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| |
| Pennsylvania | 23-2434506 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer identification No.) | |
801 Lancaster Avenue, Bryn Mawr, Pennsylvania | 19010 | |
(Address of principal executive offices) | (Zip Code) | |
| ||
| Classes | Outstanding at | |
Common Stock, par value $1 |
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| PART I - | ||
ITEM 1. | ||
Page 3 | ||
Page 8 | ||
ITEM 2. | Page | |
ITEM 3. | Page | |
ITEM 4. | Page | |
PART II - | Page | |
ITEM 1. | Page | |
ITEM 1A. | Page | |
ITEM 2. | Page | |
ITEM 3. | Page | |
ITEM 4. | Page | |
ITEM 5. | Page | |
ITEM 6. | Page | |
March 31, | December 31, | |||||||
(dollars in thousands) | 2018 | 2017 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 7,804 | $ | 11,657 | ||||
Interest bearing deposits with banks | 24,589 | 48,367 | ||||||
Cash and cash equivalents | 32,393 | 60,024 | ||||||
Investment securities available for sale, at fair value (amortized cost of $544,428 and $692,824 as of March 31, 2018 and December 31, 2017 respectively) | 534,103 | 689,202 | ||||||
Investment securities held to maturity, at amortized cost (fair value of $7,629 and $7,851 as of March 31, 2018 and December 31, 2017, respectively) | 7,885 | 7,932 | ||||||
Investment securities, trading | 8,211 | 4,610 | ||||||
Loans held for sale | 5,522 | 3,794 | ||||||
Portfolio loans and leases, originated | 2,564,827 | 2,487,296 | ||||||
Portfolio loans and leases, acquired | 740,968 | 798,562 | ||||||
Total portfolio loans and leases | 3,305,795 | 3,285,858 | ||||||
Less: Allowance for originated loan and lease losses | (17,570 | ) | (17,475 | ) | ||||
Less: Allowance for acquired loan and lease losses | (92 | ) | (50 | ) | ||||
Total allowance for loans and lease losses | (17,662 | ) | (17,525 | ) | ||||
Net portfolio loans and leases | 3,288,133 | 3,268,333 | ||||||
Premises and equipment, net | 54,986 | 54,458 | ||||||
Accrued interest receivable | 12,521 | 14,246 | ||||||
Mortgage servicing rights | 5,706 | 5,861 | ||||||
Bank owned life insurance | 56,946 | 56,667 | ||||||
Federal Home Loan Bank stock | 15,499 | 20,083 | ||||||
Goodwill | 182,200 | 179,889 | ||||||
Intangible assets | 25,087 | 25,966 | ||||||
Other investments | 11,720 | 12,470 | ||||||
Other assets | 59,464 | 46,185 | ||||||
Total assets | $ | 4,300,376 | $ | 4,449,720 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Non-interest-bearing | $ | 863,118 | $ | 924,844 | ||||
Interest-bearing | 2,452,421 | 2,448,954 | ||||||
Total deposits | 3,315,539 | 3,373,798 | ||||||
Short-term borrowings | 173,704 | 237,865 | ||||||
Long-term FHLB advances | 107,784 | 139,140 | ||||||
Subordinated notes | 98,448 | 98,416 | ||||||
Junior subordinated debentures | 21,456 | 21,416 | ||||||
Accrued interest payable | 4,814 | 3,527 | ||||||
Other liabilities | 45,570 | 47,439 | ||||||
Total liabilities | 3,767,315 | 3,921,601 | ||||||
Shareholders' equity | ||||||||
Common stock, par value $1; authorized 100,000,000 shares; issued 24,438,758 and 24,360,049 shares as of March 31, 2018 and December 31, 2017, respectively, and outstanding of 20,229,896 and 20,161,395 as of March 31, 2018 and December 31, 2017, respectively | 24,439 | 24,360 | ||||||
Paid-in capital in excess of par value | 371,319 | 371,486 | ||||||
Less: Common stock in treasury at cost - 4,208,862 and 4,198,654 shares as of March 31, 2018 and December 31, 2017, respectively | (68,787 | ) | (68,179 | ) | ||||
Accumulated other comprehensive loss, net of tax | (9,664 | ) | (4,414 | ) | ||||
Retained earnings | 216,438 | 205,549 | ||||||
Total Bryn Mawr Bank Corporation shareholders' equity | 533,745 | 528,802 | ||||||
Noncontrolling interest | (684 | ) | (683 | ) | ||||
Total shareholders' equity | 533,061 | 528,119 | ||||||
Total liabilities and shareholders' equity | $ | 4,300,376 | $ | 4,449,720 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 7,318 | $ | 11,657 | ||||
| Interest bearing deposits with banks | 39,924 | 48,367 | ||||||
| Cash and cash equivalents | 47,242 | 60,024 | ||||||
| Investment securities available for sale, at fair value (amortized cost of $543,314 and $692,824 as of June 30, 2018 and December 31, 2017, respectively) | 531,075 | 689,202 | ||||||
| Investment securities held to maturity, at amortized cost (fair value of $7,547 and $7,851 as of June 30, 2018 and December 31, 2017, respectively) | 7,838 | 7,932 | ||||||
| Investment securities, trading | 8,175 | 4,610 | ||||||
| Loans held for sale | 4,204 | 3,794 | ||||||
| Portfolio loans and leases, originated | 2,700,815 | 2,487,296 | ||||||
| Portfolio loans and leases, acquired | 688,686 | 798,562 | ||||||
| Total portfolio loans and leases | 3,389,501 | 3,285,858 | ||||||
| Less: Allowance for originated loan and lease losses | (19,181 | ) | (17,475 | ) | ||||
| Less: Allowance for acquired loan and lease losses | (217 | ) | (50 | ) | ||||
| Total allowance for loans and lease losses | (19,398 | ) | (17,525 | ) | ||||
| Net portfolio loans and leases | 3,370,103 | 3,268,333 | ||||||
| Premises and equipment, net | 54,185 | 54,458 | ||||||
| Accrued interest receivable | 13,115 | 14,246 | ||||||
| Mortgage servicing rights | 5,511 | 5,861 | ||||||
| Bank owned life insurance | 57,243 | 56,667 | ||||||
| Federal Home Loan Bank stock | 16,678 | 20,083 | ||||||
| Goodwill | 183,162 | 179,889 | ||||||
| Intangible assets | 24,977 | 25,966 | ||||||
| Other investments | 16,774 | 12,470 | ||||||
| Other assets | 53,921 | 46,185 | ||||||
| Total assets | $ | 4,394,203 | $ | 4,449,720 | ||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 892,386 | $ | 924,844 | ||||
| Interest-bearing | 2,466,529 | 2,448,954 | ||||||
| Total deposits | 3,358,915 | 3,373,798 | ||||||
| Short-term borrowings | 227,059 | 237,865 | ||||||
| Long-term FHLB advances | 87,808 | 139,140 | ||||||
| Subordinated notes | 98,491 | 98,416 | ||||||
| Junior subordinated debentures | 21,497 | 21,416 | ||||||
| Accrued interest payable | 5,230 | 3,527 | ||||||
| Other liabilities | 52,700 | 47,439 | ||||||
| Total liabilities | 3,851,700 | 3,921,601 | ||||||
| Shareholders' equity | ||||||||
| Common stock, par value $1; authorized 100,000,000 shares; issued 24,453,417 and 24,360,049 shares as of June 30, 2018 and December 31, 2017, respectively and outstanding of 20,242,893 and 20,161,395 as of June 30, 2018 and December 31, 2017, respectively | 24,453 | 24,360 | ||||||
| Paid-in capital in excess of par value | 372,227 | 371,486 | ||||||
| Less: Common stock in treasury at cost - 4,210,524 and 4,198,654 shares as of June 30, 2018 and December 31, 2017, respectively | (68,943 | ) | (68,179 | ) | ||||
| Accumulated other comprehensive loss, net of tax | (11,191 | ) | (4,414 | ) | ||||
| Retained earnings | 226,634 | 205,549 | ||||||
| Total Bryn Mawr Bank Corporation shareholders' equity | 543,180 | 528,802 | ||||||
| Noncontrolling interest | (677 | ) | (683 | ) | ||||
| Total shareholders' equity | 542,503 | 528,119 | ||||||
| Total liabilities and shareholders' equity | $ | 4,394,203 | $ | 4,449,720 | ||||
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
(dollars in thousands, except per share data) | ||||||||
Interest income: | ||||||||
Interest and fees on loans and leases | $ | 40,689 | $ | 28,482 | ||||
Interest on cash and cash equivalents | 53 | 66 | ||||||
Interest on investment securities: | ||||||||
Taxable | 2,706 | 1,623 | ||||||
Non-taxable | 84 | 110 | ||||||
Dividends | 2 | 45 | ||||||
Total interest income | 43,534 | 30,326 | ||||||
Interest expense: | ||||||||
Interest on deposits | 3,472 | 1,828 | ||||||
Interest on short-term borrowings | 630 | 27 | ||||||
Interest on FHLB advances and other borrowings | 562 | 698 | ||||||
Interest on subordinated notes | 1,143 | 370 | ||||||
Interest on junior subordinated debentures | 288 | - | ||||||
Total interest expense | 6,095 | 2,923 | ||||||
Net interest income | 37,439 | 27,403 | ||||||
Provision for loan and lease losses | 1,030 | 291 | ||||||
Net interest income after provision for loan and lease losses | 36,409 | 27,112 | ||||||
Noninterest income: | ||||||||
Fees for wealth management services | 10,308 | 9,303 | ||||||
Insurance commissions | 1,693 | 763 | ||||||
Capital markets revenue | 666 | - | ||||||
Service charges on deposits | 713 | 647 | ||||||
Loan servicing and other fees | 686 | 503 | ||||||
Net gain on sale of loans | 518 | 629 | ||||||
Net gain on sale of investment securities available for sale | 7 | 1 | ||||||
Net gain on sale of other real estate owned ("OREO") | 176 | - | ||||||
Dividends on FHLB and FRB stock | 431 | 214 | ||||||
Other operating income | 4,338 | 1,167 | ||||||
Total noninterest income | 19,536 | 13,227 | ||||||
Noninterest expenses: | ||||||||
Salaries and wages | 15,982 | 12,450 | ||||||
Employee benefits | 3,708 | 2,489 | ||||||
Occupancy and bank premises | 3,050 | 2,526 | ||||||
Furniture, fixtures, and equipment | 1,898 | 1,974 | ||||||
Advertising | 461 | 386 | ||||||
Amortization of intangible assets | 879 | 693 | ||||||
Due diligence, merger-related and merger integration expenses | 4,319 | 511 | ||||||
Professional fees | 748 | 711 | ||||||
Pennsylvania bank shares tax | 473 | 664 | ||||||
Information technology | 1,195 | 874 | ||||||
Other operating expenses | 3,317 | 3,382 | ||||||
Total noninterest expenses | 36,030 | 26,660 | ||||||
Income before income taxes | 19,915 | 13,679 | ||||||
Income tax expense | 4,630 | 4,635 | ||||||
Net income | $ | 15,285 | $ | 9,044 | ||||
Add: Net loss attributable to noncontrolling interest | 1 | - | ||||||
Net income attributable to Bryn Mawr Bank Corporation | $ | 15,286 | $ | 9,044 | ||||
Basic earnings per common share | $ | 0.76 | $ | 0.53 | ||||
Diluted earnings per common share | $ | 0.75 | $ | 0.53 | ||||
Dividends declared per share | $ | 0.22 | $ | 0.21 | ||||
Weighted-average basic shares outstanding | 20,202,969 | 16,954,132 | ||||||
Dilutive shares | 247,525 | 228,557 | ||||||
Adjusted weighted-average diluted shares | 20,450,494 | 17,182,689 | ||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (dollars in thousands, except share and per share data) | |||||||||||||||
| Interest income: | |||||||||||||||
| Interest and fees on loans and leases | $ | 41,689 | $ | 29,143 | $ | 82,378 | $ | 57,625 | |||||||
| Interest on cash and cash equivalents | 64 | 35 | 117 | 101 | |||||||||||
| Interest on investment securities: | |||||||||||||||
| Taxable | 2,922 | 1,906 | 5,628 | 3,529 | |||||||||||
| Non-taxable | 78 | 101 | 162 | 211 | |||||||||||
| Dividends | 1 | 52 | 3 | 97 | |||||||||||
| Total interest income | 44,754 | 31,237 | 88,288 | 61,563 | |||||||||||
| Interest expense: | |||||||||||||||
| Interest on deposits | 4,499 | 1,983 | 7,971 | 3,811 | |||||||||||
| Interest on short-term borrowings | 985 | 237 | 1,615 | 264 | |||||||||||
| Interest on FHLB advances and other borrowings | 490 | 682 | 1,052 | 1,380 | |||||||||||
| Interest on subordinated notes | 1,143 | 370 | 2,286 | 740 | |||||||||||
| Interest on junior subordinated debentures | 321 | — | 609 | — | |||||||||||
| Total interest expense | 7,438 | 3,272 | 13,533 | 6,195 | |||||||||||
| Net interest income | 37,316 | 27,965 | 74,755 | 55,368 | |||||||||||
| Provision for loan and lease losses | 3,137 | (83 | ) | 4,167 | 208 | ||||||||||
| Net interest income after provision for loan and lease losses | 34,179 | 28,048 | 70,588 | 55,160 | |||||||||||
| Noninterest income: | |||||||||||||||
| Fees for wealth management services | 10,658 | 9,807 | 20,966 | 19,110 | |||||||||||
| Insurance commissions | 1,902 | 943 | 3,595 | 1,706 | |||||||||||
| Capital markets revenue | 2,105 | 953 | 2,771 | 953 | |||||||||||
| Service charges on deposits | 752 | 630 | 1,465 | 1,277 | |||||||||||
| Loan servicing and other fees | 475 | 519 | 1,161 | 1,022 | |||||||||||
| Net gain on sale of loans | 528 | 520 | 1,046 | 1,149 | |||||||||||
| Net gain on sale of investment securities available for sale | — | — | 7 | 1 | |||||||||||
| Net gain (loss) on sale of other real estate owned ("OREO") | 111 | (12 | ) | 287 | (12 | ) | |||||||||
| Dividends on FHLB and FRB stock | 510 | 218 | 941 | 432 | |||||||||||
| Other operating income | 3,034 | 1,207 | 7,372 | 2,374 | |||||||||||
| Total noninterest income | 20,075 | 14,785 | 39,611 | 28,012 | |||||||||||
| Noninterest expenses: | |||||||||||||||
| Salaries and wages | 16,240 | 13,580 | 32,222 | 26,030 | |||||||||||
| Employee benefits | 2,877 | 2,404 | 6,585 | 4,893 | |||||||||||
| Occupancy and bank premises | 2,697 | 2,247 | 5,747 | 4,773 | |||||||||||
| Furniture, fixtures, and equipment | 2,069 | 1,869 | 3,967 | 3,843 | |||||||||||
| Advertising | 369 | 405 | 830 | 791 | |||||||||||
| Amortization of intangible assets | 889 | 687 | 1,768 | 1,380 | |||||||||||
| Due diligence, merger-related and merger integration expenses | 3,053 | 1,236 | 7,372 | 1,747 | |||||||||||
| Professional fees | 932 | 1,049 | 1,680 | 1,760 | |||||||||||
| Pennsylvania bank shares tax | 473 | 297 | 946 | 961 | |||||||||||
| Information technology | 1,252 | 821 | 2,447 | 1,695 | |||||||||||
| Other operating expenses | 4,985 | 3,900 | 8,302 | 7,282 | |||||||||||
| Total noninterest expenses | 35,836 | 28,495 | 71,866 | 55,155 | |||||||||||
| Income before income taxes | 18,418 | 14,338 | 38,333 | 28,017 | |||||||||||
| Income tax expense | 3,723 | 4,905 | 8,353 | 9,540 | |||||||||||
| Net income | $ | 14,695 | $ | 9,433 | $ | 29,980 | $ | 18,477 | |||||||
| Net income attributable to noncontrolling interest | 7 | — | 6 | — | |||||||||||
| Net income attributable to Bryn Mawr Bank Corporation | $ | 14,688 | $ | 9,433 | $ | 29,974 | $ | 18,477 | |||||||
| Basic earnings per common share | $ | 0.73 | $ | 0.56 | $ | 1.48 | $ | 1.09 | |||||||
| Diluted earnings per common share | $ | 0.72 | $ | 0.55 | $ | 1.47 | $ | 1.07 | |||||||
| Dividends paid or accrued per share | $ | 0.22 | $ | 0.21 | $ | 0.44 | $ | 0.42 | |||||||
| Weighted-average basic shares outstanding | 20,238,852 | 16,984,563 | 20,221,010 | 16,969,431 | |||||||||||
| Dilutive shares | 174,726 | 248,204 | 206,782 | 238,381 | |||||||||||
| Adjusted weighted-average diluted shares | 20,413,578 | 17,232,767 | 20,427,792 | 17,207,812 | |||||||||||
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
(dollars in thousands) | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Net income attributable to Bryn Mawr Bank Corporation | $ | 15,286 | $ | 9,044 | ||||
Other comprehensive (loss) income: | ||||||||
Net change in unrealized (losses) gains on investment securities available for sale: | ||||||||
Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(1,319) and $208, respectively | (4,961 | ) | 388 | |||||
Reclassification adjustment for net (gain) on sale realized in net income, net of tax (expense) benefit of $(1) and $0, respectively | (6 | ) | (1 | ) | ||||
Reclassification adjustment for net (gain) realized on transfer of investment securities available for sale to trading, net of tax (expense) benefit of $(88) and $0, respectively | (329 | ) | - | |||||
Unrealized investment (losses) gains, net of tax (benefit) expense of $(1,408) and $208, respectively | (5,296 | ) | 387 | |||||
Net change in unfunded pension liability: | ||||||||
Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax expense of $12 and $17, respectively | 46 | 32 | ||||||
Total other comprehensive (loss) income | (5,250 | ) | 419 | |||||
Total comprehensive income | $ | 10,036 | $ | 9,463 | ||||
(dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income attributable to Bryn Mawr Bank Corporation $ 14,688 $ 9,433 $ 29,974 $ 18,477 Other comprehensive (loss) income: Net change in unrealized (losses) gains on investment securities available for sale: Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(402), $221, $(1,721), and $430, respectively (1,512 ) 411 (6,473 ) 799 Reclassification adjustment for net gain on sale realized in net income, net of tax expense of $0, $0, $1 and $0, respectively — — (6 ) (1 ) Reclassification adjustment for net gain realized on transfer of investment securities available for sale to trading, net of tax expense of $0, $0, $88, and $0, respectively — — (329 ) — Unrealized investment (losses) gains, net of tax (benefit) expense of $(402), $221, $(1,810), and $430, respectively (1,512 ) 411 (6,808 ) 798 Net change in unfunded pension liability: Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax (benefit) expense of $(4), $9, $9, and $25, respectively (15 ) 15 31 47 Total other comprehensive (loss) income (1,527 ) 426 (6,777 ) 845 Total comprehensive income $ 13,161 $ 9,859 $ 23,197 $ 19,322 Page 5
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
(dollars in thousands) | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Operating activities: | ||||||||
Net income attributable to Bryn Mawr Bank Corporation | $ | 15,286 | $ | 9,044 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for loan and lease losses | 1,030 | 291 | ||||||
Depreciation of fixed assets | 1,493 | 1,392 | ||||||
Net amortization of investment premiums and discounts | 761 | 673 | ||||||
Net gain on sale of investment securities available for sale | (7 | ) | (1 | ) | ||||
Net gain on sale of loans | (518 | ) | (629 | ) | ||||
Stock based compensation | 620 | 484 | ||||||
Amortization and net impairment of mortgage servicing rights | 171 | 172 | ||||||
Net accretion of fair value adjustments | (3,004 | ) | (795 | ) | ||||
Amortization of intangible assets | 879 | 693 | ||||||
Net gain on sale of OREO | (176 | ) | - | |||||
Net increase in cash surrender value of bank owned life insurance ("BOLI") | (279 | ) | (200 | ) | ||||
Other, net | (17,436 | ) | (6,380 | ) | ||||
Loans originated for resale | (19,534 | ) | (26,064 | ) | ||||
Proceeds from loans sold | 18,265 | 33,023 | ||||||
Provision for deferred income taxes | 656 | 167 | ||||||
Change in income taxes payable/receivable | 3,819 | 4,324 | ||||||
Change in accrued interest receivable | 1,725 | 141 | ||||||
Change in accrued interest payable | 1,287 | (12 | ) | |||||
Net cash provided by operating activities | 5,038 | 16,323 | ||||||
Investing activities: | ||||||||
Purchases of investment securities available for sale | (74,029 | ) | (42,842 | ) | ||||
Purchases of investment securities held to maturity | - | (2,335 | ) | |||||
Proceeds from maturity and paydowns of investment securities available for sale | 218,393 | 217,539 | ||||||
Proceeds from maturity and paydowns of investment securities held to maturity | 39 | 15 | ||||||
Proceeds from sale of investment securities available for sale | 7 | 65 | ||||||
Net change in FHLB stock | 4,584 | 8,800 | ||||||
Proceeds from calls of investment securities | 65 | 1,134 | ||||||
Net change in other investments | 500 | (89 | ) | |||||
Purchase of domain name | - | (152 | ) | |||||
Net portfolio loan and lease originations | (21,230 | ) | (20,108 | ) | ||||
Purchases of premises and equipment | (2,063 | ) | (162 | ) | ||||
Proceeds from sale of OREO | 217 | 39 | ||||||
Net cash provided by investing activities | 126,483 | 161,904 | ||||||
Financing activities: | ||||||||
Change in deposits | (57,879 | ) | 56,909 | |||||
Change in short-term borrowings | (64,161 | ) | (180,538 | ) | ||||
Dividends paid | (4,523 | ) | (3,559 | ) | ||||
Change in long-term FHLB advances | (31,371 | ) | (15,000 | ) | ||||
Cash payments to taxing authorities on employees' behalf from shares withheld from stock-based compensation | (626 | ) | (19 | ) | ||||
Net sale of treasury stock for deferred compensation plans | 171 | - | ||||||
Repurchase of warrants from U.S. Treasury | (1,755 | ) | - | |||||
Proceeds from exercise of stock options | 992 | 650 | ||||||
Net cash used in financing activities | (159,152 | ) | (141,557 | ) | ||||
Change in cash and cash equivalents | (27,631 | ) | 36,670 | |||||
Cash and cash equivalents at beginning of period | 60,024 | 50,765 | ||||||
Cash and cash equivalents at end of period | $ | 32,393 | $ | 87,435 | ||||
Supplemental cash flow information: | ||||||||
Cash paid during the year for: | ||||||||
Income taxes | $ | 146 | $ | 117 | ||||
Interest | $ | 4,808 | $ | 2,935 | ||||
Non-cash information: | ||||||||
Change in other comprehensive loss | $ | (5,250 | ) | $ | 419 | |||
Change in deferred tax due to change in comprehensive income | $ | (1,396 | ) | $ | 225 | |||
Transfer of loans to other real estate owned and repossessed assets | $ | 37 | $ | - | ||||
Six Months Ended June 30, 2018 2017 Operating activities: Net income attributable to Bryn Mawr Bank Corporation $ 29,974 $ 18,477 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan and lease losses 4,167 208 Depreciation of fixed assets 3,033 2,792 Net amortization of investment premiums and discounts 1,509 1,352 Net gain on sale of investment securities available for sale (7 ) (1 ) Net gain on sale of loans (1,046 ) (1,149 ) Stock based compensation 1,235 915 Amortization and net impairment of mortgage servicing rights 366 387 Net accretion of fair value adjustments (5,316 ) (1,264 ) Amortization of intangible assets 1,768 1,380 Impairment of OREO and other repossessed assets — 200 Net (gain) loss on sale of OREO (287 ) 12 Net increase in cash surrender value of bank owned life insurance ("BOLI") (576 ) (401 ) Other, net (7,131 ) (1,809 ) Loans originated for resale (44,108 ) (57,248 ) Proceeds from loans sold 44,663 58,940 Provision for deferred income taxes 640 614 Change in income taxes payable/receivable, net 6,277 (3,580 ) Change in accrued interest receivable 1,131 (184 ) Change in accrued interest payable 1,703 96 Net cash provided by operating activities 37,995 19,737 Investing activities: Purchases of investment securities available for sale (94,824 ) (115,841 ) Purchases of investment securities held to maturity — (2,335 ) Proceeds from maturity and paydowns of investment securities available for sale 239,318 234,043 Proceeds from maturity and paydowns of investment securities held to maturity 77 42 Proceeds from sale of investment securities available for sale 7 130 Net change in FHLB stock 3,405 2,137 Proceeds from calls of investment securities 310 4,864 Net change in other investments (4,304 ) (55 ) Purchase of domain name — (152 ) Net portfolio loan and lease originations (104,700 ) (131,702 ) Purchases of premises and equipment (2,843 ) (3,731 ) Acquisitions, net of cash acquired (380 ) (4,792 ) Capitalize costs to OREO (15 ) — Proceeds from sale of OREO 420 68 Net cash provided by (used in) investing activities 36,471 (17,324 ) Financing activities: Change in deposits (14,164 ) 102,125 Change in short-term borrowings (10,806 ) (73,856 ) Dividends paid (8,994 ) (7,127 ) Change in long-term FHLB advances and other borrowings (51,372 ) (25,000 ) Payment of contingent consideration for business combinations (631 ) — Cash payments to taxing authorities on employees' behalf from shares withheld from stock-based compensation (732 ) (98 ) Net proceeds from sale of (purchase of) treasury stock for deferred compensation plans 99 (69 ) Repurchase of warrants from U.S. Treasury (1,755 ) — Proceeds from exercise of stock options 1,107 1,005 Net cash used in financing activities (87,248 ) (3,020 ) Change in cash and cash equivalents (12,782 ) (607 ) Cash and cash equivalents at beginning of period 60,024 50,765 Cash and cash equivalents at end of period $ 47,242 $ 50,158 Supplemental cash flow information: Cash paid during the year for: Income taxes $ 1,606 $ 12,481 Interest $ 11,830 $ 6,099 Non-cash information: Change in other comprehensive loss $ (6,777 ) $ 845 Change in deferred tax due to change in comprehensive income $ (1,801 ) $ 455 Transfer of loans to OREO and repossessed assets $ 345 $ 309 Acquisition of noncash assets and liabilities: Assets acquired $ 1,466 $ 7,284 Liabilities assumed $ 687 $ 2,492 Page 6
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
For the Three Months Ended March 31, 2018 | ||||||||||||||||||||||||||||||||
Shares of Common Stock Issued | Common Stock | Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interest | Total Shareholders' Equity | |||||||||||||||||||||||||
Balance December 31, 2017 | 24,360,049 | $ | 24,360 | $ | 371,486 | $ | (68,179 | ) | $ | (4,414 | ) | $ | 205,549 | $ | (683 | ) | $ | 528,119 | ||||||||||||||
Net income attributable to Bryn Mawr Bank Corporation | - | - | - | - | - | 15,286 | - | 15,286 | ||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | - | - | - | - | - | - | (1 | ) | (1 | ) | ||||||||||||||||||||||
Dividends declared, $0.22 per share | - | - | - | - | - | (4,495 | ) | - | (4,495 | ) | ||||||||||||||||||||||
Other comprehensive loss, net of tax expense of $1,396 | - | - | - | - | (5,250 | ) | - | - | (5,250 | ) | ||||||||||||||||||||||
Stock based compensation | - | - | 620 | - | - | - | - | 620 | ||||||||||||||||||||||||
Net purchase of treasury stock from stock awards for statutory tax withholdings | - | - | - | (626 | ) | - | - | - | (626 | ) | ||||||||||||||||||||||
Net sale of treasury stock for deferred compensation trusts | - | - | 153 | 18 | - | - | - | 171 | ||||||||||||||||||||||||
Repurchase of warrants from U.S. Treasury | - | - | (1,853 | ) | - | - | 98 | - | (1,755 | ) | ||||||||||||||||||||||
Common stock issued: | ||||||||||||||||||||||||||||||||
Common stock issued through share-based awards and options exercises | 78,709 | 79 | 913 | - | - | - | - | 992 | ||||||||||||||||||||||||
Balance March 31, 2018 | 24,438,758 | $ | 24,439 | $ | 371,319 | $ | (68,787 | ) | $ | (9,664 | ) | $ | 216,438 | $ | (684 | ) | $ | 533,061 | ||||||||||||||
| For the Six Months Ended June 30, 2018 | ||||||||||||||||||||||||||||||
| Shares of Common Stock Issued | Common Stock | Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interest | Total Shareholders' Equity | |||||||||||||||||||||||
| Balance December 31, 2017 | 24,360,049 | $ | 24,360 | $ | 371,486 | $ | (68,179 | ) | $ | (4,414 | ) | $ | 205,549 | $ | (683 | ) | $ | 528,119 | ||||||||||||
| Net income attributable to Bryn Mawr Bank Corporation | — | — | — | — | — | 29,974 | — | 29,974 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest | — | — | — | — | — | — | 6 | 6 | ||||||||||||||||||||||
