10-Q/A
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) | ||
OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the Quarterly Period Ended June 30, 2019 | |||
OR | |||
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | ||
OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 52-2061461 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
7830 Old Georgetown Road,Third Floor | 20814 | |
(Address of principal executive offices) | ||
(301) 986-1800
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||
Common Stock , $0.01 par value | EGBN |
Large accelerated filer ☒ | Accelerated filer ☐ | |
Non-accelerated filer ☐ | Smaller Reporting Company ☐ | |
Emerging Growth Company ☐ |
No☒
EXPLANATORY NOTE
This Amendment No. 1 (this “Amendment”) to Form 10-Q for the fiscal quarter ended June 30, 2019, amends Eagle Bancorp. Inc.’s (the “Company”) Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which was originally filed with the Securities and Exchange Commission on August 9, 2019 (the “Original Filing”).
This Amendment No. 1 is being filed solely to (i) include the iXBRL; and (ii) to add external links to the Exhibit Index.
This Amendment No. 1 does not reflect events that may have occurred subsequent to the filing date of the Original Filing and does not modify or update in any way disclosures made in the Original Filing.
PART I. | FINANCIAL INFORMATION | |||
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Assets | June 30, 2019 | December 31, 2018 | ||||||
Cash and due from banks | $ | 6,735 | $ | 6,773 | ||||
Federal funds sold | 17,914 | 11,934 | ||||||
Interest bearing deposits with banks and other short-term investments | 171,985 | 303,157 | ||||||
Investment securities available-for-sale, at fair value | 745,343 | 784,139 | ||||||
Federal Reserve and Federal Home Loan Bank stock | 33,993 | 23,506 | ||||||
Loans held for sale | 37,506 | 19,254 | ||||||
Loans | 7,392,615 | 6,991,447 | ||||||
Less allowance for credit losses | (72,086 | ) | (69,944 | ) | ||||
Loans, net | 7,320,529 | 6,921,503 | ||||||
Premises and equipment, net | 15,176 | 16,851 | ||||||
Operating lease right-of-use assets | 28,214 | — | ||||||
Deferred income taxes | 30,220 | 33,027 | ||||||
Bank owned life insurance | 74,295 | 73,441 | ||||||
Intangible assets, net | 105,219 | 105,766 | ||||||
Other real estate owned | 1,394 | 1,394 | ||||||
Other assets | 81,480 | 88,392 | ||||||
Total Assets | $ | 8,670,003 | $ | 8,389,137 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest bearing demand | $ | 1,873,902 | $ | 2,104,220 | ||||
Interest bearing transaction | 862,553 | 593,107 | ||||||
Savings and money market | 2,712,143 | 2,949,559 | ||||||
Time, $100,000 or more | 801,469 | 801,957 | ||||||
Other time | 699,825 | 525,442 | ||||||
Total deposits | 6,949,892 | 6,974,285 | ||||||
Customer repurchase agreements | 31,669 | 30,413 | ||||||
Other short-term borrowings | 225,000 | — | ||||||
Long-term borrowings | 217,491 | 217,296 | ||||||
Operating lease liabilities | 31,659 | — | ||||||
Other liabilities | 29,710 | 58,202 | ||||||
Total Liabilities | 7,485,421 | 7,280,196 | ||||||
Shareholders’ Equity | ||||||||
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 34,539,853 and 34,387,919, respectively | 343 | 342 | ||||||
Additional paid in capital | 532,585 | 528,380 | ||||||
Retained earnings | 647,887 | 584,494 | ||||||
Accumulated other comprehensive income (loss) | 3,767 | (4,275 | ) | |||||
Total Shareholders’ Equity | 1,184,582 | 1,108,941 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 8,670,003 | $ | 8,389,137 |
Assets | June 30, 2019 | December 31, 2018 | ||||||
Cash and due from banks | $ | 6,735 | $ | 6,773 | ||||
Federal funds sold | 17,914 | 11,934 | ||||||
Interest bearing deposits with banks and other short-term investments | 171,985 | 303,157 | ||||||
Investment securities available-for-sale, at fair value | 745,343 | 784,139 | ||||||
Federal Reserve and Federal Home Loan Bank stock | 33,993 | 23,506 | ||||||
Loans held for sale | 37,506 | 19,254 | ||||||
Loans | 7,392,615 | 6,991,447 | ||||||
Less allowance for credit losses | (72,086 | ) | (69,944 | ) | ||||
Loans, net | 7,320,529 | 6,921,503 | ||||||
Premises and equipment, net | 15,176 | 16,851 | ||||||
Operating lease right-of-use assets | 28,214 | — | ||||||
Deferred income taxes | 30,220 | 33,027 | ||||||
Bank owned life insurance | 74,295 | 73,441 | ||||||
Intangible assets, net | 105,219 | 105,766 | ||||||
Other real estate owned | 1,394 | 1,394 | ||||||
Other assets | 81,480 | 88,392 | ||||||
Total Assets | $ | 8,670,003 | $ | 8,389,137 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest bearing demand | $ | 1,873,902 | $ | 2,104,220 | ||||
Interest bearing transaction | 862,553 | 593,107 | ||||||
Savings and money market | 2,712,143 | 2,949,559 | ||||||
Time, $ 100,000 or more | 801,469 | 801,957 | ||||||
Other time | 699,825 | 525,442 | ||||||
Total deposits | 6,949,892 | 6,974,285 | ||||||
Customer repurchase agreements | 31,669 | 30,413 | ||||||
Other short-term borrowings | 225,000 | — | ||||||
Long-term borrowings | 217,491 | 217,296 | ||||||
Operating lease liabilities | 31,659 | — | ||||||
Other liabilities | 29,710 | 58,202 | ||||||
Total Liabilities | 7,485,421 | 7,280,196 | ||||||
Shareholders’ Equity | ||||||||
Common stock, par value $.01 per share; shares authorized100,000,000 , shares issued and outstanding34,539,853 and34,387,919 , respectively | 343 | 342 | ||||||
Additional paid in capital | 532,585 | 528,380 | ||||||
Retained earnings | 647,887 | 584,494 | ||||||
Accumulated other comprehensive income (loss) | 3,767 | (4,275 | ) | |||||
Total Shareholders’ Equity | 1,184,582 | 1,108,941 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 8,670,003 | $ | 8,389,137 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 101,889 | $ | 90,924 | $ | 199,710 | $ | 175,354 | ||||||||
Interest and dividends on investment securities | 5,238 | 4,058 | 10,836 | 7,650 | ||||||||||||
Interest on balances with other banks and short-term investments | 1,105 | 1,274 | 2,771 | 2,255 | ||||||||||||
Interest on federal funds sold | 47 | 40 | 96 | 86 | ||||||||||||
Total interest income | 108,279 | 96,296 | 213,413 | 185,345 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 22,461 | 14,048 | 43,361 | 23,177 | ||||||||||||
Interest on customer repurchase agreements | 75 | 62 | 173 | 112 | ||||||||||||
Interest on short-term borrowings | 1,435 | 997 | 1,575 | 2,108 | ||||||||||||
Interest on long-term borrowings | 2,979 | 2,979 | 5,958 | 5,958 | ||||||||||||
Total interest expense | 26,950 | 18,086 | 51,067 | 31,355 | ||||||||||||
Net Interest Income | 81,329 | 78,210 | 162,346 | 153,990 | ||||||||||||
Provision for Credit Losses | 3,600 | 1,650 | 6,960 | 3,619 | ||||||||||||
Net Interest Income After Provision For Credit Losses | 77,729 | 76,560 | 155,386 | 150,371 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges on deposits | 1,606 | 1,760 | 3,300 | 3,374 | ||||||||||||
Gain on sale of loans | 1,923 | 1,675 | 3,311 | 3,198 | ||||||||||||
Gain on sale of investment securities | 563 | 26 | 1,475 | 68 | ||||||||||||
Increase in the cash surrender value of bank owned life insurance | 429 | 356 | 854 | 700 | ||||||||||||
Other income | 1,839 | 1,736 | 3,711 | 3,517 | ||||||||||||
Total noninterest income | 6,360 | 5,553 | 12,651 | 10,857 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 17,743 | 17,812 | 41,387 | 34,670 | ||||||||||||
Premises and equipment expenses | 3,652 | 3,873 | 7,504 | 7,802 | ||||||||||||
Marketing and advertising | 1,268 | 1,291 | 2,416 | 2,228 | ||||||||||||
Data processing | 2,603 | 2,404 | 4,978 | 4,721 | ||||||||||||
Legal, accounting and professional fees | 2,740 | 2,179 | 4,449 | 5,152 | ||||||||||||
FDIC insurance | 1,126 | 951 | 2,242 | 1,626 | ||||||||||||
Other expenses | 4,227 | 3,779 | 8,687 | 7,211 | ||||||||||||
Total noninterest expense | 33,359 | 32,289 | 71,663 | 63,410 | ||||||||||||
Income Before Income Tax Expense | 50,730 | 49,824 | 96,374 | 97,818 | ||||||||||||
Income Tax Expense | 13,487 | 12,528 | 25,382 | 24,807 | ||||||||||||
Net Income | $ | 37,243 | $ | 37,296 | $ | 70,992 | $ | 73,011 | ||||||||
Earnings Per Common Share | ||||||||||||||||
Basic | $ | 1.08 | $ | 1.09 | $ | 2.06 | $ | 2.13 | ||||||||
Diluted | $ | 1.08 | $ | 1.08 | $ | 2.05 | $ | 2.12 |
Three Months Ended June 30 , | Six Months Ended June 30 , | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 101,889 | $ | 90,924 | $ | 199,710 | $ | 175,354 | ||||||||
Interest and dividends on investment securities | 5,238 | 4,058 | 10,836 | 7,650 | ||||||||||||
Interest on balances with other banks and short-term investments | 1,105 | 1,274 | 2,771 | 2,255 | ||||||||||||
Interest on federal funds sold | 47 | 40 | 96 | 86 | ||||||||||||
Total interest income | 108,279 | 96,296 | 213,413 | 185,345 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 22,461 | 14,048 | 43,361 | 23,177 | ||||||||||||
Interest on customer repurchase agreements | 75 | 62 | 173 | 112 | ||||||||||||
Interest on short-term borrowings | 1,435 | 997 | 1,575 | 2,108 | ||||||||||||
Interest on long-term borrowings | 2,979 | 2,979 | 5,958 | 5,958 | ||||||||||||
Total interest expense | 26,950 | 18,086 | 51,067 | 31,355 | ||||||||||||
Net Interest Income | 81,329 | 78,210 | 162,346 | 153,990 | ||||||||||||
Provision for Credit Losses | 3,600 | 1,650 | 6,960 | 3,619 | ||||||||||||
Net Interest Income After Provision For Credit Losses | 77,729 | 76,560 | 155,386 | 150,371 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges on deposits | 1,606 | 1,760 | 3,300 | 3,374 | ||||||||||||
Gain on sale of loans | 1,923 | 1,675 | 3,311 | 3,198 | ||||||||||||
Gain on sale of investment securities | 563 | 26 | 1,475 | 68 | ||||||||||||
Increase in the cash surrender value of bank owned life insurance | 429 | 356 | 854 | 700 | ||||||||||||
Other income | 1,839 | 1,736 | 3,711 | 3,517 | ||||||||||||
Total noninterest income | 6,360 | 5,553 | 12,651 | 10,857 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 17,743 | 17,812 | 41,387 | 34,670 | ||||||||||||
Premises and equipment expenses | 3,652 | 3,873 | 7,504 | 7,802 | ||||||||||||
Marketing and advertising | 1,268 | 1,291 | 2,416 | 2,228 | ||||||||||||
Data processing | 2,603 | 2,404 | 4,978 | 4,721 | ||||||||||||
Legal, accounting and professional fees | 2,740 | 2,179 | 4,449 | 5,152 | ||||||||||||
FDIC insurance | 1,126 | 951 | 2,242 | 1,626 | ||||||||||||
Other expenses | 4,227 | 3,779 | 8,687 | 7,211 | ||||||||||||
Total noninterest expense | 33,359 | 32,289 | 71,663 | 63,410 | ||||||||||||
Income Before Income Tax Expense | 50,730 | 49,824 | 96,374 | 97,818 | ||||||||||||
Income Tax Expense | 13,487 | 12,528 | 25,382 | 24,807 | ||||||||||||
Net Income | $ | 37,243 | $ | 37,296 | $ | 70,992 | $ | 73,011 | ||||||||
Earnings Per Common Share | ||||||||||||||||
Basic | $ | 1.08 | $ | 1.09 | $ | 2.06 | $ | 2.13 | ||||||||
