization of prior service cost | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net amortization of net (gain) loss | 314 | 518 | — | — | 629 | 1,036 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost | $ | 91 | $ | 335 | $ | 36 | $ | 36 | $ | 182 | $ | 672 | $ | 72 | $ | 73 |
23
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||||||||||||||||
| | | | | | | | Post-Retirement | | | | | | | | Post-Retirement | ||||||||
| | Pension Benefits | | Health Benefits | | Pension Benefits | | Health Benefits | ||||||||||||||||
(Dollar amounts in thousands) |
| 2022 |
| 2021 | | 2022 |
| 2021 | | 2022 |
| 2021 | | 2022 |
| 2021 | ||||||||
Service cost | | $ | 297 | | $ | 339 | | $ | 8 | | $ | 10 | | $ | 892 | | $ | 1,016 | | $ | 25 | | $ | 32 |
Interest cost | |
| 707 | |
| 658 | |
| 28 | |
| 26 | |
| 2,120 | |
| 1,974 | |
| 83 | |
| 77 |
Expected return on plan assets | |
| (1,227) | |
| (1,178) | |
| — | |
| — | |
| (3,682) | |
| (3,535) | |
| — | |
| — |
Net amortization of prior service cost | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — |
Net amortization of net (gain) loss | | | 315 | | | 518 | | | — | | | — | | | 944 | | | 1,554 | | | — | | | — |
Net Periodic Benefit Cost | | $ | 92 | | $ | 337 | | $ | 36 | | $ | 36 | | $ | 274 | | $ | 1,009 | | $ | 108 | | $ | 109 |
Employer Contributions
First Financial Corporation previously disclosed in its financial statements for the year ended December 31, 2021 that it expected to contribute $250 thousand and $703 thousand respectively to its Pension Plan and ESOP and $248 thousand to the Post Retirement Health Benefits Plan in 2022. Contributions of $63$95 thousand have been made to the Pension Plan thus far in 2022. Contributions of $116$171 thousand have been made through the first sixnine months of 2022 for the Post Retirement Health Benefits plan. No contributions have been made in 2022 for the ESOP. The Pension plan was frozen for most employees at the end of 2012 and for those employees there will be discretionary contributions to the ESOP plan and a 401K plan in place of the former Pension benefit. In the first sixnine months of 2022 and 2021 there has been $1.3$1.7 million and $1.4$2.3 million of expense accrued for potential contributions to these alternative retirement benefit options.
7.New accounting standards
Recent Accounting Pronouncements:
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The
In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-02, "Financial“Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures"Disclosures” (ASU 2022-02). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (TDRs) in ASC 310-40, "Receivables“Receivables - Troubled Debt Restructurings by Creditors"Creditors” for entities that have adopted the current expected credit loss (CECL) model introduced by ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13). ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, "Financial“Financial Instruments—Credit Losses—Measured at Amortized Cost"Cost”. ASU 2022-02 is effective for the Corporation for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Corporation is evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures.
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03 “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.”These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 is effective for the Corporation for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption is permitted. The Corporation is evaluating the effect that ASU 2022-03 will have on its consolidated financial statements and related disclosures.
24
All of the Corporation'sCorporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporation'sCorporation’s sources of Non-Interest Income for the three and sixnine months ended JuneSeptember 30, 2022 and 2021. Items outside the scope of ASC 606 are noted as such.