| Dividends paid or accrued, $0.44 per share | — | — | — | — | — | (8,987 | ) | — | (8,987 | ) | ||||||||||||||||||||
| Other comprehensive loss, net of tax benefit of $1,801 | — | — | — | — | (6,777 | ) | — | — | (6,777 | ) | ||||||||||||||||||||
| Stock based compensation | — | — | 1,235 | — | — | — | — | 1,235 | ||||||||||||||||||||||
| Retirement of treasury stock | (2,253 | ) | (2 | ) | (20 | ) | 22 | — | — | — | — | |||||||||||||||||||
| Net purchase of treasury stock from stock awards for statutory tax withholdings | — | — | — | (732 | ) | — | — | — | (732 | ) | ||||||||||||||||||||
| Net treasury stock activity for deferred compensation trusts | — | — | 153 | (54 | ) | — | — | — | 99 | |||||||||||||||||||||
| Repurchase of warrants from U.S. Treasury | — | — | (1,853 | ) | — | — | 98 | — | (1,755 | ) | ||||||||||||||||||||
| Common stock issued: | ||||||||||||||||||||||||||||||
| Common stock issued through share-based awards and options exercises | 93,059 | 92 | 1,116 | — | — | — | — | 1,208 | ||||||||||||||||||||||
Shares issued in acquisitions(1) | 2,562 | 3 | 110 | — | — | — | — | 113 | ||||||||||||||||||||||
| Balance June 30, 2018 | 24,453,417 | $ | 24,453 | $ | 372,227 | $ | (68,943 | ) | $ | (11,191 | ) | $ | 226,634 | $ | (677 | ) | $ | 542,503 | ||||||||||||
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
10-K10-K for the twelve months ended December 31, 2017 (the “2017(the “2017 Annual Report”).March 31,June 30, 2018 are not necessarily indicative of the results to be expected for the full year.the Bank.The Bryn Mawr Trust Company (the “Bank”). In connection with the RBPI Merger (defined in Note 3 – Business Combinations below), the Corporation acquired two Delaware trusts, Royal Bancshares Capital Trust I and Royal Bancshares Capital Trust II. These two entities are notconsolidated per requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation” (“ASC Topic 810”). All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current-year presentation.March 31,June 30, 2018.2014-092014-9 (Topic 606)606), “Revenue from Contracts with Customers”2014-092014-9 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as other real estate owned (“OREO”).OREO. The majority of the Corporation’s revenues come from interest income and other sources, including loans, leases, investment securities and derivatives, that are outside the scope of ASC 606. The Corporation’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Corporation satisfies its obligation to the customer. Services within the scope of ASC 606 include service charges on deposits, interchange income, wealth management fees, investment brokerage fees, and the net gain on sale of OREO. Refer to Note 17Revenuefrom Contracts with Customers for further discussion on the Corporation’s accounting policies for revenue sources within the scope of ASC 606. The adoption of this ASU did not have an impact to our Consolidated Financial Statements.2017-012017-1 (Topic 805)805), “Business Combinations”2017-01,2017-1, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The adoption of this ASU did not have a material impact on our Consolidated Financial Statements and related disclosures.2016-152016-15 (Topic 320)320), “Classification of Certain Cash Receipts and Cash Payments”2016-15,2016-15, which provides guidance on eight specific cash flow issues and their disclosure in the consolidated statements of cash flows. The issues addressed include debt prepayment, settlement of zero-couponzero-coupon debt,Page 8
FASB ASU 2016-012016-1 (Subtopic 825-10)825-10), “Financial Instruments – Overall, Recognition and Measurement of Financial Assets and Financial Liabilities”
FASB ASU 2016-022016-2 (Topic 842)842), “Leases”
| (dollars in thousands) | |||
| Consideration paid: | |||
| Cash paid at closing | $ | 750 | |
| Contingent payment liability (present value) | 706 | ||
| Value of consideration | $ | 1,456 | |
| Assets acquired: | |||
| Cash and due from banks | 370 | ||
| Intangible assets - customer relationships | 779 | ||
| Premises and equipment | 1 | ||
| Other assets | 316 | ||
| Total assets | 1,466 | ||
| Liabilities assumed: | |||
| Accounts payable | 657 | ||
| Other liabilities | 30 | ||
| Total liabilities | $ | 687 | |
| Net assets acquired | $ | 779 | |
| Goodwill resulting from acquisition of Domenick | $ | 677 | |
(dollars in thousands) | ||||
Consideration paid: | ||||
Common shares issued (3,098,754) | $ | 136,655 | ||
Cash in lieu of fractional shares | 7 | |||
Cash-out of certain options | 112 | |||
Fair value of warrants assumed | 1,853 | |||
Value of consideration | $ | 138,627 | ||
Assets acquired: | ||||
Cash and due from banks | $ | 17,092 | ||
Investment securities available for sale | 121,587 | |||
Loans | 567,308 | |||
Premises and equipment | 8,264 | |||
Deferred income taxes | 34,380 | |||
Bank-owned life insurance | 16,550 | |||
Core deposit intangible | 4,670 | |||
Favorable lease asset | 566 | |||
Other assets | 13,996 | |||
Total assets | $ | 784,413 | ||
Liabilities assumed: | ||||
Deposits | $ | 593,172 | ||
FHLB and other long-term borrowings | 59,568 | |||
Short-term borrowings | 15,000 | |||
Junior subordinated debentures | 21,416 | |||
Unfavorable lease liability | 322 | |||
Other liabilities | 31,381 | |||
Total liabilities | $ | 720,859 | ||
Net assets acquired | $ | 63,554 | ||
Goodwill resulting from acquisition of RBPI | $ | 75,073 |
| (dollars in thousands) | |||
| Consideration paid: | |||
| Common shares issued (3,101,316) | $ | 136,768 | |
| Cash in lieu of fractional shares | 7 | ||
| Cash-out of certain options | 112 | ||
| Fair value of warrants assumed | 1,853 | ||
| Value of consideration | $ | 138,740 | |
| Assets acquired: | |||
| Cash and due from banks | 17,092 | ||
| Investment securities available for sale | 121,587 | ||
| Loans | 567,308 | ||
| Premises and equipment | 8,264 | ||
| Deferred income taxes | 34,208 | ||
| Bank-owned life insurance | 16,550 | ||
| Core deposit intangible | 4,670 | ||
| Favorable lease asset | 566 | ||
| Other assets | 13,996 | ||
| Total assets | $ | 784,241 | |
| Liabilities assumed: | |||
| Deposits | 593,172 | ||
| FHLB and other long-term borrowings | 59,568 | ||
| Short-term borrowings | 15,000 | ||
| Junior subordinated debentures | 21,416 | ||
| Unfavorable lease liability | 322 | ||
| Other liabilities | 31,381 | ||
| Total liabilities | $ | 720,859 | |
| Net assets acquired | $ | 63,382 | |
| Goodwill resulting from acquisition of RBPI | $ | 75,358 | |
(dollars in thousands) | ||||
Goodwill resulting from the acquisition of RBPI reported as of December 31, 2017 | $ | 72,762 | ||
Fair Value Adjustments: | ||||
Loans | 3,065 | |||
Other assets | 491 | |||
Deferred income taxes | (1,245 | ) | ||
Total Fair Value Adjustments | 2,311 | |||
Goodwill from the acquisition of RBPI as of March 31, 2018 | $ | 75,073 |
| (dollars in thousands) | |||
| Goodwill resulting from the acquisition of RBPI reported as of December 31, 2017 | $ | 72,762 | |
| Value of Consideration Adjustment: | |||
| Common shares issued (2,562) | 113 | ||
| Fair Value Adjustments: | |||
| Loans | 3,065 | ||
| Other assets | 491 | ||
| Deferred income taxes | (1,073 | ) | |
| Total Fair Value Adjustments | 2,483 | ||
| Goodwill from the acquisition of RBPI as of June 30, 2018 | $ | 75,358 | |
| (dollars in thousands) | |||
| Contractually required principal and interest payments | $ | 38,404 | |
| Contractual cash flows not expected to be collected (nonaccretable difference) | (16,025 | ) | |
| Cash flows expected to be collected | 22,379 | ||
| Interest component of expected cash flows (accretable yield) | (2,526 | ) | |
| Fair value of loans acquired with deterioration of credit quality | $ | 19,853 | |
HarryHarry R. Hirshorn & Company, Inc., d/b/a Hirshorn Boothby (“Hirshorn”)
| (dollars in thousands) | |||
| Consideration paid: | |||
| Cash paid at closing | $ | 5,770 | |
| Contingent payment liability (present value) | 1,690 | ||
| Value of consideration | 7,460 | ||
| Assets acquired: | |||
| Cash operating accounts | 978 | ||
| Intangible assets – trade name | 195 | ||
| Intangible assets – customer relationships | 2,672 | ||
| Intangible assets – non-competition agreements | 41 | ||
| Premises and equipment | 1,795 | ||
| Accounts receivable | 192 | ||
| Other assets | 27 | ||
| Total assets | 5,900 | ||
| Liabilities assumed: | |||
| Accounts payable | 800 | ||
| Other liabilities | 2 | ||
| Total liabilities | 802 | ||
| Net assets acquired | 5,098 | ||
| Goodwill resulting from acquisition of Hirshorn | $ | 2,362 | |
(dollars in thousands) | Three Months Ended March 31, 2017 | Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | ||||||||
Total interest income | $ | 41,227 | $ | 42,337 | $ | 83,564 | |||||
Total interest expense | 4,562 | 4,971 | 9,533 | ||||||||
Net interest income | 36,665 | 37,366 | 74,031 | ||||||||
Provision for loan and lease losses | 588 | (26 | ) | 562 | |||||||
Net interest income after provision for loan and lease losses | 36,077 | 37,392 | 73,469 | ||||||||
Total non-interest income | 13,738 | ||||||||||
Total non-interest expenses* | 32,295 | ||||||||||
| Total noninterest income | 15,728 | 29,466 | |||||||||
| Total noninterest expenses* | 34,040 | 66,335 | |||||||||
Income before income taxes | 17,520 | 19,080 | 36,600 | ||||||||
Income tax expense | 5,936 | 6,526 | 12,463 | ||||||||
Net income | $ | 11,584 | $ | 12,554 | $ | 24,137 | |||||
Per share data**: | |||||||||||
Weighted-average basic shares outstanding | 20,052,886 | 20,083,317 | 20,068,185 | ||||||||
Dilutive shares | 256,176 | 278,199 | 267,210 | ||||||||
Adjusted weighted-average diluted shares | 20,309,062 | 20,361,516 | 20,335,395 | ||||||||
Basic earnings per common share | $ | 0.58 | $ | 0.63 | $ | 1.20 | |||||
Diluted earnings per common share | $ | 0.57 | $ | 0.62 | $ | 1.19 | |||||
Three Months Ended March 31, (dollars in thousands) 2018 2017(1) Advertising Employee Benefits Occupancy and bank premises Furniture, fixtures, and equipment Information technology Professional fees Salaries and wages Other Total due diligence, merger-related and merger integration expenses (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities Obligations of the U.S. government and agencies ) Obligations of state and political subdivisions ) Mortgage-backed securities ) Collateralized mortgage obligations ) Other investment securities ) Total ) Less than 12 12 Months Total (dollars in thousands) Fair Unrealized Losses Fair Unrealized Losses Fair Unrealized Losses Obligations of the U.S. government and agencies ) ) ) Obligations of state and political subdivisions ) ) ) Mortgage-backed securities ) ) ) Collateralized mortgage obligations ) ) ) Other investment securities ) ) Total ) ) )non-interestnoninterest expense includes RBPI Net Income Attributable to Noncontrolling Interest and Preferred Stock Series A Accumulated Dividend and Accretion for pro forma presentation.periodperiods ended March 31,June 30, 2017. $ 59 $ — 203 — 1,856 — 179 — 112 — 747 396 346 80 817 35 $ 4,319 $ 511 (1) Total due diligence, merger-related and merger integration expenses for the three months ended March 31, 2017 were primarily related to the acquisition of Hirshorn. Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2018 2017 2018 2017 Advertising $ 2 $ 19 $ 61 $ 19 Employee Benefits 68 5 271 5 Occupancy and bank premises 289 — 2,145 — Furniture, fixtures, and equipment 186 6 365 6 Information technology 142 259 254 259 Professional fees 510 542 1,257 938 Salaries and wages 477 320 823 400 Other 1,378 85 2,195 120 Total due diligence, merger-related and merger integration expenses $ 3,052 $ 1,236 $ 7,371 $ 1,747 March 31,June 30, 2018 and December 31, 2017 are as follows:March 31,June 30, 2018 $ 100 $ — $ — $ 100 178,863 34 (3,790 175,107 19,992 8 (83 19,917 309,071 511 (5,680 303,902 35,302 2 (1,324 33,980 1,100 — (3 1,097 $ 544,428 $ 555 $ (10,880 $ 534,103 (dollars in thousands) U.S. Treasury securities $ 100 $ — $ — $ 100 Obligations of the U.S. government and agencies 187,850 21 (4,615 ) 183,256 Obligations of state and political subdivisions 17,483 11 (69 ) 17,425 Mortgage-backed securities 298,704 416 (6,557 ) 292,563 Collateralized mortgage obligations 38,077 16 (1,459 ) 36,634 Other investment securities 1,100 — (3 ) 1,097 Total $ 543,314 $ 464 $ (12,703 ) $ 531,075 (dollars in thousands) U.S. Treasury securities $ 200,077 $ 11 $ — $ 200,088 Obligations of the U.S. government and agencies 153,028 75 (2,059 ) 151,044 Obligations of state and political subdivisions 21,352 11 (53 ) 21,310 Mortgage-backed securities 275,958 887 (1,855 ) 274,990 Collateralized mortgage obligations 37,596 14 (948 ) 36,662 Other investment securities 4,813 318 (23 ) 5,108 Total $ 692,824 $ 1,316 $ (4,938 ) $ 689,202 March 31,June 30, 2018 and December 31, 2017 on available for sale investment securities classified according to the amount of time those securities have been in a continuous unrealized loss position:March 31,June 30, 2018
Months
or Longer
Value
Value
Value $ 128,699 $ (2,688 $ 26,389 $ (1,102 $ 155,088 $ (3,790 9,758 (26 2,122 (57 11,880 (83 236,886 (4,620 29,840 (1,060 266,726 (5,680 7,726 (112 25,143 (1,212 32,869 (1,324 797 (3 — — 797 (3 $ 383,866 $ (7,449 $ 83,494 $ (3,431 $ 467,360 $ (10,880 Total (dollars in thousands) Unrealized Losses Unrealized Losses Unrealized Losses Obligations of the U.S. government and agencies $ 154,255 $ (3,361 ) $ 28,237 $ (1,254 ) $ 182,492 $ (4,615 ) Obligations of state and political subdivisions 5,907 (16 ) 1,563 (53 ) 7,470 (69 ) Mortgage-backed securities 228,831 (5,183 ) 37,068 (1,374 ) 265,899 (6,557 ) Collateralized mortgage obligations 6,800 (130 ) 23,815 (1,329 ) 30,615 (1,459 ) Other investment securities 797 (3 ) — — 797 (3 ) Total $ 396,590 $ (8,693 ) $ 90,683 $ (4,010 ) $ 487,273 $ (12,703 ) 20172017 Total (dollars in thousands) Unrealized Losses Unrealized Losses Unrealized Losses Obligations of the U.S. government and agencies $ 114,120 $ (1,294 ) $ 26,726 $ (765 ) $ 140,846 $ (2,059 ) Obligations of state and political subdivisions 11,144 (29 ) 2,709 (24 ) 13,853 (53 ) Mortgage-backed securities 177,919 (1,293 ) 31,787 (562 ) 209,706 (1,855 ) Collateralized mortgage obligations 5,166 (47 ) 26,686 (901 ) 31,852 (948 ) Other investment securities 1,805 (23 ) — — 1,805 (23 ) Total $ 310,154 $ (2,686 ) $ 87,908 $ (2,252 ) $ 398,062 $ (4,938 ) Page 14
Management evaluates the Corporation’s investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. The investment portfolio includes debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state and local municipalities and other issuers. All fixed income investment securities in the Corporation’s investment portfolio are rated as investment-grade or higher. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, interest rates and the bond rating of each security. The unrealized losses presented in the tables above are temporary in nature and are primarily related to market interest rates rather than the underlying credit quality of the issuers or collateral. Management does not believe that these unrealized losses are other-than-temporary. Management does not have the intent to sell these securities prior to their maturity or the recovery of their cost bases and believes that it is more likely than not that it will not have to sell these securities prior to their maturity or the recovery of their cost bases.
FHLB as well as certain securities individually pledged by the Corporation.
March 31, 2018 | December 31, 2017 | |||||||||||||||
(dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Investment securities: | ||||||||||||||||
Due in one year or less | $ | 11,932 | $ | 11,922 | $ | 211,019 | $ | 211,019 | ||||||||
Due after one year through five years | 149,967 | 146,773 | 126,452 | 124,797 | ||||||||||||
Due after five years through ten years | 23,413 | 22,910 | 23,147 | 22,804 | ||||||||||||
Due after ten years | 14,743 | 14,616 | 15,439 | 15,421 | ||||||||||||
Subtotal | 200,055 | 196,221 | 376,057 | 374,041 | ||||||||||||
Mortgage-related securities(1) | 344,373 | 337,882 | 313,554 | 311,652 | ||||||||||||
Mutual funds with no stated maturity | — | — | 3,213 | 3,509 | ||||||||||||
Total | $ | 544,428 | $ | 534,103 | $ | 692,824 | $ | 689,202 | ||||||||
(1)
| June 30, 2018 | December 31, 2017 | ||||||||||||||
| (dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
| Investment securities: | |||||||||||||||
| Due in one year or less | $ | 10,137 | $ | 10,132 | $ | 211,019 | $ | 211,019 | |||||||
| Due after one year through five years | 165,647 | 161,611 | 126,452 | 124,797 | |||||||||||
| Due after five years through ten years | 16,539 | 16,099 | 23,147 | 22,804 | |||||||||||
| Due after ten years | 14,210 | 14,036 | 15,439 | 15,421 | |||||||||||
| Subtotal | 206,533 | 201,878 | 376,057 | 374,041 | |||||||||||
Mortgage-related securities(1) | 336,781 | 329,197 | 313,554 | 311,652 | |||||||||||
| Mutual funds with no stated maturity | — | — | 3,213 | 3,509 | |||||||||||
| Total | $ | 543,314 | $ | 531,075 | $ | 692,824 | $ | 689,202 | |||||||
As of March 31, 2018
(dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses |
Fair Value | ||||||||||||
Mortgage-backed securities | $ | 7,885 | $ | — | $ | (256 | ) | $ | 7,629 | |||||||
(dollars in thousands) Mortgage-backed securities $ 7,838 $ — $ (291 ) $ 7,547 20172017(dollars in thousands) Mortgage-backed securities $ 7,932 $ 5 $ (86 ) $ 7,851
The following tables present the aggregate amount of gross unrealized losses as of March 31,June 30, 2018 and December 31, 2017 on held to maturitysecurities classified according to the amount of time those securities have been in a continuous unrealized loss position:
Less than 12 12 Months Total (dollars in thousands) Fair Unrealized Losses Fair Unrealized Losses Unrealized Losses Mortgage-backed securities ) ) )March 31,June 30, 2018
Months
or Longer
Value
Value Fair
Value $ 4,953 $ (143 $ 2,676 $ (113 $ 7,629 $ (256 Total (dollars in thousands) Mortgage-backed securities $ 4,900 $ (167 ) $ 2,647 $ (124 ) $ 7,547 $ (291 ) Total (dollars in thousands) Mortgage-backed securities $ 2,756 $ (25 ) $ 3,866 $ (61 ) $ 6,622 $ (86 )
March 31, 2018 | December 31, 2017 | |||||||||||||||
(dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Mortgage-backed securities(1) | $ | 7,885 | $ | 7,629 | $ | 7,932 | $ | 7,851 | ||||||||
(1)
| June 30, 2018 | December 31, 2017 | ||||||||||||||
| (dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Mortgage-backed securities(1) | $ | 7,838 | $ | 7,547 | $ | 7,932 | $ | 7,851 | |||||||
Note 5 - Loans and Leases
The loan and lease portfolio consists of loans and leases originated by the Corporation, as well as loans acquired in mergers and acquisitions. These mergers and acquisitions include the December 2017 RBPI Merger, the January 2015 Continental Bank Holdings, Inc. Merger, the November 2012 transaction with First Bank of Delaware, and the July 2010 acquisition of First Keystone Financial, Inc. Certain tables in this footnote are presented with a breakdown between originated and acquired loans and leases.
March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
(dollars in thousands) | Originated | Acquired | Total Loans and Leases | Originated | Acquired | Total Loans and Leases | ||||||||||||||||||
Loans held for sale | $ | 5,522 | $ | — | $ | 5,522 | $ | 3,794 | $ | — | $ | 3,794 | ||||||||||||
Real Estate Loans: | ||||||||||||||||||||||||
Commercial mortgage | $ | 1,151,578 | $ | 389,879 | $ | 1,541,457 | $ | 1,122,327 | $ | 401,050 | $ | 1,523,377 | ||||||||||||
Home equity lines and loans | 178,624 | 32,845 | 211,469 | 183,283 | 34,992 | 218,275 | ||||||||||||||||||
Residential mortgage | 360,242 | 93,413 | 453,655 | 360,935 | 97,951 | 458,886 | ||||||||||||||||||
Construction | 135,480 | 66,688 | 202,168 | 128,266 | 84,188 | 212,454 | ||||||||||||||||||
Total real estate loans | $ | 1,825,924 | $ | 582,825 | $ | 2,408,749 | $ | 1,794,811 | $ | 618,181 | $ | 2,412,992 | ||||||||||||
Commercial and industrial | 613,315 | 113,916 | 727,231 | 589,304 | 130,008 | 719,312 | ||||||||||||||||||
Consumer | 45,731 | 2,692 | 48,423 | 35,146 | 3,007 | 38,153 | ||||||||||||||||||
Leases | 79,857 | 41,535 | 121,392 | 68,035 | 47,366 | 115,401 | ||||||||||||||||||
Total portfolio loans and leases | $ | 2,564,827 | $ | 740,968 | $ | 3,305,795 | $ | 2,487,296 | $ | 798,562 | $ | 3,285,858 | ||||||||||||
Total loans and leases | $ | 2,570,349 | $ | 740,968 | $ | 3,311,317 | $ | 2,491,090 | $ | 798,562 | $ | 3,289,652 | ||||||||||||
Loans with fixed rates | $ | 1,081,414 | $ | 473,855 | $ | 1,555,269 | $ | 1,034,542 | $ | 538,510 | $ | 1,573,052 | ||||||||||||
Loans with adjustable or floating rates | 1,488,935 | 267,113 | 1,756,048 | 1,456,548 | 260,052 | 1,716,600 | ||||||||||||||||||
Total loans and leases | $ | 2,570,349 | $ | 740,968 | $ | 3,311,317 | $ | 2,491,090 | $ | 798,562 | $ | 3,289,652 | ||||||||||||
Net deferred loan origination fees included in the above loan table | $ | 1,226 | $ | — | $ | 1,226 | $ | 887 | $ | — | $ | 887 | ||||||||||||
| June 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
| (dollars in thousands) | Originated | Acquired | Total Loans and Leases | Originated | Acquired | Total Loans and Leases | |||||||||||||||||
| Loans held for sale | $ | 4,204 | $ | — | $ | 4,204 | $ | 3,794 | $ | — | $ | 3,794 | |||||||||||
| Real Estate Loans: | |||||||||||||||||||||||
| Commercial mortgage | $ | 1,237,885 | $ | 375,836 | $ | 1,613,721 | $ | 1,122,327 | $ | 401,050 | $ | 1,523,377 | |||||||||||
| Home equity lines and loans | 176,771 | 29,658 | 206,429 | 183,283 | 34,992 | 218,275 | |||||||||||||||||
| Residential mortgage | 358,271 | 90,789 | 449,060 | 360,935 | 97,951 | 458,886 | |||||||||||||||||
| Construction | 147,636 | 43,238 | 190,874 | 128,266 | 84,188 | 212,454 | |||||||||||||||||
| Total real estate loans | $ | 1,920,563 | $ | 539,521 | $ | 2,460,084 | $ | 1,794,811 | $ | 618,181 | $ | 2,412,992 | |||||||||||
| Commercial and industrial | 632,917 | 112,389 | 745,306 | 589,304 | 130,008 | 719,312 | |||||||||||||||||
| Consumer | 49,828 | 1,634 | 51,462 | 35,146 | 3,007 | 38,153 | |||||||||||||||||
| Leases | 97,506 | 35,143 | 132,649 | 68,035 | 47,366 | 115,401 | |||||||||||||||||
| Total portfolio loans and leases | $ | 2,700,814 | $ | 688,687 | $ | 3,389,501 | $ | 2,487,296 | $ | 798,562 | $ | 3,285,858 | |||||||||||
| Total loans and leases | $ | 2,705,018 | $ | 688,687 | $ | 3,393,705 | $ | 2,491,090 | $ | 798,562 | $ | 3,289,652 | |||||||||||
| Loans with fixed rates | $ | 1,127,713 | $ | 412,461 | $ | 1,540,174 | $ | 1,034,542 | $ | 538,510 | $ | 1,573,052 | |||||||||||
| Loans with adjustable or floating rates | 1,577,305 | 276,226 | 1,853,531 | 1,456,548 | 260,052 | 1,716,600 | |||||||||||||||||
| Total loans and leases | $ | 2,705,018 | $ | 688,687 | $ | 3,393,705 | $ | 2,491,090 | $ | 798,562 | $ | 3,289,652 | |||||||||||
| Net deferred loan origination fees included in the above loan table | $ | 1,200 | $ | — | $ | 1,200 | $ | 887 | $ | — | $ | 887 | |||||||||||
March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
(dollars in thousands) | Originated | Acquired | Total Leases | Originated | Acquired | Total Leases | ||||||||||||||||||
Minimum lease payments receivable | $ | 88,752 | $ | 47,549 | $ | 136,301 | $ | 75,592 | $ | 55,219 | $ | 130,811 | ||||||||||||
Unearned lease income | (12,523 | ) | (7,336 | ) | (19,859 | ) | (10,338 | ) | (9,523 | ) | (19,861 | ) | ||||||||||||
Initial direct costs and deferred fees | 3,628 | 1,322 | 4,950 | 2,781 | 1,670 | 4,451 | ||||||||||||||||||
Total Leases | $ | 79,857 | $ | 41,535 | $ | 121,392 | $ | 68,035 | $ | 47,366 | $ | 115,401 | ||||||||||||
March 31, 2018 December 31, 2017 (dollars in thousands) Originated Acquired Total Loans and Leases Originated Acquired Total Loans and Leases Commercial mortgage Home equity lines and loans Residential mortgage Commercial and industrial Leases Total non-performing loans and leases June 30, 2018 December 31, 2017 (dollars in thousands) Originated Acquired Total Leases Originated Acquired Total Leases Minimum lease payments receivable $ 108,718 $ 39,656 $ 148,374 $ 75,592 $ 55,219 $ 130,811 Unearned lease income (15,735 ) (5,534 ) (21,269 ) (10,338 ) (9,523 ) (19,861 ) Initial direct costs and deferred fees 4,523 1,021 5,544 2,781 1,670 4,451 Total Leases $ 97,506 $ 35,143 $ 132,649 $ 68,035 $ 47,366 $ 115,401 (1)(1) $ 89 $ 49 $ 138 $ 90 $ 782 $ 872 1,693 256 1,949 1,221 260 1,481 1,491 1,113 2,604 1,505 2,912 4,417 1,926 573 2,499 826 880 1,706 189 154 343 103 — 103 $ 5,388 2,145 $ 7,533 $ 3,745 $ 4,834 $ 8,579
(1) June 30, 2018 December 31, 2017 (dollars in thousands) Originated Acquired Total Loans and Leases Originated Acquired Total Loans and Leases Commercial mortgage $ — $ 1,011 $ 1,011 $ 90 $ 782 $ 872 Home equity lines and loans 1,833 490 2,323 1,221 260 1,481 Residential mortgage 1,615 1,032 2,647 1,505 2,912 4,417 Commercial and industrial 1,011 574 1,585 826 880 1,706 Leases 575 1,307 1,882 103 — 103 Total non-performing loans and leases $ 5,034 $ 4,414 $ 9,448 $ 3,745 $ 4,834 $ 8,579 excludedexcluded from this table, with theexception of$10787 thousandandand $167 thousand of purchased credit-impaired loans as of March 31,June 30, 2018and December 31, 2017,respectively, which became non-performing subsequent to acquisition.Page 17
D.D. Purchased Credit-Impaired Loans
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Outstanding principal balance | $ | 48,720 | $ | 46,543 | ||||
Carrying amount(1) | $ | 33,228 | $ | 30,849 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | |||||
| Outstanding principal balance | $ | 38,791 | $ | 46,543 | |||
Carrying amount(1) | $ | 27,601 | $ | 30,849 | |||
(dollars in thousands) | Accretable | |||
Balance, December 31, 2017 | $ | 4,083 | ||
Accretion | (685 | ) | ||
Reclassifications from nonaccretable difference | 5 | |||
Additions/adjustments | 212 | |||
Disposals | — | |||
Balance, March 31, 2018 | $ | 3,615 | ||
E.