Diluted | $ | 1.08 | $ | 1.08 | $ | 2.05 | $ | 2.12 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Income | $ | 37,243 | $ | 37,296 | $ | 70,992 | $ | 73,011 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Unrealized gain (loss) on securities available for sale | 5,925 | (1,935 | ) | 11,979 | (7,058 | ) | ||||||||||
Reclassification adjustment for net gains included in net income | (417 | ) | (20 | ) | (1,092 | ) | (51 | ) | ||||||||
Total unrealized gain (loss) on investment securities | 5,508 | (1,955 | ) | 10,887 | (7,109 | ) | ||||||||||
Unrealized (loss) gain on derivatives | (513 | ) | 692 | (1,665 | ) | 2,925 | ||||||||||
Reclassification adjustment for amounts included in net income | (236 | ) | 64 | (1,180 | ) | (1 | ) | |||||||||
Total unrealized (loss) gain on derivatives | (749 | ) | 756 | (2,845 | ) | 2,924 | ||||||||||
Other comprehensive income (loss) | 4,759 | (1,199 | ) | 8,042 | (4,185 | ) | ||||||||||
Comprehensive Income | $ | 42,002 | $ | 36,097 | $ | 79,034 | $ | 68,826 |
Three Months Ended June 30 , | Six Months Ended June 30 , | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Income | $ | 37,243 | $ | 37,296 | $ | 70,992 | $ | 73,011 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Unrealized gain (loss) on securities available for sale | 5,925 | (1,935 | ) | 11,979 | (7,058 | ) | ||||||||||
Reclassification adjustment for net gains included in net income | (417 | ) | (20 | ) | (1,092 | ) | (51 | ) | ||||||||
Total unrealized gain (loss) on investment securities | 5,508 | (1,955 | ) | 10,887 | (7,109 | ) | ||||||||||
Unrealized (loss) gain on derivatives | (513 | ) | 692 | (1,665 | ) | 2,925 | ||||||||||
Reclassification adjustment for amounts included in net income | (236 | ) | 64 | (1,180 | ) | (1 | ) | |||||||||
Total unrealized (loss) gain on derivatives | (749 | ) | 756 | (2,845 | ) | 2,924 | ||||||||||
Other comprehensive income (loss) | 4,759 | (1,199 | ) | 8,042 | (4,185 | ) | ||||||||||
Comprehensive Income | $ | 42,002 | $ | 36,097 | $ | 79,034 | $ | 68,826 |
Common | Additional Paid | Retained | Accumulated Other Comprehensive | Total Shareholders’ | ||||||||||||||||||||
Shares | Amount | in Capital | Earnings | Income (Loss) | Equity | |||||||||||||||||||
Balance April 1, 2019 | 34,537,193 | $ | 343 | $ | 530,894 | $ | 618,243 | $ | (992 | ) | $ | 1,148,488 | ||||||||||||
Net Income | — | — | — | 37,243 | — | 37,243 | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 4,759 | 4,759 | ||||||||||||||||||
Stock-based compensation expense | — | — | 1,471 | — | — | 1,471 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 750 | — | 37 | — | — | 37 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (1,800 | ) | — | — | — | — | — | |||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 3,710 | — | 183 | — | — | 183 | ||||||||||||||||||
Cash dividends declared ($0.22 per share) | — | — | — | (7,599 | ) | — | (7,599 | ) | ||||||||||||||||
Balance June 30, 2019 | 34,539,853 | $ | 343 | $ | 532,585 | $ | 647,887 | $ | 3,767 | $ | 1,184,582 | |||||||||||||
Balance April 1, 2018 | 34,303,056 | $ | 341 | $ | 522,316 | $ | 467,933 | $ | (5,410 | ) | $ | 985,180 | ||||||||||||
Net Income | — | — | — | 37,296 | — | 37,296 | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (1,199 | ) | (1,199 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 1,667 | — | — | 1,667 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (1,255 | ) | — | — | — | — | — | |||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 3,270 | — | 193 | — | — | 193 | ||||||||||||||||||
Balance June 30, 2018 | 34,305,071 | $ | 341 | $ | 524,176 | $ | 505,229 | $ | (6,609 | ) | $ | 1,023,137 |
Common | Additional Paid | Retained | Accumulated Other Comprehensive | Total Shareholders’ | ||||||||||||||||||||
Shares | Amount | in Capital | Earnings | Income (Loss) | Equity | |||||||||||||||||||
Balance April 1, 2019 | 34,537,193 | $ | 343 | $ | 530,894 | $ | 618,243 | $ | (992 | ) | $ | 1,148,488 | ||||||||||||
Net Income | — | — | — | 37,243 | — | 37,243 | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 4,759 | 4,759 | ||||||||||||||||||
Stock-based compensation expense | — | — | 1,471 | — | — | 1,471 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 750 | — | 37 | — | — | 37 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (1,800 | ) | — | — | — | — | — | |||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 3,710 | — | 183 | — | — | 183 | ||||||||||||||||||
Cash dividends declared ($0.22 per share) | — | — | — | (7,599 | ) | — | (7,599 | ) | ||||||||||||||||
Balance June 30, 2019 | 34,539,853 | $ | $ | $ | $ | $ | ||||||||||||||||||
Balance April 1, 2018 | 34,303,056 | $ | 341 | $ | 522,316 | $ | 467,933 | $ | (5,410 | ) | $ | 985,180 | ||||||||||||
Net Income | — | — | — | 37,296 | — | 37,296 | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (1,199 | ) | (1,199 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 1,667 | — | — | 1,667 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (1,255 | ) | — | — | — | — | — | |||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 3,270 | — | 193 | — | — | 193 | ||||||||||||||||||
Balance June 30, 2018 | 34,305,071 | $ | 341 | $ | 524,176 | $ | 505,229 | $ | (6,609 | ) | $ | 1,023,137 |
Common | Additional Paid | Retained | Accumulated Other Comprehensive | Shareholders’ | ||||||||||||||||||||
Shares | Amount | in Capital | Earnings | Income (Loss) | Equity | |||||||||||||||||||
Balance January 1, 2019 | 34,387,919 | $ | 342 | $ | 528,380 | $ | 584,494 | $ | (4,275 | ) | $ | 1,108,941 | ||||||||||||
Net Income | — | — | — | 70,992 | — | 70,992 | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 8,042 | 8,042 | ||||||||||||||||||
Stock-based compensation expense | — | — | 3,501 | — | — | 3,501 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 26,784 | — | 332 | — | — | 332 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (12,744 | ) | 1 | (1 | ) | — | — | — | ||||||||||||||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes | 17,655 | — | — | — | — | — | ||||||||||||||||||
Time based stock awards granted | 112,636 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 7,603 | — | 373 | — | — | 373 | ||||||||||||||||||
Cash dividends declared ($0.22 per share) | — | — | — | (7,599 | ) | — | (7,599 | ) | ||||||||||||||||
Balance June 30, 2019 | 34,539,853 | $ | 343 | $ | 532,585 | $ | 647,887 | $ | 3,767 | $ | 1,184,582 | |||||||||||||
Balance January 1, 2018 | 34,185,163 | $ | 340 | $ | 520,304 | $ | 431,544 | $ | (1,750 | ) | $ | 950,438 | ||||||||||||
Net Income | — | — | — | 73,011 | — | 73,011 | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (4,185 | ) | (4,185 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 3,143 | — | — | 3,143 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 32,230 | — | 338 | — | — | 338 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (13,361 | ) | 1 | (1 | ) | — | — | — | ||||||||||||||||
Time based stock awards granted | 94,344 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 6,695 | — | 392 | — | — | 392 | ||||||||||||||||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from AOCI (ASU 2018-02) | — | — | — | 674 | (674 | ) | — | |||||||||||||||||
Balance June 30, 2018 | 34,305,071 | $ | 341 | $ | 524,176 | $ | 505,229 | $ | (6,609 | ) | $ | 1,023,137 |
Common | Additional Paid | Retained | Accumulated Other Comprehensive | Shareholders’ | ||||||||||||||||||||
Shares | Amount | in Capital | Earnings | Income (Loss) | Equity | |||||||||||||||||||
Balance January 1, 2019 | 34,387,919 | $ | 342 | $ | 528,380 | $ | 584,494 | $ | (4,275 | ) | $ | 1,108,941 | ||||||||||||
Net Income | — | — | — | 70,992 | — | 70,992 | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 8,042 | 8,042 | ||||||||||||||||||
Stock-based compensation expense | — | — | 3,501 | — | — | 3,501 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 26,784 | — | 332 | — | — | 332 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (12,744 | ) | 1 | (1 | ) | — | — | — | ||||||||||||||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes | 17,655 | — | — | — | — | — | ||||||||||||||||||
Time based stock awards granted | 112,636 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 7,603 | — | 373 | — | — | 373 | ||||||||||||||||||
Cash dividends declared ($ 0.22 per share) | — | — | — | (7,599 | ) | — | (7,599 | ) | ||||||||||||||||
Balance June 30, 2019 | 34,539,853 | $ | 343 | $ | 532,585 | $ | 647,887 | $ | 3,767 | $ | 1,184,582 | |||||||||||||
Balance January 1, 2018 | 34,185,163 | $ | 340 | $ | 520,304 | $ | 431,544 | $ | (1,750 | ) | $ | 950,438 | ||||||||||||
Net Income | — | — | — | 73,011 | — | 73,011 | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (4,185 | ) | (4,185 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 3,143 | — | — | 3,143 | ||||||||||||||||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 32,230 | — | 338 | — | — | 338 | ||||||||||||||||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | (13,361 | ) | 1 | (1 | ) | — | — | — | ||||||||||||||||
Time based stock awards granted | 94,344 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock related to employee stock purchase plan | 6,695 | — | 392 | — | — | 392 | ||||||||||||||||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from AOCI (ASU 2018 -02 ) | — | — | — | 674 | (674 | ) | — | |||||||||||||||||
Balance June 30, 2018 | 34,305,071 | $ | 341 | $ | 524,176 | $ | 505,229 | $ | (6,609 | ) | $ | 1,023,137 |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash Flows From Operating Activities: | �� | |||||||
Net Income | $ | 70,992 | $ | 73,011 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for credit losses | 6,960 | 3,619 | ||||||
Depreciation and amortization | 3,567 | 3,561 | ||||||
Amortization of operating lease right-of-use assets | 1,360 | — | ||||||
Gains on sale of loans | (3,311 | ) | (3,198 | ) | ||||
Gains on sale of GNMA loans | (71 | ) | — | |||||
Securities premium amortization (discount accretion), net | 2,519 | 2,169 | ||||||
Origination of loans held for sale | (230,865 | ) | (224,643 | ) | ||||
Proceeds from sale of loans held for sale | 215,995 | 222,444 | ||||||
Net increase in cash surrender value of BOLI | (854 | ) | (700 | ) | ||||
Deferred income tax expense (benefit) | 2,807 | 1,533 | ||||||
Net gain on sale of investment securities | (1,475 | ) | (68 | ) | ||||
Stock-based compensation expense | 3,501 | 3,143 | ||||||
Net tax benefits from stock compensation | 10 | 108 | ||||||
Decrease (increase) in other assets | 6,912 | (12,644 | ) | |||||
Decrease in other liabilities | (29,242 | ) | (14,254 | ) | ||||
Net cash provided by operating activities | 48,805 | 54,081 | ||||||
Cash Flows From Investing Activities: | ||||||||
Purchases of available-for-sale investment securities | (63,572 | ) | (150,528 | ) | ||||
Proceeds from maturities of available-for-sale securities | 67,223 | 42,144 | ||||||
Proceeds from sale/call of available-for-sale securities | 42,143 | 28,974 | ||||||
Purchases of Federal Reserve and Federal Home Loan Bank stock | (76,150 | ) | (42,179 | ) | ||||
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 65,663 | 42,628 | ||||||