| | | | | | | | | | | | | |
|
| Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
(Dollar amounts in thousands) |
| 2022 |
| 2021 | | 2022 |
| 2021 | | ||||
Non-interest income |
| |
|
| |
| | |
|
| |
| |
Service charges on deposits and debit card fee income | | $ | 6,965 | | $ | 6,421 | | $ | 20,698 | | $ | 18,031 | |
Asset management fees | |
| 1,015 | |
| 1,156 | |
| 3,687 | |
| 3,774 | |
Interchange income | |
| 149 | |
| 224 | |
| 418 | |
| 423 | |
Net gains on sales of loans (a) | |
| 440 | |
| 1,426 | |
| 1,705 | |
| 4,268 | |
Loan servicing fees (a) | |
| 457 | |
| 344 | |
| 1,184 | |
| 1,485 | |
Net gains/(losses) on sales of securities (a) | |
| — | |
| 5 | |
| 5 | |
| 111 | |
Other service charges and fees (a) | |
| 160 | |
| 135 | |
| 488 | |
| 957 | |
Other (b) | |
| 2,954 | |
| 1,381 | |
| 7,963 | (c) |
| 2,268 | |
Total non-interest income | | $ | 12,140 | | $ | 11,092 | | $ | 36,148 | | $ | 31,317 | |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
(Dollar amounts in thousands) | 2022 | 2021 | 2022 | 2020 | ||||||||||||||||||||||
Non-interest income | ||||||||||||||||||||||||||
Service charges on deposits and debit card fee income | $ | 7,079 | $ | 6,015 | $ | 13,733 | $ | 11,610 | ||||||||||||||||||
Asset management fees | 1,300 | 1,313 | 2,672 | 2,618 | ||||||||||||||||||||||
Interchange income | 151 | 115 | 269 | 199 | ||||||||||||||||||||||
Net gains on sales of loans (a) | 603 | 1,450 | 1,265 | 2,843 | ||||||||||||||||||||||
Loan servicing fees (a) | 368 | 788 | 727 | 1,141 | ||||||||||||||||||||||
Net gains/(losses) on sales of securities (a) | — | 258 | 5 | 106 | ||||||||||||||||||||||
Other service charges and fees (a) | 222 | 406 | 328 | 822 | ||||||||||||||||||||||
Other (b) | 547 | 586 | 5,009 | (c) | 886 | |||||||||||||||||||||
Total non-interest income | $ | 10,270 | $ | 10,931 | $ | 24,008 | $ | 20,225 |
Service charges on deposits: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer'scustomer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer'scustomer’s account balance.
Asset management fees: The Corporation earns asset management fees from its contracts with trust customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e. the trade date. Other related services provided and the fees the Corporation earns, which are based on a fixed fee schedule, are recognized when the services are rendered.
Interchange income: The Corporation earns interchange fees from debit and credit cardholder transactions conducted through the payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.
Gains/Losses on sales of OREO: The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.
25
On November 5, 2021, the Corporation completed its acquisition of Hancock Bancorp, Inc. and its banking subsidiary, Hancock Bank and Trust Company. Therefore, the results of Hancock Bancorp have been included in the results of operations beginning on November 5, 2021. Pursuant to the terms of the merger agreement, each issued and outstanding share of Hancock Bancorp, Inc. common stock, issued and outstanding, was converted into the right to receive $18.38 per share in cash. The aggregate value of the transaction was $31.36 million. Acquisition-related costs of $1.2 million are included in the Corporation'sCorporation’s income statement for the year ended December 31, 2021.
Goodwill of $8.4 million arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.