| (dollars in thousands) | Accretable Discount | ||
| Balance, December 31, 2017 | $ | 4,083 | |
| Accretion | (1,361 | ) | |
| Reclassifications from nonaccretable difference | 110 | ||
| Additions/adjustments | 211 | ||
| Disposals | — | ||
| Balance, June 30, 2018 | $ | 3,043 | |
Accruing Loans and Leases | ||||||||||||||||||||||||||||||||
As of March 31, 2018 (dollars in thousands) | 30 – 59 Days | 60 – 89 Days | Over 89 Days | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | ||||||||||||||||||||||||
Commercial mortgage | $ | 533 | $ | 391 | $ | — | $ | 924 | $ | 1,540,395 | $ | 1,541,319 | $ | 138 | $ | 1,541,457 | ||||||||||||||||
Home equity lines and loans | 150 | — | — | 150 | 209,370 | 209,520 | 1,949 | 211,469 | ||||||||||||||||||||||||
Residential mortgage | 1,119 | — | — | 1,119 | 449,932 | 451,051 | 2,604 | 453,655 | ||||||||||||||||||||||||
Construction | 333 | — | — | 333 | 201,835 | 202,168 | — | 202,168 | ||||||||||||||||||||||||
Commercial and industrial | 499 | — | — | 499 | 724,233 | 724,732 | 2,499 | 727,231 | ||||||||||||||||||||||||
Consumer | — | — | — | — | 48,423 | 48,423 | — | 48,423 | ||||||||||||||||||||||||
Leases | 2,640 | 881 | — | 3,521 | 117,528 | 121,049 | 343 | 121,392 | ||||||||||||||||||||||||
Total portfolio loans and leases | $ | 5,274 | $ | 1,272 | $ | — | $ | 6,546 | $ | 3,291,716 | $ | 3,298,262 | $ | 7,533 | $ | 3,305,795 | ||||||||||||||||
Accruing Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2017 (dollars in thousands) | 30 – 59 Days | 60 – 89 Days | Over 89 Days | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accruing Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2018 | 30 – 59 Days Past Due | 60 – 89 Days Past Due | Over 89 Days Past Due | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage | $ | 1,366 | $ | 2,428 | $ | — | $ | 3,794 | $ | 1,518,711 | $ | 1,522,505 | $ | 872 | $ | 1,523,377 | $ | 2,645 | $ | 150 | $ | — | $ | 2,795 | $ | 1,609,915 | $ | 1,612,710 | $ | 1,011 | $ | 1,613,721 | |||||||||||||||||||||||||||||||
Home equity lines and loans | 338 | 10 | — | 348 | 216,446 | 216,794 | 1,481 | 218,275 | — | — | — | — | 204,106 | 204,106 | 2,323 | 206,429 | |||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | 1,386 | 79 | — | 1,465 | 453,004 | 454,469 | 4,417 | 458,886 | 891 | 127 | — | 1,018 | 445,395 | 446,413 | 2,647 | 449,060 | |||||||||||||||||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 212,454 | 212,454 | — | 212,454 | 2,854 | 1,083 | — | 3,937 | 186,937 | 190,874 | — | 190,874 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | 658 | 286 | — | 944 | 716,662 | 717,606 | 1,706 | 719,312 | 832 | 163 | — | 995 | 742,726 | 743,721 | 1,585 | 745,306 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | 1,106 | — | — | 1,106 | 37,047 | 38,153 | — | 38,153 | 19 | — | — | 19 | 51,443 | 51,462 | — | 51,462 | |||||||||||||||||||||||||||||||||||||||||||||||
Leases | 125 | 177 | — | 302 | 114,996 | 115,298 | 103 | 115,401 | 786 | 829 | — | 1,615 | 129,152 | 130,767 | 1,882 | 132,649 | |||||||||||||||||||||||||||||||||||||||||||||||
Total portfolio loans and leases | $ | 4,979 | $ | 2,980 | $ | — | $ | 7,959 | $ | 3,269,320 | $ | 3,277,279 | $ | 8,579 | $ | 3,285,858 | $ | 8,027 | $ | 2,352 | $ | — | $ | 10,379 | $ | 3,369,674 | $ | 3,380,053 | $ | 9,448 | $ | 3,389,501 | |||||||||||||||||||||||||||||||
Accruing Loans and Leases As of December 31, 2017 Current* (dollars in thousands) Commercial mortgage $ 1,366 $ 2,428 $ — $ 3,794 $ 1,518,711 $ 1,522,505 $ 872 $ 1,523,377 Home equity lines and loans 338 10 — 348 216,446 216,794 1,481 218,275 Residential mortgage 1,386 79 — 1,465 453,004 454,469 4,417 458,886 Construction — — — — 212,454 212,454 — 212,454 Commercial and industrial 658 286 — 944 716,662 717,606 1,706 719,312 Consumer 1,106 — — 1,106 37,047 38,153 — 38,153 Leases 125 177 — 302 114,996 115,298 103 115,401 Total portfolio loans and leases $ 4,979 $ 2,980 $ — $ 7,959 $ 3,269,320 $ 3,277,279 $ 8,579 $ 3,285,858 $1.8$6.5 million and $4.1 million of loans and leases as of March 31,June 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The CorporationManagement does not consider these loans to be delinquent.Page 18
The following tables present an aging of originated portfolio loans and leases as of the dates indicated:
Accruing Loans and Leases | ||||||||||||||||||||||||||||||||
As of March 31, 2018 (dollars in thousands) | 30 – 59 Days | 60 – 89 Days | Over 89 Days | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | ||||||||||||||||||||||||
Commercial mortgage | $ | 425 | $ | 391 | $ | — | $ | 816 | $ | 1,150,673 | $ | 1,151,489 | $ | 89 | $ | 1,151,578 | ||||||||||||||||
Home equity lines and loans | 150 | — | — | 150 | 176,781 | 176,931 | 1,693 | 178,624 | ||||||||||||||||||||||||
Residential mortgage | 647 | — | — | 647 | 358,104 | 358,751 | 1,491 | 360,242 | ||||||||||||||||||||||||
Construction | — | — | — | — | 135,480 | 135,480 | — | 135,480 | ||||||||||||||||||||||||
Commercial and industrial | 99 | — | — | 99 | 611,290 | 611,389 | 1,926 | 613,315 | ||||||||||||||||||||||||
Consumer | — | — | — | — | 45,731 | 45,731 | — | 45,731 | ||||||||||||||||||||||||
Leases | 788 | 503 | — | 1,291 | 78,377 | 79,668 | 189 | 79,857 | ||||||||||||||||||||||||
Total originated portfolio loans and leases | $ | 2,109 | $ | 894 | $ | — | $ | 3,003 | $ | 2,556,436 | $ | 2,559,439 | $ | 5,388 | $ | 2,564,827 | ||||||||||||||||
Accruing Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2017 (dollars in thousands) | 30 – 59 Days | 60 – 89 Days | Over 89 Days | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accruing Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2018 | 30 – 59 Days Past Due | 60 – 89 Days Past Due | Over 89 Days Past Due | Total Past Due | Current* | Total Accruing Loans and Leases | Nonaccrual Loans and Leases | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage | $ | 1,255 | $ | 81 | $ | — | $ | 1,336 | $ | 1,120,901 | $ | 1,122,237 | $ | 90 | $ | 1,122,327 | $ | 2,107 | $ | 77 | $ | — | $ | 2,184 | $ | 1,235,701 | $ | 1,237,885 | $ | — | $ | 1,237,885 | |||||||||||||||||||||||||||||||
Home equity lines and loans | 26 | — | — | 26 | 182,036 | 182,062 | 1,221 | 183,283 | — | — | — | — | 174,938 | 174,938 | 1,833 | 176,771 | |||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | 721 | — | — | 721 | 358,709 | 359,430 | 1,505 | 360,935 | 626 | 64 | — | 690 | 355,966 | 356,656 | 1,615 | 358,271 | |||||||||||||||||||||||||||||||||||||||||||||||
Construction | — | — | — | — | 128,266 | 128,266 | — | 128,266 | 2,854 | 1,083 | — | 3,937 | 143,699 | 147,636 | — | 147,636 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | 439 | 236 | — | 675 | 587,803 | 588,478 | 826 | 589,304 | 766 | — | — | 766 | 631,140 | 631,906 | 1,011 | 632,917 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | 21 | — | — | 21 | 35,125 | 35,146 | — | 35,146 | 19 | — | — | 19 | 49,809 | 49,828 | — | 49,828 | |||||||||||||||||||||||||||||||||||||||||||||||
Leases | 125 | 177 | — | 302 | 67,630 | 67,932 | 103 | 68,035 | 311 | 508 | — | 819 | 96,112 | 96,931 | 575 | 97,506 | |||||||||||||||||||||||||||||||||||||||||||||||
Total originated portfolio loans and leases | $ | 2,587 | $ | 494 | $ | — | $ | 3,081 | $ | 2,480,470 | $ | 2,483,551 | $ | 3,745 | $ | 2,487,296 | $ | 6,683 | $ | 1,732 | $ | — | $ | 8,415 | $ | 2,687,365 | $ | 2,695,780 | $ | 5,034 | $ | 2,700,814 | |||||||||||||||||||||||||||||||
Accruing Loans and Leases As of March 31, 2018 (dollars in thousands) 30 – 59 Days 60 – 89 Days Over 89 Days Total Past Due Current* Total Accruing Loans and Leases Nonaccrual Loans and Leases Total Loans and Leases Commercial mortgage Home equity lines and loans Residential mortgage Construction Commercial and industrial Consumer Leases Total acquired portfolio loans and leases Accruing Loans and Leases As of December 31, 2017 (dollars in thousands) 30 – 59 Days 60 – 89 Days Over 89 Days Total Past Due Current* Total Accruing Loans and Leases Nonaccrual Loans and Leases Total Loans and Leases Commercial mortgage Home equity lines and loans Residential mortgage Construction Commercial and industrial Consumer Leases Total acquired portfolio loans and leases Accruing Loans and Leases As of December 31, 2017 Current* (dollars in thousands) Commercial mortgage $ 1,255 $ 81 $ — $ 1,336 $ 1,120,901 $ 1,122,237 $ 90 $ 1,122,327 Home equity lines and loans 26 — — 26 182,036 182,062 1,221 183,283 Residential mortgage 721 — — 721 358,709 359,430 1,505 360,935 Construction — — — — 128,266 128,266 — 128,266 Commercial and industrial 439 236 — 675 587,803 588,478 826 589,304 Consumer 21 — — 21 35,125 35,146 — 35,146 Leases 125 177 — 302 67,630 67,932 103 68,035 Total originated portfolio loans and leases $ 2,587 $ 494 $ — $ 3,081 $ 2,480,470 $ 2,483,551 $ 3,745 $ 2,487,296 $1.8$6.2 million and $4.0 million of loans and leases as of March 31,June 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The CorporationManagement does not consider these loans to be delinquent.
Past Due
Past Due
Past Due $ 108 $ — $ — $ 108 $ 389,722 $ 389,830 $ 49 $ 389,879 — — — — 32,589 32,589 256 32,845 472 — — 472 91,828 92,300 1,113 93,413 333 — — 333 66,355 66,688 — 66,688 400 — — 400 112,943 113,343 573 113,916 — — — — 2,692 2,692 — 2,692 1,852 378 — 2,230 39,151 41,381 154 41,535 $ 3,165 $ 378 $ — $ 3,543 $ 735,280 $ 738,823 $ 2,145 $ 740,968
Past Due
Past Due
Past Due Accruing Loans and Leases As of June 30, 2018 Current* (dollars in thousands) $ 111 $ 2,347 $ — $ 2,458 $ 397,810 $ 400,268 $ 782 $ 401,050 $ 538 $ 73 $ — $ 611 $ 374,214 $ 374,825 $ 1,011 $ 375,836 312 10 — 322 34,410 34,732 260 34,992 — — — — 29,168 29,168 490 29,658 665 79 — 744 94,295 95,039 2,912 97,951 265 63 — 328 89,429 89,757 1,032 90,789 — — — — 84,188 84,188 — 84,188 — — — — 43,238 43,238 — 43,238 219 50 — 269 128,859 129,128 880 130,008 66 163 — 229 111,586 111,815 574 112,389 1,085 — — 1,085 1,922 3,007 — 3,007 — — — — 1,634 1,634 — 1,634 — — — — 47,366 47,366 — 47,366 475 321 — 796 33,040 33,836 1,307 35,143 $ 2,392 $ 2,486 $ — $ 4,878 $ 788,850 $ 793,728 $ 4,834 $ 798,562 $ 1,344 $ 620 $ — $ 1,964 $ 682,309 $ 684,273 $ 4,414 $ 688,687
Accruing Loans and Leases As of December 31, 2017 Current* (dollars in thousands) Commercial mortgage $ 111 $ 2,347 $ — $ 2,458 $ 397,810 $ 400,268 $ 782 $ 401,050 Home equity lines and loans 312 10 — 322 34,410 34,732 260 34,992 Residential mortgage 665 79 — 744 94,295 95,039 2,912 97,951 Construction — — — — 84,188 84,188 — 84,188 Commercial and industrial 219 50 — 269 128,859 129,128 880 130,008 Consumer 1,085 — — 1,085 1,922 3,007 — 3,007 Leases — — — — 47,366 47,366 — 47,366 Total acquired portfolio loans and leases $ 2,392 $ 2,486 $ — $ 4,878 $ 788,850 $ 793,728 $ 4,834 $ 798,562 $0$297 thousand and $102 thousand of loans and leases as of March 31,June 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. The CorporationManagement does not consider these loans to be delinquent.Page 19
F.F. Allowance for Loan and Lease Losses (the “Allowance”)
(dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Unallocated | Total | |||||||||||||||||||||||||||
Balance, December 31, 2017 | $ | 7,550 | $ | 1,086 | $ | 1,926 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | — | $ | 17,525 | ||||||||||||||||||
Charge-offs | — | (25 | ) | — | — | (283 | ) | (49 | ) | (596 | ) | — | (953 | ) | ||||||||||||||||||||||
Recoveries | 3 | — | — | 1 | — | 1 | 55 | — | 60 | |||||||||||||||||||||||||||
Provision for loan and lease losses | (379 | ) | (16 | ) | (28 | ) | (94 | ) | 606 | 93 | 848 | — | 1,030 | |||||||||||||||||||||||
Balance, March 31, 2018 | $ | 7,174 | $ | 1,045 | $ | 1,898 | $ | 844 | $ | 5,361 | $ | 291 | $ | 1,049 | $ | — | $ | 17,662 | ||||||||||||||||||
(dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Unallocated | Total | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2016 | $ | 6,227 | $ | 1,255 | $ | 1,917 | $ | 2,233 | $ | 5,142 | $ | 153 | $ | 559 | $ | — | $ | 17,486 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2017 | $ | 7,550 | $ | 1,086 | $ | 1,926 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | — | $ | 17,525 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | — | (438 | ) | (27 | ) | — | (59 | ) | (41 | ) | (206 | ) | — | (771 | ) | (16 | ) | (225 | ) | — | — | (750 | ) | (92 | ) | (1,348 | ) | — | (2,431 | ) | |||||||||||||||||||||||||||||||||||||||||
Recoveries | 3 | — | — | 1 | — | 2 | 95 | — | 101 | 6 | 1 | 1 | 2 | 1 | 3 | 123 | — | 137 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for loan and lease losses | 180 | 426 | (92 | ) | (39 | ) | (336 | ) | 21 | 131 | — | 291 | 493 | 71 | 6 | 219 | 1,383 | 132 | 1,863 | — | 4,167 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2017 | $ | 6,410 | $ | 1,243 | $ | 1,798 | $ | 2,195 | $ | 4,747 | $ | 135 | $ | 579 | $ | — | $ | 17,107 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2018 | $ | 8,033 | $ | 933 | $ | 1,933 | $ | 1,158 | $ | 5,672 | $ | 289 | $ | 1,380 | $ | — | $ | 19,398 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||
| Balance, March 31, 2018 | $ | 7,174 | $ | 1,045 | $ | 1,898 | $ | 844 | $ | 5,361 | $ | 291 | $ | 1,049 | $ | — | $ | 17,662 | |||||||||||||||||
| Charge-offs | (16 | ) | (200 | ) | — | — | (467 | ) | (43 | ) | (751 | ) | — | (1,477 | ) | ||||||||||||||||||||
| Recoveries | 3 | 1 | 1 | 1 | — | 2 | 68 | — | 76 | ||||||||||||||||||||||||||
| Provision for loan and lease losses | 872 | 87 | 34 | 313 | 778 | 39 | 1,014 | — | 3,137 | ||||||||||||||||||||||||||
| Balance, June 30, 2018 | $ | 8,033 | $ | 933 | $ | 1,933 | $ | 1,158 | $ | 5,672 | $ | 289 | $ | 1,380 | $ | — | $ | 19,398 | |||||||||||||||||
| (dollars in thousands) | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||
| Balance, December 31, 2016 | $ | 6,227 | $ | 1,255 | $ | 1,917 | $ | 2,233 | $ | 5,142 | $ | 153 | $ | 559 | $ | — | $ | 17,486 | |||||||||||||||||
| Charge-offs | — | (606 | ) | (70 | ) | — | (259 | ) | (59 | ) | (513 | ) | — | (1,507 | ) | ||||||||||||||||||||
| Recoveries | 6 | — | — | 2 | 15 | 4 | 185 | — | 212 | ||||||||||||||||||||||||||
| Provision for loan and lease losses | 375 | 565 | (71 | ) | (1,124 | ) | (85 | ) | 79 | 469 | — | 208 | |||||||||||||||||||||||
| Balance, June 30, 2017 | $ | 6,608 | $ | 1,214 | $ | 1,776 | $ | 1,111 | $ | 4,813 | $ | 177 | $ | 700 | $ | — | $ | 16,399 | |||||||||||||||||
| (dollars in thousands) | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||
| Balance, March 31, 2017 | $ | 6,410 | $ | 1,243 | $ | 1,798 | $ | 2,195 | $ | 4,747 | $ | 135 | $ | 579 | $ | — | $ | 17,107 | |||||||||||||||||
| Charge-offs | — | (169 | ) | (43 | ) | — | (200 | ) | (18 | ) | (307 | ) | — | (737 | ) | ||||||||||||||||||||
| Recoveries | 3 | — | — | 1 | 15 | 2 | 91 | — | 112 | ||||||||||||||||||||||||||
| Provision for loan and lease losses | 195 | 140 | 21 | (1,085 | ) | 251 | 58 | 337 | — | (83 | ) | ||||||||||||||||||||||||
| Balance, June 30, 2017 | $ | 6,608 | $ | 1,214 | $ | 1,776 | $ | 1,111 | $ | 4,813 | $ | 177 | $ | 700 | $ | — | $ | 16,399 | |||||||||||||||||
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Unallocated | Total | |||||||||||||||||||||||||||
Allowance on loans and leases: | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 19 | $ | 224 | $ | — | $ | 41 | $ | 4 | $ | — | $ | — | $ | 288 | ||||||||||||||||||
Collectively evaluated for impairment | 7,174 | 1,026 | 1,674 | 844 | 5,320 | 287 | 1,049 | — | 17,374 | |||||||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 7,174 | $ | 1,045 | $ | 1,898 | $ | 844 | $ | 5,361 | $ | 291 | $ | 1,049 | $ | — | $ | 17,662 | ||||||||||||||||||
As of December 31, 2017 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance on loans and leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 19 | $ | 230 | $ | — | $ | 5 | $ | 4 | $ | — | $ | — | $ | 258 | $ | — | $ | 19 | $ | 299 | $ | — | $ | 104 | $ | 4 | $ | — | $ | — | $ | 426 | |||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | 7,550 | 1,067 | 1,696 | 937 | 5,033 | 242 | 742 | — | 17,267 | 8,033 | 914 | 1,634 | 1,158 | 5,568 | 285 | 1,380 | — | 18,972 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,550 | $ | 1,086 | $ | 1,926 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | — | $ | 17,525 | $ | 8,033 | $ | 933 | $ | 1,933 | $ | 1,158 | $ | 5,672 | $ | 289 | $ | 1,380 | $ | — | $ | 19,398 | |||||||||||||||||||||||||||||||||||
| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Unallocated | Total | ||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Allowance on loans and leases: | |||||||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | — | $ | 19 | $ | 230 | $ | — | $ | 5 | $ | 4 | $ | — | $ | — | $ | 258 | |||||||||||||||||
| Collectively evaluated for impairment | 7,550 | 1,067 | 1,696 | 937 | 5,033 | 242 | 742 | — | 17,267 | ||||||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Total | $ | 7,550 | $ | 1,086 | $ | 1,926 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | — | $ | 17,525 | |||||||||||||||||
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial and Industrial | Consumer | Leases | Total | ||||||||||||||||||||||||
Carrying value of loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 1,394 | $ | 2,626 | $ | 5,350 | $ | — | $ | 2,754 | $ | 27 | $ | — | $ | 12,151 | ||||||||||||||||
Collectively evaluated for impairment | 1,525,887 | 208,333 | 448,305 | 186,559 | 721,545 | 48,396 | 121,392 | 3,260,417 | ||||||||||||||||||||||||
Purchased credit-impaired(1) | 14,176 | 510 | — | 15,609 | 2,932 | — | — | 33,227 | ||||||||||||||||||||||||
Total | $ | 1,541,457 | $ | 211,469 | $ | 453,655 | $ | 202,168 | $ | 727,231 | $ | 48,423 | $ | 121,392 | $ | 3,305,795 | ||||||||||||||||
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | 1,011 | $ | 2,995 | $ | 5,603 | $ | — | $ | 1,864 | $ | 27 | $ | — | $ | 11,500 | |||||||||||||||
| Collectively evaluated for impairment | 1,603,381 | 202,923 | 443,457 | 188,474 | 728,081 | 51,435 | 132,649 | 3,350,400 | |||||||||||||||||||||||
Purchased credit-impaired(1) | 9,329 | 511 | — | 2,400 | 15,361 | — | — | 27,601 | |||||||||||||||||||||||
| Total | $ | 1,613,721 | $ | 206,429 | $ | 449,060 | $ | 190,874 | $ | 745,306 | $ | 51,462 | $ | 132,649 | $ | 3,389,501 | |||||||||||||||
| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | 2,128 | $ | 2,162 | $ | 7,726 | $ | — | $ | 1,897 | $ | 27 | $ | — | $ | 13,940 | |||||||||||||||
| Collectively evaluated for impairment | 1,503,825 | 215,604 | 451,160 | 204,088 | 712,865 | 38,126 | 115,401 | 3,241,069 | |||||||||||||||||||||||
Purchased credit-impaired(1) | 17,424 | 509 | — | 8,366 | 4,550 | — | — | 30,849 | |||||||||||||||||||||||
| Total | $ | 1,523,377 | $ | 218,275 | $ | 458,886 | $ | 212,454 | $ | 719,312 | $ | 38,153 | $ | 115,401 | $ | 3,285,858 | |||||||||||||||
As of December 31, 2017 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial and Industrial | Consumer | Leases | Total | ||||||||||||||||||||||||
Carrying value of loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 2,128 | $ | 2,162 | $ | 7,726 | $ | — | $ | 1,897 | $ | 27 | $ | — | $ | 13,940 | ||||||||||||||||
Collectively evaluated for impairment | 1,503,825 | 215,604 | 451,160 | 204,088 | 712,865 | 38,126 | 115,401 | 3,241,069 | ||||||||||||||||||||||||
Purchased credit-impaired(1) | 17,424 | 509 | — | 8,366 | 4,550 | — | — | 30,849 | ||||||||||||||||||||||||
Total | $ | 1,523,377 | $ | 218,275 | $ | 458,886 | $ | 212,454 | $ | 719,312 | $ | 38,153 | $ | 115,401 | $ | 3,285,858 | ||||||||||||||||
(1)(1) Purchased credit-impaired loans are evaluated for impairment on an individual basis.