Net increase in loans | (405,986 | ) | (241,944 | ) | ||||
Decrease (increase) in premises and equipment | 1,675 | (936 | ) | |||||
Net cash used in investing activities | (369,004 | ) | (321,841 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
(Decrease) increase in deposits | (24,393 | ) | 414,774 | |||||
Increase (decrease) in customer repurchase agreements | 1,256 | (47,426 | ) | |||||
Increase (decrease) in short-term borrowings | 225,000 | (25,000 | ) | |||||
Proceeds from exercise of equity compensation plans | 332 | 338 | ||||||
Proceeds from employee stock purchase plan | 373 | 392 | ||||||
Cash dividends paid | (7,599 | ) | — | |||||
Net cash provided by financing activities | 194,969 | 343,078 | ||||||
Net (Decrease) Increase In Cash and Cash Equivalents | (125,230 | ) | 75,318 | |||||
Cash and Cash Equivalents at Beginning of Period | 321,864 | 190,473 | ||||||
Cash and Cash Equivalents at End of Period | $ | 196,634 | $ | 265,791 | ||||
Supplemental Cash Flows Information: | ||||||||
Interest paid | $ | 51,735 | $ | 30,242 | ||||
Income taxes paid | $ | 31,850 | $ | 31,200 | ||||
Non-Cash Investing Activities | ||||||||
Initial recognition of operating lease right-of-use assets | $ | 29,574 | $ | — | ||||
Initial recognition of operating lease liabilities | $ | 33,535 | $ | — |
Six Months Ended June 30 , | ||||||||
2019 | 2018 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net Income | $ | 70,992 | $ | 73,011 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for credit losses | 6,960 | 3,619 | ||||||
Depreciation and amortization | 3,567 | 3,561 | ||||||
Amortization of operating lease right-of-use assets | 1,360 | — | ||||||
Gains on sale of loans | (3,311 | ) | (3,198 | ) | ||||
Gains on sale of GNMA loans | (71 | ) | — | |||||
Securities premium amortization (discount accretion), net | 2,519 | 2,169 | ||||||
Origination of loans held for sale | (230,865 | ) | (224,643 | ) | ||||
Proceeds from sale of loans held for sale | 215,995 | 222,444 | ||||||
Net increase in cash surrender value of BOLI | (854 | ) | (700 | ) | ||||
Deferred income tax expense (benefit) | 2,807 | 1,533 | ||||||
Net gain on sale of investment securities | (1,475 | ) | (68 | ) | ||||
Stock-based compensation expense | 3,501 | 3,143 | ||||||
Net tax benefits from stock compensation | 10 | 108 | ||||||
Decrease (increase) in other assets | 6,912 | (12,644 | ) | |||||
Decrease in other liabilities | (29,242 | ) | (14,254 | ) | ||||
Net cash provided by operating activities | 48,805 | 54,081 | ||||||
Cash Flows From Investing Activities: | ||||||||
Purchases of available-for-sale investment securities | (63,572 | ) | (150,528 | ) | ||||
Proceeds from maturities of available-for-sale securities | 67,223 | 42,144 | ||||||
Proceeds from sale/call of available-for-sale securities | 42,143 | 28,974 | ||||||
Purchases of Federal Reserve and Federal Home Loan Bank stock | (76,150 | ) | (42,179 | ) | ||||
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 65,663 | 42,628 | ||||||
Net increase in loans | (405,986 | ) | (241,944 | ) | ||||
Decrease (increase) in premises and equipment | 1,675 | (936 | ) | |||||
Net cash used in investing activities | (369,004 | ) | (321,841 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
(Decrease) increase in deposits | (24,393 | ) | 414,774 | |||||
Increase (decrease) in customer repurchase agreements | 1,256 | (47,426 | ) | |||||
Increase (decrease) in short-term borrowings | 225,000 | (25,000 | ) | |||||
Proceeds from exercise of equity compensation plans | 332 | 338 | ||||||
Proceeds from employee stock purchase plan | 373 | 392 | ||||||
Cash dividends paid | (7,599 | ) | — | |||||
Net cash provided by financing activities | 194,969 | 343,078 | ||||||
Net (Decrease) Increase In Cash and Cash Equivalents | (125,230 | ) | 75,318 | |||||
Cash and Cash Equivalents at Beginning of Period | 321,864 | 190,473 | ||||||
Cash and Cash Equivalents at End of Period | $ | 196,634 | $ | 265,791 | ||||
Supplemental Cash Flows Information: | ||||||||
Interest paid | $ | 51,735 | $ | 30,242 | ||||
Income taxes paid | $ | 31,850 | $ | 31,200 | ||||
Non-Cash Investing Activities | ||||||||
Initial recognition of operating lease right-of-use assets | $ | 29,574 | $ | — | ||||
Initial recognition of operating lease liabilities | $ | 33,535 | $ | — |
ASU
Gross | Gross | Estimated | ||||||||||||||
June 30, 2019 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||
(dollars in thousands) | Cost | Gains | Losses | Value | ||||||||||||
U. S. agency securities | $ | 225,389 | $ | 940 | $ | 659 | $ | 225,670 | ||||||||
Residential mortgage backed securities | 440,243 | 5,186 | 1,884 | 443,545 | ||||||||||||
Municipal bonds | 67,835 | 1,503 | — | 69,338 | ||||||||||||
Corporate bonds | 6,502 | 70 | — | 6,572 | ||||||||||||
Other equity investments | 218 | — | — | 218 | ||||||||||||
$ | 740,187 | $ | 7,699 | $ | 2,543 | $ | 745,343 |
Gross | Gross | Estimated | ||||||||||||||
December 31, 2018 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||
(dollars in thousands) | Cost | Gains | Losses | Value | ||||||||||||
U. S. agency securities | $ | 260,150 | $ | 228 | $ | 4,033 | $ | 256,345 | ||||||||
Residential mortgage backed securities | 477,949 | 1,575 | 7,293 | 472,231 | ||||||||||||
Municipal bonds | 45,814 | 439 | 484 | 45,769 | ||||||||||||
Corporate bonds | 9,503 | 79 | 6 | 9,576 | ||||||||||||
Other equity investments | 218 | — | — | 218 | ||||||||||||
$ | 793,634 | $ | 2,321 | $ | 11,816 | $ | 784,139 |
Less than | 12 Months | |||||||||||||||||||||||||||
12 Months | or Greater | Total | ||||||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||||||
June 30, 2019 | Number of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||
(dollars in thousands) | Securities | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
U. S. agency securities | 39 | $ | 26,149 | $ | 50 | $ | 99,252 | $ | 609 | $ | 125,401 | $ | 659 | |||||||||||||||
Residential mortgage backed securities | 103 | 4,234 | 13 | 174,316 | 1,871 | 178,550 | 1,884 | |||||||||||||||||||||
Municipal bonds | 2 | 1,500 | — | — | — | 1,500 | — | |||||||||||||||||||||
144 | $ | 31,883 | $ | 63 | $ | 273,568 | $ | 2,480 | $ | 305,451 | $ | 2,543 |
Less than | 12 Months | |||||||||||||||||||||||||||
12 Months | or Greater | Total | ||||||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||||||
December 31, 2018 | Number of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||
(dollars in thousands) | Securities | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
U. S. agency securities | 58 | $ | 72,679 | $ | 533 | $ | 144,636 | $ | 3,500 | $ | 217,315 | $ | 4,033 | |||||||||||||||
Residential mortgage backed securities | 151 | 61,199 | 527 | 225,995 | 6,766 | 287,194 | 7,293 | |||||||||||||||||||||
Municipal bonds | 11 | 4,299 | 50 | 17,041 | 434 | 21,340 | 484 | |||||||||||||||||||||
Corporate bonds | 1 | 1,494 | 6 | — | — | 1,494 | 6 | |||||||||||||||||||||
221 | $ | 139,671 | $ | 1,116 | $ | 387,672 | $ | 10,700 | $ | 527,343 | $ | 11,816 |
Less than | 12Months | |||||||||||||||||||||||||||
12Months | or Greater | Total | ||||||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||||||
June 30, 2019 | Number of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||
(dollars in thousands) | Securities | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
U. S. agency securities | 39 | $ | 26,149 | $ | 50 | $ | 99,252 | $ | 609 | $ | 125,401 | $ | 659 | |||||||||||||||
Residential mortgage backed securities | 103 | 4,234 | 13 | 174,316 | 1,871 | 178,550 | 1,884 | |||||||||||||||||||||
Municipal bonds | 2 | 1,500 | — | — | — | 1,500 | — | |||||||||||||||||||||
144 | $ | 31,883 | $ | 63 | $ | 273,568 | $ | 2,480 | $ | 305,451 | $ | 2,543 |
Less than | 12Months | |||||||||||||||||||||||||||
12Months | or Greater | Total | ||||||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||||||
December 31, 2018 | Number of | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||
(dollars in thousands) | Securities | Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
U. S. agency securities | 58 | $ | 72,679 | $ | 533 | $ | 144,636 | $ | 3,500 | $ | 217,315 | $ | 4,033 | |||||||||||||||
Residential mortgage backed securities | 151 | 61,199 | 527 | 225,995 | 6,766 | 287,194 | 7,293 | |||||||||||||||||||||
Municipal bonds | 11 | 4,299 | 50 | 17,041 | 434 | 21,340 | 484 | |||||||||||||||||||||
Corporate bonds | 1 | 1,494 | 6 | — | — | 1,494 | 6 | |||||||||||||||||||||
221 | $ | 139,671 | $ | 1,116 | $ | 387,672 | $ | 10,700 | $ | 527,343 | $ | 11,816 |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Amortized | Estimated | Amortized | Estimated | |||||||||||||
(dollars in thousands) | Cost | Fair Value | Cost | Fair Value | ||||||||||||
U. S. agency securities maturing: | ||||||||||||||||
One year or less | $ | 114,260 | $ | 114,564 | $ | 128,148 | $ | 125,545 | ||||||||
After one year through five years | 103,105 | 103,042 | 119,856 | 118,883 | ||||||||||||
Five years through ten years | 8,024 | 8,064 | 12,146 | 11,917 | ||||||||||||
Residential mortgage backed securities | 440,243 | 443,545 | 477,949 | 472,231 | ||||||||||||
Municipal bonds maturing: | ||||||||||||||||
One year or less | 6,947 | 6,977 | 8,097 | 8,167 | ||||||||||||
After one year through five years | 13,426 | 13,694 | 15,025 | 15,081 | ||||||||||||
Five years through ten years | 46,399 | 47,468 | 21,626 | 21,385 | ||||||||||||
After ten years | 1,063 | 1,199 | 1,066 | 1,136 | ||||||||||||
Corporate bonds maturing: | ||||||||||||||||
After one year through five years | 5,002 | 5,072 | 8,003 | 8,076 | ||||||||||||
After ten years | 1,500 | 1,500 | 1,500 | 1,500 | ||||||||||||
Other equity investments | 218 | 218 | 218 | 218 | ||||||||||||
$ | 740,187 | $ | 745,343 | $ | 793,634 | $ | 784,139 |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Amortized | Estimated | Amortized | Estimated | |||||||||||||
(dollars in thousands) | Cost | Fair Value | Cost | Fair Value | ||||||||||||
U. S. agency securities maturing: | ||||||||||||||||
Oneyear or less | $ | 114,260 | $ | 114,564 | $ | 128,148 | $ | 125,545 | ||||||||
Afteroneyear throughfiveyears | 103,105 | 103,042 | 119,856 | 118,883 | ||||||||||||
Fiveyears throughtenyears | 8,024 | 8,064 | 12,146 | 11,917 | ||||||||||||
Residential mortgage backed securities | 440,243 | 443,545 | 477,949 | 472,231 | ||||||||||||
Municipal bonds maturing: | ||||||||||||||||
Oneyear or less | 6,947 | 6,977 | 8,097 | 8,167 | ||||||||||||
Afteroneyear throughfiveyears | 13,426 | 13,694 | 15,025 | 15,081 | ||||||||||||
Fiveyears throughtenyears | 46,399 | 47,468 | 21,626 | 21,385 | ||||||||||||
Aftertenyears | 1,063 | 1,199 | 1,066 | 1,136 | ||||||||||||
Corporate bonds maturing: | ||||||||||||||||
Afteroneyear throughfiveyears | 5,002 | 5,072 | 8,003 | 8,076 | ||||||||||||
Aftertenyears | 1,500 | 1,500 | 1,500 | 1,500 | ||||||||||||
Other equity investments | 218 | 218 | 218 | 218 | ||||||||||||
$ | 740,187 | $ | 745,343 | $ | 793,634 | $ | 784,139 |
in2018 .