(Dollar amounts in thousands) | As Initially Reported | Measurement Period Adjustments | As Adjusted | |||||||||||||||||||||||||||||
Consideration | ||||||||||||||||||||||||||||||||
Cash consideration | $ | 31,358 | $ | — | $ | 31,358 | ||||||||||||||||||||||||||
Fair value of total consideration transferred | $ | 31,358 | $ | — | $ | 31,358 | ||||||||||||||||||||||||||
Assets acquired | ||||||||||||||||||||||||||||||||
Cash | $ | 3,046 | $ | — | $ | 3,046 | ||||||||||||||||||||||||||
Investment securities available-for-sale | 57,054 | — | 57,054 | |||||||||||||||||||||||||||||
Federal funds sold | 10,470 | — | 10,470 | |||||||||||||||||||||||||||||
Bank owned life insurance | 9,753 | — | 9,753 | |||||||||||||||||||||||||||||
Federal Home Loan Bank stock | 1,362 | — | 1,362 | |||||||||||||||||||||||||||||
Loans | 227,827 | — | 227,827 | |||||||||||||||||||||||||||||
Premises and equipment | 8,180 | — | 8,180 | |||||||||||||||||||||||||||||
Core deposit intangibles | 652 | — | 652 | |||||||||||||||||||||||||||||
Other assets | 4,567 | (850) | 3,717 | |||||||||||||||||||||||||||||
Total assets acquired | 322,911 | (850) | 322,061 | |||||||||||||||||||||||||||||
Liabilities assumed | ||||||||||||||||||||||||||||||||
Deposits | 286,098 | — | 286,098 | |||||||||||||||||||||||||||||
FHLB advances | 11,042 | — | 11,042 | |||||||||||||||||||||||||||||
Other liabilities | 1,956 | — | 1,956 | |||||||||||||||||||||||||||||
Total liabilities assumed | 299,096 | — | 299,096 | |||||||||||||||||||||||||||||
Net identifiable assets | 23,815 | (850) | 22,965 | |||||||||||||||||||||||||||||
Goodwill | $ | 7,543 | $ | 850 | $ | 8,393 |
| | | | | | | | | | |
| | | | | Measurement | | | | | |
| | As Initially | | Period | | | | | ||
(Dollar amounts in thousands) |
| Reported | | Adjustments | | As Adjusted | | |||
Consideration | |
| | |
| | |
| | |
Cash consideration | | $ | 31,358 | | $ | — | | $ | 31,358 | |
| | | | | | | | | | |
Fair value of total consideration transferred | | $ | 31,358 | | $ | — | | $ | 31,358 | |
| | | | | | | | | | |
Assets acquired | |
|
| |
|
| |
|
| |
Cash | | $ | 3,046 | | $ | — | | $ | 3,046 | |
Investment securities available-for-sale | |
| 57,054 | |
| — | |
| 57,054 | |
Federal funds sold | |
| 10,470 | |
| — | |
| 10,470 | |
Bank owned life insurance | |
| 9,753 | |
| — | |
| 9,753 | |
Federal Home Loan Bank stock | |
| 1,362 | |
| — | |
| 1,362 | |
Loans | |
| 227,827 | |
| — | |
| 227,827 | |
Premises and equipment | |
| 8,180 | |
| — | |
| 8,180 | |
Core deposit intangibles | |
| 652 | |
| — | |
| 652 | |
Other assets | |
| 4,567 | |
| (850) | |
| 3,717 | |
Total assets acquired | |
| 322,911 | |
| (850) | |
| 322,061 | |
| | | | | | | | | | |
Liabilities assumed | |
|
| |
|
| |
|
| |
Deposits | |
| 286,098 | |
| — | |
| 286,098 | |
FHLB advances | |
| 11,042 | |
| — | |
| 11,042 | |
Other liabilities | |
| 1,956 | |
| — | |
| 1,956 | |
Total liabilities assumed | |
| 299,096 | |
| — | |
| 299,096 | |
| | | | | | | | | | |
Net identifiable assets | |
| 23,815 | |
| (850) | |
| 22,965 | |
Goodwill | | $ | 7,543 | | $ | 850 | | $ | 8,393 | |
The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Corporation believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to guidance relating to purchase credit impaired loans, which have shown evidence of credit deterioration since origination.
A goodwill adjustment was recorded in the second quarter 2022 of $850 thousand. The deferred tax assets were adjusted for the acquisition based on the final short-period income tax return that was filed for Hancock Bancorp, Inc. in the second quarter 2022.
26
The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2020. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.
Year ended December 31, | |||||||||||
(Dollar amounts in thousands, except per share data) | 2021 | 2020 | |||||||||
Net interest income | $ | 150,806 | $ | 156,051 | |||||||
Net income | $ | 53,714 | $ | 55,958 | |||||||
Basic and diluted earnings per share | $ | 4.07 | $ | 4.08 |
| | | | | | |
|
| Year ended December 31, | ||||
(Dollar amounts in thousands, except per share data) | | 2021 | | 2020 | ||
Net interest income | | $ | 150,806 | | $ | 156,051 |
Net income | | $ | 53,714 | | $ | 55,958 |
Basic and diluted earnings per share | | $ | 4.07 | | $ | 4.08 |
The fair value of purchased financial assets with credit deterioration was $12.9 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $18.3 million. The Corporation estimates, on the date of acquisition, that $4.4 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.