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Total | ||||||||||||||||||||||||
Allowance on loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 19 | $ | 168 | $ | — | $ | 5 | $ | 4 | $ | — | $ | 196 | ||||||||||||||||
Collectively evaluated for impairment | 7,174 | 1,026 | 1,674 | 844 | 5,320 | 287 | 1,049 | 17,374 | ||||||||||||||||||||||||
Total | $ | 7,174 | $ | 1,045 | $ | 1,842 | $ | 844 | $ | 5,325 | $ | 291 | $ | 1,049 | $ | 17,570 | ||||||||||||||||
As of December 31, 2017 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance on loans and leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 19 | $ | 180 | $ | — | $ | 5 | $ | 4 | $ | — | $ | 208 | $ | — | $ | 19 | $ | 182 | $ | — | $ | 4 | $ | 4 | $ | — | $ | 209 | |||||||||||||||||||||||||||||||
Collectively evaluated for impairment | 7,550 | 1,067 | 1,696 | 937 | 5,033 | 242 | 742 | 17,267 | 8,033 | 914 | 1,634 | 1,158 | 5,568 | 285 | 1,380 | 18,972 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,550 | $ | 1,086 | $ | 1,876 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | 17,475 | $ | 8,033 | $ | 933 | $ | 1,816 | $ | 1,158 | $ | 5,572 | $ | 289 | $ | 1,380 | $ | 19,181 | |||||||||||||||||||||||||||||||
| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Allowance on loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | — | $ | 19 | $ | 180 | $ | — | $ | 5 | $ | 4 | $ | — | $ | 208 | |||||||||||||||
| Collectively evaluated for impairment | 7,550 | 1,067 | 1,696 | 937 | 5,033 | 242 | 742 | 17,267 | |||||||||||||||||||||||
| Total | $ | 7,550 | $ | 1,086 | $ | 1,876 | $ | 937 | $ | 5,038 | $ | 246 | $ | 742 | $ | 17,475 | |||||||||||||||
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Total | ||||||||||||||||||||||||
Carrying value of loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 1,345 | $ | 2,370 | $ | 3,637 | $ | — | $ | 2,288 | $ | 27 | $ | — | $ | 9,667 | ||||||||||||||||
Collectively evaluated for impairment | 1,150,233 | 176,254 | 356,605 | 135,480 | 611,027 | 45,704 | 79,857 | 2,555,160 | ||||||||||||||||||||||||
Total | $ | 1,151,578 | $ | 178,624 | $ | 360,242 | $ | 135,480 | $ | 613,315 | $ | 45,731 | $ | 79,857 | $ | 2,564,827 | ||||||||||||||||
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | — | $ | 2,505 | $ | 3,974 | $ | — | $ | 1,377 | $ | 27 | $ | — | $ | 7,883 | |||||||||||||||
| Collectively evaluated for impairment | 1,237,885 | 174,266 | 354,297 | 147,636 | 631,540 | 49,801 | 97,506 | 2,692,931 | |||||||||||||||||||||||
| Total | $ | 1,237,885 | $ | 176,771 | $ | 358,271 | $ | 147,636 | $ | 632,917 | $ | 49,828 | $ | 97,506 | $ | 2,700,814 | |||||||||||||||
| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | 1,345 | $ | 1,902 | $ | 4,418 | $ | — | $ | 1,186 | $ | 27 | $ | — | $ | 8,878 | |||||||||||||||
| Collectively evaluated for impairment | 1,120,982 | 181,381 | 356,517 | 128,266 | 588,118 | 35,119 | 68,035 | 2,478,418 | |||||||||||||||||||||||
| Total | $ | 1,122,327 | $ | 183,283 | $ | 360,935 | $ | 128,266 | $ | 589,304 | $ | 35,146 | $ | 68,035 | $ | 2,487,296 | |||||||||||||||
The following tables detail the allocation of the Allowance for acquired portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of March 31,June 30, 2018 and December 31, 2017:
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Total | ||||||||||||||||||||||||
| Allowance on loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | 56 | $ | — | $ | 36 | $ | — | $ | — | $ | 92 | ||||||||||||||||
Collectively evaluated for impairment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 56 | $ | — | $ | 36 | $ | — | $ | — | $ | 92 | ||||||||||||||||
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Allowance on loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | — | $ | — | $ | 117 | $ | — | $ | 100 | $ | — | $ | — | $ | 217 | |||||||||||||||
| Collectively evaluated for impairment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
| Total | $ | — | $ | — | $ | 117 | $ | — | $ | 100 | $ | — | $ | — | $ | 217 | |||||||||||||||
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| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Allowance on loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | — | $ | — | $ | 50 | $ | — | $ | — | $ | — | $ | — | $ | 50 | |||||||||||||||
| Collectively evaluated for impairment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Purchased credit-impaired(1) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
| Total | $ | — | $ | — | $ | 50 | $ | — | $ | — | $ | — | $ | — | $ | 50 | |||||||||||||||
As of March 31, 2018 (dollars in thousands) | Commercial | Home Equity | Residential | Construction | Commercial | Consumer | Leases | Total | ||||||||||||||||||||||||
| Carrying value of loans and leases: | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 49 | $ | 256 | $ | 1,713 | $ | — | $ | 466 | $ | — | $ | — | $ | 2,484 | ||||||||||||||||
Collectively evaluated for impairment | 375,654 | 32,079 | 91,700 | 51,079 | 110,518 | 2,692 | 41,535 | 705,257 | ||||||||||||||||||||||||
Purchased credit-impaired(1) | 14,176 | 510 | — | 15,609 | 2,932 | — | — | 33,227 | ||||||||||||||||||||||||
Total | $ | 389,879 | $ | 32,845 | $ | 93,413 | $ | 66,688 | $ | 113,916 | $ | 2,692 | $ | 41,535 | $ | 740,968 | ||||||||||||||||
(1)
| As of June 30, 2018 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | 1,011 | $ | 490 | $ | 1,629 | $ | — | $ | 487 | $ | — | $ | — | $ | 3,617 | |||||||||||||||
| Collectively evaluated for impairment | 365,496 | 28,657 | 89,160 | 40,838 | 96,541 | 1,634 | 35,143 | 657,469 | |||||||||||||||||||||||
Purchased credit-impaired(1) | 9,329 | 511 | — | 2,400 | 15,361 | — | — | 27,601 | |||||||||||||||||||||||
| Total | $ | 375,836 | $ | 29,658 | $ | 90,789 | $ | 43,238 | $ | 112,389 | $ | 1,634 | $ | 35,143 | $ | 688,687 | |||||||||||||||
| As of December 31, 2017 | Commercial Mortgage | Home Equity Lines and Loans | Residential Mortgage | Construction | Commercial and Industrial | Consumer | Leases | Total | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Carrying value of loans and leases: | |||||||||||||||||||||||||||||||
| Individually evaluated for impairment | $ | 783 | $ | 260 | $ | 3,308 | $ | — | $ | 711 | $ | — | $ | — | $ | 5,062 | |||||||||||||||
| Collectively evaluated for impairment | 382,843 | 34,223 | 94,643 | 75,822 | 124,747 | 3,007 | 47,366 | 762,651 | |||||||||||||||||||||||
Purchased credit-impaired(1) | 17,424 | 509 | — | 8,366 | 4,550 | — | — | 30,849 | |||||||||||||||||||||||
| Total | $ | 401,050 | $ | 34,992 | $ | 97,951 | $ | 84,188 | $ | 130,008 | $ | 3,007 | $ | 47,366 | $ | 798,562 | |||||||||||||||
(1) Page 22
As part of the process of determining the Allowance for the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by both in-house staff as well as external loan reviewers. The result of these reviews is reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:
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Commercial Mortgage | Construction | Commercial and Industrial | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||
Pass | $ | 1,502,268 | $ | 1,490,862 | $ | 179,047 | $ | 193,227 | $ | 717,447 | $ | 711,145 | $ | 2,398,762 | $ | 2,395,234 | ||||||||||||||||
Special Mention | 11,403 | 13,448 | 2,528 | 3,902 | 1,705 | 889 | 15,636 | 18,239 | ||||||||||||||||||||||||
Substandard | 27,221 | 18,194 | 20,593 | 15,325 | 7,015 | 6,013 | 54,829 | 39,532 | ||||||||||||||||||||||||
Doubtful | 565 | 873 | — | — | 1,063 | 1,265 | 1,628 | 2,138 | ||||||||||||||||||||||||
Total | $ | 1,541,457 | $ | 1,523,377 | $ | 202,168 | $ | 212,454 | $ | 727,230 | $ | 719,312 | $ | 2,470,855 | $ | 2,455,143 | ||||||||||||||||
| Commercial Mortgage | Construction | Commercial and Industrial | Total | ||||||||||||||||||||||||||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
| Pass | $ | 1,585,083 | $ | 1,490,862 | $ | 180,805 | $ | 193,227 | $ | 726,009 | $ | 711,145 | $ | 2,491,897 | $ | 2,395,234 | |||||||||||||||
| Special Mention | 2,357 | 13,448 | 2,208 | 3,902 | 230 | 889 | 4,795 | 18,239 | |||||||||||||||||||||||
| Substandard | 25,717 | 18,194 | 7,861 | 15,325 | 18,797 | 6,013 | 52,375 | 39,532 | |||||||||||||||||||||||
| Doubtful | 564 | 873 | — | — | 270 | 1,265 | 834 | 2,138 | |||||||||||||||||||||||
| Total | $ | 1,613,721 | $ | 1,523,377 | $ | 190,874 | $ | 212,454 | $ | 745,306 | $ | 719,312 | $ | 2,549,901 | $ | 2,455,143 | |||||||||||||||
Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Performing | $ | 451,051 | $ | 454,469 | $ | 209,520 | $ | 216,794 | $ | 48,423 | $ | 38,153 | $ | 121,049 | $ | 115,298 | $ | 830,043 | $ | 824,714 | ||||||||||||||||||||
Non-performing | 2,604 | 4,417 | 1,949 | 1,481 | — | — | 343 | 103 | 4,896 | 6,001 | ||||||||||||||||||||||||||||||
Total | $ | 453,655 | $ | 458,886 | $ | 211,469 | $ | 218,275 | $ | 48,423 | $ | 38,153 | $ | 121,392 | $ | 115,401 | $ | 834,939 | $ | 830,715 | ||||||||||||||||||||
| Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||
| Performing | $ | 446,413 | $ | 454,469 | $ | 204,106 | $ | 216,794 | $ | 51,462 | $ | 38,153 | $ | 130,767 | $ | 115,298 | $ | 832,748 | $ | 824,714 | |||||||||||||||||||
| Non-performing | 2,647 | 4,417 | 2,323 | 1,481 | — | — | 1,882 | 103 | 6,852 | 6,001 | |||||||||||||||||||||||||||||
| Total | $ | 449,060 | $ | 458,886 | $ | 206,429 | $ | 218,275 | $ | 51,462 | $ | 38,153 | $ | 132,649 | $ | 115,401 | $ | 839,600 | $ | 830,715 | |||||||||||||||||||
Commercial Mortgage | Construction | Commercial and Industrial | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||
Pass | $ | 1,140,584 | $ | 1,114,171 | $ | 131,797 | $ | 126,260 | $ | 607,758 | $ | 586,896 | $ | 1,880,139 | $ | 1,827,327 | ||||||||||||||||
Special Mention | 994 | — | 1,253 | — | 1,254 | 664 | 3,501 | 664 | ||||||||||||||||||||||||
Substandard | 10,000 | 8,156 | 2,430 | 2,006 | 4,033 | 1,389 | 16,463 | 11,551 | ||||||||||||||||||||||||
Doubtful | — | — | — | — | 270 | 355 | 270 | 355 | ||||||||||||||||||||||||
Total | $ | 1,151,578 | $ | 1,122,327 | $ | 135,480 | $ | 128,266 | $ | 613,315 | $ | 589,304 | $ | 1,900,373 | $ | 1,839,897 | ||||||||||||||||
| Commercial Mortgage | Construction | Commercial and Industrial | Total | ||||||||||||||||||||||||||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
| Pass | $ | 1,228,319 | $ | 1,114,171 | $ | 140,896 | $ | 126,260 | $ | 630,227 | $ | 586,896 | $ | 1,999,442 | $ | 1,827,327 | |||||||||||||||
| Special Mention | 990 | — | 1,279 | — | — | 664 | 2,269 | 664 | |||||||||||||||||||||||
| Substandard | 8,576 | 8,156 | 5,461 | 2,006 | 2,420 | 1,389 | 16,457 | 11,551 | |||||||||||||||||||||||
| Doubtful | — | — | — | — | 270 | 355 | 270 | 355 | |||||||||||||||||||||||
| Total | $ | 1,237,885 | $ | 1,122,327 | $ | 147,636 | $ | 128,266 | $ | 632,917 | $ | 589,304 | $ | 2,018,438 | $ | 1,839,897 | |||||||||||||||
Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Performing | $ | 358,751 | $ | 359,430 | $ | 176,931 | $ | 182,062 | $ | 45,731 | $ | 35,146 | $ | 79,668 | $ | 67,932 | $ | 661,081 | $ | 644,570 | ||||||||||||||||||||
Non-performing | 1,491 | 1,505 | 1,693 | 1,221 | — | — | 189 | 103 | 3,373 | 2,829 | ||||||||||||||||||||||||||||||
Total | $ | 360,242 | $ | 360,935 | $ | 178,624 | $ | 183,283 | $ | 45,731 | $ | 35,146 | $ | 79,857 | $ | 68,035 | $ | 664,454 | $ | 647,399 | ||||||||||||||||||||
| Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||
| Performing | $ | 356,656 | $ | 359,430 | $ | 174,938 | $ | 182,062 | $ | 49,828 | $ | 35,146 | $ | 96,931 | $ | 67,932 | $ | 678,353 | $ | 644,570 | |||||||||||||||||||
| Non-performing | 1,615 | 1,505 | 1,833 | 1,221 | — | — | 575 | 103 | 4,023 | 2,829 | |||||||||||||||||||||||||||||
| Total | $ | 358,271 | $ | 360,935 | $ | 176,771 | $ | 183,283 | $ | 49,828 | $ | 35,146 | $ | 97,506 | $ | 68,035 | $ | 682,376 | $ | 647,399 | |||||||||||||||||||
Commercial Mortgage | Construction | Commercial and Industrial | Total | |||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||
Pass | $ | 361,684 | $ | 376,691 | $ | 47,250 | $ | 66,967 | $ | 109,690 | $ | 124,249 | $ | 518,624 | $ | 567,907 | ||||||||||||||||
Special Mention | 10,409 | 13,448 | 1,275 | 3,902 | 451 | 225 | 12,135 | 17,575 | ||||||||||||||||||||||||
Substandard | 17,221 | 10,038 | 18,163 | 13,319 | 2,982 | 4,624 | 38,366 | 27,981 | ||||||||||||||||||||||||
Doubtful | 565 | 873 | — | — | 793 | 910 | 1,358 | 1,783 | ||||||||||||||||||||||||
Total | $ | 389,879 | $ | 401,050 | $ | 66,688 | $ | 84,188 | $ | 113,916 | $ | 130,008 | $ | 570,483 | $ | 615,246 | ||||||||||||||||
| Commercial Mortgage | Construction | Commercial and Industrial | Total | ||||||||||||||||||||||||||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
| Pass | $ | 356,764 | $ | 376,691 | $ | 39,909 | $ | 66,967 | $ | 95,782 | $ | 124,249 | $ | 492,455 | $ | 567,907 | |||||||||||||||
| Special Mention | 1,367 | 13,448 | 929 | 3,902 | 230 | 225 | 2,526 | 17,575 | |||||||||||||||||||||||
| Substandard | 17,141 | 10,038 | 2,400 | 13,319 | 16,377 | 4,624 | 35,918 | 27,981 | |||||||||||||||||||||||
| Doubtful | 564 | 873 | — | — | — | 910 | 564 | 1,783 | |||||||||||||||||||||||
| Total | $ | 375,836 | $ | 401,050 | $ | 43,238 | $ | 84,188 | $ | 112,389 | $ | 130,008 | $ | 531,463 | $ | 615,246 | |||||||||||||||
Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Performing | $ | 92,300 | $ | 95,039 | $ | 32,589 | $ | 34,732 | $ | 2,692 | $ | 3,007 | $ | 41,381 | $ | 47,366 | $ | 168,962 | $ | 180,144 | ||||||||||||||||||||
Non-performing | 1,113 | 2,912 | 256 | 260 | — | — | 154 | — | 1,523 | 3,172 | ||||||||||||||||||||||||||||||
Total | $ | 93,413 | $ | 97,951 | $ | 32,845 | $ | 34,992 | $ | 2,692 | $ | 3,007 | $ | 41,535 | $ | 47,366 | $ | 170,485 | $ | 183,316 | ||||||||||||||||||||
| Residential Mortgage | Home Equity Lines and Loans | Consumer | Leases | Total | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||
| Performing | $ | 89,757 | $ | 95,039 | $ | 29,168 | $ | 34,732 | $ | 1,634 | $ | 3,007 | $ | 33,836 | $ | 47,366 | $ | 154,395 | $ | 180,144 | |||||||||||||||||||
| Non-performing | 1,032 | 2,912 | 490 | 260 | — | — | 1,307 | — | 2,829 | 3,172 | |||||||||||||||||||||||||||||
| Total | $ | 90,789 | $ | 97,951 | $ | 29,658 | $ | 34,992 | $ | 1,634 | $ | 3,007 | $ | 35,143 | $ | 47,366 | $ | 157,224 | $ | 183,316 | |||||||||||||||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
TDRs included in nonperforming loans and leases | $ | 1,125 | $ | 3,289 | ||||
TDRs in compliance with modified terms | 5,235 | 5,800 | ||||||
Total TDRs | $ | 6,360 | $ | 9,089 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | |||||
| TDRs included in nonperforming loans and leases | $ | 1,044 | $ | 3,289 | |||
| TDRs in compliance with modified terms | 4,117 | 5,800 | |||||
| Total TDRs | $ | 5,161 | $ | 9,089 | |||
For the Three Months Ended March 31, 2018 | ||||||||||||
(dollars in thousands) | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | |||||||||
Commercial and industrial | 1 | $ | 18 | $ | 18 | |||||||
| For the Three Months Ended June 30, 2018 | |||||||||
| (dollars in thousands) | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | ||||||
| Home equity loans and lines | 1 | $ | 8 | $ | 8 | ||||
| Residential mortgages | 2 | 219 | 219 | ||||||
| Leases | 2 | 33 | 33 | ||||||
| Total | 5 | $ | 260 | $ | 260 | ||||
| ||||||||||||||||||||
|
|
|
|
| ||||||||||||||||
| ||||||||||||||||||||
| Number of Contracts | |||||||||
| Loan Term Extension | Interest Rate Change and Term Extension | Interest Rate Change and/or Interest-Only Period | Contractual Payment Reduction (Leases only) | Temporary Payment Deferral | |||||
| Home equity loans and lines | — | 1 | — | — | — | ||||
| Residential mortgages | 1 | 1 | — | — | — | ||||
| Leases | — | — | — | 2 | — | ||||
| Total | 1 | 2 | — | 2 | — | ||||
| For the Six Months Ended June 30, 2018 | |||||||||
| (dollars in thousands) | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | ||||||
| Home equity loans and lines | 1 | $ | 8 | $ | 8 | ||||
| Residential mortgages | 2 | 219 | 219 | ||||||
| Commercial and industrial | 1 | 18 | 18 | ||||||
| Leases | 2 | 33 | 33 | ||||||
| Total | 6 | $ | 278 | $ | 278 | ||||
| Number of Contracts | |||||||||
| Loan Term Extension | Interest Rate Change and Term Extension | Interest Rate Change and/or Interest-Only Period | Contractual Payment Reduction (Leases only) | Temporary Payment Deferral | |||||
| Home equity loans and lines | — | 1 | — | — | — | ||||
| Residential mortgages | 1 | 1 | — | — | — | ||||
| Commercial and industrial | — | 1 | — | — | — | ||||
| Leases | — | — | — | 2 | — | ||||
| Total | 1 | 3 | — | 2 | — | ||||
As of or for the Three Months Ended March 31, 2018 (dollars in thousands) | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | ||||||||||||||||||
Impaired loans with related allowance: | ||||||||||||||||||||||||
Home equity lines and loans | $ | 574 | $ | 574 | $ | 19 | $ | 575 | $ | 6 | $ | — | ||||||||||||
Residential mortgage | 1,796 | 1,796 | 224 | 1,801 | 21 | — | ||||||||||||||||||
Commercial and industrial | 54 | 110 | 40 | 97 | — | — | ||||||||||||||||||
Consumer | 27 | 27 | 4 | 27 | — | — | ||||||||||||||||||
Total | $ | 2,451 | $ | 2,507 | $ | 287 | $ | 2,500 | $ | 27 | $ | — | ||||||||||||
Impaired loans without related allowance*: | ||||||||||||||||||||||||
Commercial mortgage | $ | 1,394 | $ | 1,483 | $ | — | $ | 1,394 | $ | 23 | $ | — | ||||||||||||
Home equity lines and loans | 2,052 | 2,114 | — | 2,094 | 2 | — | ||||||||||||||||||
Residential mortgage | 3,554 | 3,758 | — | 154 | — | — | ||||||||||||||||||
Commercial and industrial | 2,700 | 3,498 | — | 2,872 | 5 | — | ||||||||||||||||||
Total | $ | 9,700 | $ | 10,853 | $ | — | $ | 6,514 | $ | 30 | $ | — | ||||||||||||
Grand total | $ | 12,151 | $ | 13,360 | $ | 287 | $ | 9,014 | $ | 57 | $ | — | ||||||||||||
| As of and for the Three Months Ended June 30, 2018 | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Impaired loans with related allowance: | |||||||||||||||||||||||
| Home equity lines and loans | $ | 570 | $ | 570 | $ | 19 | $ | 572 | $ | 6 | $ | — | |||||||||||
| Residential mortgage | 2,379 | 2,379 | 299 | 2,383 | 22 | — | |||||||||||||||||
| Commercial and industrial | 267 | 362 | 104 | 314 | — | — | |||||||||||||||||
| Consumer | 27 | 27 | 4 | 27 | — | — | |||||||||||||||||
| Total | $ | 3,243 | $ | 3,338 | $ | 426 | $ | 3,296 | $ | 28 | $ | — | |||||||||||
| Impaired loans without related allowance*: | |||||||||||||||||||||||
| Commercial mortgage | $ | 1,011 | $ | 1,010 | $ | — | $ | 1,022 | $ | — | $ | — | |||||||||||
| Home equity lines and loans | 2,425 | 2,487 | — | 2,450 | 2 | — | |||||||||||||||||
| Residential mortgage | 3,223 | 3,265 | — | 3,236 | 19 | — | |||||||||||||||||
| Commercial and industrial | 1,598 | 2,300 | — | 1,620 | 5 | — | |||||||||||||||||
| Total | $ | 8,257 | $ | 9,062 | $ | — | $ | 8,328 | $ | 26 | $ | — | |||||||||||
| Grand total | $ | 11,500 | $ | 12,400 | $ | 426 | $ | 11,624 | $ | 54 | $ | — | |||||||||||
Allowance.