thanfiveyears. Income Producing - Commercial Owner Occupied - Commercial Real Estate Mortgage - Construction - Commercial and June 30, 2019 December 31, 2018 (dollars in thousands) Amount % Amount % Commercial $ 1,475,201 20 % $ 1,553,112 22 % Income producing - commercial real estate 3,666,815 50 % 3,256,900 46 % Owner occupied - commercial real estate 970,850 13 % 887,814 13 % Real estate mortgage - residential 105,191 1 % 106,418 2 % Construction - commercial and residential 1,012,789 14 % 1,039,815 15 % Construction - C&I (owner occupied) 76,324 1 % 57,797 1 % Home equity 83,447 1 % 86,603 1 % Other consumer 1,998 — 2,988 — Total loans 7,392,615 100 % 6,991,447 100 % Less: allowance for credit losses (72,086 ) (69,944 ) Net loans $ 7,320,529 $ 6,921,503 14%14 % of the loan portfolio. At June 30, 2019, non-owner occupied commercial real estate and real estate construction represented approximately 64%64 % of the loan portfolio. The combined owner occupied and commercial real estate loans represent approximately 78%78 % of the loan portfolio. Real estate also serves as collateral for loans made for other purposes, resulting in 84%84 % of all loans being secured by real estate. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank typically requires a maximum loan to value of 80%80 % and minimum cash flow debt service coverage of 1.15 to 1.0.1.0 . Personal guarantees may be required, but may be limited. In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years.20%2 0% of the loan portfolio at June 30, 2019 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent approximately 2%approximately2 % of the commercial loan category. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit as well as potential repairs to the SBA guarantees. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA as well as internal loan size guidelines.1%1 % of the loan portfolio at June 30, 2019 consists of home equity loans and lines of credit and other consumer loans. These credits, while making up a small portion of the loan portfolio, demand the same emphasis on underwriting and credit evaluation as other types of loans advanced by the Bank.1%1 % of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 20 months. These credits represent first liens on residential property loans originated by the Bank. While the Bank’s general practice is to originate and sell (servicing released) loans made by its Residential Lending department, from time to time certain loan characteristics do not meet the requirements of third party investors and these loans are instead maintained in the Bank’s portfolio until they are resold to another investor at a later date or mature.than 10than10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5between5 to 7 years, with amortization to a maximum of 25of25 years.71%71 % of the outstanding ADC loan portfolio at June 30, 2019. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1)( 1) the feasibility of the project; (2)( 2) the experience of the sponsor; (3)( 3) the creditworthiness of the borrower and guarantors; (4)( 4) borrower equity contribution; and (5)( 5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company recognizes that one ofthatoneof the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1)( 1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2)( 2) a construction loan administration department independent of the lending function; (3)( 3) third party independent construction loan inspection reports; (4)( 4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5)( 5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total Three Months Ended June 30, 2019 Allowance for credit losses: Balance at beginning of period $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 Loans charged-off (1 ) (1,847 ) — — — — (2 ) (1,850 ) Recoveries of loans previously charged-off 37 302 2 2 37 — 13 393 Net loans charged-off 36 (1,545 ) 2 2 37 — 11 (1,457 ) Provision for credit losses 905 1,790 (226 ) 672 500 (24 ) (17 ) 3,600 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 Six Months Ended June 30, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (5 ) (5,343 ) — — — — (2 ) (5,350 ) Recoveries of loans previously charged-off 167 302 2 3 37 — 21 532 Net loans (charged-off) recoveries 162 (5,041 ) 2 3 37 — 19 (4,818 ) Provision for credit losses 2,117 4,017 (488 ) 387 794 (18 ) 151 6,960 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 As of June 30, 2019 Allowance for credit losses: Individually evaluated for impairment $ 7,905 $ 1,000 $ 475 $ 650 $ — $ — $ — $ 10,030 Collectively evaluated for impairment 10,231 26,010 5,281 705 19,006 581 242 62,056 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 Three Months Ended June 30, 2018 Allowance for credit losses: Balance at beginning of period $ 13,358 $ 26,468 $ 5,471 $ 734 $ 18,742 $ 699 $ 335 $ 65,807 Loans charged-off (408 ) — — — (517 ) — — (925 ) Recoveries of loans previously charged-off 23 2 1 1 35 10 5 77 Net loans (charged-off) recoveries (385 ) 2 1 1 (482 ) 10 5 (848 ) Provision for credit losses (767 ) 1,518 531 22 391 (36 ) (9 ) 1,650 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 Six Months Ended June 30, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (1,261 ) (121 ) (132 ) — (517 ) — — (2,031 ) Recoveries of loans previously charged-off 26 2 2 3 95 127 8 263 Net loans (charged-off) recoveries (1,235 ) (119 ) (130 ) 3 (422 ) 127 8 (1,768 ) Provision for credit losses 339 2,731 199 (190 ) 581 (224 ) 183 3,619 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 As of June 30, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,506 $ 3,543 $ 500 $ — $ — $ — $ 80 $ 8,629 Collectively evaluated for impairment 7,700 24,445 5,503 757 18,651 673 251 57,980 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total ThreeMonths Ended June 30, 2019 Allowance for credit losses: Balance at beginning of period $ 17,195 $ 26,765 $ 5,980 $ 681 $ 18,469 $ 605 $ 248 $ 69,943 Loans charged-off (1 ) (1,847 ) — — — — (2 ) (1,850 ) Recoveries of loans previously charged-off 37 302 2 2 37 — 13 393 Net loans charged-off 36 (1,545 ) 2 2 37 — 11 (1,457 ) Provision for credit losses 905 1,790 (226 ) 672 500 (24 ) (17 ) 3,600 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 SixMonths Ended June 30, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (5 ) (5,343 ) — — — — (2 ) (5,350 ) Recoveries of loans previously charged-off 167 302 2 3 37 — 21 532 Net loans (charged-off) recoveries 162 (5,041 ) 2 3 37 — 19 (4,818 ) Provision for credit losses 2,117 4,017 (488 ) 387 794 (18 ) 151 6,960 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 As of June 30, 2019 Allowance for credit losses: Individually evaluated for impairment $ 7,905 $ 1,000 $ 475 $ 650 $ — $ — $ — $ 10,030 Collectively evaluated for impairment 10,231 26,010 5,281 705 19,006 581 242 62,056 Ending balance $ 18,136 $ 27,010 $ 5,756 $ 1,355 $ 19,006 $ 581 $ 242 $ 72,086 ThreeMonths Ended June 30, 2018 Allowance for credit losses: Balance at beginning of period $ 13,358 $ 26,468 $ 5,471 $ 734 $ 18,742 $ 699 $ 335 $ 65,807 Loans charged-off (408 ) — — — (517 ) — — (925 ) Recoveries of loans previously charged-off 23 2 1 1 35 10 5 77 Net loans (charged-off) recoveries (385 ) 2 1 1 (482 ) 10 5 (848 ) Provision for credit losses (767 ) 1,518 531 22 391 (36 ) (9 ) 1,650 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 SixMonths Ended June 30, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (1,261 ) (121 ) (132 ) — (517 ) — — (2,031 ) Recoveries of loans previously charged-off 26 2 2 3 95 127 8 263 Net loans (charged-off) recoveries (1,235 ) (119 ) (130 ) 3 (422 ) 127 8 (1,768 ) Provision for credit losses 339 2,731 199 (190 ) 581 (224 ) 183 3,619 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 As of June 30, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,506 $ 3,543 $ 500 $ — $ — $ — $ 80 $ 8,629 Collectively evaluated for impairment 7,700 24,445 5,503 757 18,651 673 251 57,980 Ending balance $ 12,206 $ 27,988 $ 6,003 $ 757 $ 18,651 $ 673 $ 331 $ 66,609 Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total June 30, 2019 Recorded investment in loans: Individually evaluated for impairment $ 26,980 $ 37,900 $ 3,879 $ 5,367 $ 9,155 $ 487 $ — $ 83,768 Collectively evaluated for impairment 1,448,221 3,628,915 966,971 99,824 1,079,958 82,960 1,998 7,308,847 Ending balance $ 1,475,201 $ 3,666,815 $ 970,850 $ 105,191 $ 1,089,113 $ 83,447 $ 1,998 $ 7,392,615 December 31, 2018 Recorded investment in loans: Individually evaluated for impairment $ 8,738 $ 61,747 $ 5,307 $ 1,228 $ 7,012 $ 487 $ — $ 84,519 Collectively evaluated for impairment 1,544,374 3,195,153 882,507 105,190 1,090,600 86,116 2,988 6,906,928 Ending balance $ 1,553,112 $ 3,256,900 $ 887,814 $ 106,418 $ 1,097,612 $ 86,603 $ 2,988 $ 6,991,447 $273 thousand and $155 thousand,$273thousandand $155thousand, respectively, and an unpaid principal balance of $323 thousand and $968 thousand,$323thousandand $968thousand, respectively, and were evaluated separately in accordance with ASC Topic 310-30,310 -30,.”$282 thousand and $202 thousand,$282thousandand $202thousand, respectively, and an unpaid principal balance of $332 thousand and $995 thousand,$332thousandand $995thousand, respectively, and were evaluated separately in accordance with ASC Topic 310-30. The various impaired loans were recorded at estimated fair value with any excess being charged-off or treated as a non-accretable discount. Subsequent downward adjustments to the valuation of impaired loans acquired will result in additional loan loss provisions and related allowance for credit losses.Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass. Watch: Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time. Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered pass.special mention.Watch:Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time.Special Mention:Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.Classified: Watch and Total (dollars in thousands) Pass Special Mention Substandard Doubtful Loans June 30, 2019 Commercial $ 1,398,098 $ 50,123 $ 26,980 $ — $ 1,475,201 Income producing - commercial real estate 3,611,968 16,947 37,900 — 3,666,815 Owner occupied - commercial real estate 924,643 42,328 3,879 — 970,850 Real estate mortgage – residential 99,188 636 5,367 — 105,191 Construction - commercial and residential 1,079,958 — 9,155 — 1,089,113 Home equity 82,274 686 487 — 83,447 Other consumer 1,998 — — — 1,998 Total $ 7,198,127 $ 110,720 $ 83,768 $ — $ 7,392,615 December 31, 2018 Commercial $ 1,505,477 $ 25,584 $ 22,051 $ — $ 1,553,112 Income producing - commercial real estate 3,172,479 1,536 82,885 — 3,256,900 Owner occupied - commercial real estate 844,286 38,221 5,307 — 887,814 Real estate mortgage – residential 104,543 647 1,228 — 106,418 Construction - commercial and residential 1,090,600 — 7,012 — 1,097,612 Home equity 85,434 682 487 — 86,603 Other consumer 2,988 — — — 2,988 Total $ 6,805,807 $ 66,670 $ 118,970 $ — $ 6,991,447 (dollars in thousands) June 30,
2019 December 31,
2018 Commercial $ 16,053 $ 7,115 Income producing - commercial real estate 4,563 1,766 Owner occupied - commercial real estate 1,510 2,368 Real estate mortgage - residential 5,640 1,510 Construction - commercial and residential 9,155 3,031 Home equity 487 487 Total nonaccrual loans (1)(2) $ 37,408 $ 16,277 (dollars in thousands) June 30,
2019 December 31,