The following tables summarize the changes, net of tax, within each classification of accumulated other comprehensive income/(loss) for the three and sixnine months ended JuneSeptember 30, 2022 and 2021.
| | | | | | | | | |
| | Unrealized | | | | | | | |
| | gains and | | | | | | | |
| | (Losses) on available- | | 2022 | |||||
| | for-sale | | Retirement | | | | ||
(Dollar amounts in thousands) |
| Securities |
| plans |
| Total | |||
Beginning balance, July 1, | | $ | (109,159) | | $ | (17,471) | | $ | (126,630) |
Change in other comprehensive income (loss) before reclassification | |
| (41,060) | |
| — | |
| (41,060) |
Amounts reclassified from accumulated other comprehensive income | |
| — | |
| 315 | |
| 315 |
Net current period other comprehensive income (loss) | |
| (41,060) | |
| 315 | |
| (40,745) |
Ending balance, September 30, | | $ | (150,219) | | $ | (17,156) | | $ | (167,375) |
| | | | | | | | | |
| | Unrealized | | | | | | | |
| | gains and | | | | | | | |
| | (Losses) on available- | | 2022 | |||||
| | for-sale | | Retirement | | | | ||
(Dollar amounts in thousands) |
| Securities |
| plans |
| Total | |||
Beginning balance, January 1, | | $ | 15,674 | | $ | (18,100) | | $ | (2,426) |
Change in other comprehensive income (loss) before reclassification | |
| (165,889) | |
| — | |
| (165,889) |
Amounts reclassified from accumulated other comprehensive income | |
| (4) | |
| 944 | |
| 940 |
Net current period other comprehensive income (loss) | |
| (165,893) | |
| 944 | |
| (164,949) |
Ending balance, September 30, | | $ | (150,219) | | $ | (17,156) | | $ | (167,375) |
| | | | | | | | | |
| | Unrealized | | | | | | | |
| | gains and | | | | | | | |
| | (Losses) on available- | | 2021 | |||||
| | for-sale | | Retirement | |
| | ||
(Dollar amounts in thousands) |
| Securities |
| plans |
| Total | |||
Beginning balance, July 1, | | $ | 24,866 | | $ | (23,454) | | $ | 1,412 |
Change in other comprehensive income (loss) before reclassification | |
| (2,981) | |
| — | |
| (2,981) |
Amounts reclassified from accumulated other comprehensive income | |
| (4) | |
| 471 | |
| 467 |
Net current period other comprehensive income (loss) | |
| (2,985) | |
| 471 | |
| (2,514) |
Ending balance, September 30, | | $ | 21,881 | | $ | (22,983) | | $ | (1,102) |
Unrealized | ||||||||||||||||||||
gains and | 2022 | |||||||||||||||||||
(Losses) on available- for-sale | Retirement | |||||||||||||||||||
(Dollar amounts in thousands) | Securities | plans | Total | |||||||||||||||||
Beginning balance, April 1, | $ | (53,240) | $ | (17,785) | $ | (71,025) | ||||||||||||||
Change in other comprehensive income (loss) before reclassification | (55,919) | — | (55,919) | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 314 | 314 | |||||||||||||||||
Net current period other comprehensive income (loss) | (55,919) | 314 | (55,605) | |||||||||||||||||
Ending balance, June 30, | $ | (109,159) | $ | (17,471) | $ | (126,630) |
27
Unrealized | ||||||||||||||||||||
gains and | 2022 | |||||||||||||||||||
(Losses) on available- for-sale | Retirement | |||||||||||||||||||
(Dollar amounts in thousands) | Securities | plans | Total | |||||||||||||||||
Beginning balance, January 1, | $ | 15,674 | $ | (18,100) | $ | (2,426) | ||||||||||||||
Change in other comprehensive income (loss) before reclassification | (124,829) | — | (124,829) | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (4) | 629 | 625 | |||||||||||||||||
Net current period other comprehensive loss | — | — | — | |||||||||||||||||
Net current period other comprehensive income (loss) | (124,833) | 629 | (124,204) | |||||||||||||||||