As of or for the Three Months Ended March 31, 2017 (dollars in thousands) | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | |||||||||||||||||||||||||||||||||||||||||
| As of and for the Six Months Ended June 30, 2018 | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | |||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Impaired loans with related allowance: | |||||||||||||||||||||||||||||||||||||||||||||||
| Home equity lines and loans | $ | 570 | $ | 570 | $ | 19 | $ | 574 | $ | 11 | $ | — | |||||||||||||||||||||||||||||||||||
Residential mortgage | $ | 620 | $ | 619 | $ | 73 | $ | 621 | $ | 7 | $ | — | 2,379 | 2,379 | 299 | 2,387 | 45 | — | |||||||||||||||||||||||||||||
Commercial and industrial | 88 | 121 | 11 | 110 | 1 | — | 267 | 362 | 104 | 391 | — | — | |||||||||||||||||||||||||||||||||||
Consumer | 29 | 29 | 5 | 29 | — | — | 27 | 27 | 4 | 27 | 1 | — | |||||||||||||||||||||||||||||||||||
Total | $ | 737 | $ | 769 | $ | 89 | $ | 760 | $ | 8 | $ | — | $ | 3,243 | $ | 3,338 | $ | 426 | $ | 3,379 | $ | 57 | $ | — | |||||||||||||||||||||||
Impaired loans without related allowance*: | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage | $ | 1,570 | $ | 1,570 | $ | — | $ | 1,573 | $ | 15 | $ | — | $ | 1,011 | $ | 1,010 | $ | — | $ | 771 | $ | 6 | $ | — | |||||||||||||||||||||||
Home equity lines and loans | 1,945 | 2,806 | — | 2,358 | 2 | — | 2,425 | 2,487 | — | 2,473 | 8 | — | |||||||||||||||||||||||||||||||||||
Residential mortgage | 6,637 | 6,623 | — | 6,755 | 53 | — | 3,223 | 3,265 | — | 3,105 | 41 | — | |||||||||||||||||||||||||||||||||||
Commercial and industrial | 2,357 | 3,156 | — | 2,456 | 2 | — | 1,598 | 2,300 | — | 1,569 | 12 | — | |||||||||||||||||||||||||||||||||||
Total | $ | 12,509 | $ | 14,155 | $ | — | $ | 13,142 | $ | 72 | $ | — | $ | 8,257 | $ | 9,062 | $ | — | $ | 7,918 | $ | 67 | $ | — | |||||||||||||||||||||||
Grand total | $ | 13,246 | $ | 14,924 | $ | 89 | $ | 13,902 | $ | 80 | $ | — | $ | 11,500 | $ | 12,400 | $ | 426 | $ | 11,297 | $ | 124 | $ | — | |||||||||||||||||||||||
Allowance. (dollars in thousands) As of December 31, 2017 Recorded Investment (2) Principal Balance Related Allowance Impaired loans with related allowance: Home equity lines and loans Residential mortgage Commercial and industrial Consumer Total Impaired loans without related allowance(1): Home equity lines and loans Residential mortgage Commercial and industrial Commercial mortgage Total Grand total$232 thousand$2.0 million of impaired leases without a related allowance for loan and lease losses. $ 577 577 19 2,436 $ 2,435 $ 230 18 19 5 27 27 4 $ 3,058 $ 3,058 $ 258 $ 1,585 $ 1,645 $ — 5,290 5,529 — 1,879 3,613 — 2,128 2,218 — $ 10,882 $ 13,005 $ — $ 13,940 $ 16,063 $ 258
| As of and for the Three Months Ended June 30, 2017 | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Impaired loans with related allowance: | |||||||||||||||||||||||
| Home equity lines and loans | $ | 21 | $ | 21 | $ | 3 | $ | 21 | $ | — | $ | — | |||||||||||
| Residential mortgage | 1,578 | 1,578 | 112 | 1,581 | 20 | — | |||||||||||||||||
| Consumer | 38 | 38 | 14 | 38 | — | — | |||||||||||||||||
| Total | 1,637 | 1,637 | 129 | 1,640 | 20 | — | |||||||||||||||||
| Impaired loans without related allowance*: | |||||||||||||||||||||||
| Commercial mortgage | $ | 2,071 | $ | 2,106 | $ | — | $ | 2,113 | $ | 15 | $ | — | |||||||||||
| Home equity lines and loans | 1,514 | 2,054 | — | 1,536 | 1 | — | |||||||||||||||||
| Residential mortgage | 5,371 | 5,712 | — | 5,496 | 36 | — | |||||||||||||||||
| Commercial and industrial | 2,140 | 2,796 | — | 2,338 | 3 | — | |||||||||||||||||
| Total | $ | 11,096 | $ | 12,668 | $ | — | $ | 11,483 | $ | 55 | $ | — | |||||||||||
| Grand total | $ | 12,733 | $ | 14,305 | $ | 129 | $ | 13,123 | $ | 75 | $ | — | |||||||||||
| As of and for the Six Months Ended June 30, 2017 | Recorded Investment** | Principal Balance | Related Allowance | Average Principal Balance | Interest Income Recognized | Cash-Basis Interest Income Recognized | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Impaired loans with related allowance: | |||||||||||||||||||||||
| Home equity lines and loans | $ | 21 | $ | 21 | $ | 3 | $ | 21 | $ | 1 | $ | — | |||||||||||
| Residential mortgage | 1,578 | 1,578 | 112 | 1,585 | 41 | — | |||||||||||||||||
| Consumer | 38 | 38 | 14 | 39 | 1 | — | |||||||||||||||||
| Total | $ | 1,637 | $ | 1,637 | $ | 129 | $ | 1,645 | $ | 43 | $ | — | |||||||||||
| Impaired loans without related allowance*: | |||||||||||||||||||||||
| Commercial mortgage | $ | 2,071 | $ | 2,106 | $ | — | $ | 2,117 | $ | 39 | $ | — | |||||||||||
| Home equity lines and loans | 1,514 | 2,054 | — | 1,579 | 3 | — | |||||||||||||||||
| Residential mortgage | 5,371 | 5,712 | — | 5,521 | 76 | — | |||||||||||||||||
| Commercial and industrial | 2,140 | 2,796 | — | 2,367 | 6 | — | |||||||||||||||||
| Total | $ | 11,096 | $ | 12,668 | $ | — | $ | 11,584 | $ | 124 | $ | — | |||||||||||
| Grand total | $ | 12,733 | $ | 14,305 | $ | 129 | $ | 13,229 | $ | 167 | $ | — | |||||||||||
| (dollars in thousands) | Recorded Investment (2) | Principal Balance | Related Allowance | ||||||||
| As of December 31, 2017 | |||||||||||
| Impaired loans with related allowance: | |||||||||||
| Home equity lines and loans | $ | 577 | $ | 577 | $ | 19 | |||||
| Residential mortgage | 2,436 | 2,435 | 230 | ||||||||
| Commercial and industrial | 18 | 19 | 5 | ||||||||
| Consumer | 27 | 27 | 4 | ||||||||
| Total | 3,058 | 3,058 | 258 | ||||||||
Impaired loans without related allowance(1): | |||||||||||
| Home equity lines and loans | $ | 1,585 | $ | 1,645 | $ | — | |||||
| Residential mortgage | 5,290 | 5,529 | — | ||||||||
| Commercial and industrial | 1,879 | 3,613 | — | ||||||||
| Commercial mortgage | 2,128 | 2,218 | — | ||||||||
| Total | $ | 10,882 | $ | 13,005 | $ | — | |||||
| Grand total | $ | 13,940 | $ | 16,063 | $ | 258 | |||||
|
Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal. |
I.I. Loan Mark
As of March 31, 2018 | ||||||||||||
(dollars in thousands) | Outstanding Principal | Remaining Loan Mark | Recorded Investment | |||||||||
Commercial mortgage | $ | 403,196 | $ | (13,317 | ) | $ | 389,879 | |||||
Home equity lines and loans | 35,697 | (2,852 | ) | 32,845 | ||||||||
Residential mortgage | 96,609 | (3,196 | ) | 93,413 | ||||||||
Construction | 67,926 | (1,238 | ) | 66,688 | ||||||||
Commercial and industrial | 123,250 | (9,334 | ) | 113,916 | ||||||||
Consumer | 2,729 | (37 | ) | 2,692 | ||||||||
Leases | 43,820 | (2,285 | ) | 41,535 | ||||||||
Total | $ | 773,227 | $ | (32,259 | ) | $ | 740,968 | |||||
As of December 31, 2017 | ||||||||||||
(dollars in thousands) | Outstanding Principal | Remaining Loan Mark | Recorded Investment | |||||||||
Commercial mortgage | $ | 412,263 | $ | (11,213 | ) | $ | 401,050 | |||||
Home equity lines and loans | 37,944 | (2,952 | ) | 34,992 | ||||||||
Residential mortgage | 101,523 | (3,572 | ) | 97,951 | ||||||||
Construction | 86,081 | (1,893 | ) | 84,188 | ||||||||
Commercial and industrial | 141,960 | (11,952 | ) | 130,008 | ||||||||
Consumer | 3,051 | (44 | ) | 3,007 | ||||||||
Leases | 50,530 | (3,164 | ) | 47,366 | ||||||||
Total | $ | 833,352 | $ | (34,790 | ) | $ | 798,562 | |||||
| As of June 30, 2018 | |||||||||||
| (dollars in thousands) | Outstanding Principal | Remaining Loan Mark | Recorded Investment | ||||||||
| Commercial mortgage | $ | 385,801 | $ | (9,965 | ) | $ | 375,836 | ||||
| Home equity lines and loans | 32,271 | (2,613 | ) | 29,658 | |||||||
| Residential mortgage | 93,916 | (3,127 | ) | 90,789 | |||||||
| Construction | 43,676 | (438 | ) | 43,238 | |||||||
| Commercial and industrial | 121,265 | (8,876 | ) | 112,389 | |||||||
| Consumer | 1,669 | (35 | ) | 1,634 | |||||||
| Leases | 36,792 | (1,649 | ) | 35,143 | |||||||
| Total | $ | 715,390 | $ | (26,703 | ) | $ | 688,687 | ||||
| As of December 31, 2017 | |||||||||||
| (dollars in thousands) | Outstanding Principal | Remaining Loan Mark | Recorded Investment | ||||||||
| Commercial mortgage | $ | 412,263 | $ | (11,213 | ) | $ | 401,050 | ||||
| Home equity lines and loans | 37,944 | (2,952 | ) | 34,992 | |||||||
| Residential mortgage | 101,523 | (3,572 | ) | 97,951 | |||||||
| Construction | 86,081 | (1,893 | ) | 84,188 | |||||||
| Commercial and industrial | 141,960 | (11,952 | ) | 130,008 | |||||||
| Consumer | 3,051 | (44 | ) | 3,007 | |||||||
| Leases | 50,530 | (3,164 | ) | 47,366 | |||||||
| Total | $ | 833,352 | $ | (34,790 | ) | $ | 798,562 | ||||
Three Months Ended March 31, | ||||||||
(dollars in thousands) | 2018 | 2017 | ||||||
Balance, beginning of period | $ | 5,861 | $ | 5,582 | ||||
Additions | 16 | 276 | ||||||
Amortization | (221 | ) | (169 | ) | ||||
Recovery / (Impairment) | 50 | (3 | ) | |||||
Balance, end of period | $ | 5,706 | $ | 5,686 | ||||
Fair value | $ | 6,791 | $ | 6,394 | ||||
Residential mortgage loans serviced for others | 634,970 | 638,553 | ||||||
| Three Months Ended June 30, | |||||||
| (dollars in thousands) | 2018 | 2017 | |||||
| Balance, beginning of period | $ | 5,706 | $ | 5,686 | |||
| Additions | — | 213 | |||||
| Amortization | (196 | ) | (173 | ) | |||
| Recovery / (Impairment) | 1 | (43 | ) | ||||
| Balance, end of period | $ | 5,511 | $ | 5,683 | |||
| Fair value | $ | 6,695 | $ | 6,057 | |||
| Six Months Ended June 30, | |||||||
| (dollars in thousands) | 2018 | 2017 | |||||
| Balance, beginning of period | $ | 5,861 | $ | 5,582 | |||
| Additions | 16 | 489 | |||||
| Amortization | (417 | ) | (342 | ) | |||
| Recovery / (Impairment) | 51 | (46 | ) | ||||
| Balance, end of period | $ | 5,511 | $ | 5,683 | |||
| Fair value | $ | 6,695 | $ | 6,057 | |||
| Residential mortgage loans serviced for others | $ | 614,259 | $ | 631,888 | |||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Fair value amount of MSRs | $ | 6,791 | $ | 6,397 | ||||
Weighted average life (in years) | 6.5 | 6.1 | ||||||
Prepayment speeds (constant prepayment rate)* | 9.2 | % | 10.3 | % | ||||
Impact on fair value: | ||||||||
10% adverse change | $ | (135 | ) | $ | (194 | ) | ||
20% adverse change | $ | (288 | ) | $ | (394 | ) | ||
Discount rate | 9.55 | % | 9.55 | % | ||||
Impact on fair value: | ||||||||
10% adverse change | $ | (249 | ) | $ | (225 | ) | ||
20% adverse change | $ | (480 | ) | $ | (434 | ) | ||
(dollars in thousands) June 30,
2018 December 31,
2017Fair value amount of MSRs $ 6,695 $ 6,397 Weighted average life (in years) 6.6 6.1 Prepayment speeds (constant prepayment rate)* 9.0 % 10.3 % Impact on fair value: 10% adverse change $ (112 ) $ (194 ) 20% adverse change $ (242 ) $ (394 ) Discount rate 9.55 % 9.55 % Impact on fair value: 10% adverse change $ (247 ) $ (225 ) 20% adverse change $ (477 ) $ (434 ) Page 27
At March 31,June 30, 2018 and December 31, 2017 the fair value of the MSRs was $6.8$6.7 million and $6.4$6.4 million, respectively. The fair value of the MSRs for these dates was determined using values obtained from a third party which utilizes a valuation model which calculates the present value of estimated future servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds and discount rates. Mortgage loan prepayment speed is the annual rate at which borrowers are forecasted to repay their mortgage loan principal and is based on historical experience. The discount rate is used to determine the present value of future net servicing income. Another key assumption in the model is the required rate of return the market would expect for an asset with similar risk. These assumptions can, and generally will, change quarterly valuations as market conditions and interest rates change. Management reviews, annually, the process utilized by its independent third-partythird-party valuation experts.
(dollars in thousands) | Balance December 31, 2017 | Adjustments | Amortization | Balance March 31, 2018 | Amortization | ||||||||||||||
Goodwill – Wealth | $ | 20,412 | $ | — | $ | — | $ | 20,412 | Indefinite | ||||||||||
Goodwill – Banking | 153,545 | 2,311 | — | 155,856 | Indefinite | ||||||||||||||
Goodwill – Insurance | 5,932 | — | — | 5,932 | Indefinite | ||||||||||||||
Total Goodwill | $ | 179,889 | $ | 2,311 | $ | — | $ | 182,200 | |||||||||||
Core deposit intangible | $ | 7,380 | $ | — | $ | (377 | ) | $ | 7,003 | 10 Years | |||||||||
Customer relationships | 14,173 | — | (404 | ) | 13,769 | 10 | to | 20 Years | |||||||||||
Non-compete agreements | 1,319 | — | (61 | ) | 1,258 | 5 | to | 10 Years | |||||||||||
Trade name | 2,322 | — | (16 | ) | 2,306 | 3 Years | to | Indefinite | |||||||||||
Domain name | 151 | — | — | 151 | Indefinite | ||||||||||||||
Favorable lease assets | 621 | — | (21 | ) | 600 | 1 | to | 16 Years | |||||||||||
Total Intangible Assets | $ | 25,966 | $ | — | $ | (879 | ) | $ | 25,087 | ||||||||||
Grand Total | $ | 205,855 | $ | 2,311 | $ | (879 | ) | $ | 207,287 | ||||||||||
| (dollars in thousands) | Balance December 31, 2017 | Additions | Adjustments | Amortization | Balance June 30, 2018 | Amortization Period | |||||||||||||||
| Goodwill – Wealth | $ | 20,412 | $ | — | $ | — | $ | — | $ | 20,412 | Indefinite | ||||||||||
| Goodwill – Banking | 153,545 | — | 2,596 | — | 156,141 | Indefinite | |||||||||||||||
| Goodwill – Insurance | 5,932 | 677 | — | — | 6,609 | Indefinite | |||||||||||||||
| Total Goodwill | $ | 179,889 | $ | 677 | $ | 2,596 | $ | — | $ | 183,162 | |||||||||||
| Core deposit intangible | $ | 7,380 | $ | — | $ | — | $ | (742 | ) | $ | 6,638 | 10 years | |||||||||
| Customer relationships | 14,173 | 779 | — | (833 | ) | 14,119 | 10 to 20 years | ||||||||||||||
| Non-compete agreements | 1,319 | — | — | (121 | ) | 1,198 | 5 to 10 years | ||||||||||||||
| Trade name | 2,322 | — | — | (32 | ) | 2,290 | 3 years to Indefinite | ||||||||||||||
| Domain name | 151 | — | — | — | 151 | Indefinite | |||||||||||||||
| Favorable lease assets | 621 | — | — | (40 | ) | 581 | 1 to 16 years | ||||||||||||||
| Total Intangible Assets | $ | 25,966 | $ | 779 | $ | — | $ | (1,768 | ) | $ | 24,977 | ||||||||||
| Total Goodwill and Intangible Assets | $ | 205,855 | $ | 1,456 | $ | 2,596 | $ | (1,768 | ) | $ | 208,139 | ||||||||||
Note 8 - Deposits
The following table details the components of deposits:
March 31, 2018 | December 31, 2017 | |||||||
(dollars in thousands) | ||||||||
Interest-bearing demand | $ | 529,478 | $ | 481,336 | ||||
Money market | 856,072 | 862,639 | ||||||
Savings | 308,925 | 338,572 | ||||||
Retail time deposits | 523,138 | 532,202 | ||||||
Wholesale non-maturity deposits | 63,449 | 62,276 | ||||||
Wholesale time deposits | 171,359 | 171,929 | ||||||
Total interest-bearing deposits | 2,452,421 | 2,448,954 | ||||||
Non-interest-bearing deposits | 863,118 | 924,844 | ||||||
Total deposits | $ | 3,315,539 | $ | 3,373,798 | ||||
| June 30, 2018 | December 31, 2017 | ||||||
| (dollars in thousands) | |||||||
| Interest-bearing demand | $ | 617,258 | $ | 481,336 | |||
| Money market | 814,530 | 862,639 | |||||
| Savings | 291,858 | 338,572 | |||||
| Retail time deposits | 536,287 | 532,202 | |||||
| Wholesale non-maturity deposits | 36,826 | 62,276 | |||||
| Wholesale time deposits | 169,770 | 171,929 | |||||
| Total interest-bearing deposits | 2,466,529 | 2,448,954 | |||||
| Noninterest-bearing deposits | 892,386 | 924,844 | |||||
| Total deposits | $ | 3,358,915 | $ | 3,373,798 | |||
Note9-Short-Term Borrowings and Long-Term FHLB Advances
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Repurchase agreements* – commercial customers | $ | 13,804 | $ | 25,865 | ||||
Short-term FHLB advances | 159,900 | 212,000 | ||||||
Total short-term borrowings | $ | 173,704 | $ | 237,865 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | |||||
| Repurchase agreements* – commercial customers | $ | 17,159 | $ | 25,865 | |||
| Short-term FHLB advances | 209,900 | 212,000 | |||||
| Total short-term borrowings | $ | 227,059 | $ | 237,865 | |||
Three Months Ended March 31, | ||||||||
(dollars in thousands) | 2018 | 2017 | ||||||
Balance at period-end | $ | 173,704 | $ | 23,613 | ||||
Maximum amount outstanding at any month end | $ | 173,704 | $ | 39,378 | ||||
Average balance outstanding during the period | $ | 172,532 | $ | 47,603 | ||||
Weighted-average interest rate: | ||||||||
As of the period-end | 1.76 | % | 0.10 | % | ||||
Paid during the period | 1.48 | % | 0.23 | % | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Balance at period-end | $ | 227,059 | $ | 130,295 | $ | 227,059 | $ | 130,295 | |||||||
| Maximum amount outstanding at any month end | $ | 279,525 | $ | 130,295 | $ | 279,525 | $ | 130,295 | |||||||
| Average balance outstanding during the period | $ | 218,566 | $ | 98,869 | $ | 198,079 | $ | 73,378 | |||||||
| Weighted-average interest rate: | |||||||||||||||
| As of the period-end | 1.89 | % | 1.11 | % | 1.89 | % | 1.11 | % | |||||||
| Paid during the period | 1.92 | % | 0.96 | % | 1.72 | % | 0.72 | % | |||||||
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Within one year | $ | 52,377 | $ | 83,766 | ||||
Over one year through five years | 55,407 | 55,374 | ||||||
Total | $ | 107,784 | $ | 139,140 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | |||||
| Within one year | $ | 39,867 | $ | 83,766 | |||
| Over one year through five years | 47,941 | 55,374 | |||||
| Total | $ | 87,808 | $ | 139,140 | |||
Maturity Range(1) | Weighted | Coupon Rate(1) | Balance at | |||||||||||||||||||||
Description | From | To | Average Rate(1) | From | To | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Bullet maturity – fixed rate | 4/30/2018 | 8/24/2021 | 1.79 | % | 1.18 | % | 2.13 | % | 97,784 | 118,131 | ||||||||||||||
Convertible-fixed(2) | 8/20/2018 | 8/20/2018 | 2.58 | % | 2.58 | % | 2.58 | % | 10,000 | 21,009 | ||||||||||||||
Total | $ | 107,784 | $ | 139,140 | ||||||||||||||||||||
(1)
Maturity Range(1) | Weighted Average Rate(1) | Coupon Rate(1) | Balance at | |||||||||||||||||
| Description | From | To | From | To | June 30, 2018 | December 31, 2017 | ||||||||||||||
| Bullet maturity – fixed rate | 7/30/2018 | 8/24/2021 | 1.70 | % | 1.31 | % | 2.13 | % | $ | 77,808 | $ | 118,131 | ||||||||
Convertible-fixed(2) | 8/20/2018 | 8/20/2018 | 2.58 | % | 2.58 | % | 2.58 | % | 10,000 | 21,009 | ||||||||||
| Total | $ | 87,808 | $ | 139,140 | ||||||||||||||||
C. Other Borrowings Information
March 31, 2018 | December 31, 2017 | |||||||||||||||
(dollars in thousands) | Balance | Rate(1)(2) | Balance | Rate(1)(2) | ||||||||||||
Subordinated Notes – due 2027 | $ | 68,848 | 4.25 | % | $ | 68,829 | 4.25 | % | ||||||||
Subordinated Notes – due 2025 | 29,600 | 4.75 | % | 29,587 | 4.75 | % | ||||||||||
Total Subordinated Notes | $ | 98,448 | $ | 98,416 | ||||||||||||
| June 30, 2018 | December 31, 2017 | ||||||||||||
| (dollars in thousands) | Balance | Rate(1)(2) | Balance | Rate(1)(2) | |||||||||
| Subordinated notes – due 2027 | $ | 68,877 | 4.25 | % | $ | 68,829 | 4.25 | % | |||||
| Subordinated notes – due 2025 | 29,614 | 4.75 | % | 29,587 | 4.75 | % | |||||||
| Total subordinated notes | $ | 98,491 | $ | 98,416 | |||||||||
Note 1212– Derivative Instruments and Hedging Activities
Asset Derivatives | Liability Derivatives | |||||||||||||||
(dollars in thousands) | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
As of March 31, 2018: | ||||||||||||||||
Customer derivatives – interest rate swaps | $ | 158,973 | $ | 2,847 | $ | 158,973 | $ | 2,846 | ||||||||
Risk participation agreements sold | — | — | 892 | 2 | ||||||||||||
Risk participation agreements purchased | 14,672 | 13 | — | — | ||||||||||||
Total derivatives | $ | 173,645 | $ | 2,860 | $ | 159,865 | $ | 2,848 | ||||||||
As of December 31, 2017: | ||||||||||||||||
Customer derivatives – interest rate swaps | $ | 124,627 | $ | 1,895 | $ | 124,627 | $ | 1,895 | ||||||||
Risk participation agreements sold | — | — | 899 | 3 | ||||||||||||
Risk participation agreements purchased | 14,710 | 21 | — | — | ||||||||||||
Total derivatives | $ | 139,337 | $ | 1,916 | $ | 125,526 | $ | 1,898 | ||||||||
| Asset Derivatives | Liability Derivatives | ||||||||||||||
| (dollars in thousands) | Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||
| As of June 30, 2018: | |||||||||||||||
| Customer derivatives – interest rate swaps | $ | 274,541 | $ | 6,318 | $ | 274,541 | $ | 6,269 | |||||||
| RPAs sold | — | — | 553 | 1 | |||||||||||
| RPAs purchased | 35,636 | 65 | — | — | |||||||||||
| Total derivatives | $ | 310,177 | $ | 6,383 | $ | 275,094 | $ | 6,270 | |||||||
| As of December 31, 2017: | |||||||||||||||
| Customer derivatives – interest rate swaps | $ | 124,627 | $ | 1,895 | $ | 124,627 | $ | 1,895 | |||||||
| RPAs sold | — | — | 899 | 3 | |||||||||||
| RPAs purchased | 14,710 | 21 | — | — | |||||||||||
| Total derivatives | $ | 139,337 | $ | 1,916 | $ | 125,526 | $ | 1,898 | |||||||
Note 14 - Shareholders’ Equity
Dividend
S-3
offerings.
Option
$615 thousand and $1.2 million for the three and six months ended June 30, 2018, respectively.