2018 Commercial $ 16,053 $ 7,115 Income producing - commercial real estate 4,563 1,766 Owner occupied - commercial real estate 1,510 2,368 Real estate mortgage - residential 5,640 1,510 Construction - commercial and residential 9,155 3,031 Home equity 487 487 Total nonaccrual loans ( 1)( 2) $ 37,408 $ 16,277 (1)( 1)Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $8.6 million at June 30, 2019 and $24.0 million at June 30, 2019 and $24.0 million at December 31, 2018.(2)( 2)Gross interest income of $1.2 million and $321 thousand would have been recorded for the six monthsthesixmonths ended June 30, 2019 and 2018, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while the interest actually recorded on such loans was $86 thousand and $6 thousand for thesixmonths ended June 30, 2019 and 2018, respectively. See Note 1 to the six months ended June 30, 2019 and 2018, respectively. See Note 1 toConsolidated Financial Statements for a description of the Consolidated Financial StatementsCompany’s policy for a description of the Company’s policy for placing loans on nonaccrual status. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans June 30, 2019 Commercial $ 4,784 $ 1,112 $ 16,053 $ 21,949 $ 1,453,252 $ 1,475,201 Income producing - commercial real estate 2,253 4,656 4,563 11,472 3,655,343 3,666,815 Owner occupied - commercial real estate 445 3,654 1,510 5,609 965,241 970,850 Real estate mortgage – residential — — 5,640 5,640 99,551 105,191 Construction - commercial and residential 2,011 1,866 9,155 13,032 1,076,081 1,089,113 Home equity 1,413 47 487 1,947 81,500 83,447 Other consumer 21 10 — 31 1,967 1,998 Total $ 10,927 $ 11,345 $ 37,408 $ 59,680 $ 7,332,935 $ 7,392,615 December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 Loans Loans Loans Total Recorded 30-59Days 60-89Days 90Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans June 30, 2019 Commercial $ 4,784 $ 1,112 $ 16,053 $ 21,949 $ 1,453,252 $ 1,475,201 Income producing - commercial real estate 2,253 4,656 4,563 11,472 3,655,343 3,666,815 Owner occupied - commercial real estate 445 3,654 1,510 5,609 965,241 970,850 Real estate mortgage – residential — — 5,640 5,640 99,551 105,191 Construction - commercial and residential 2,011 1,866 9,155 13,032 1,076,081 1,089,113 Home equity 1,413 47 487 1,947 81,500 83,447 Other consumer 21 10 — 31 1,967 1,998 Total $ 10,927 $ 11,345 $ 37,408 $ 59,680 $ 7,332,935 $ 7,392,615 December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 Unpaid Recorded Recorded Contractual Investment Investment Total Average Recorded Investment Interest Income Recognized Principal With No With Recorded Related Quarter Year Quarter Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date To Date To Date June 30, 2019 Commercial $ 17,434 $ 5,003 $ 11,959 $ 16,962 $ 7,905 $ 14,972 $ 12,695 $ 84 $ 103 Income producing - commercial real estate 8,953 4,563 4,390 8,953 1,000 24,198 23,266 (165 ) 98 Owner occupied - commercial real estate 4,819 3,449 1,370 4,819 475 4,836 5,134 47 93 Real estate mortgage – residential 5,640 3,184 2,456 5,640 650 5,642 4,265 — — Construction - commercial and residential 10,315 9,155 — 9,155 — 6,093 5,072 15 15 Home equity 487 487 — 487 — 487 487 — — Other consumer — — — — — — — — — Total $ 47,648 $ 25,841 $ 20,175 $ 46,016 $ 10,030 $ 56,228 $ 50,919 $ (19 ) $ 309 December 31, 2018 Commercial $ 8,613 $ 2,057 $ 6,084 $ 8,141 $ 4,803 $ 10,306 $ 8,359 $ (126 ) $ 190 Income producing - commercial real estate 21,402 1,720 19,682 21,402 2,465 15,331 12,309 189 550 Owner occupied - commercial real estate 5,731 4,361 1,370 5,731 600 5,746 6,011 47 196 Real estate mortgage – residential 1,510 1,510 — 1,510 — 1,516 1,688 — 2 Construction - commercial and residential 3,031 3,031 — 3,031 1,050 3,031 2,028 — 68 Home equity 487 487 — 487 — 487 491 — — Other consumer — — — — — 46 69 — — Total $ 40,774 $ 13,166 $ 27,136 $ 40,302 $ 8,918 $ 36,463 $ 30,955 $ 110 $ 1,006 For the Six Months Ended June 30, 2019 Number of Income Producing - Owner Occupied - Construction - (dollars in thousands) Contracts Commercial Commercial Real Estate Commercial Real Estate Commercial Real Estate Total Troubled debt restructurings Restructured accruing 7 $ 909 $ 4,390 $ 3,309 $ — $ 8,608 Restructured nonaccruing 4 2,831 — — — 2,831 Total 11 $ 3,740 $ 4,390 $ 3,309 $ — $ 11,439 Specific allowance $ — $ 1,000 $ — $ — $ 1,000 Restructured and subsequently defaulted $ $ 2,300 $ — $ — $ 1,847 For the Six Months Ended June 30, 2018 Number of Income Producing - Owner Occupied - Construction - (dollars in thousands) Contracts Commercial Commercial Real Estate Commercial Real Estate Commercial Real Estate Total Troubled debt restructings Restructured accruing 9 $ 4,938 $ 9,138 $ 1,047 $ — $ 15,123 Restructured nonaccruing 4 1,211 — — — 1,211 Total 13 $ 6,149 $ 9,138 $ 1,047 $ — $ 16,334 Specific allowance $ 2,000 $ 3,500 $ — $ — $ 5,500 Restructured and subsequently defaulted $ — $ 937 $ — $ — $ 937 For theSixMonths Ended June 30, 2019 Number of Income Producing - Owner Occupied - Construction - (dollars in thousands) Contracts Commercial Commercial Real Estate Commercial Real Estate Commercial Real Estate Total Troubled debt restructurings Restructured accruing 7 $ 909 $ 4,390 $ 3,309 $ — $ 8,608 Restructured nonaccruing 4 2,831 — — — 2,831 Total 11 $ 3,740 $ 4,390 $ 3,309 $ — $ 11,439 Specific allowance $ — $ 1,000 $ — $ — $ 1,000 Restructured and subsequently defaulted $ $ 2,300 $ — $ — $ 1,847 For theSixMonths Ended June 30, 2018 Number of Income Producing - Owner Occupied - Construction - (dollars in thousands) Contracts Commercial Commercial Real Estate Commercial Real Estate Commercial Real Estate Total Troubled debt restructings Restructured accruing 9 $ 4,938 $ 9,138 $ 1,047 $ — $ 15,123 Restructured nonaccruing 4 1,211 — — — 1,211 Total 13 $ 6,149 $ 9,138 $ 1,047 $ — $ 16,334 Specific allowance $ 2,000 $ 3,500 $ — $ — $ 5,500 Restructured and subsequently defaulted $ — $ 937 $ — $ — $ 937 million. Seven ofmillion.Sevenof these loans totaling approximately $8.6 million are performing under their modified terms. There was one performingwasoneperforming TDR totaling $2.3 million that defaulted on its modified terms which was reclassified to nonperforming loans during the six monthsthesixmonths ended June 30, 2019. During the six monthsthesixmonths ended June 30, 2018, there were two performingweretwoperforming TDRs totaling $937 thousand that defaulted on their modified terms which were reclassified to nonperforming loans. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. For the three monthsthethreemonths ended June 30, 2019, there was one restructuredwasonerestructured loan totaling approximately $4.8 million that had its collateral property sold for approximately $3 million and the remaining $1.8 million was charged-off during the quarter, as compared to the same period in 2018, there was one defaultedwasonedefaulted loan totaling approximately $315 thousand that was charged-off. During the three monthsthethreemonths ended June 30, 2019, there was one loanwasoneloan totaling $10.4 million that was re-underwritten into two newintotwonew loans which provided better collateral for the Bank, as compared to the three monthsthethreemonths ended June 30, 2018, there was one loanwasoneloan totaling $274 thousand that was partially paid off from the sale proceeds of the business which totaled approximately $236 thousand. The remaining balance on the loan of $38 thousand was charged-off. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. For the three monthsthethreemonths ended June 30, 2019, there were no loans modified in a TDR, as compared to the three monthsthethreemonths ended June 30, 2018 which had two loanshadtwoloans totaling $4.0 million modified in a TDR.a 90%a90 % probability that the Company will exercise the option. If these criteria are not met, the options are not included in our ROU assets and lease liabilities. Six Months Ended (dollars in thousands) June 30, 2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 3,898 Variable Lease Cost (Cost excluded from lease payments) 535 Sublease Income (188 ) Net Lease Cost $ 4,245 Operating Lease - Operating Cash Flows (Fixed Payments) $ 4,246 Operating Lease - Operating Cash Flows (Liability Reduction) 3,619 Right-of-Use Assets - Operating Leases 28,214 Weighted Average Lease Term - Operating Leases 5.59 yrs Weighted Average Discount Rate - Operating Leases 4.00 % Six Months Ended (dollars in thousands) June 30, 2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 3,898 Variable Lease Cost (Cost excluded from lease payments) 535 Sublease Income (188 ) Net Lease Cost $ 4,245 Operating Lease - Operating Cash Flows (Fixed Payments) $ Operating Lease - Operating Cash Flows (Liability Reduction) 3,619 Right-of-Use Assets - Operating Leases 28,214 Weighted Average Lease Term - Operating Leases 5.59yrs Weighted Average Discount Rate - Operating Leases 4.00 % (dollars in thousands) Twelve Months Ended: June 30, 2020 $ 8,581 June 30, 2021 8,104 June 30, 2022 6,541 June 30, 2023 4,500 June 29, 2024 3,895 Thereafter 5,140 Total Future Minimum Lease Payments 36,761 Amounts Representing Interest (5,102 ) Present Value of Net Future Minimum Lease Payments $ 31,659 (dollars in thousands) Twelve Months Ended: June 30, 2020 $ June 30, 2021 8,104 June 30, 2022 6,541 June 30, 2023 4,500 June 29, 2024 3,895 Thereafter 5,140 Total Future Minimum Lease Payments 36,761 Amounts Representing Interest (5,102 ) Present Value of Net Future Minimum Lease Payments $ 31,659 June 30, 2019 December 31, 2018 Notional Balance Sheet Notional Balance Sheet Amount Fair Value Category Amount Fair Value Category (dollars in thousands) Interest rate product $ — $ — Other Assets $ 250,000 $ 3,727 Other Assets (dollars in thousands) Interest rate product $ 100,000 $ 101 Other Liabilities $ — $ — Other Liabilities (dollars in thousands) Interest rate product $ 26,000 $ 41 Other Assets $ — $ — Other Assets (dollars in thousands) Interest rate product $ 26,000 $ 40 Other Liabilities $ — $ — Other Liabilities Other Contracts 27,500 101 Other Liabilities 27,500 59 Other Liabilities $ 53,500 $ 141 Other Liabilities $ 27,500 $ 59 Other Liabilities Derivatives in Subtopic 815-20 Hedging Relationships (dollars in thousands) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income 2019 2018 Interest Rate Products $ (834 ) $ 1,109 Interest Expense $ 313 $ 104 Total $ (834 ) $ 1,109 $ 313 $ 104 Derivatives in Subtopic 815-20 Hedging Relationships
(dollars in thousands) Amount of Gain or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,867 ) $ 3,552 Interest Expense $ 775 $ 16 Interest Rate Products — — Gain on sale of investment securities 829 — Total $ (1,867 ) $ 3,552 $ 1,604 $ 16 Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships (in 000's) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2019 2018 Interest Expense Interest Expense Gain on sale of investment securities Interest Expense Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded $ 313 $ 104 $ 775 $ 829 $ 16 Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 313 $ 104 $ 775 $ — $ 16 Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring $ — $ — $ — $ 829 $ — Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance Derivatives Not Designated as
Hedging Instruments under Subtopic
815-20 Location of Gain or
(Loss) Recognized in
Income on Derivative Amount of Gain or (Loss)
Recognized in Income on
Derivative Amount of Gain or (Loss)
Recognized in Income on
Derivative Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Other Contracts Other income / (expense) (29 ) — (42 ) — Total (29 ) — (42 ) — As of June 30, 2019 Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Derivatives $ 41 $ — $ 41 $ — $ — $ 41 Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Derivatives $ 224 $ — $ 224 $ — $ — $ 224 As of December 31, 2018 Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Derivatives $ 3,840 $ — $ 3,840 $ — $ — $ 3,840 Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Derivatives $ 59 $ — $ 59 $ — $ — $ 59 Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2019 2018 2019 2018 Beginning Balance $ 1,394 $ 1,394 $ 1,394 $ 1,394 Real estate acquired from borrowers — — — — Properties sold — — — — Ending Balance $ 1,394 $ 1,394 $ 1,394 $ 1,394 Three Months Ended June 30 , Six Months Ended June 30 , 2019 2018 2019 2018 Beginning Balance $ 1,394 $ 1,394 $ 1,394 $ 1,394 Real estate acquired from borrowers — — — — Properties sold — — — — Ending Balance $ 1,394 $ 1,394 $ 1,394 $ 1,394 (dollars in thousands) June 30,
2019 December 31,
2018 Subordinated Notes, 5.75% $ 70,000 $ 70,000 Subordinated Notes, 5.0% 150,000 150,000 Less: unamortized debt issuance costs (2,509 ) (2,704 ) Long-term borrowings $ 217,491 $ 217,296 June 30,
2019 December 31,