Ending balance, June 30, | $ | (109,159) | $ | (17,471) | $ | (126,630) |
| | | | | | | | | |
| | Unrealized | | | | | | | |
| | gains and | | | | | | | |
| | (Losses) on available- | | 2021 | |||||
| | for-sale | | Retirement | |
| | ||
(Dollar amounts in thousands) |
| Securities |
| plans |
| Total | |||
Beginning balance, January 1, | | $ | 34,162 | | $ | (24,398) | | $ | 9,764 |
Change in other comprehensive income (loss) before reclassification | |
| (12,198) | |
| — | |
| (12,198) |
Amounts reclassified from accumulated other comprehensive income | |
| (83) | |
| 1,415 | |
| 1,332 |
Net current period other comprehensive income (loss) | |
| (12,281) | |
| 1,415 | |
| (10,866) |
Ending balance, September 30, | | $ | 21,881 | | $ | (22,983) | | $ | (1,102) |
| | | | | | | | | |
| | Balance at | | Current Period | | Balance at | |||
(Dollar amounts in thousands) |
| 7/1/2022 |
| Change |
| 9/30/2022 | |||
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment | | $ | (111,474) | | $ | (41,078) | | $ | (152,552) |
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment | |
| 2,315 | |
| 18 | |
| 2,333 |
Total unrealized loss on securities available-for-sale | | $ | (109,159) | | $ | (41,060) | | $ | (150,219) |
Unrealized gain (loss) on retirement plans | |
| (17,471) | |
| 315 | |
| (17,156) |
TOTAL | | $ | (126,630) | | $ | (40,745) | | $ | (167,375) |
| | | | | | | | | |
| | Balance at | | Current Period | | Balance at | |||
(Dollar amounts in thousands) |
| 1/1/2022 |
| Change |
| 9/30/2022 | |||
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment | | $ | 13,155 | | $ | (165,707) | | $ | (152,552) |
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment | |
| 2,519 | |
| (186) | |
| 2,333 |
Total unrealized gain (loss) on securities available-for-sale | | $ | 15,674 | | $ | (165,893) | | $ | (150,219) |
Unrealized loss on retirement plans | |
| (18,100) | |
| 944 | |
| (17,156) |
TOTAL | | $ | (2,426) | | $ | (164,949) | | $ | (167,375) |
| | | | | | | | | |
| | Balance at | | Current Period | | Balance at | |||
(Dollar amounts in thousands) |
| 7/1/2021 |
| Change |
| 9/30/2021 | |||
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment | | $ | 22,417 | | $ | (2,969) | | $ | 19,448 |
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment | |
| 2,449 | |
| (16) | |
| 2,433 |
Total unrealized gain (loss) on securities available-for-sale | | $ | 24,866 | | $ | (2,985) | | $ | 21,881 |
Unrealized loss on retirement plans | |
| (23,454) | |
| 471 | |
| (22,983) |
TOTAL | | $ | 1,412 | | $ | (2,514) | | $ | (1,102) |
| | | | | | | | | |
| | Balance at | | Current Period | | Balance at | |||
(Dollar amounts in thousands) |
| 1/1/2021 |
| Change |
| 9/30/2021 | |||
Unrealized gains (losses) on securities available-for-sale without other than temporary impairment | | $ | 31,810 | | $ | (12,362) | | $ | 19,448 |
Unrealized gains (losses) on securities available-for-sale with other than temporary impairment | |
| 2,352 | |
| 81 | |
| 2,433 |
Total unrealized income (loss) on securities available-for-sale | | $ | 34,162 | | $ | (12,281) | | $ | 21,881 |
Unrealized gain (loss) on retirement plans | |
| (24,398) | |
| 1,415 | |
| (22,983) |
TOTAL | | $ | 9,764 | | $ | (10,866) | | $ | (1,102) |
28
Unrealized | ||||||||||||||||||||
gains and | 2021 | |||||||||||||||||||
(Losses) on available- for-sale | Retirement | |||||||||||||||||||
(Dollar amounts in thousands) | Securities | plans | Total | |||||||||||||||||
Beginning balance, April 1, | $ | 23,094 | $ | (23,926) | $ | (832) | ||||||||||||||