Note 15 – Accumulated Other Comprehensive (Loss) Income (Loss)
(dollars in thousands) | Net Change in Unrealized Gains on Available-for- Sale Investment Securities | Net Change in Unfunded Pension Liability | Accumulated Other Comprehensive Loss | |||||||||
Balance, December 31, 2017 | $ | (2,861 | ) | $ | (1,553 | ) | $ | (4,414 | ) | |||
Other comprehensive (loss) income | (5,296 | ) | 46 | (5,250 | ) | |||||||
Balance, March 31, 2018 | $ | (8,157 | ) | $ | (1,507 | ) | $ | (9,664 | ) | |||
Balance, December 31, 2016 | $ | (1,231 | ) | $ | (1,178 | ) | $ | (2,409 | ) | |||
Other comprehensive income | 387 | 32 | 419 | |||||||||
Balance, March 31, 2017 | $ | (844 | ) | $ | (1,193 | ) | $ | (1,990 | ) | |||
| (dollars in thousands) | Net Change in Unrealized Gains on Available-for- Sale Investment Securities | Net Change in Unfunded Pension Liability | Accumulated Other Comprehensive Loss | ||||||||
| Balance, March 31, 2018 | $ | (8,157 | ) | $ | (1,507 | ) | $ | (9,664 | ) | ||
| Other comprehensive (loss) | (1,512 | ) | (15 | ) | (1,527 | ) | |||||
| Balance, June 30, 2018 | $ | (9,669 | ) | $ | (1,522 | ) | $ | (11,191 | ) | ||
| Balance, March 31, 2017 | $ | (844 | ) | $ | (1,146 | ) | $ | (1,990 | ) | ||
| Other comprehensive income | 411 | 15 | 426 | ||||||||
| Balance, June 30, 2017 | $ | (433 | ) | $ | (1,131 | ) | $ | (1,564 | ) | ||
| (dollars in thousands) | Net Change in Unrealized Gains on Available-for- Sale Investment Securities | Net Change in Unfunded Pension Liability | Accumulated Other Comprehensive Loss | ||||||||
| Balance, December 31, 2017 | $ | (2,861 | ) | $ | (1,553 | ) | $ | (4,414 | ) | ||
| Other comprehensive (loss) income | (6,808 | ) | 31 | (6,777 | ) | ||||||
| Balance, June 30, 2018 | $ | (9,669 | ) | $ | (1,522 | ) | $ | (11,191 | ) | ||
| Balance, December 31, 2016 | $ | (1,231 | ) | $ | (1,178 | ) | $ | (2,409 | ) | ||
| Other comprehensive income | 798 | 47 | 845 | ||||||||
| Balance, June 30, 2017 | $ | (433 | ) | $ | (1,131 | ) | $ | (1,564 | ) | ||
Description of Accumulated Other | Amount Reclassified from Accumulated Other Comprehensive Loss |
| |||||||
| Comprehensive Loss Component | Three Months Ended March 31, | Affected Income Statement Category | |||||||
2018 | 2017 | ||||||||
Net unrealized gain on investment securities available for sale: | |||||||||
Realization of gain on sale of investment securities available for sale | $ | (7 | ) | $ | (1 | ) | Net gain on sale of available for sale investment securities | ||
Realization of gain on transfer of investment securities available for sale to trading | (417 | ) | — | Other operating income | |||||
Total | $ | (424 | ) | $ | (1 | ) | |||
Income tax effect | 89 | — | Income tax expense | ||||||
Net of income tax | $ | (335 | ) | $ | (1 | ) | Net income | ||
Unfunded pension liability: | |||||||||
Amortization of net loss included in net periodic pension costs* | $ | 25 | $ | 23 | Other operating expenses | ||||
Income tax effect | (5 | ) | (8 | ) | Income tax expense | ||||
Net of income tax | $ | 20 | $ | 15 | Net income | ||||
| Description of Accumulated Other | Amount Reclassified from Accumulated Other Comprehensive Loss | |||||||||
| Comprehensive Loss Component | Three Months Ended June 30, | Affected Income Statement Category | ||||||||
| 2018 | 2017 | |||||||||
| Unfunded pension liability: | ||||||||||
| Amortization of net loss included in net periodic pension costs* | $ | 25 | $ | 24 | Other operating expenses | |||||
| Income tax effect | 5 | 8 | Income tax expense | |||||||
| Net of income tax | $ | 20 | $ | 16 | Net income | |||||
| Description of Accumulated Other | Amount Reclassified from Accumulated Other Comprehensive Loss | |||||||||
| Comprehensive Loss Component | Six Months Ended June 30, | Affected Income Statement Category | ||||||||
| 2018 | 2017 | |||||||||
| Net unrealized gain on investment securities available for sale: | ||||||||||
| Realization of gain on sale of investment securities available for sale | $ | 7 | $ | 1 | Net gain on sale of available for sale investment securities | |||||
| Realization of gain on transfer of investment securities available for sale to trading | 417 | — | Other operating income | |||||||
| Total | $ | 424 | $ | 1 | ||||||
| Income tax effect | 89 | — | Income tax expense | |||||||
| Net of income tax | $ | 335 | $ | 1 | Net income | |||||
| Unfunded pension liability: | ||||||||||
| Amortization of net loss included in net periodic pension costs* | $ | 50 | $ | 47 | Other operating expenses | |||||
| Income tax effect | 10 | 16 | Income tax expense | |||||||
| Net of income tax | $ | 40 | $ | 31 | Net income | |||||
Note 16 - Earnings per Common Share
Three Months Ended March 31, | ||||||||
(dollars in thousands except per share data) | 2018 | 2017 | ||||||
Numerator: | ||||||||
Net income available to common shareholders | $ | 15,286 | $ | 9,044 | ||||
Denominator for basic earnings per share – weighted average shares outstanding | 20,202,969 | 16,954,132 | ||||||
Effect of dilutive common shares | 247,525 | 228,557 | ||||||
Denominator for diluted earnings per share – adjusted weighted average shares outstanding | 20,450,494 | 17,182,689 | ||||||
Basic earnings per share | $ | 0.76 | $ | 0.53 | ||||
Diluted earnings per share | $ | 0.75 | $ | 0.53 | ||||
Antidilutive shares excluded from computation of average dilutive earnings per share | 870 | — | ||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands except share and per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Numerator: | |||||||||||||||
| Net income available to common shareholders | $ | 14,688 | $ | 9,433 | $ | 29,974 | $ | 18,477 | |||||||
Denominator for basic earnings per share – weighted average shares outstanding | 20,238,852 | 16,984,563 | 20,221,010 | 16,969,431 | |||||||||||
| Effect of dilutive common shares | 174,726 | 248,204 | 206,782 | 238,381 | |||||||||||
Denominator for diluted earnings per share – adjusted weighted average shares outstanding | 20,413,578 | 17,232,767 | 20,427,792 | 17,207,812 | |||||||||||
| Basic earnings per share | $ | 0.73 | $ | 0.56 | $ | 1.48 | $ | 1.09 | |||||||
| Diluted earnings per share | $ | 0.72 | $ | 0.55 | $ | 1.47 | $ | 1.07 | |||||||
| Antidilutive shares excluded from computation of average dilutive earnings per share | 1,422 | — | 2,495 | — | |||||||||||
Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | |||||||||||||||||||||||
(dollars in thousands) | Banking | Wealth Management | Consolidated | Banking | Wealth Management | Consolidated | ||||||||||||||||||
Fees for wealth management services | $ | — | $ | 10,308 | $ | 10,308 | $ | — | $ | 9,303 | $ | 9,303 | ||||||||||||
Insurance commissions(1) | — | 1,693 | 1,693 | — | 763 | 763 | ||||||||||||||||||
Capital markets revenue(1) | 666 | — | 666 | — | — | — | ||||||||||||||||||
Service charges on deposit accounts | 713 | — | 713 | 647 | — | 647 | ||||||||||||||||||
Loan servicing and other fees(1) | 686 | — | 686 | 503 | — | 503 | ||||||||||||||||||
Net gain on sale of loans(1) | 518 | — | 518 | 629 | — | 629 | ||||||||||||||||||
Net gain on sale of investment securities available for sale(1) | 7 | — | 7 | 1 | — | 1 | ||||||||||||||||||
Net gain on sale of other real estate owned | 176 | — | 176 | — | — | — | ||||||||||||||||||
Dividends on FHLB and FRB stock(1) | 431 | — | 431 | 214 | — | 214 | ||||||||||||||||||
Other operating income(2) | 4,294 | 44 | 4,338 | 1,119 | 48 | 1,167 | ||||||||||||||||||
Total noninterest income | $ | 7,491 | $ | 12,045 | $ | 19,536 | $ | 3,113 | $ | 10,114 | $ | 13,227 | ||||||||||||
Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 (dollars in thousands) Banking Wealth
Management Consolidated Banking Wealth
Management Consolidated Fees for wealth management services $ — $ 10,658 $ 10,658 $ — $ 9,807 $ 9,807 — 1,902 1,902 — 943 943 2,105 — 2,105 953 — 953 Service charges on deposit accounts 752 — 752 630 — 630 475 — 475 519 — 519 528 — 528 520 — 520 — — — — — — Net gain on sale of other real estate owned 111 — 111 (12 ) — (12 ) 510 — 510 218 — 218 2,976 58 3,034 1,158 49 1,207 Total noninterest income $ 7,457 $ 12,618 $ 20,075 $ 3,986 $ 10,799 $ 14,785 $521$610 thousand and $479$501 thousand for the three-monthsthree months ended March 31,June 30, 2018 and 2017, respectively, which are within the scope of ASC 606. Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 (dollars in thousands) Banking Wealth
Management Consolidated Banking Wealth
Management Consolidated Fees for wealth management services $ — $ 20,966 $ 20,966 $ — $ 19,110 $ 19,110 — 3,595 3,595 — 1,706 1,706 2,771 — 2,771 953 — 953 Service charges on deposit accounts 1,465 — 1,465 1,277 — 1,277 1,161 — 1,161 1,022 — 1,022 1,046 — 1,046 1,149 — 1,149 7 — 7 1 — 1 Net gain on sale of other real estate owned 287 — 287 (12 ) — (12 ) 941 — 941 432 — 432 7,270 102 7,372 2,277 97 2,374 Total noninterest income $ 14,948 $ 24,663 $ 39,611 $ 7,099 $ 20,913 $ 28,012 Page 34
Wealth Management Fees:Fees: The Corporation earns wealth management fee revenue from a variety of sources including fees from trust administration and other related fiduciary services, custody, investment management and advisory services, employee benefit account and IRA administration, estate settlement, tax service fees, shareholder service fees and brokerage.
B.B. Other Stock Option Information
Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||||
Options outstanding, December 31, 2017 | 115,246 | $ | 20.73 | $ | 4.86 | |||||||
Forfeited | — | $ | — | $ | — | |||||||
Expired | — | $ | — | $ | — | |||||||
Exercised | (43,925 | ) | $ | 22.57 | $ | 5.03 | ||||||
Options outstanding, March 31, 2018 | 71,321 | $ | 19.59 | $ | 4.75 | |||||||
| Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||
| Options outstanding, March 31, 2018 | 71,321 | $ | 19.59 | $ | 4.75 | |||||
| Forfeited | — | — | — | |||||||
| Expired | — | — | — | |||||||
| Exercised | (4,750 | ) | $ | 24.26 | $ | 5.27 | ||||
| Options outstanding, June 30, 2018 | 66,571 | $ | 19.26 | $ | 4.71 | |||||
| Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||
| Options outstanding, December 31, 2017 | 115,246 | $ | 20.73 | $ | 4.86 | |||||
| Forfeited | — | — | — | |||||||
| Expired | — | — | — | |||||||
| Exercised | (48,675 | ) | $ | 22.74 | $ | 5.05 | ||||
| Options outstanding, June 30, 2018 | 66,571 | $ | 19.26 | $ | 4.71 | |||||
| Three Months Ended March 31, | |||||||
| (dollars in thousands) | 2018 | 2017 | ||||||
Proceeds from exercise of stock options | $ | 992 | $ | 650 | ||||
Related tax benefit recognized | 210 | 141 | ||||||
Net proceeds of options exercised | $ | 1,202 | $ | 791 | ||||
Intrinsic value of options exercised | $ | 999 | $ | 548 | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Proceeds from exercise of stock options | $ | 115 | $ | 355 | $ | 1,107 | $ | 1,005 | |||||||
| Related tax benefit recognized | 21 | 86 | 231 | 227 | |||||||||||
| Net proceeds of options exercised | $ | 136 | $ | 441 | $ | 1,338 | $ | 1,232 | |||||||
| Intrinsic value of options exercised | $ | 99 | $ | 326 | $ | 1,098 | $ | 874 | |||||||
(dollars in thousands, except exercise price) | Outstanding | Exercisable | ||||||
Number of shares | 71,321 | 71,321 | ||||||
Weighted average exercise price | $ | 19.59 | $ | 19.59 | ||||
Aggregate intrinsic value | $ | 1,737,209 | $ | 1,737,209 | ||||
Weighted average contractual term in years | 1.2 | 1.2 | ||||||
C.
| (dollars in thousands, except share data and exercise price) | Outstanding | Exercisable | |||||
| Number of shares | 66,571 | 66,571 | |||||
| Weighted average exercise price | $ | 19.26 | $ | 19.26 | |||
| Aggregate intrinsic value | $ | 1,800 | $ | 1,800 | |||
| Weighted average remaining contractual term in years | 1.0 | 1.0 | |||||
Three Months Ended March 31, 2018 | ||||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||||
Beginning balance | 75,707 | $ | 35.80 | |||||
Granted | 2,400 | $ | 43.95 | |||||
Vested | (1,000 | ) | $ | 30.04 | ||||
Forfeited | — | $ | — | |||||
Ending balance | 77,107 | $ | 36.13 | |||||
PSUs
The
| Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Beginning balance | 77,107 | $ | 36.13 | 75,707 | $ | 35.80 | |||||||
| Granted | — | $ | — | 2,400 | $ | 43.95 | |||||||
| Vested | (7,347 | ) | $ | 29.17 | (8,347 | ) | $ | 29.28 | |||||
| Forfeited | (1,165 | ) | $ | 35.36 | (1,165 | ) | $ | 35.36 | |||||
| Ending balance | 68,595 | $ | 36.89 | 68,595 | $ | 36.89 | |||||||
Three Months Ended March 31, 2018 | ||||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||||
Beginning balance | 168,453 | $ | 24.76 | |||||
Granted | — | $ | — | |||||
Vested | — | $ | — | |||||
Forfeited | — | $ | — | |||||
Ending balance | 168,453 | $ | 24.76 | |||||
| Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Beginning balance | 168,453 | $ | 24.76 | 168,453 | $ | 24.76 | |||||||
| Granted | — | $ | — | — | $ | — | |||||||
| Vested | (33,784 | ) | $ | 16.91 | (33,784 | ) | $ | 16.91 | |||||
| Forfeited | (4,409 | ) | $ | 26.57 | (4,409 | ) | $ | 26.57 | |||||
| Ending balance | 130,260 | $ | 26.73 | 130,260 | $ | 26.73 | |||||||
A.
Interest Rate Swaps and Risk Participation Agreements
As of March 31, 2018 | ||||||||||||||||
(dollars in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Investment securities available for sale: | ||||||||||||||||
U.S. Treasury securities | $ | 0.1 | $ | 0.1 | $ | — | $ | — | ||||||||
Obligations of U.S. government & agencies | 175.1 | — | 175.1 | — | ||||||||||||
Obligations of state & political subdivisions |
| 19.9 | — | 19.9 | — | |||||||||||
Mortgage-backed securities | 303.9 | — | 303.9 | — | ||||||||||||
Collateralized mortgage obligations | 34.0 | — | 34.0 | — | ||||||||||||
Other debt securities | 1.1 | — | 1.1 | — | ||||||||||||
Total investment securities available for sale | $ | 534.1 | $ | 0.1 | $ | 534.0 | $ | — | ||||||||
Investment securities trading: | ||||||||||||||||
Mutual funds | 8.2 | 8.2 | — | — | ||||||||||||
Derivatives: | ||||||||||||||||
Interest rate swaps | 2.8 | — | 2.8 | — | ||||||||||||
Total recurring fair value measurements | $ | 545.1 | $ | 8.3 | $ | 536.8 | $ | — | ||||||||
As of December 31, 2017 | ||||||||||||||||
(dollars in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Investment securities available for sale: | ||||||||||||||||
U.S. Treasury securities | $ | 200.1 | $ | 200.1 | $ | — | $ | — | ||||||||
Obligations of U.S. government & agencies | 151.0 | — | 151.0 | — | ||||||||||||
Obligations of state & political subdivisions | 21.3 | — | 21.3 | — | ||||||||||||
Mortgage-backed securities | 275.0 | — | 275.0 | — | ||||||||||||
Collateralized mortgage obligations | 36.7 | — | 36.7 | — | ||||||||||||
Mutual funds | 3.5 | 3.5 | — | — | ||||||||||||
Other debt securities | 1.6 | — | 1.6 | — | ||||||||||||
Total investment securities available for sale | $ | 689.2 | $ | 203.6 | $ | 485.6 | $ | — | ||||||||
Investment securities trading: | ||||||||||||||||
Mutual funds | 4.6 | 4.6 | — | — | ||||||||||||
Derivatives: | ||||||||||||||||
Interest rate swaps | 1.9 | — | 1.9 | — | ||||||||||||
Total recurring fair value measurements | $ | 695.7 | $ | 208.2 | $ | 487.5 | $ | — | ||||||||
| As of June 30, 2018 | |||||||||||||||
| (dollars in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
| Investment securities available for sale: | |||||||||||||||
| U.S. Treasury securities | $ | 0.1 | $ | 0.1 | $ | — | $ | — | |||||||
| Obligations of U.S. government & agencies | 183.3 | — | 183.3 | — | |||||||||||
| Obligations of state & political subdivisions | 17.4 | — | 17.4 | — | |||||||||||
| Mortgage-backed securities | 292.6 | — | 292.6 | — | |||||||||||
| Collateralized mortgage obligations | 36.6 | — | 36.6 | — | |||||||||||
| Other debt securities | 1.1 | — | 1.1 | — | |||||||||||
| Total investment securities available for sale | $ | 531.1 | $ | 0.1 | $ | 531.0 | $ | — | |||||||
| Investment securities trading: | |||||||||||||||
| Mutual funds | $ | 8.2 | $ | 8.2 | $ | — | $ | — | |||||||
| Derivatives: | |||||||||||||||
| Interest rate swaps | $ | 6.3 | $ | — | $ | 6.3 | $ | — | |||||||
| Total recurring fair value measurements | $ | 545.6 | $ | 8.3 | $ | 537.3 | $ | — | |||||||
| As of December 31, 2017 | |||||||||||||||
| (dollars in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
| Investment securities available for sale: | |||||||||||||||
| U.S. Treasury securities | $ | 200.1 | $ | 200.1 | $ | — | $ | — | |||||||
| Obligations of U.S. government & agencies | 151.0 | — | 151.0 | — | |||||||||||
| Obligations of state & political subdivisions | 21.3 | — | 21.3 | — | |||||||||||
| Mortgage-backed securities | 275.0 | — | 275.0 | — | |||||||||||
| Collateralized mortgage obligations | 36.7 | — | 36.7 | — | |||||||||||
| Mutual funds | 3.5 | 3.5 | — | — | |||||||||||
| Other debt securities | 1.6 | — | 1.6 | — | |||||||||||
| Total investment securities available for sale | $ | 689.2 | $ | 203.6 | $ | 485.6 | $ | — | |||||||
| Investment securities trading: | |||||||||||||||
| Mutual funds | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||
| Derivatives: | |||||||||||||||
| Interest rate swaps | $ | 1.9 | $ | — | $ | 1.9 | $ | — | |||||||
| Total recurring fair value measurements | $ | 695.7 | $ | 208.2 | $ | 487.5 | $ | — | |||||||
B.
The Corporation
Other real estate owned
As of March 31, 2018 | ||||||||||||||||
(dollars in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Mortgage servicing rights | $ | 6.8 | $ | — | $ | — | $ | 6.8 | ||||||||
Impaired loans and leases | 11.9 | — | — | 11.9 | ||||||||||||
OREO | 0.3 | — | — | 0.3 | ||||||||||||
Total non-recurring fair value measurements | $ | 19.0 | $ | — | $ | — | $ | 19.0 | ||||||||
Fair value of assets measured on a non-recurring basis as of December 31, 2017:
As of December 31, 2017 | |||||||||||||||||||||||||||||||
| As of June 30, 2018 | |||||||||||||||||||||||||||||||
(dollars in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Mortgage servicing rights | $ | 6.4 | $ | — | $ | — | $ | 6.4 | |||||||||||||||||||||||
| MSRs | $ | 6.7 | $ | — | $ | — | $ | 6.7 | |||||||||||||||||||||||
Impaired loans and leases | 14.0 | — | — | 14.0 | 13.1 | — | — | 13.1 | |||||||||||||||||||||||
OREO | 0.3 | — | — | 0.3 | 0.5 | — | — | 0.5 | |||||||||||||||||||||||
Total non-recurring fair value measurements | $ | 20.7 | $ | — | $ | — | $ | 20.7 | $ | 20.3 | $ | — | $ | — | $ | 20.3 | |||||||||||||||
| As of December 31, 2017 | |||||||||||||||
| (dollars in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
| MSRs | $ | 6.4 | $ | — | $ | — | $ | 6.4 | |||||||
| Impaired loans and leases | 14.0 | — | — | 14.0 | |||||||||||
| OREO | 0.3 | — | — | 0.3 | |||||||||||
| Total non-recurring fair value measurements | $ | 20.7 | $ | — | $ | — | $ | 20.7 | |||||||
The carrying amount and fair value of the Corporation’s financial instruments are as follows:
As of March 31, 2018 | As of December 31, 2017 | |||||||||||||||||
(dollars in thousands) | Fair Value Hierarchy Level* | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Financial assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 32,393 | $ | 32,393 | $ | 60,024 | $ | 60,024 | |||||||||
Investment securities - available for sale | See Note 19 | 534,103 | 534,103 | 689,202 | 689,202 | |||||||||||||
Investment securities - trading | See Note 19 | 8,211 | 8,211 | 4,610 | 4,610 | |||||||||||||
Investment securities – held to maturity | Level 2 | 7,885 | 7,629 | 7,932 | 7,851 | |||||||||||||
Loans held for sale | Level 2 | 5,522 | 5,522 | 3,794 | 3,794 | |||||||||||||
Net portfolio loans and leases | Level 3 | 3,288,133 | 3,249,948 | 3,268,333 | 3,293,802 | |||||||||||||
Mortgage servicing rights | Level 3 | 5,706 | 6,791 | 5,861 | 6,397 | |||||||||||||
Interest rate swaps | Level 2 | 2,847 | 2,847 | 1,895 | 1,895 | |||||||||||||
Risk participation agreements purchased | Level 2 | 13 | 13 | 21 | 21 | |||||||||||||
Other assets | Level 3 | 39,740 | 39,740 | 46,799 | 46,799 | |||||||||||||
Total financial assets | $ | 3,924,553 | $ | 3,887,197 | $ | 4,088,471 | $ | 4,114,395 | ||||||||||
Financial liabilities: | ||||||||||||||||||
Deposits | Level 2 | $ | 3,315,539 | $ | 3,309,113 | $ | 3,373,798 | $ | 3,368,276 | |||||||||
Short-term borrowings | Level 2 | 173,704 | 173,704 | 237,865 | 237,865 | |||||||||||||
Long-term FHLB advances | Level 2 | 107,784 | 106,857 | 139,140 | 138,685 | |||||||||||||
Subordinated notes | Level 2 | 98,448 | 97,074 | 98,416 | 95,044 | |||||||||||||
Junior subordinated debentures | Level 2 | 21,456 | 22,901 | 21,416 | 19,366 | |||||||||||||
Interest rate swaps | Level 2 | 2,846 | 2,846 | 1,895 | 1,895 | |||||||||||||
Risk participation agreements sold | Level 2 | 2 | 2 | 3 | 3 | |||||||||||||
Other liabilities | Level 3 | 47,535 | 47,535 | 49,071 | 49,071 | |||||||||||||
Total financial liabilities | $ | 3,767,314 | $ | 3,760,032 | $ | 3,921,604 | $ | 3,910,205 | ||||||||||
| As of June 30, 2018 | As of December 31, 2017 | ||||||||||||||||
| (dollars in thousands) | Fair Value Hierarchy Level* | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
| Financial assets: | |||||||||||||||||
| Cash and cash equivalents | Level 1 | $ | 47,242 | $ | 47,242 | $ | 60,024 | $ | 60,024 | ||||||||
| Investment securities - available for sale | See Note 19 | 531,075 | 531,075 | 689,202 | 689,202 | ||||||||||||
| Investment securities - trading | See Note 19 | 8,175 | 8,175 | 4,610 | 4,610 | ||||||||||||
| Investment securities – held to maturity | Level 2 | 7,838 | 7,547 | 7,932 | 7,851 | ||||||||||||
| Loans held for sale | Level 2 | 4,204 | 4,204 | 3,794 | 3,794 | ||||||||||||
| Net portfolio loans and leases | Level 3 | 3,370,103 | 3,304,479 | 3,268,333 | 3,293,802 | ||||||||||||
| MSRs | Level 3 | 5,511 | 6,695 | 5,861 | 6,397 | ||||||||||||
| Interest rate swaps | Level 2 | 6,318 | 6,318 | 1,895 | 1,895 | ||||||||||||
| RPAs purchased | Level 2 | 65 | 65 | 21 | 21 | ||||||||||||
| Other assets | Level 3 | 46,567 | 46,567 | 46,799 | 46,799 | ||||||||||||
| Total financial assets | $ | 4,027,098 | $ | 3,962,367 | $ | 4,088,471 | $ | 4,114,395 | |||||||||
| Financial liabilities: | |||||||||||||||||
| Deposits | Level 2 | $ | 3,358,915 | $ | 3,340,565 | $ | 3,373,798 | $ | 3,368,276 | ||||||||
| Short-term borrowings | Level 2 | 227,059 | 227,059 | 237,865 | 237,865 | ||||||||||||
| Long-term FHLB advances | Level 2 | 87,808 | 86,963 | 139,140 | 138,685 | ||||||||||||
| Subordinated notes | Level 2 | 98,491 | 97,629 | 98,416 | 95,044 | ||||||||||||
| Junior subordinated debentures | Level 2 | 21,497 | 23,675 | 21,416 | 19,366 | ||||||||||||
| Interest rate swaps | Level 2 | 6,269 | 6,269 | 1,895 | 1,895 | ||||||||||||
| RPAs sold | Level 2 | 1 | 1 | 3 | 3 | ||||||||||||
| Other liabilities | Level 3 | 57,928 | 57,928 | 49,071 | 49,071 | ||||||||||||
| Total financial liabilities | $ | 3,857,968 | $ | 3,840,089 | $ | 3,921,604 | $ | 3,910,205 | |||||||||
Arrangements
Standby letters of credit are conditional commitments issued by the Bank to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in extending loan facilities to customers. The collateral varies, but may include accounts receivable, marketable securities, inventory, property, plant and equipment, and residential real estate for those commitments for which collateral is deemed necessary. The Corporation’s obligationobligations under standby letters of credit as of March 31,June 30, 2018 and December 31, 2017 were $15.5$21.8 million and $17.0$17.7 million, respectively. There were no outstanding bankers’ acceptances as of March 31, 2018 and December 31, 2017.
three or six months ended June 30, 2018.
Note 22 - Segment Information
FASB Codification 280 – “Segment Reporting” identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s chief operating decision maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations.
The Wealth Management segment has responsibility for a number of activities within the Corporation, including trust administration, other related fiduciary services, custody, investment management and advisory services, employee benefits and IRA administration, estate settlement, tax services and brokerage. Bryn Mawr Trust of Delaware and Lau Associates are included in the Wealth Management segment of the Corporation since they have similar economic characteristics, products and services to those of the Wealth Management Division of the Corporation. BMT Investment Advisers, formed in May 2017, which serves as investment adviser to BMT Investment Funds, a Delaware statutory trust, is also reported under the Wealth Management segment. In addition, the Wealth Management Division oversees all insurance services of the Corporation, which are conducted through the Bank’s insurance subsidiary, BMT Insurance Advisors, Inc., and are reported in the Wealth Management segment.
Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | |||||||||||||||||||||||
(dollars in thousands) | Banking | Wealth Management | Consolidated | Banking | Wealth Management | Consolidated | ||||||||||||||||||
Net interest income | $ | 37,438 | $ | 1 | $ | 37,439 | $ | 27,402 | $ | 1 | $ | 27,403 | ||||||||||||
Less: loan loss provision | 1,030 | — | 1,030 | 291 | — | 291 | ||||||||||||||||||
Net interest income after loan loss provision | 36,408 | 1 | 36,409 | 27,111 | 1 | 27,112 | ||||||||||||||||||
Other income: | ||||||||||||||||||||||||
Fees for wealth management services | — | 10,308 | 10,308 | — | 9,303 | 9,303 | ||||||||||||||||||
Insurance commissions | — | 1,693 | 1,693 | — | 763 | 763 | ||||||||||||||||||
Capital markets revenue | 666 | — | 666 | — | — | — | ||||||||||||||||||
Service charges on deposit accounts | 713 | — | 713 | 647 | — | 647 | ||||||||||||||||||
Loan servicing and other fees | 686 | — | 686 | 503 | — | 503 | ||||||||||||||||||
Net gain on sale of loans | 518 | — | 518 | 629 | — | 629 | ||||||||||||||||||
Net gain (loss) on sale of investment securities available for sale | 7 | — | 7 | 1 | — | 1 | ||||||||||||||||||
Net (loss) gain on sale of OREO | 176 | — | 176 | — | — | — | ||||||||||||||||||
Other operating income | 4,725 | 44 | 4,769 | 1,333 | 48 | 1,381 | ||||||||||||||||||
Total noninterest income | 7,491 | 12,045 | 19,536 | 3,113 | 10,114 | 13,227 | ||||||||||||||||||
Noninterest expenses: | ||||||||||||||||||||||||
Salaries & wages | 11,156 | 4,826 | 15,982 | 8,630 | 3,820 | 12,450 | ||||||||||||||||||
Employee benefits | 2,676 | 1,032 | 3,708 | 1,557 | 932 | 2,489 | ||||||||||||||||||
Occupancy and bank premise | 2,576 | 474 | 3,050 | 2,127 | 399 | 2,526 | ||||||||||||||||||
Amortization of intangible assets | 398 | 481 | 879 | 353 | 340 | 693 | ||||||||||||||||||
Professional fees | 729 | 19 | 748 | 681 | 30 | 711 | ||||||||||||||||||
Other operating expenses | 10,431 | 1,232 | 11,663 | 6,765 | 1,026 | 7,791 | ||||||||||||||||||
Total noninterest expenses | 27,966 | 8,064 | 36,030 | 20,113 | 6,547 | 26,660 | ||||||||||||||||||
Segment profit | 15,933 | 3,982 | 19,915 | 10,111 | 3,568 | 13,679 | ||||||||||||||||||
Intersegment (revenues) expenses* | (149 | ) | 149 | — | (112 | ) | 112 | — | ||||||||||||||||
Pre-tax segment profit after eliminations | $ | 15,784 | $ | 4,131 | $ | 19,915 | $ | 9,999 | $ | 3,680 | $ | 13,679 | ||||||||||||
% of segment pre-tax profit after eliminations | 79.3 | % | 20.7 | % | 100.0 | % | 73.1 | % | 26.9 | % | 100.0 | % | ||||||||||||
Segment assets (dollars in millions) | $ | 4,248.4 | $ | 52.0 | $ | 4,300.4 | $ | 3,247 | $ | 46 | $ | 3,293 | ||||||||||||
(dollars in millions) March 31, 2018 December 31, 2017 Assets under management, administration, supervision and brokerage Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 (dollars in thousands) Banking Consolidated Banking Consolidated Net interest income $ 37,315 $ 1 $ 37,316 $ 27,964 $ 1 $ 27,965 Provision for loan and lease losses 3,137 — 3,137 (83 ) — (83 ) Net interest income after loan loss provision 34,178 1 34,179 28,047 1 28,048 Noninterest income: Fees for wealth management services — 10,658 10,658 — 9,807 9,807 Insurance commissions — 1,902 1,902 — 943 943 Capital markets revenue 2,105 — 2,105 953 — 953 Service charges on deposit accounts 752 — 752 630 — 630 Loan servicing and other fees 475 — 475 519 — 519 Net gain on sale of loans 528 — 528 520 — 520 Net gain (loss) on sale of OREO 111 — 111 (12 ) — (12 ) Other operating income 3,486 58 3,544 1,376 49 1,425 Total noninterest income 7,457 12,618 20,075 3,986 10,799 14,785 Noninterest expenses: Salaries & wages 11,184 5,056 16,240 9,284 4,296 13,580 Employee benefits 1,922 955 2,877 1,421 983 2,404 Occupancy and bank premise 2,235 462 2,697 1,849 398 2,247 Amortization of intangible assets 385 504 889 196 491 687 Professional fees 879 53 932 1,031 18 1,049 Other operating expenses 10,875 1,326 12,201 7,489 1,039 8,528 Total noninterest expenses 27,480 8,356 35,836 21,270 7,225 28,495 Segment profit 14,155 4,263 18,418 10,763 3,575 14,338 Intersegment (revenues) expenses* (150 ) 150 — (112 ) 112 — Pre-tax segment profit after eliminations $ 14,005 $ 4,413 $ 18,418 $ 10,651 $ 3,687 $ 14,338 % of segment pre-tax profit after eliminations 76.0 % 24.0 % 100.0 % 74.3 % 25.7 % 100.0 % $ 4,339.3 $ 54.9 $ 4,394.2 $ 3,387.0 $ 51.0 $ 3,438.0 Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 (dollars in thousands) Banking Consolidated Banking Consolidated Net interest income $ 74,753 $ 2 $ 74,755 $ 55,366 $ 2 $ 55,368 Provision for loan and lease losses 4,167 — 4,167 208 — 208 Net interest income after loan loss provision 70,586 2 70,588 55,158 2 55,160 Noninterest income: — Fees for wealth management services — 20,966 20,966 — 19,110 19,110 Insurance commissions — 3,595 3,595 — 1,706 1,706 Capital markets revenue 2,771 — 2,771 953 — 953 Service charges on deposit accounts 1,465 — 1,465 1,277 — 1,277 Loan servicing and other fees 1,161 — 1,161 1,022 — 1,022 Net gain on sale of loans 1,046 — 1,046 1,149 — 1,149 Net gain on sale of investment securities available for sale 7 — 7 1 — 1 Net gain (loss) gain on sale of OREO 287 — 287 (12 ) — (12 ) Other operating income 8,211 102 8,313 2,709 97 2,806 Total noninterest income 14,948 24,663 39,611 7,099 20,913 28,012 Noninterest expenses: Salaries & wages 22,340 9,882 32,222 17,915 8,115 26,030 Employee benefits 4,598 1,987 6,585 2,978 1,915 4,893 Occupancy and bank premise 4,811 936 5,747 3,976 797 4,773 Amortization of intangible assets 783 985 1,768 392 988 1,380 Professional fees 1,608 72 1,680 1,712 48 1,760 Other operating expenses 21,306 2,558 23,864 14,254 2,065 16,319 Total noninterest expenses 55,446 16,420 71,866 41,227 13,928 55,155 Segment profit 30,088 8,245 38,333 21,030 6,987 28,017 Intersegment (revenues) expenses* (299 ) 299 — (224 ) 224 — Pre-tax segment profit after eliminations $ 29,789 $ 8,544 $ 38,333 $ 20,806 $ 7,211 $ 28,017 % of segment pre-tax profit after eliminations 77.7 % 22.3 % 100.0 % 74.3 % 25.7 % 100.0 % $ 4,339.3 $ 54.9 $ 4,394.2 $ 3,387.0 $ 51.0 $ 3,438.0 $ 13,146.9 $ 12,968.7
(dollars in millions) June 30,
2018 December 31,
2017Assets under management, administration, supervision and brokerage $ 13,404.7 $ 12,968.7 22. Management’s Discussion and Analysis of Results of Operation and Financial Condition37 full-service36 branches, eight limited-hour retirement community offices, two limited-service branches, six wealth management offices and a full-service insurance agency located throughout Montgomery, Delaware, Chester, Philadelphia, Berks, and Dauphin counties in Pennsylvania, Mercer and Camden counties of New Jersey, and New Castle county in Delaware. The common stock of the Corporation trades on the NASDAQ Stock Market (“NASDAQ”) under the symbol BMTC.In addition to the critical accounting policies described and referenced above, as it relates to derivative financial instruments, the Corporation recognizes all derivative instruments at fair value as either assets or liabilities in other assets or other liabilities on the balance sheet. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship. As of March 31, 2018, the Corporation’s derivative financial instruments are not designated as hedges and gains or losses are recognized in current earnings.
On May 1, 2018, BMT Insurance Advisors, Inc. acquired Domenick & Associates, a full-service insurance agency established in 1993 and headquartered in the Old City section of Philadelphia. Domenick & Associates has a specialty niche with nonprofit and social service organizations which aligns well with our banking and wealth management solutions in these specialty service areas. This acquisition furthers our objective of pursuing strategic growth opportunities to enhance, broaden, and diversify our revenue streams.
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Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Return on average equity | 11.78 | % | 9.60 | % | ||||
Return on average assets | 1.46 | % | 1.13 | % | ||||
Tax-equivalent net interest margin | 3.94 | % | 3.74 | % | ||||
Basic earnings per share | $ | 0.76 | $ | 0.53 | ||||
Diluted earnings per share | $ | 0.75 | $ | 0.53 | ||||
Dividend per share | $ | 0.22 | $ | 0.21 | ||||
Dividend declared per share to net income per basic common share | 28.9 | % | 39.4 | % | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Return on average equity | 11.03 | % | 9.71 | % | 11.49 | % | 9.65 | % | |||||||
| Return on average assets | 1.36 | % | 1.14 | % | 1.41 | % | 1.13 | % | |||||||
| Tax-equivalent net interest margin | 3.81 | % | 3.68 | % | 3.87 | % | 3.71 | % | |||||||
| Basic earnings per share | $ | 0.73 | $ | 0.56 | $ | 1.48 | $ | 1.09 | |||||||
| Diluted earnings per share | $ | 0.72 | $ | 0.55 | $ | 1.47 | $ | 1.07 | |||||||
| Dividends paid or accrued per share | $ | 0.22 | $ | 0.21 | $ | 0.44 | $ | 0.42 | |||||||
| Dividends paid or accrued per share to net income per basic common share | 30.1 | % | 37.5 | % | 29.7 | % | 38.5 | % | |||||||
(dollars in millions, except per share amounts) | March 31, 2018 | December 31, 2017 | ||||||
Book value per share | $ | 26.35 | $ | 26.19 | ||||
Tangible book value per share | $ | 16.10 | $ | 15.98 | ||||
Allowance as a percentage of portfolio loans and leases | 0.53 | % | 0.53 | % | ||||
Tier I capital to risk weighted assets | 10.46 | % | 10.36 | % | ||||
Tangible common equity ratio | 9.19 | % | 8.67 | % | ||||
Loan to deposit ratio | 99.7 | % | 97.4 | % | ||||
Wealth assets under management, administration, supervision and brokerage | $ | 13,146.9 | $ | 12,968.7 | ||||
Portfolio loans and leases | $ | 3,305.8 | $ | 3,285.9 | ||||
Total assets | $ | 4,300.4 | $ | 4,449.7 | ||||
Shareholders’ equity | $ | 533.1 | $ | 528.1 | ||||
| (dollars in millions, except per share amounts) | June 30, 2018 | December 31, 2017 | |||||
| Book value per share | $ | 26.80 | $ | 26.19 | |||
| Tangible book value per share | $ | 16.55 | $ | 16.02 | |||
| Allowance as a percentage of portfolio loans and leases | 0.57 | % | 0.53 | % | |||
| Tier I capital to risk weighted assets | 10.46 | % | 10.42 | % | |||
| Tangible common equity ratio | 8.00 | % | 7.61 | % | |||
| Loan to deposit ratio | 100.9 | % | 97.4 | % | |||
| Wealth assets under management, administration, supervision and brokerage | $ | 13,404.7 | $ | 12,968.7 | |||
| Portfolio loans and leases | $ | 3,389.5 | $ | 3,285.9 | |||
| Total assets | $ | 4,394.2 | $ | 4,449.7 | |||
| Total shareholders’ equity | $ | 542.5 | $ | 528.1 | |||
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Tax-equivalent
Partially offsetting the effect on tax-equivalent interest income associated2017 coupled with thea 24 basis point increase in average loans and leases andthe yield on available for sale investment securities were increases of $1.6 million, $603 thousand, $288 thousand and $773 thousand of interestover the same period.
For the Three Months Ended March 31, | ||||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||
(dollars in thousands) | Average | Interest | Average | Average | Interest | Average | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 38,044 | $ | 53 | 0.56 | % | $ | 39,669 | $ | 66 | 0.67 | % | ||||||||||||
Investment securities - available for sale: | ||||||||||||||||||||||||
Taxable | 498,718 | 2,675 | 2.18 | % | 354,229 | 1,653 | 1.89 | % | ||||||||||||||||
Tax-exempt(4) | 25,501 | 100 | 1.98 | % | 31,485 | 164 | 2.11 | % | ||||||||||||||||
Total investment securities – available for sale | 519,219 | 2,775 | 2.17 | % | 385,714 | 1,817 | 1.91 | % | ||||||||||||||||
Investment securities – held to maturity | 7,913 | 12 | 0.62 | % | 3,708 | 7 | 0.77 | % | ||||||||||||||||
Investment securities – trading | 8,339 | 21 | 1.02 | % | 3,890 | 8 | 0.83 | % | ||||||||||||||||
Loans and leases(1)(2)(3)(4) | 3,291,212 | 40,754 | 5.02 | % | 2,555,677 | 28,622 | 4.54 | % | ||||||||||||||||
Total interest-earning assets | 3,864,727 | 43,615 | 4.58 | % | 2,988,652 | 30,520 | 4.14 | % | ||||||||||||||||
Cash and due from banks | 10,698 | 14,942 | ||||||||||||||||||||||
Allowance for loan and lease losses | (17,628 | ) | (17,580 | ) | ||||||||||||||||||||
Other assets | 388,383 | 258,046 | ||||||||||||||||||||||
Total assets | $ | 4,246,180 | $ | 3,244,060 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Savings, NOW, and market rate accounts | $ | 1,676,733 | $ | 1,479 | 0.36 | % | $ | 1,388,561 | $ | 756 | 0.22 | % | ||||||||||||
Wholesale deposits | 231,289 | 733 | 1.29 | % | 143,461 | 317 | 0.90 | % | ||||||||||||||||
Retail time deposits | 527,469 | 1,260 | 0.97 | % | 320,172 | 755 | 0.96 | % | ||||||||||||||||
Total interest-bearing deposits | 2,435,491 | 3,472 | 0.58 | % | 1,852,194 | 1,828 | 0.40 | % | ||||||||||||||||
Short-term borrowings | 172,534 | 630 | 1.48 | % | 47,603 | 27 | 0.23 | % | ||||||||||||||||
Long-term FHLB advances | 123,920 | 562 | 1.84 | % | 182,507 | 698 | 1.55 | % | ||||||||||||||||
Subordinated notes | 98,430 | 1,143 | 4.71 | % | 29,537 | 370 | 5.08 | % | ||||||||||||||||
Junior subordinated debt | 21,430 | 288 | 5.45 | % | — | — | — | |||||||||||||||||
Total interest-bearing liabilities | 2,851,805 | 6,095 | 0.87 | % | 2,111,841 | 2,923 | 0.56 | % | ||||||||||||||||
Non-interest-bearing deposits | 835,476 | 711,794 | ||||||||||||||||||||||
Other liabilities | 32,465 | 38,211 | ||||||||||||||||||||||
Total non-interest-bearing liabilities | 867,941 | 750,005 | ||||||||||||||||||||||
Total liabilities | 3,719,746 | 2,861,846 | ||||||||||||||||||||||
Shareholders’ equity | 526,434 | 382,214 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,246,180 | $ | 3,244,060 | ||||||||||||||||||||
Net interest spread | 3.71 | % | 3.58 | % | ||||||||||||||||||||
Effect of non-interest-bearing sources | 0.23 | % | 0.16 | % | ||||||||||||||||||||
Net interest income/margin on earning assets(4) | $ | 37,520 | 3.94 | % | $ | 27,597 | 3.74 | % | ||||||||||||||||
Tax-equivalent adjustment(4) | $ | 81 | 0.01 | % | $ | 194 | 0.02 | % | ||||||||||||||||
| For the Three Months Ended June 30, | ||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | ||||||||||||||||
| Assets: | ||||||||||||||||||||||
| Interest-bearing deposits with banks | $ | 37,215 | $ | 64 | 0.69 | % | $ | 26,266 | $ | 35 | 0.53 | % | ||||||||||
| Investment securities - available for sale: | �� | |||||||||||||||||||||
| Taxable | 514,966 | 2,888 | 2.25 | % | 391,112 | 1,940 | 1.99 | % | ||||||||||||||
Tax-exempt(4) | 18,215 | 93 | 2.05 | % | 28,970 | 150 | 2.08 | % | ||||||||||||||
| Total investment securities – available for sale | 533,181 | 2,981 | 2.24 | % | 420,082 | 2,090 | 2.00 | % | ||||||||||||||
| Investment securities – held to maturity | 7,866 | 13 | 0.66 | % | 5,181 | 5 | 0.39 | % | ||||||||||||||
| Investment securities – trading | 8,202 | 22 | 1.08 | % | 4,137 | 13 | 1.26 | % | ||||||||||||||
Loans and leases(1)(2)(3)(4) | 3,353,339 | 41,782 | 5.00 | % | 2,615,610 | 29,309 | 4.49 | % | ||||||||||||||
| Total interest-earning assets | 3,939,803 | 44,862 | 4.57 | % | 3,071,276 | 31,452 | 4.11 | % | ||||||||||||||
| Cash and due from banks | 7,153 | 15,727 | ||||||||||||||||||||
| Allowance for loan and lease losses | (18,043 | ) | (17,549 | ) | ||||||||||||||||||
| Other assets | 415,628 | 263,853 | ||||||||||||||||||||
| Total assets | $ | 4,344,541 | $ | 3,333,307 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||
| Savings, NOW, and market rate accounts | $ | 1,722,328 | $ | 2,073 | 0.48 | % | $ | 1,375,949 | $ | 813 | 0.24 | % | ||||||||||
| Wholesale deposits | 233,714 | 973 | 1.67 | % | 154,424 | 378 | 0.98 | % | ||||||||||||||
| Retail time deposits | 533,254 | 1,453 | 1.09 | % | 323,287 | 792 | 0.98 | % | ||||||||||||||
| Total interest-bearing deposits | 2,489,296 | 4,499 | 0.72 | % | 1,853,660 | 1,983 | 0.43 | % | ||||||||||||||
| Short-term borrowings | 205,323 | 985 | 1.92 | % | 98,869 | 237 | 0.96 | % | ||||||||||||||
| Long-term FHLB advances | 102,023 | 490 | 1.93 | % | 171,567 | 682 | 1.59 | % | ||||||||||||||
| Subordinated notes | 98,463 | 1,143 | 4.66 | % | 29,550 | 370 | 5.02 | % | ||||||||||||||
| Junior subordinated debt | 21,470 | 321 | 6.00 | % | — | — | — | |||||||||||||||
| Total interest-bearing liabilities | 2,916,575 | 7,438 | 1.02 | % | 2,153,646 | 3,272 | 0.61 | % | ||||||||||||||
| Noninterest-bearing deposits | 841,676 | 755,597 | ||||||||||||||||||||
| Other liabilities | 52,389 | 34,348 | ||||||||||||||||||||
| Total noninterest-bearing liabilities | 894,065 | 789,945 | ||||||||||||||||||||
| Total liabilities | 3,810,640 | 2,943,591 | ||||||||||||||||||||
| Shareholders’ equity | 533,901 | 389,716 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,344,541 | $ | 3,333,307 | ||||||||||||||||||
| Net interest spread | 3.55 | % | 3.50 | % | ||||||||||||||||||
| Effect of noninterest-bearing sources | 0.26 | % | 0.18 | % | ||||||||||||||||||
Net interest income/margin on earning assets(4) | $ | 37,424 | 3.81 | % | $ | 28,180 | 3.68 | % | ||||||||||||||
Tax-equivalent adjustment(4) | $ | 108 | 0.01 | % | $ | 215 | 0.03 | % | ||||||||||||||
| (1) | Non-accrual loans have been included in average loan balances, but interest on non-accrual loans has not been included for purposes of determining interest income. |
| (2) |
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| (3) | Interest on loans and leases includes deferred feesof |
| (4) |
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Three Months Ended March 31, (dollars in thousands) 2018 Compared to 2017 increase/(decrease) Volume Rate Total Interest Income: Interest-bearing deposits with banks ) ) ) Investment securities - taxable Investment securities -nontaxable ) ) ) Loans and leases Total interest income Interest expense: Savings, NOW and market rate accounts Wholesale deposits Retail time deposits Borrowed funds – short-term Borrowed funds – long-term ) ) Subordinated notes ) Junior subordinated debentures Total interest expense Interest differential Quarter Interest- Earning Asset Yield Interest- Bearing Liability Cost Net Interest Spread Effect of Non-Interest Bearing Sources Net Interest Margin 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017 1st Quarter 2017 Rate/ For the Six Months Ended June 30, 2018 2017 (dollars in thousands) Average
Balance Interest
Income/
Expense Average
Rates
Earned/
Paid Average
Balance Interest
Income/
Expense Average
Rates
Earned/
PaidAssets: Interest-bearing deposits with banks $ 37,627 $ 117 0.63 % $ 32,931 $ 101 0.62 % Investment securities - available for sale: Taxable 506,887 5,563 2.21 % 372,772 3,620 1.96 % 19,352 193 2.01 % 30,221 314 2.10 % Total investment securities – available for sale 526,239 5,756 2.21 % 402,993 3,934 1.97 % Investment securities – held to maturity 7,889 25 0.64 % 4,446 4 0.18 % Investment securities – trading 8,270 43 1.05 % 4,014 2 0.10 % 3,322,447 82,536 5.01 % 2,585,809 57,931 4.52 % Total interest-earning assets 3,902,472 88,477 4.57 % 3,030,193 61,972 4.12 % Cash and due from banks 8,916 15,336 Allowance for loan and lease losses (17,837 ) (17,564 ) Other assets 402,086 260,963 Total assets $ 4,295,637 $ 3,288,928 Liabilities: Savings, NOW, and market rate accounts $ 1,701,732 $ 3,552 0.42 % $ 1,382,220 $ 1,569 0.23 % Wholesale deposits 232,508 1,706 1.48 % 148,973 695 0.94 % Retail time deposits 530,378 2,713 1.03 % 321,738 1,547 0.97 % Total interest-bearing deposits 2,464,618 7,971 0.65 % 1,852,931 3,811 0.41 % Short-term borrowings 189,019 1,615 1.72 % 73,378 264 0.73 % Long-term FHLB advances 112,911 1,052 1.88 % 177,006 1,380 1.57 % Subordinated notes 98,447 2,286 4.68 % 29,544 740 5.05 % Junior subordinated debt 21,450 609 5.73 % — — — Total interest-bearing liabilities 2,886,445 13,533 0.95 % 2,132,859 6,195 0.59 % Noninterest-bearing deposits 840,571 733,817 Other liabilities 42,482 36,266 Total noninterest-bearing liabilities 883,053 770,083 Total liabilities 3,769,498 2,902,942 Shareholders’ equity 526,139 385,986 Total liabilities and shareholders’ equity $ 4,295,637 $ 3,288,928 Net interest spread 3.62 % 3.53 % Effect of noninterest-bearing sources 0.25 % 0.18 % $ 74,944 3.87 % $ 55,777 3.71 % $ 189 0.01 % $ 409 0.03 % (1) Non-accrual loans have been included in average loan balances, but interest on non-accrual loans has not been included for purposes of determining interest income. (2) Includes portfolio loans and leases and loans held for sale. (3) Interest on loans and leases includes deferred fees of $699 thousand and $350 thousand for the six months ended June 30, 2018 and 2017, respectively. (4) Tax rate used for tax-equivalent calculations is 21% for 2018 and 35% for 2017 (tax-equivalent basis)(tax-equivalentbasis)*March 31,June 30, 2018 as compared to the same period in 2017, allocated by rate and volume. The change in interest income and/or expense due to both volume and rate has been allocated to changes in volume. $ (3 $ (10 $ (13 698 342 1,040 (57 (7 (64 8,236 3,896 12,132 8,874 4,221 13,095 154 569 723 194 222 416 492 13 505 71 532 603 (612 476 (136 1,360 (587 773 288 — 288 1,947 1,225 3,172 $ 6,927 $ 2,996 $ 9,923 2018 Compared to 2017 (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, increase/(decrease) Volume Rate Total Volume Rate Total Interest Income: Interest-bearing deposits with banks $ 14 $ 15 $ 29 $ 14 $ 2 $ 16 Investment securities - taxable 647 318 965 1,316 689 2,005 Investment securities -nontaxable (56 ) (1 ) (57 ) (112 ) (9 ) (121 ) Loans and leases 8,226 4,247 12,473 16,525 8,080 24,605 Total interest income 8,831 4,579 13,410 17,743 8,762 26,505 Interest expense: Savings, NOW and market rate accounts 211 1,049 1,260 367 1,616 1,983 Wholesale deposits 193 402 595 389 622 1,011 Retail time deposits 514 147 661 1,008 158 1,166 Short-term borrowings 255 493 748 420 931 1,351 Long-term FHLB advances (674 ) 482 (192 ) (763 ) 435 (328 ) Subordinated notes 1,344 (571 ) 773 2,059 (513 ) 1,546 Junior subordinated debt 321 — 321 609 — 609 Total interest expense 2,164 2,002 4,166 4,089 3,249 7,338 Interest differential $ 6,667 $ 2,577 $ 9,244 $ 13,654 $ 5,513 $ 19,167 3.94%3.81% for the three months ended March 31,June 30, 2018 was a 2013 basis point increase from 3.74%3.68% for the same period in 2017. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin remained relatively unchanged atdecreased four basis point to 3.58% from 3.62% and 3.63% for three months ended March 31,June 30, 2018 and 2017, respectively. The contribution to the tax-equivalent net interest margin from the accretion of purchase accounting adjustments was 3223 basis points infor three months ended June 30, 2018 as compared to 11six basis points infor three months ended June 30, 2017. 4.58 % 0.87 % 3.71 % 0.23 % 3.94 % 4.15 % 0.74 % 3.41 % 0.21 % 3.62 % 4.18 % 0.67 % 3.51 % 0.20 % 3.71 % 4.11 % 0.61 % 3.50 % 0.18 % 3.68 % 4.14 % 0.56 % 3.58 % 0.16 % 3.74 % Quarter Interest-
Earning
Asset Yield Interest-
Bearing
Liability Cost Net Interest
Spread Effect of Noninterest Bearing Sources Net Interest
Margin2nd Quarter 2018 4.57% 1.02% 3.55% 0.26% 3.81% 1st Quarter 2018 4.58% 0.87% 3.71% 0.23% 3.94% 4th Quarter 2017 4.15% 0.74% 3.41% 0.21% 3.62% 3rd Quarter 2017 4.18% 0.67% 3.51% 0.20% 3.71% 2nd Quarter 2017 4.11% 0.61% 3.50% 0.18% 3.68% Page 48
Management utilizes several tools to measure the effect of interest rate risk on net interest income. These methods include gap analysis, market value of portfolio equity analysis, and net interest income simulations under various scenarios. The results of these analyses are compared to limits established by the Corporation’s ALCO policies and make adjustments as appropriate if the results are outside the established limits.
Change in Net Interest Income Over the Twelve Months Beginning After March 31, 2018 | Change in Net Interest Income Over the Twelve Months Beginning After December 31, 2017 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
+300 basis points | $ | 7,448 | 4.86 | % | $ | 15,953 | 10.66 | % | ||||||||
+200 basis points | $ | 5,001 | 3.26 | % | $ | 10,644 | 7.11 | % | ||||||||
+100 basis points | $ | 2,523 | 1.65 | % | $ | 5,316 | 3.55 | % | ||||||||
-100 basis points | $ | (4,722 | ) | (3.08 | ) % | $ | (6,913 | ) | (4.62 | ) | ||||||
| Change in Net Interest Income Over the Twelve Months Beginning After June 30, 2018 | Change in Net Interest Income Over the Twelve Months Beginning After December 31, 2017 | ||||||||||||
| Amount | Percentage | Amount | Percentage | ||||||||||
| +300 basis points | $ | 7,360 | 4.82 | % | $ | 15,953 | 10.66 | % | |||||
| +200 basis points | $ | 4,987 | 3.26 | % | $ | 10,644 | 7.11 | % | |||||
| +100 basis points | $ | 2,551 | 1.67 | % | $ | 5,316 | 3.55 | % | |||||
| -100 basis points | $ | (4,716 | ) | (3.09 | )% | $ | (6,913 | ) | (4.62 | ) | |||
on deposits.