2018 Subordinated Notes, 5.75 % $ 70,000 $ 70,000 Subordinated Notes, 5.0 % 150,000 150,000 Less: unamortized debt issuance costs (2,509 ) (2,704 ) Long-term borrowings $ 217,491 $ 217,296 its 5.75%its5.75 % subordinated notes, due September 1, 2024 (the “2024“ 2024 Notes”). The 2024 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which are being amortized over the life of the 2024 Notes.5.00%5.00 % Fixed-to-Floating Rate Subordinated Notes, due August 1, 2026 (the “2026“ 2026 Notes”). The 2026 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $147.35 million, which includes $2.6 million in deferred financing costs which are being amortized over the life of the 2026 Notes. Three Months Ended June 30, Six Months Ended June 30, (dollars and shares in thousands, except per share data) 2019 2018 2019 2018 Basic: Net income $ 37,243 $ 37,296 $ 70,992 $ 73,011 Average common shares outstanding 34,540 34,306 34,511 34,283 Basic net income per common share $ 1.08 $ 1.09 $ 2.06 $ 2.13 Diluted: Net income $ 37,243 $ 37,296 $ 70,992 $ 73,011 Average common shares outstanding 34,540 34,306 34,511 34,283 Adjustment for common share equivalents 25 142 38 145 Average common shares outstanding-diluted 34,565 34,448 34,549 34,428 Diluted net income per common share $ 1.08 $ 1.08 $ 2.05 $ 2.12 Anti-dilutive shares 2 — 19 — Three Months Ended June 30 , Six Months Ended June 30 , (dollars and shares in thousands, except per share data) 2019 2018 2019 2018 Basic: Net income $ 37,243 $ 37,296 $ 70,992 $ 73,011 Average common shares outstanding 34,540 34,306 34,511 34,283 Basic net income per common share $ 1.08 $ 1.09 $ 2.06 $ 2.13 Diluted: Net income $ 37,243 $ 37,296 $ 70,992 $ 73,011 Average common shares outstanding 34,540 34,306 34,511 34,283 Adjustment for common share equivalents 25 142 38 145 Average common shares outstanding-diluted 34,565 34,448 34,549 34,428 Diluted net income per common share $ 1.08 $ 1.08 $ 2.05 $ 2.12 Anti-dilutive shares 2 — 19 — 2018.2018 .(dollars in thousands) Before Tax Tax Effect Net of Tax Three Months Ended June 30, 2019 Net unrealized gain on securities available-for-sale $ 7,976 $ 2,051 $ 5,925 Less: Reclassification adjustment for net gains included in net income (563 ) (146 ) (417 ) Total unrealized gain 7,413 1,905 5,508 Net unrealized loss on derivatives (171 ) (342 ) (513 ) Less: Reclassification adjustment for gain included in net income (319 ) (83 ) (236 ) Total unrealized loss (490 ) 259 (749 ) Other Comprehensive Income $ 6,923 $ 2,164 $ 4,759 Three Months Ended June 30, 2018 Net unrealized loss on securities available-for-sale $ (2,605 ) $ 670 $ (1,935 ) Less: Reclassification adjustment for net gains included in net income (26 ) (6 ) (20 ) Total unrealized loss (2,631 ) 664 (1,955 ) Net unrealized gain on derivatives 930 238 692 Less: Reclassification adjustment for losses included in net income 87 23 64 Total unrealized gain 1,017 261 756 Other Comprehensive Loss $ (1,614 ) $ 925 $ (1,199 ) Six Months Ended June 30, 2019 Net unrealized gain on securities available-for-sale $ 16,127 $ (4,148 ) $ 11,979 Less: Reclassification adjustment for net gains included in net income (1,475 ) (383 ) (1,092 ) Total unrealized gain 14,652 (4,531 ) 10,887 Net unrealized loss on derivatives (2,234 ) 569 (1,665 ) Less: Reclassification adjustment for gain included in net income (1,594 ) (414 ) (1,180 ) Total unrealized loss (3,828 ) 155 (2,845 ) Other Comprehensive Income $ 10,824 $ (4,376 ) $ 8,042 Six Months Ended June 30, 2018 Net unrealized loss on securities available-for-sale $ (8,826 ) $ 1,768 $ (7,058 ) Less: Reclassification adjustment for net gains included in net income (68 ) (17 ) (51 ) Total unrealized loss (8,894 ) 1,751 (7,109 ) Net unrealized gain on derivatives 3,537 612 2,925 Less: Reclassification adjustment for losses included in net income (1 ) — (1 ) Total unrealized gain 3,536 612 2,924 Other Comprehensive Loss $ (5,358 ) $ 2,363 $ (4,185 ) 2018.2018 .(dollars in thousands) Securities Available For Sale Derivatives Accumulated Other Comprehensive Income (Loss) Three Months Ended June 30, 2019 Balance at Beginning of Period $ (1,665 ) $ 673 $ (992 ) Other comprehensive income (loss) before reclassifications 5,925 (513 ) 5,412 Amounts reclassified from accumulated other comprehensive income (417 ) (236 ) (653 ) Net other comprehensive income (loss) during period 5,508 (749 ) 4,759 Balance at End of Period $ 3,843 $ (76 ) $ 3,767 Three Months Ended June 30, 2018 Balance at Beginning of Period $ (8,959 ) $ 3,549 $ (5,410 ) Other comprehensive income (loss) before reclassifications (1,935 ) 692 (1,243 ) Amounts reclassified from accumulated other comprehensive income (20 ) 64 44 Net other comprehensive (loss) income during period (1,955 ) 756 (1,199 ) Balance at End of Period $ (10,914 ) $ 4,305 $ (6,609 ) (dollars in thousands) Securities Available For Sale Derivatives Accumulated Other Comprehensive Income (Loss) Six Months Ended June 30, 2019 Balance at Beginning of Period $ (7,044 ) $ 2,769 $ (4,275 ) Other comprehensive income (loss) before reclassifications 11,979 (1,665 ) 10,314 Amounts reclassified from accumulated other comprehensive income (1,092 ) (1,180 ) (2,272 ) Net other comprehensive income (loss) during period 10,887 (2,845 ) 8,042 Balance at End of Period $ 3,843 $ (76 ) $ 3,767 Six Months Ended June 30, 2018 Balance at Beginning of Period $ (3,131 ) $ 1,381 $ (1,750 ) Other comprehensive income (loss) before reclassifications (7,058 ) 2,925 (4,133 ) Amounts reclassified from accumulated other comprehensive income (51 ) (1 ) (52 ) Net other comprehensive (loss) income during period (7,109 ) 2,924 (4,185 ) Reclassification of the Income Tax Effects of the Tax Cuts and Jobs Act from AOCI (674 ) — (674 ) Balance at End of Period $ (10,914 ) $ 4,305 $ (6,609 ) 2018.Details about Accumulated Other
Comprehensive Income Components
(dollars in thousands) Amount Reclassified from
Accumulated Other
Comprehensive Income (Loss) Affected Line Item in
the Statement Where
Net Income is Presented Three Months Ended June 30, 2019 2018 Realized gain on sale of investment securities $ 563 $ 26 Gain on sale of investment securities Interest income (expense) derivative deposits 319 (87 ) Interest expense on deposits Income tax (expense) benefit (229 ) 17 Income Tax Expense Total Reclassifications for the Period $ 653 $ (44 ) Net Income 2018 .Details about Accumulated Other
Comprehensive Income Components
(dollars in thousands) Amount Reclassified from
Accumulated Other
Comprehensive Income Affected Line Item in
the Statement Where
Net Income is Presented Six Months Ended June 30, 2019 2018 Realized gain on sale of investment securities $ 1,475 $ 68 Gain on sale of investment securities Realized gain on swap termination 829 — Gain on sale of investment securities Interest income (expense) derivative deposits 765 1 Interest expense on deposits Income tax expense (797 ) (17 ) Income Tax Expense Total Reclassifications for the Period $ 2,272 $ 52 Net Income Details about Accumulated Other
Comprehensive Income Components
(dollars in thousands) Amount Reclassified from
Accumulated Other
Comprehensive Income (Loss) Affected Line Item in
the Statement Where
Net Income is Presented Three Months Ended June 30 , 2019 2018 Realized gain on sale of investment securities $ 563 $ 26 Gain on sale of investment securities Interest income (expense) derivative deposits 319 (87 ) Interest expense on deposits Income tax (expense) benefit ( 229 ) 17 Income Tax Expense Total Reclassifications for the Period $ 653 $ (44 ) Net Income Details about Accumulated Other
Comprehensive Income Components
(dollars in thousands) Amount Reclassified from
Accumulated Other
Comprehensive Income Affected Line Item in
the Statement Where
Net Income is Presented Six Months Ended June 30 , 2019 2018 Realized gain on sale of investment securities $ 1,475 $ 68 Gain on sale of investment securities Realized gain on swap termination 829 — Gain on sale of investment securities Interest income (expense) derivative deposits 765 1 Interest expense on deposits Income tax expense (797 ) (17 ) Income Tax Expense Total Reclassifications for the Period $ 2,272 $ 52 Net Income Level 1 Level 1Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets.Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale. Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain U.S. Governmentprivate equity investments, retained interests from securitizations, and agency securities, corporatecertain collateralized debt securities, derivative instruments, and residential mortgage loans held for sale.Level 3Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations.(dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs
(Level 2) Significant Other Unobservable Inputs
(Level 3) Total
(Fair Value) June 30, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 225,670 $ — $ 225,670 Residential mortgage backed securities — 443,545 — 443,545 Municipal bonds — 69,338 — 69,338 Corporate bonds — — 6,572 6,572 Other equity investments — — 218 218 Loans held for sale — 37,506 — 37,506 Interest Rate Caps — 41 — 41 Mortgage banking derivatives — — 387 387 Total assets measured at fair value on a recurring basis as of June 30, 2019 $ — $ 776,100 $ 7,177 $ 783,277 Liabilities: Interest rate swap derivatives $ — $ 101 $ — $ 101 Derivative liability — 101 — 101 Interest Rate Caps — 40 — 40 Mortgage banking derivatives — — 309 309 Total liabilities measured at fair value on a recurring basis as of June 30, 2019 $ — $ 242 $ 309 $ 551 December 31, 2018 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ 269 $ 269 (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total
(Fair Value) June 30, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 225,670 $ — $ 225,670 Residential mortgage backed securities — 443,545 — 443,545 Municipal bonds — 69,338 — 69,338 Corporate bonds — — 6,572 6,572 Other equity investments — — 218 218 Loans held for sale — 37,506 — 37,506 Interest Rate Caps — 41 — 41 Mortgage banking derivatives — — 387 387 Total assets measured at fair value on a recurring basis as of June 30, 2019 $ — $ 776,059 $ 7,177 $ 783,236 Liabilities: Interest rate swap derivatives $ — $ 101 $ — $ 101 Derivative liability — 101 — 101 Interest Rate Caps — 40 — 40 Mortgage banking derivatives — — 309 309 Total liabilities measured at fair value on a recurring basis as of June 30, 2019 $ — $ 242 $ 309 $ 551 December 31, 2018 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ $ June 30, 2019 (dollars in thousands) Fair Value Aggregate Unpaid Principal Balance Difference Residential mortgage loans held for sale $ 37,506 $ 36,638 $ 868 FHA mortgage loans held for sale $ — $ — $ — December 31, 2018 (dollars in thousands) Fair Value Aggregate Unpaid Principal Balance Difference Residential mortgage loans held for sale $ 19,254 $ 18,797 $ 457 FHA mortgage loans held for sale $ — $ — $ — Agreements: Agreements:Caps: theCaps:
(dollars in thousands) Investment Securities Mortgage Banking Derivatives Total Assets: Beginning balance at January 1, 2019 $ 9,794 $ 229 $ 10,023 Realized gain included in earnings — 158 158 Unrealized loss included in other comprehensive income — — — Principal redemption (3,004 ) — (3,004 ) Ending balance at June 30, 2019 $ 6,790 $ 387 $ 7,177 Liabilities: Beginning balance at January 1, 2019 $ — $ 269 $ 269 Realized gain included in earnings — 40 40 Principal redemption — — — Ending balance at June 30, 2019 $ — $ 309 $ 309 (dollars in thousands) Investment Securities Mortgage Banking Derivatives Total Assets: Beginning balance at January 1, 2018 $ 1,718 $ 43 $ 1,761 Realized gain included in earnings — 186 186 Purchases of available-for-sale securities 8,076 — 8,076 Principal redemption — — — Ending balance at December 31, 2018 $ 9,794 $ 229 $ 10,023 Liabilities: Beginning balance at January 1, 2018 $ — $ 10 $ 10 Realized loss included in earnings — 259 259 Principal redemption — — — Ending balance at December 31, 2018 $ — $ 269 $ 269 loansloans:: The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is considered impaired and an allowance for loan loss is established. The Company considers a loan impaired when it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that nonaccrual loans and loans that have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310,“Receivables.” The fair value of impaired loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At June 30, 2019, substantially all of the Company’s impaired loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the underlying collateral for collateral-dependent loans, which the Company classifies as a Level 3 valuation.(dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs
(Level 2) Significant Other
Unobservable Inputs
(Level 3) Total
(Fair Value) June 30, 2019 Impaired loans: Commercial $ — $ — $ 9,057 $ 9,057 Income producing - commercial real estate — — 7,953 7,953 Owner occupied - commercial real estate — — 4,344 4,344 Real estate mortgage - residential — — 4,990 4,990 Construction - commercial and residential — — 9,155 9,155 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of June 30, 2019 $ — $ — $ 37,380 $ 37,380 (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs
(Level 2) Significant Other Unobservable Inputs
(Level 3) Total
(Fair Value) December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential — — 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total
(Fair Value) June 30, 2019 Impaired loans: Commercial $ — $ — $ 9,057 $ 9,057 Income producing - commercial real estate — — 7,953 7,953 Owner occupied - commercial real estate — — 4,344 4,344 Real estate mortgage - residential — — 4,990 4,990 Construction - commercial and residential — — 9,155 9,155 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of June 30, 2019 $ — $ — $ 37,380 $ 37,380 (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total