Change in other comprehensive income (loss) before reclassification | 1,965 | — | 1,965 | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (193) | 472 | 279 | |||||||||||||||||
Net current period other comprehensive income (loss) | 1,772 | 472 | 2,244 | |||||||||||||||||
Ending balance, June 30, | $ | 24,866 | $ | (23,454) | $ | 1,412 |
Unrealized | ||||||||||||||||||||
gains and | 2021 | |||||||||||||||||||
(Losses) on available- for-sale | Retirement | |||||||||||||||||||
(Dollar amounts in thousands) | Securities | plans | Total | |||||||||||||||||
Beginning balance, January 1, | $ | 34,162 | $ | (24,398) | $ | 9,764 | ||||||||||||||
Change in other comprehensive income (loss) before reclassification | (9,217) | — | (9,217) | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (79) | 944 | 865 | |||||||||||||||||
Net current period other comprehensive income (loss) | (9,296) | 944 | (8,352) | |||||||||||||||||
ASU 2018-02 adjustment | — | — | — | |||||||||||||||||
Ending balance, June 30, | $ | 24,866 | $ | (23,454) | $ | 1,412 |
Balance at | Current Period | Balance at | ||||||||||||||||||
(Dollar amounts in thousands) | 4/1/2022 | Change | 6/30/2022 | |||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||
without other than temporary impairment | $ | (55,888) | $ | (55,586) | $ | (111,474) | ||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||
with other than temporary impairment | 2,648 | (333) | 2,315 | |||||||||||||||||
Total unrealized loss on securities available-for-sale | $ | (53,240) | $ | (55,919) | $ | (109,159) | ||||||||||||||
Unrealized gain (loss) on retirement plans | (17,785) | 314 | (17,471) | |||||||||||||||||
TOTAL | $ | (71,025) | $ | (55,605) | $ | (126,630) | ||||||||||||||
Balance at | Current Period | Balance at | ||||||||||||||||||
(Dollar amounts in thousands) | 1/1/2022 | Change | 6/30/2022 | |||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||
without other than temporary impairment | $ | 13,155 | $ | (124,629) | $ | (111,474) | ||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||
with other than temporary impairment | 2,519 | (204) | 2,315 | |||||||||||||||||
Total unrealized gain (loss) on securities available-for-sale | $ | 15,674 | $ | (124,833) | $ | (109,159) | ||||||||||||||
Unrealized loss on retirement plans | (18,100) | 629 | (17,471) | |||||||||||||||||
TOTAL | $ | (2,426) | $ | (124,204) | $ | (126,630) |
Balance at | Current Period | Balance at | ||||||||||||||||||||||||
(Dollar amounts in thousands) | 4/1/2021 | Change | 6/30/2021 | |||||||||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||||||||
without other than temporary impairment | $ | 20,598 | $ | 1,819 | $ | 22,417 | ||||||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||||||||
with other than temporary impairment | 2,496 | (47) | 2,449 | |||||||||||||||||||||||
Total unrealized gain (loss) on securities available-for-sale | $ | 23,094 | $ | 1,772 | $ | 24,866 | ||||||||||||||||||||
Unrealized loss on retirement plans | (23,926) | 472 | (23,454) | |||||||||||||||||||||||
TOTAL | $ | (832) | $ | 2,244 | $ | 1,412 |
Balance at | Current Period | Balance at | ||||||||||||||||||||||||
(Dollar amounts in thousands) | 1/1/2021 | Change | 6/30/2021 | |||||||||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||||||||
without other than temporary impairment | $ | 31,810 | $ | (9,393) | $ | 22,417 | ||||||||||||||||||||
Unrealized gains (losses) on securities available-for-sale | ||||||||||||||||||||||||||
with other than temporary impairment | 2,352 | 97 | 2,449 | |||||||||||||||||||||||