(Fair Value) December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential — — 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 Fair Value Measurements (dollars in thousands) Carrying Value Fair Value Quoted Prices (Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) June 30, 2019 Assets Cash and due from banks $ 6,735 $ 6,735 $ — $ 6,735 $ — Federal funds sold 17,914 17,914 — 17,914 — Interest bearing deposits with other banks 171,985 171,985 — 171,985 — Investment securities 745,343 745,343 — 738,553 6,790 Federal Reserve and Federal Home Loan Bank stock 33,903 33,903 — 33,903 — Loans held for sale 37,506 37,506 — 37,506 — Loans 7,320,529 7,392,664 — — 7,392,664 Bank owned life insurance 74,295 74,295 — 74,295 — Annuity investment 12,088 12,088 — 12,088 — Interest Rate Caps 41 41 — 41 — Mortgage banking derivatives 387 387 — — 387 Liabilities Noninterest bearing deposits 1,873,902 1,873,902 — 1,873,902 — Interest bearing deposits 3,574,696 3,574,696 — 3,574,696 — Certificates of deposit 1,501,294 1,509,812 — 1,509,812 — Customer repurchase agreements 31,669 31,669 — 31,669 — Borrowings 467,491 468,790 — 468,790 — Interest rate swap derivatives 101 101 101 — Derivative liability 101 101 — 101 — Interest Rate Caps 40 40 — 40 — Mortgage banking derivatives 309 309 — — 309 December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,400 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives 269 269 — — 269 Fair Value Measurements (dollars in thousands) June 30, 2019 Assets Cash and due from banks $ 6,735 $ 6,735 $ — $ 6,735 $ — Federal funds sold 17,914 17,914 — 17,914 — Interest bearing deposits with other banks 171,985 171,985 — 171,985 — Investment securities 745,343 745,343 — 738,553 6,790 Federal Reserve and Federal Home Loan Bank stock 33,903 33,903 — 33,903 — Loans held for sale 37,506 37,506 — 37,506 — Loans 7,320,529 7,392,664 — — 7,392,664 Bank owned life insurance 74,295 74,295 — 74,295 — Annuity investment 12,088 12,088 — 12,088 — Interest Rate Caps 41 41 — 41 — Mortgage banking derivatives 387 387 — — 387 Liabilities Noninterest bearing deposits 1,873,902 1,873,902 — 1,873,902 — Interest bearing deposits 3,574,696 3,574,696 — 3,574,696 — Certificates of deposit 1,501,294 1,509,812 — 1,509,812 — Customer repurchase agreements 31,669 31,669 — 31,669 — Borrowings 467,491 468,790 — 468,790 — Interest rate swap derivatives 101 101 — 101 — Derivative liability 101 101 — 101 — Interest Rate Caps 40 40 — 40 — Mortgage banking derivatives 309 309 — — 309 December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,400 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives — — 67.67 . The SERP Agreements provide that (a) the benefits vest ratably over six years of service to the Bank, with the executive receiving credit for years of service prior to entering into the SERP Agreement, (b) death, disability and change-in-control shall result in immediate vesting, and (c) the monthly amount will be reduced if retirement occurs earlier than age 67 for any reason other than death, disability or change-in-control. The SERP Agreements further provide for a death benefit in the event the retired executive dies prior to receiving 180 monthly installments, paid either in a lump sum payment or continued monthly installment payments, such that the executive’s beneficiary has received payment(s) sufficient to equate to a cumulative 180 monthly installments.$101$65 thousand of income offset by $110 thousand of annual fees, and $202 thousand, respectively, for this post retirement benefit. For the three and six months ended June 30, 2018, the Company recorded benefit expense accruals of $385 thousand and $486 thousand, respectively, for this post retirement benefit.GENERALEarnings Summary Three Months Ended June 30, 2019 2018 Average
Balance Interest Average
Yield/Rate Average
Balance Interest Average
Yield/Rate ASSETS Interest earning assets: Interest bearing deposits with other banks and other short-term investments $ 209,096 $ 1,105 2.12 % $ 302,991 $ 1,274 1.69 % Loans held for sale (1) 34,760 349 4.02 % 25,621 291 4.54 % Loans (1) (2) 7,260,899 101,540 5.61 % 6,569,931 90,633 5.53 % Investment securities available for sale (2) 803,207 5,238 2.62 % 643,409 4,058 2.53 % Federal funds sold 20,361 47 0.93 % 16,186 40 0.99 % Total interest earning assets 8,328,323 108,279 5.21 % 7,558,138 96,296 5.11 % Total noninterest earning assets 337,172 297,601 Less: allowance for credit losses 69,972 66,175 Total noninterest earning assets 267,200 231,426 TOTAL ASSETS $ 8,595,523 $ 7,789,564 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing liabilities: Interest bearing transaction $ 705,628 $ 1,197 0.68 % $ 444,842 $ 815 0.73 % Savings and money market 2,628,255 12,279 1.87 % 2,647,910 8,546 1.29 % Time deposits 1,442,197 8,985 2.50 % 1,123,330 4,687 1.67 % Total interest bearing deposits 4,776,080 22,461 1.89 % 4,216,082 14,048 1.34 % Customer repurchase agreements 33,248 75 0.90 % 38,438 62 0.65 % Other short-term borrowings 219,508 1,435 2.59 % 230,223 997 1.71 % Long-term borrowings 217,458 2,979 5.42 % 217,068 2,979 5.43 % Total interest bearing liabilities 5,246,294 26,950 2.06 % 4,701,811 18,086 1.54 % Noninterest bearing liabilities: Noninterest bearing demand 2,117,901 2,053,044 Other liabilities 64,841 32,618 Total noninterest bearing liabilities 2,182,742 2,085,662 Shareholders’ Equity 1,166,487 1,002,091 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,595,523 $ 7,789,564 Net interest income $ 81,329 $ 78,210 Net interest spread 3.15 % 3.57 % Net interest margin 3.91 % 4.15 % Cost of funds 1.30 % 0.96 % (1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.7 million and $5.2 million for the three months ended June 30, 2019 and 2018, respectively. (2) Interest and fees on loans and investments exclude tax equivalent adjustments. Six Months Ended June 30, 2019 2018 Average
Balance Interest Average
Yield/Rate Average
Balance Interest Average
Yield/Rate ASSETS Interest earning assets: Interest bearing deposits with other banks and other short-term investments $ 254,804 $ 2,771 2.19 % $ 292,772 $ 2,255 1.55 % Loans held for sale (1) 26,386 550 4.17 % 25,293 565 4.47 % Loans (1) (2) 7,150,300 199,160 5.62 % 6,502,207 174,789 5.42 % Investment securities available-for-sale (2) 806,858 10,836 2.71 % 628,818 7,650 2.45 % Federal funds sold 19,063 96 1.02 % 17,258 86 1.00 % Total interest earning assets 8,257,411 213,413 5.21 % 7,466,348 185,345 5.01 % Total noninterest earning assets 338,290 293,488 Less: allowance for credit losses 69,713 65,781 Total noninterest earning assets 268,577 227,707 TOTAL ASSETS $ 8,525,988 $ 7,694,055 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing liabilities: Interest bearing transaction $ 648,557 $ 2,378 0.74 % $ 409,066 $ 1,279 0.63 % Savings and money market 2,709,950 24,242 1.80 % 2,708,480 14,210 1.06 % Time deposits 1,386,876 16,741 2.43 % 1,006,356 7,688 1.54 % Total interest bearing deposits 4,745,383 43,361 1.84 % 4,123,902 23,177 1.13 % Customer repurchase agreements 30,536 173 1.14 % 53,158 112 0.42 % Other short-term borrowings 120,832 1,575 2.59 % 234,267 2,108 1.79 % Long-term borrowings 217,408 5,958 5.45 % 217,019 5,958 5.46 % Total interest bearing liabilities 5,114,159 51,067 2.01 % 4,628,346 31,355 1.37 % Noninterest bearing liabilities: Noninterest bearing demand 2,195,084 2,042,738 Other liabilities 68,963 38,535 Total noninterest bearing liabilities 2,264,047 2,081,273 Shareholders’ equity 1,147,782 984,436 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,525,988 $ 7,694,055 Net interest income $ 162,346 $ 153,990 Net interest spread 3.20 % 3.64 % Net interest margin 3.97 % 4.16 % Cost of funds 1.24 % 0.85 % (1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.7$8.8 million and $5.2$9.9 million for the threesix months ended June 30, 2019 and 2018, respectively.(2) Interest and fees on loans and investments exclude tax equivalent adjustments.Eagle Bancorp, Inc.Consolidated Average Balances, Interest Yields and Rates (Unaudited)(dollars in thousands) Six Months Ended June 30, 2019 2018 Average
Balance Interest Average
Yield/Rate Average
Balance Interest Average
Yield/Rate ASSETS Interest earning assets: Interest bearing deposits with other banks and other short-term investments $ 254,804 $ 2,771 2.19 % $ 292,772 $ 2,255 1.55 % Loans held for sale (1) 26,386 550 4.17 % 25,293 565 4.47 % Loans (1) (2) 7,150,300 199,160 5.62 % 6,502,207 174,789 5.42 % Investment securities available-for-sale (2) 806,858 10,836 2.71 % 628,818 7,650 2.45 % Federal funds sold 19,063 96 1.02 % 17,258 86 1.00 % Total interest earning assets 8,257,411 213,413 5.21 % 7,466,348 185,345 5.01 % Total noninterest earning assets 338,290 293,488 Less: allowance for credit losses 69,713 65,781 Total noninterest earning assets 268,577 227,707 TOTAL ASSETS $ 8,525,988 $ 7,694,055 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing liabilities: Interest bearing transaction $ 648,557 $ 2,378 0.74 % $ 409,066 $ 1,279 0.63 % Savings and money market 2,709,950 24,242 1.80 % 2,708,480 14,210 1.06 % Time deposits 1,386,876 16,741 2.43 % 1,006,356 7,688 1.54 % Total interest bearing deposits 4,745,383 43,361 1.84 % 4,123,902 23,177 1.13 % Customer repurchase agreements 30,536 173 1.14 % 53,158 112 0.42 % Other short-term borrowings 120,832 1,575 2.59 % 234,267 2,108 1.79 % Long-term borrowings 217,408 5,958 5.45 % 217,019 5,958 5.46 % Total interest bearing liabilities 5,114,159 51,067 2.01 % 4,628,346 31,355 1.37 % Noninterest bearing liabilities: Noninterest bearing demand 2,195,084 2,042,738 Other liabilities 68,963 38,535 Total noninterest bearing liabilities 2,264,047 2,081,273 Shareholders’ equity 1,147,782 984,436 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,525,988 $ 7,694,055 Net interest income $ 162,346 $ 153,990 Net interest spread 3.20 % 3.64 % Net interest margin 3.97 % 4.16 % Cost of funds 1.24 % 0.85 % (1)Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $8.8 million and $9.9 million for the six months ended June 30, 2019 and 2018, respectively.(2)Interest and fees on loans and investments exclude tax equivalent adjustments. Six Months Ended June 30, (dollars in thousands) 2019 2018 Balance at beginning of period $ 69,944 $ 64,758 Charge-offs: Commercial 5 1,261 Income producing - commercial real estate 5,343 121 Owner occupied - commercial real estate — 132 Real estate mortgage - residential — — Construction - commercial and residential — 517 Construction - C&I (owner occupied) — — Home equity — — Other consumer 2 — Total charge-offs 5,350 2,031 Recoveries: Commercial 167 26 Income producing - commercial real estate 302 2 Owner occupied - commercial real estate 2 2 Real estate mortgage - residential 3 3 Construction - commercial and residential 37 95 Construction - C&I (owner occupied) — — Home equity — 127 Other consumer 21 8 Total recoveries 532 263 Net charge-offs 4,818 1,768 Provision for Credit Losses 6,960 3,619 Balance at end of period $ 72,086 $ 66,609 Annualized ratio of net charge-offs during the period to average loans outstanding during the period 0.13 % 0.05 % June 30, 2019 December 31, 2018 (dollars in thousands) Amount %(1) Amount %(1) Commercial $ 18,136 20 % $ 15,857 22 % Income producing - commercial real estate 27,010 50 % 28,034 46 % Owner occupied - commercial real estate 5,756 13 % 6,242 13 % Real estate mortgage - residential 1,355 1 % 965 2 % Construction - commercial and residential 17,674 14 % 17,484 15 % Construction - C&I (owner occupied) 1,332 1 % 691 1 % Home equity 581 1 % 599 1 % Other consumer 242 — 72 — Total allowance $ 72,086 100 % $ 69,944 100 % (1) (1)Represents the percent of loans in each category to total loans. 310—310 -“Receivables,” and updated quarterly. For collateral dependent impaired loans, the carrying amount of the loan is determined by current appraised value less estimated costs to sell the underlying collateral, which may be adjusted downward under certain circumstances for actual events and/or changes in market conditions. For example, current average actual selling prices less average actual closing costs on an impaired multi-unit real estate project may indicate the need for an adjustment in the appraised valuation of the project, which in turn could increase the associated ASC Topic 310 specific reserve for the loan. Generally, all appraisals associated with impaired loans are updated on a not less than annual basis. June 30, December 31, (dollars in thousands) 2019 2018 Nonaccrual Loans: Commercial $ 16,053 $ 7,115 Income producing - commercial real estate 4,563 1,766 Owner occupied - commercial real estate 1,510 2,368 Real estate mortgage - residential 5,640 1,510 Construction - commercial and residential 9,155 3,031 Construction - C&I (owner occupied) — — Home equity 487 487 Other consumer — — Accrual loans-past due 90 days — — Total nonperforming loans (1) 37,408 16,277 Other real estate owned 1,394 1,394 Total nonperforming assets $ 38,802 $ 17,671 Coverage ratio, allowance for credit losses to total nonperforming loans 192.70 % 429.72 % Ratio of nonperforming loans to total loans 0.51 % 0.23 % Ratio of nonperforming assets to total assets 0.45 % 0.21 % (1) Nonaccrual loans reported in the table above include one loan totaling $2.3 million that migrated from a performing TDRs during the six months ended June 30, 2019, as compared to the six months ended June 30, 2019, as compared to the six months ended June 30, 2018 where there were two loans totaling $937 thousand that migrated from performing TDRs. June 30, 2019 December 31, 2018 (dollars in thousands) Amount % Amount % Commercial $ 1,475,201 20 % $ 1,553,112 22 % Income producing - commercial real estate 3,666,815 50 % 3,256,900 46 % Owner occupied - commercial real estate 970,850 13 % 887,814 13 % Real estate mortgage - residential 105,191 1 % 106,418 2 % Construction - commercial and residential 1,012,789 14 % 1,039,815 15 % Construction - C&I (owner occupied) 76,324 1 % 57,797 1 % Home equity 83,447 1 % 86,603 1 % Other consumer 1,998 — 2,988 — Total loans 7,392,615 100 % 6,991,447 100 % Less: allowance for credit losses (72,086 ) (69,944 ) Net loans $ 7,320,529 $ 6,921,503 54(dollars in thousands) 2019 Unfunded loan commitments $ 2,398,984 Unfunded lines of credit 90,902 Letters of credit 78,525 Total $ 2,568,411
rates (basis points)
net interest income
net income
market value of
portfolio equity +400 +16.6% +28.8% +3.9% +300 +12.5% +21.6% +3.6% +200 +8.4% +14.5% +3.1% +100 +4.2% +7.3% +2.0% 0 — — — -100 -3.8% -6.6% -3.0% -200 -5.7% -9.9% -7.7% 58GAP Analysis June 30, 2019 (dollars in thousands) 0-3 months 4-12 months 13-36 months 37-60 months Over 60 months Total Rate Sensitive Non Sensitive Total RATE SENSITIVE ASSETS: Investment securities $ 185,852 $ 76,621 $ 169,361 $ 121,902 $ 225,600 $ 779,336 Loans (1)(2) 4,003,852 549,180 1,091,962 1,033,287 751,840 7,430,121 Fed funds and other short-term investments 189,899 — — — — 189,899 Other earning assets 74,295 — — — — 74,295 Total $ 4,453,898 $ 625,801 $ 1,261,323 $ 1,155,189 $ 977,440 $ 8,473,651 $ 196,352 $ 8,670,003 RATE SENSITIVE LIABILITIES: Noninterest bearing demand $ 71,984 $ 199,273 $ 426,953 $ 308,870 $ 866,822 $ 1,873,902 Interest bearing transaction 862,553 — — — — 862,553 Savings and money market 2,712,143 — — — — 2,712,143 Time deposits 255,101 649,747 459,757 133,547 3,142 1,501,294 Customer repurchase agreements and fed funds purchased 31,669 — — — — 31,669 Other borrowings 225,000 — 148,130 — 69,361 442,491 Total $ 4,158,450 $ 849,020 $ 1,034,840 $ 442,417 $ 939,325 $ 7,424,052 $ 61,369 $ 7,485,421 GAP $ 295,448 $ (223,219 ) $ 226,483 $ 712,772 $ 38,115 $ 1,049,599 Cumulative GAP $ 295,448 $ 72,229 $ 298,712 $ 1,011,484 $ 1,049,599 Cumulative gap as percent of total assets 3.41 % 0.83 % 3.45 % 11.67 % 12.11 % OFF BALANCE-SHEET: Interest Rate Swaps - LIBOR based $ 100,000 $ — $ (100,000 ) $ — $ — $ — Interest Rate Swaps - Fed Funds based — — — — — — Total $ 100,000 $ — $ (100,000 ) $ — $ — $ — $ — $ — GAP $ 395,448 $ (223,219 ) $ 126,483 $ 712,772 $ 38,115 $ 1,049,599 Cumulative GAP $ 395,448 $ 172,229 $ 298,712 $ 1,011,484 $ 1,049,599 $ — Cumulative gap as percent of total assets 4.56 % 1.99 % 3.45 % 11.67 % 12.11 % CET1 capital (to risk weighted aseets) $ 1,075,087 12.87 % $ 1,227,269 14.70 % 7.000 % 6.5 % Total capital (to risk weighted assets) 1,367,227 16.36 % 1,299,409 15.57 % 10.500 % 10.0 % Tier 1 capital (to risk weighted assets) 1,075,087 12.87 % 1,227,269 14.70 % 8.500 % 8.0 % Tier 1 capital (to average assets) 1,075,087 12.66 % 1,227,269 14.46 % 4.000 % 5.0 % CET1 capital (to risk weighted aseets) $ 1,007,438 12.49 % $ 1,147,151 14.23 % 6.375 % 6.5 % Total capital (to risk weighted assets) 1,297,427 16.08 % 1,217,140 15.10 % 9.875 % 10.0 % Tier 1 capital (to risk weighted assets) 1,007,438 12.49 % 1,147,151 14.23 % 7.875 % 8.0 % Tier 1 capital (to average assets) 1,007,438 12.10 % 1,147,151 13.78 % 5.000 % 5.0 % Three Months Ended
June 30, 2019 Six Months Ended
June 30, 2019 Common shareholders’ equity $ 1,184,582 $ 1,108,941 $ 1,023,137 Less: Intangible assets (105,219 ) (105,766 ) (106,820 ) Tangible common equity $ 1,079,363 $ 1,003,175 $ 916,317 Book value per common share $ 34.30 $ 32.25 $ 29.82 Less: Intangible book value per common share (3.05 ) (3.08 ) (3.11 ) Tangible book value per common share $ 31.25 $ 29.17 $ 26.71 Total assets $ 8,670,003 $ 8,389,137 $ 7,880,017 Less: Intangible assets (105,219 ) (105,766 ) (106,820 ) Tangible assets $ 8,564,784 $ 8,283,371 $ 7,773,197 Tangible common equity ratio 12.60 % 12.11 % 11.79 % Average common shareholders’ equity $ 1,166,487 $ 1,147,782 $ 1,022,642 $ 1,002,091 $ 984,436 Less: Average intangible assets (105,280 ) �� (105,430 ) (106,806 ) (106,955 ) (107,112 ) Average tangible common equity $ 1,061,206 $ 1,042,352 $ 915,836 $ 895,136 $ 877,324 Net Income $ 37,243 $ 70,992 $ 152,276 $ 37,296 $ 73,011 Average tangible common equity $ 1,061,206 $ 1,042,352 $ 915,836 $ 895,136 $ 877,324 Annualized Return on Average Tangible Common Equity 14.08 % 13.73 % 16.63 % 16.71 % 16.78 % None Not Applicable None NoneNone NoneNot Applicable Not Applicable None None NoneCertificate of Incorporation of the Company, as amended (1) Bylaws of the Company (2) Subordinated Indenture, dated as of August 5, 2014, between the Company and Wilmington Trust, National Association, as Trustee (3) First Supplemental Indenture, dated as of August 5, 2014, between the Company and Wilmington Trust, National Association, as Trustee (4) 4.3 Form of Global Note representing the 5.75% Subordinated Notes due September 1, 2024 (included in Exhibit 4.2) Second Supplemental Indenture, dated as of July 26, 2016, between the Company and Wilmington Trust, National Association, as Trustee (5) 4.5 Form of Global Note representing the 5.00% Fixed-to-Floating Rate Subordinated Notes due August 1, 2026 (included in Exhibit 4.4) 2016 Stock Option Plan (6) 10.2 2006 Stock Plan (7) Employment Agreement dated as of April 7, 2017, between EagleBank and Charles D. Levingston (8) Amended and Restated Employment Agreement dated as of January 31, 2017, between EagleBank and Antonio F. Marquez (9) Amended and Restated Employment Agreement dated as of January 31, 2017, between EagleBank and Susan G. Riel (10) Amended and Restated Employment Agreement dated as of January 31, 2017, between EagleBank and Janice L. Williams (11) Non-Compete Agreement dated as of April 7, 2017, between EagleBank and Charles D. Levingston (12) Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Antonio F. Marquez (13) Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Susan G. Riel (14) Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Janice L. Williams (15) Form of Supplemental Executive Retirement Plan Agreement (16) Amended and Restated Employment Agreement dated as of January 31, 2017 between EagleBank and Lindsey S. Rheaume (17) Non-Compete Agreement dated as of December 15, 2014, between EagleBank and Lindsey S. Rheaume (18) 10.14 Virginia Heritage Bank 2006 Stock Option Plan (19) 10.15 Virginia Heritage Bank 2010 Long-Term Incentive Plan (20) First Amendment to Employment Agreement of Charles D. Levingston (21) First Amendment to Amended and Restated Employment Agreement of Antonio F. Marquez (22) First Amendment to Amended and Restated Employment Agreement of Susan G. Riel (23) First Amendment to Amended and Restated Employment Agreement of Janice L. Williams (24) First Amendment to Amended and Restated Employment Agreement of Lindsey S. Rheaume (25) 2019 Senior Executive Incentive Plan (26) 2019 Long Term Incentive Plan (27) 11 Statement Regarding Computation of Per Share Income Subsidiaries of the Registrant Certification of Susan G. Riel Certification of Charles D. Levingston Certification of Susan G. Riel Certification of Charles D. Levingston 101 CertificationInteractive data files pursuant to Rule 405 of Charles D. LevingstonRegulation S-T:101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets at June 30, 2019, December 31, 2018 (ii) Consolidated Statement of Operations for the three and six months ended June 30, 2019 and 2018 (iii) Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (iii)(iv)Consolidated Statement of Comprehensive IncomeChanges in Shareholders’ Equity for the three and six months ended June 30, 2019 and 2018 (iv)(v)Consolidated Statement of Changes in Shareholders’ EquityCash Flows for the three and six months ended June 30, 2019 and 2018 (v)(vi)Notes to the Consolidated Statement of Cash Flows for the six months ended June 30, 2019 and 2018Financial Statements(vi)Notes to the Consolidated Financial Statements(1) Incorporated by reference to the Exhibit of the same number to the Company’s Current Report on Form 8-K filed on May 17, 2016. (2) Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on December 18, 2017. (3) Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 5, 2014. (4) Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 5, 2014. (5) Incorporated by Reference to Exhibit 4.2 to the Company’s Current report on Form 8-K filed on July 22, 2016. (6) Incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-211857) filed on June 6, 2016. (7) Incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8 (No. 333-187713) (8) Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 11, 2017. (9) Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 6, 2017. (10) Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 6, 2017. (11) Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 6, 2017. (12) Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 11, 2017. (13) Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on December 15, 2014. (14) Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on December 15, 2014. (15) Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on December 15, 2014. (16) Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the Year ended December 31, 2013. (17) Incorporated by reference to Exhibit 10.7 to the Company’s current Report on Form 8-K filed on February 6, 2017. (18) Incorporated by reference to Exhibit 10.29 to the Company’s Form 10-Q for the Quarter ended March 31, 2015. (19) Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (No. 333-199875) (20) Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (No. 333-199875) (21) Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 6, 2017.28, 2018.(10)(22)Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 28, 2018. (23) Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 6, 2017.28, 2018.(11)(24)Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 6, 2017.(12)Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 11, 2017.28, 2018.(13)(25)Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on December 15, 2014.February 28, 2018.(14)Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on December 15, 2014.(15)Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on December 15, 2014.(16)Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the Year ended December 31, 2013.(17)Incorporated by reference to Exhibit 10.7 to the Company’s current Report on Form 8-K filed on February 6, 2017.(18)Incorporated by reference to Exhibit 10.29 to the Company’s Form 10-Q for the Quarter ended March 31, 2015.(19)Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (No. 333-199875)(20)Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (No. 333-199875)(21)(26)Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 28, 2018.15, 2019.(22)(27)Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 28, 2018.(23)Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 28, 2018.(24)Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 28, 2018.(25)Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on February 28, 2018.(26)Incorporated by reference to Exhibit 10.210.1 to the Company’s Current Report on Form 8-K filed on February 15, 2019.(27)Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 15, 2019. Date: August 9, 2019 By: /s/ Susan G. Riel Susan G. Riel, President and Chief Executive Officer of the Company Date: August 9, 2019 By: /s/ Susan G. RielCharles D. Levingston Susan G. Riel,Charles D. Levingston, Executive Vice President andChief ExecutiveFinancial Officer of the CompanyDate: August 9, 2019By:/s/ Charles D. LevingstonCharles D. Levingston, Executive Vice President andChief Financial Officer of the Company