Total unrealized income (loss) on securities available-for-sale | $ | 34,162 | $ | (9,296) | $ | 24,866 | ||||||||||||||||||||
Unrealized gain (loss) on retirement plans | (24,398) | 944 | (23,454) | |||||||||||||||||||||||
TOTAL | $ | 9,764 | $ | (8,352) | $ | 1,412 |
| | | | | | | ||||||||
| Three Months Ended | | ||||||||||||
Details about accumulated | | Amount reclassified from | | | Affected line item in | |||||||||
other comprehensive | | accumulated other | | | the statement where | |||||||||
income components | comprehensive income | | net income is presented | |||||||||||
| | (in thousands) | | | | |||||||||
Unrealized gains and losses | | $ | — | | Net securities gains (losses) | |||||||||
on available-for-sale | | — | | Income tax expense | ||||||||||
securities | | $ | — | | Net of tax | |||||||||
| | | | | | | ||||||||
Amortization of | | $ | (420) | (a) | | Salary and benefits | ||||||||
retirement plan items | | 105 | | Income tax expense | ||||||||||
| | $ | (315) | | Net of tax | |||||||||
Total reclassifications for the period | | $ | (315) | | Net of tax |
(a) | Included in the computation of net periodic benefit cost. (see Footnote 6 for additional details). |
| | | | | | |
|
| Nine Months Ended September 30, 2022 |
| |
| |
Details about accumulated | | Amount reclassified from | | | Affected line item in | |
other comprehensive | | accumulated other | | | the statement where | |
income components |
| comprehensive income |
| | net income is presented | |
| | (in thousands) | | | | |
Unrealized gains and losses | | $ | 5 |
| | Net securities gains (losses) |
on available-for-sale | |
| (1) |
| | Income tax expense |
securities | | $ | 4 |
| | Net of tax |
| | | | | | |
Amortization of | | $ | (1,260) | (a) | | Salary and benefits |
retirement plan items | |
| 316 |
| | Income tax expense |
| | $ | (944) |
| | Net of tax |
Total reclassifications for the period | | $ | (940) |
| | Net of tax |
(a) | Included in the computation of net periodic benefit cost. (see Footnote 6 for additional details). |
29
| | | | | | |
| | Three Months Ended September 30, 2021 | | | | |
Details about accumulated | | Amount reclassified from | | | Affected line item in | |
other comprehensive | | accumulated other | | | the statement where | |
income components |
| comprehensive income |
| | net income is presented | |
|
| (in thousands) |
| | | |
Unrealized gains and losses | | $ | 5 |
| | Net securities gains (losses) |
on available-for-sale | |
| (1) |
| | Income tax expense |
securities | | $ | 4 |
| | Net of tax |
| | | | | | |
Amortization of | | $ | (518) | (a) | | Salary and benefits |
retirement plan items | |
| 47 |
| | Income tax expense |
| | $ | (471) |
| | Net of tax |
Total reclassifications for the period | | $ | (467) |
| | Net of tax |
(a) | ||||||||||||||
the | ||||||||||||||
computation of net | ||||||||||||||
| | | | | | |
| | Nine Months Ended September 30, 2021 | | | | |
Details about accumulated | | Amount reclassified from | | | Affected line item in | |
other comprehensive | | accumulated other | | | the statement where | |
income components |
| comprehensive income |
| | net income is presented | |
|
| (in thousands) |
| | | |
Unrealized gains and losses | | $ | 111 |
| | Net securities gains (losses) |
on available-for-sale | |
| (28) |
| | Income tax expense |
securities | | $ | 83 |
| | Net of tax |
| | | | | | |
Amortization of | | $ | (1,554) | (a) | | Salary and benefits |
retirement plan items | |
| 139 |
| | Income tax expense |
| | $ | (1,415) |
| | Net of tax |
Total reclassifications for the period | | $ | (1,332) |
| | Net of tax |