Non-maturity deposits (demand deposits in particular) are recognized by the Bank’s regulatory agencies to have different sensitivities to interest rate environments. Consequently, it is an accepted practice to spread non-maturity deposits over defined time periods to capture that sensitivity. Commercial demand deposits are often in the form of compensating balances, and fluctuate inversely to the level of interest rates; the maturity of these deposits is reported as having a shorter life than typical retail demand deposits. Additionally, the Bank’s regulatory agencies have suggested distribution limits for non-maturity deposits. However, management has taken a more conservative approach than these limits would suggest by forecasting these deposit types with a shorter maturity. The following table presents the Corporation’s gap analysis as of March 31,June 30, 2018:
(dollars in millions) | 0 to 90 Days | 91 to 365 Days | 1 - 5 Years | Over 5 Years | Non-Rate Sensitive | Total | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 24.6 | $ | — | $ | — | $ | — | $ | — | $ | 24.6 | ||||||||||||
Investment securities(1) | 28.1 | 58.5 | 321.7 | 141.9 | — | 550.2 | ||||||||||||||||||
Loans and leases(2) | 1,281.7 | 397.2 | 1,220.9 | 411.5 | — | 3,311.3 | ||||||||||||||||||
Allowance | — | — | — | — | (17.7 | ) | (17.7 | ) | ||||||||||||||||
Cash and due from banks | — | — | — | — | 7.8 | 7.8 | ||||||||||||||||||
Other assets | — | — | — | — | 424.1 | 424.1 | ||||||||||||||||||
Total assets | $ | 1,334.4 | $ | 455.7 | $ | 1,542.6 | $ | 553.4 | $ | 414.2 | $ | 4,300.3 | ||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||
Demand, non-interest-bearing | $ | 53.5 | $ | 160.4 | $ | 225.7 | $ | 423.5 | $ | — | $ | 863.1 | ||||||||||||
Savings, NOW and market rate | 114.8 | 344.5 | 818.7 | 416.4 | — | 1,694.4 | ||||||||||||||||||
Time deposits | 102.6 | 309.1 | 110.6 | 3.1 | — | 525.4 | ||||||||||||||||||
Wholesale non-maturity deposits | 63.4 | — | — | — | — | 63.4 | ||||||||||||||||||
Wholesale time deposits | 138.3 | 30.8 | — | — | — | 169.1 | ||||||||||||||||||
Short-term borrowings | 173.7 | — | — | — | — | 173.7 | ||||||||||||||||||
Long-term FHLB advances | 20.0 | 32.5 | 55.3 | — | — | 107.8 | ||||||||||||||||||
Subordinated notes | — | — | 98.4 | — | — | 98.4 | ||||||||||||||||||
Junior subordinated debentures | 21.5 | — | — | — | — | 21.5 | ||||||||||||||||||
Other liabilities | — | — | — | — | 50.4 | 50.4 | ||||||||||||||||||
Shareholders’ equity | 19.0 | 57.1 | 304.6 | 152.4 | — | 533.1 | ||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 706.8 | $ | 934.4 | $ | 1,613.3 | $ | 995.4 | $ | 50.4 | $ | 4,300.3 | ||||||||||||
Interest-earning assets | $ | 1,334.4 | $ | 455.7 | $ | 1,542.6 | $ | 553.4 | $ | — | $ | 3,886.1 | ||||||||||||
Interest-bearing liabilities | 634.3 | 716.9 | 1,083.0 | 419.5 | — | 2,853.7 | ||||||||||||||||||
Difference between interest-earning assets and interest-bearing liabilities | $ | 700.1 | $ | (261.2 | ) | $ | 459.6 | $ | 133.9 | $ | — | $ | 1,032.4 | |||||||||||
Cumulative difference between interest earning assets and interest-bearing liabilities | $ | 700.1 | $ | 438.9 | $ | 898.5 | $ | 1,032.4 | $ | — | $ | 1,032.4 | ||||||||||||
Cumulative earning assets as a % of cumulative interest-bearing liabilities | 210 | % | 132 | % | 137 | % | 136 | % | ||||||||||||||||
| (dollars in millions) | 0 to 90 Days | 91 to 365 Days | 1 - 5 Years | Over 5 Years | Non-Rate Sensitive | Total | |||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Interest-bearing deposits with banks | 39.9 | — | — | — | — | 39.9 | |||||||||||||||||
Investment securities(1) | 24.7 | 54.8 | 332.3 | 135.3 | — | 547.1 | |||||||||||||||||
Loans and leases(2) | 1,360.3 | 379.0 | 1,269.1 | 385.3 | — | 3,393.7 | |||||||||||||||||
| Allowance | — | — | — | — | (19.4 | ) | (19.4 | ) | |||||||||||||||
| Cash and due from banks | — | — | — | — | 7.3 | 7.3 | |||||||||||||||||
| Other assets | — | — | — | — | 425.6 | 425.6 | |||||||||||||||||
| Total assets | 1,424.9 | 433.8 | 1,601.4 | 520.6 | 413.5 | 4,394.2 | |||||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||
| Demand, noninterest-bearing | 64.2 | 162.2 | 226.6 | 439.4 | — | 892.4 | |||||||||||||||||
| Savings, NOW and market rate | 114.7 | 344.1 | 808.0 | 456.8 | — | 1,723.6 | |||||||||||||||||
| Time deposits | 93.6 | 310.8 | 131.1 | 2.8 | — | 538.3 | |||||||||||||||||
| Wholesale non-maturity deposits | 36.9 | — | — | — | — | 36.9 | |||||||||||||||||
| Wholesale time deposits | 53.2 | 114.6 | — | — | — | 167.8 | |||||||||||||||||
| Short-term borrowings | 227.1 | — | — | — | — | 227.1 | |||||||||||||||||
| Long-term FHLB advances | 15.0 | 25.0 | 47.8 | — | — | 87.8 | |||||||||||||||||
| Subordinated notes | — | — | 98.5 | — | — | 98.5 | |||||||||||||||||
| Junior subordinated debentures | 21.5 | — | — | — | — | 21.5 | |||||||||||||||||
| Other liabilities | — | — | — | — | 57.8 | 57.8 | |||||||||||||||||
| Shareholders’ equity | 19.4 | 58.1 | 310.0 | 155.0 | — | 542.5 | |||||||||||||||||
| Total liabilities and shareholders’ equity | 645.6 | 1,014.8 | 1,622.0 | 1,054.0 | 57.8 | 4,394.2 | |||||||||||||||||
| Interest-earning assets | 1,424.9 | 433.8 | 1,601.4 | 520.6 | — | 3,980.7 | |||||||||||||||||
| Interest-bearing liabilities | 562.0 | 794.5 | 1,085.4 | 459.6 | — | 2,901.5 | |||||||||||||||||
| Difference between interest-earning assets and interest-bearing liabilities | 862.9 | (360.7 | ) | 516.0 | 61.0 | — | 1,079.2 | ||||||||||||||||
| Cumulative difference between interest earning assets and interest-bearing liabilities | $ | 862.9 | $ | 502.2 | $ | 1,018.2 | $ | 1,079.2 | $ | — | $ | 1,079.2 | |||||||||||
| Cumulative earning assets as a % of cumulative interest-bearing liabilities | 254 | % | 137 | % | 142 | % | 137 | % | |||||||||||||||
(1)
2017.
foreclosed during the period.
As of March 31,June 30, 2018, the Corporation had $6.4$5.2 million of troubled debt restructurings (“TDRs”), of which $5.2$4.1 million were in compliance with the modified terms and excluded from non-performing loans and leases. As of December 31, 2017, the Corporation had $9.1 million of TDRs, of which $5.8 million were in compliance with the modified terms, and were excluded from non-performing loans and leases.
The decrease in TDRs during the six months ended June 30, 2018 was primarily the result of the payoffs of two residential mortgage loans totaling $2.5 million and one $1.3 million commercial mortgage loan, all of which had been previously modified to TDRs.
The Corporation
(dollars in thousands) | March 31, 2018 | December 31, 2017 | ||||||
Nonperforming Assets: | ||||||||
Nonperforming loans and leases | $ | 7,533 | $ | 8,579 | ||||
Other real estate owned | 300 | 304 | ||||||
Total nonperforming assets | $ | 7,833 | $ | 8,883 | ||||
Troubled Debt Restructurings: | ||||||||
TDRs included in non-performing loans | $ | 1,125 | $ | 3,289 | ||||
TDRs in compliance with modified terms | 5,235 | 5,800 | ||||||
Total TDRs | $ | 6,360 | $ | 9,089 | ||||
Loan and Lease quality indicators: | ||||||||
Allowance for loan and lease losses to nonperforming loans and leases | 234.5 | % | 204.3 | % | ||||
Nonperforming loans and leases to total portfolio loans and leases | 0.23 | % | 0.26 | % | ||||
Allowance for loan and lease losses to total portfolio loans and leases | 0.53 | % | 0.53 | % | ||||
Nonperforming assets to total loans and leases and OREO | 0.24 | % | 0.27 | % | ||||
Nonperforming assets to total assets | 0.18 | % | 0.21 | % | ||||
Total portfolio loans and leases | $ | 3,305,795 | $ | 3,285,858 | ||||
Allowance for loan and lease losses | $ | 17,662 | $ | 17,525 | ||||
| (dollars in thousands) | June 30, 2018 | December 31, 2017 | |||||
| Nonperforming Assets: | |||||||
| Nonperforming loans and leases | $ | 9,448 | $ | 8,579 | |||
| Other real estate owned | 531 | 304 | |||||
| Total nonperforming assets | $ | 9,979 | $ | 8,883 | |||
| Troubled Debt Restructurings: | |||||||
| TDRs included in non-performing loans | $ | 1,044 | $ | 3,289 | |||
| TDRs in compliance with modified terms | 4,117 | 5,800 | |||||
| Total TDRs | $ | 5,161 | $ | 9,089 | |||
| Loan and Lease quality indicators: | |||||||
| Allowance for loan and lease losses to nonperforming loans and leases | 205.3 | % | 204.3 | % | |||
| Nonperforming loans and leases to total portfolio loans and leases | 0.28 | % | 0.26 | % | |||
| Allowance for loan and lease losses to total portfolio loans and leases | 0.57 | % | 0.53 | % | |||
| Nonperforming assets to total loans and leases and OREO | 0.29 | % | 0.27 | % | |||
| Nonperforming assets to total assets | 0.23 | % | 0.20 | % | |||
| Total portfolio loans and leases | $ | 3,389,501 | $ | 3,285,858 | |||
| Allowance for loan and lease losses | $ | 19,398 | $ | 17,525 | |||
Non-interest
For the Three Months Ended or as of March 31, | ||||||||
(dollars in thousands) | 2018 | 2017 | ||||||
Mortgage originations | $ | 26,055 | $ | 48,550 | ||||
Mortgage loans sold: | ||||||||
Servicing retained | $ | 1,850 | $ | 27,705 | ||||
Servicing released | 15,956 | 4,966 | ||||||
Total mortgage loans sold | $ | 17,806 | $ | 32,671 | ||||
Percentage of originated mortgage loans sold | 68.3 | % | 67.3 | % | ||||
Servicing retained % | 10.4 | % | 84.8 | % | ||||
Servicing released % | 89.6 | % | 15.2 | % | ||||
Residential mortgage loans serviced for others | $ | 634,970 | $ | 638,553 | ||||
Mortgage servicing rights | $ | 5,706 | $ | 5,686 | ||||
Gain on sale of mortgage loans | $ | 345 | $ | 578 | ||||
Loan servicing and other fees | $ | 686 | $ | 503 | ||||
Amortization of MSRs | $ | 221 | $ | 169 | ||||
(Recovery) / Impairment of MSRs | $ | (50 | ) | $ | 3 | |||
| As of and for the Three Months Ended June 30, | As of and for the Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Mortgage originations | $ | 35,763 | $ | 46,848 | $ | 61,818 | $ | 95,398 | |||||||
| Mortgage loans sold: | |||||||||||||||
| Servicing retained | $ | — | $ | 21,793 | $ | 1,850 | $ | 49,479 | |||||||
| Servicing released | 25,892 | 3,816 | 41,848 | 8,800 | |||||||||||
| Total mortgage loans sold | $ | 25,892 | $ | 25,609 | $ | 43,698 | $ | 58,279 | |||||||
| Percentage of originated mortgage loans sold | 72.4 | % | 54.7 | % | 70.7 | % | 61.1 | % | |||||||
| Servicing retained % | — | % | 85.1 | % | 4.2 | % | 84.9 | % | |||||||
| Servicing released % | 100.0 | % | 14.9 | % | 95.8 | % | 15.1 | % | |||||||
| Residential mortgage loans serviced for others | $ | 614,259 | $ | 631,888 | $ | 614,259 | $ | 631,888 | |||||||
| Mortgage servicing rights | $ | 5,511 | $ | 5,683 | $ | 5,511 | $ | 5,683 | |||||||
| Gain on sale of mortgage loans | $ | 419 | $ | 519 | $ | 764 | $ | 1,097 | |||||||
| Loan servicing and other fees | $ | 475 | $ | 519 | $ | 1,161 | $ | 1,022 | |||||||
| Amortization of MSRs | $ | 196 | $ | 173 | $ | 417 | $ | 342 | |||||||
| (Recovery) / Impairment of MSRs | $ | (1 | ) | $ | 43 | $ | (51 | ) | $ | 46 | |||||
| Three Months Ended March 31, | |||||||
| (dollars in thousands) | 2018 | 2017 | ||||||
Merchant interchange fees | $ | 387 | $ | 341 | ||||
Bank-owned life insurance (“BOLI”) income | 278 | 201 | ||||||
Commissions and fees | 255 | 131 | ||||||
Safe deposit box rentals | 91 | 90 | ||||||
Other investment income | 22 | — | ||||||
Rent income | 43 | 48 | ||||||
Gain on trading investments | 335 | 210 | ||||||
Recovery of purchase accounting fair value loan mark | 2,294 | 18 | ||||||
Miscellaneous other income | 633 | 128 | ||||||
Other operating income | $ | 4,338 | $ | 1,167 | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Merchant interchange fees | $ | 469 | $ | 361 | $ | 856 | $ | 701 | |||||||
| Bank-owned life insurance (“BOLI”) income | 298 | 201 | 576 | 401 | |||||||||||
| Commissions and fees | 470 | 142 | 725 | 273 | |||||||||||
| Safe deposit box rentals | 96 | 94 | 187 | 184 | |||||||||||
| Other investment income | 125 | 9 | 147 | 9 | |||||||||||
| Rental income | 45 | 46 | 88 | 95 | |||||||||||
| Gain on trading investments | 84 | 108 | 419 | 318 | |||||||||||
| Recovery of purchase accounting fair value loan mark | 710 | — | 3,004 | 18 | |||||||||||
| Miscellaneous other income | 737 | 246 | 1,370 | 375 | |||||||||||
| Other operating income | $ | 3,034 | $ | 1,207 | $ | 7,372 | $ | 2,374 | |||||||
(dollars in thousands) | Wealth Assets as of: | |||||||||||||||||||
Fee Basis | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Market value | $ | 5,693,146 | $ | 5,884,692 | $ | 5,759,375 | $ | 5,593,936 | $ | 5,483,237 | ||||||||||
Fixed fee | 7,453,780 | 7,084,046 | 6,671,995 | 6,456,619 | 6,242,223 | |||||||||||||||
Total | $ | 13,146,926 | $ | 12,968,738 | $ | 12,431,370 | $ | 12,050,555 | $ | 11,725,460 | ||||||||||
Percentage of Wealth Assets as of: | ||||||||||||||||||||
Fee Basis | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Market value | 43.3 | % | 45.4 | % | 46.3 | % | 46.4 | % | 46.8 | % | ||||||||||
Fixed fee | 56.7 | % | 54.6 | % | 53.7 | % | 53.6 | % | 53.2 | % | ||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
| (dollars in thousands) | Wealth Assets as of: | ||||||||||||||||||
| Fee Basis | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | ||||||||||||||
| Market value | $ | 5,779,774 | $ | 5,693,146 | $ | 5,884,692 | $ | 5,759,375 | $ | 5,593,936 | |||||||||
| Fixed fee | 7,624,949 | 7,453,780 | 7,084,046 | 6,671,995 | 6,456,619 | ||||||||||||||
| Total | $ | 13,404,723 | $ | 13,146,926 | $ | 12,968,738 | $ | 12,431,370 | $ | 12,050,555 | |||||||||
| Percentage of Wealth Assets as of: | ||||||||||||||
| Fee Basis | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | |||||||||
| Market value | 43.1 | % | 43.3 | % | 45.4 | % | 46.3 | % | 46.4 | % | ||||
| Fixed fee | 56.9 | % | 56.7 | % | 54.6 | % | 53.7 | % | 53.6 | % | ||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
(dollars in thousands) | For the Three Months Ended: | |||||||||||||||||||
| Fee Basis | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Market value | $ | 7,880 | $ | 7,618 | $ | 7,522 | $ | 7,382 | $ | 7,230 | ||||||||||
Fixed fee | 2,428 | 2,356 | 2,129 | 2,425 | 2,073 | |||||||||||||||
Total | $ | 10,308 | $ | 9,974 | $ | 9,651 | $ | 9,807 | $ | 9,303 | ||||||||||
Percentage of Fees for Wealth Management for the Three Months Ended: | ||||||||||||||||||||
Fee Basis | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Market value | 76.4 | % | 76.4 | % | 77.9 | % | 75.3 | % | 77.7 | % | ||||||||||
Fixed fee | 23.6 | % | 23.6 | % | 22.1 | % | 24.7 | % | 22.3 | % | ||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
| (dollars in thousands) | For the Three Months Ended: | ||||||||||||||||||
| Fee Basis | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | ||||||||||||||
| Market value | $ | 7,620 | $ | 7,880 | $ | 7,618 | $ | 7,522 | $ | 7,382 | |||||||||
| Fixed fee | 3,038 | 2,428 | 2,356 | 2,129 | 2,425 | ||||||||||||||
| Total | $ | 10,658 | $ | 10,308 | $ | 9,974 | $ | 9,651 | $ | 9,807 | |||||||||
| Percentage of Fees for Wealth Management for the Three Months Ended: | ||||||||||||||
| Fee Basis | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | |||||||||
| Market value | 71.5 | % | 76.4 | % | 76.4 | % | 77.9 | % | 75.3 | % | ||||
| Fixed fee | 28.5 | % | 23.6 | % | 23.6 | % | 22.1 | % | 24.7 | % | ||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
The following table provides details of other operating expenses for the three and six months ended March 31,June 30, 2018 and 2017:
| Three Months Ended March 31, | |||||||
| (dollars in thousands) | 2018 | 2017 | ||||||
Contributions | $ | 188 | $ | 121 | ||||
Deferred compensation trust expense | 81 | 125 | ||||||
Director fees | 161 | 157 | ||||||
Dues and subscriptions | 257 | 154 | ||||||
FDIC insurance | 200 | 374 | ||||||
Insurance | 227 | 207 | ||||||
Loan processing | 270 | 523 | ||||||
Miscellaneous other expenses | 563 | 105 | ||||||
MSR amortization and impairment / (recovery) | 171 | 172 | ||||||
Other taxes | 13 | 9 | ||||||
Outsourced services | 66 | 99 | ||||||
Portfolio maintenance | 123 | 99 | ||||||
Postage | 163 | 148 | ||||||
Stationary and supplies | 152 | 117 | ||||||
Telephone and data lines | 405 | 400 | ||||||
Temporary help and recruiting | 99 | 397 | ||||||
Travel and entertainment | 178 | 175 | ||||||
Other operating expenses | $ | 3,317 | $ | 3,382 | ||||
INCOME
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Contributions | $ | 441 | $ | 289 | $ | 629 | $ | 410 | |||||||
| Deferred compensation trust expense | 171 | 242 | 252 | 367 | |||||||||||
| Director fees | 177 | 179 | 338 | 336 | |||||||||||
| Dues and subscriptions | 250 | 263 | 507 | 417 | |||||||||||
| FDIC insurance | 552 | 369 | 752 | 743 | |||||||||||
| Impairment of OREO and other repossessed assets | — | 200 | — | 200 | |||||||||||
| Insurance | 214 | 211 | 441 | 418 | |||||||||||
| Loan processing | 599 | 527 | 869 | 1,050 | |||||||||||
| Miscellaneous other expenses | 992 | 252 | 1,555 | 357 | |||||||||||
| MSR amortization and impairment / (recovery) | 195 | 216 | 366 | 388 | |||||||||||
| Other taxes | 24 | 4 | 37 | 13 | |||||||||||
| Outsourced services | 67 | 20 | 133 | 119 | |||||||||||
| Portfolio maintenance | 113 | 130 | 236 | 229 | |||||||||||
| Postage | 192 | 156 | 355 | 304 | |||||||||||
| Stationary and supplies | 111 | 109 | 263 | 226 | |||||||||||
| Telephone and data lines | 531 | 394 | 936 | 794 | |||||||||||
| Temporary help and recruiting | 58 | 117 | 157 | 514 | |||||||||||
| Travel and entertainment | 298 | 222 | 476 | 397 | |||||||||||
| Other operating expenses | $ | 4,985 | $ | 3,900 | $ | 8,302 | $ | 7,282 | |||||||
In connection with the December 15, 2017 RBPI Merger, measurement period adjustments to the fair value of assets acquired gave rise to $1.2 million in additional deferred tax assets. These deferred tax assets were determined using the enacted tax rate in effect at the date of acquisition and subsequently re-measured at the new, lower corporate income tax rate due to Tax Reform.
March 31, 2018 | December 31, 2017 | Change | ||||||||||||||||||||||
(dollars in thousands) | Balance | Percent of Portfolio | Balance | Percent of Portfolio | Amount | Percent | ||||||||||||||||||
Commercial mortgage | $ | 1,541,457 | 46.6 | % | $ | 1,523,377 | 46.4 | % | $ | 18,080 | 1.2 | % | ||||||||||||
Home equity lines & loans | 211,469 | 6.4 | % | 218,275 | 6.6 | % | (6,806 | ) | (3.1 | ) % | ||||||||||||||
Residential mortgage | 453,655 | 13.7 | % | 458,886 | 14.0 | % | (5,231 | ) | (1.1 | ) % | ||||||||||||||
Construction | 202,168 | 6.1 | % | 212,454 | 6.5 | % | (10,286 | ) | (4.8 | ) % | ||||||||||||||
Commercial and industrial | 727,231 | 22.0 | % | 719,312 | 21.9 | % | 7,919 | 1.1 | % | |||||||||||||||
Consumer | 48,423 | 1.5 | % | 38,153 | 1.2 | % | 10,270 | 26.9 | % | |||||||||||||||
Leases | 121,392 | 3.7 | % | 115,401 | 3.5 | % | 5,991 | 5.2 | % | |||||||||||||||
Total portfolio loans and leases | 3,305,795 | 100.0 | % | 3,285,858 | 100.0 | % | 19,937 | 0.6 | % | |||||||||||||||
Loans held for sale | 5,522 | 3,794 | 1,728 | 45.5 | % | |||||||||||||||||||
Total loans and leases | $ | 3,311,317 | $ | 3,289,652 | $ | 21,665 | 0.7 | % | ||||||||||||||||
| June 30, 2018 | December 31, 2017 | Change | ||||||||||||||||||
| (dollars in thousands) | Balance | Percent of Portfolio | Balance | Percent of Portfolio | Amount | Percent | ||||||||||||||
| Commercial mortgage | $ | 1,613,721 | 47.6 | % | $ | 1,523,377 | 46.4 | % | $ | 90,344 | 5.9 | % | ||||||||
| Home equity lines & loans | 206,429 | 6.1 | % | 218,275 | 6.6 | % | (11,846 | ) | (5.4 | )% | ||||||||||
| Residential mortgage | 449,060 | 13.2 | % | 458,886 | 14.0 | % | (9,826 | ) | (2.1 | )% | ||||||||||
| Construction | 190,874 | 5.6 | % | 212,454 | 6.5 | % | (21,580 | ) | (10.2 | )% | ||||||||||
| Commercial and industrial | 745,306 | 22.0 | % | 719,312 | 21.9 | % | 25,994 | 3.6 | % | |||||||||||
| Consumer | 51,462 | 1.5 | % | 38,153 | 1.2 | % | 13,309 | 34.9 | % | |||||||||||
| Leases | 132,649 | 3.9 | % | 115,401 | 3.5 | % | 17,248 | 14.9 | % | |||||||||||
| Total portfolio loans and leases | 3,389,501 | 100.0 | % | 3,285,858 | 100.0 | % | 103,643 | 3.2 | % | |||||||||||
| Loans held for sale | 4,204 | 3,794 | 410 | 10.8 | % | |||||||||||||||
| Total loans and leases | $ | 3,393,705 | $ | 3,289,652 | $ | 104,053 | 3.2 | % | ||||||||||||
March 31, 2018 | December 31, 2017 | Change | ||||||||||||||||||||||
(dollars in thousands) | Balance | Percent of Deposits | Balance | Percent of Deposits | Amount | Percent | ||||||||||||||||||
Interest-bearing demand | $ | 529,478 | 16.0 | % | $ | 481,336 | 14.3 | % | $ | 48,142 | 10.0 | % | ||||||||||||
Money market | 856,072 | 25.8 | % | 862,639 | 25.6 | % | (6,567 | ) | (0.8 | ) % | ||||||||||||||
Savings | 308,925 | 9.3 | % | 338,572 | 10.0 | % | (29,647 | ) | (8.8 | ) % | ||||||||||||||
Retail time deposits | 523,138 | 15.8 | % | 532,202 | 15.8 | % | (9,064 | ) | (1.7 | ) % | ||||||||||||||
Wholesale non-maturity deposits | 63,449 | 1.9 | % | 62,276 | 1.8 | % | 1,173 | 1.9 | % | |||||||||||||||
Wholesale time deposits | 171,359 | 5.2 | % | 171,929 | 5.1 | % | (570 | ) | (0.3 | ) % | ||||||||||||||
Interest-bearing deposits | 2,452,421 | 74.0 | % | 2,448,954 | 72.6 | % | 3,467 | 0.1 | % | |||||||||||||||
Non-interest-bearing deposits | 863,118 | 26.0 | % | 924,844 | 27.4 | % | (61,726 | ) | (6.7 | ) % | ||||||||||||||
Total deposits | $ | 3,315,539 | 100.0 | % | $ | 3,373,798 | 100.0 | % | $ | (58,259 | ) | (1.7 | ) % | |||||||||||
| June 30, 2018 | December 31, 2017 | Change | ||||||||||||||||||
| (dollars in thousands) | Balance | Percent of Deposits | Balance | Percent of Deposits | Amount | Percent | ||||||||||||||
| Interest-bearing demand | $ | 617,258 | 18.4 | % | $ | 481,336 | 14.3 | % | $ | 135,922 | 28.2 | % | ||||||||
| Money market | 814,530 | 24.2 | % | 862,639 | 25.6 | % | (48,109 | ) | (5.6 | )% | ||||||||||
| Savings | 291,858 | 8.7 | % | 338,572 | 10.0 | % | (46,714 | ) | (13.8 | )% | ||||||||||
| Retail time deposits | 536,287 | 16.0 | % | 532,202 | 15.8 | % | 4,085 | 0.8 | % | |||||||||||
| Wholesale non-maturity deposits | 36,826 | 1.1 | % | 62,276 | 1.8 | % | (25,450 | ) | (40.9 | )% | ||||||||||
| Wholesale time deposits | 169,770 | 5.1 | % | 171,929 | 5.1 | % | (2,159 | ) | (1.3 | )% | ||||||||||
| Interest-bearing deposits | 2,466,529 | 73.4 | % | 2,448,954 | 72.6 | % | 17,575 | 0.7 | % | |||||||||||
| Noninterest-bearing deposits | 892,386 | 26.6 | % | 924,844 | 27.4 | % | (32,458 | ) | (3.5 | )% | ||||||||||
| Total deposits | $ | 3,358,915 | 100.0 | % | $ | 3,373,798 | 100.0 | % | $ | (14,883 | ) | (0.4 | )% | |||||||
March 31, 2018 | December 31, 2017 | Change | ||||||||||||||||||||||
(dollars in thousands) | Balance | Percent of Borrowings | Balance | Percent of Borrowings | Amount | Percent | ||||||||||||||||||
Short-term borrowings | $ | 173,704 | 43.3 | % | $ | 237,865 | 47.9 | % | $ | (64,161 | ) | (27.0 | ) % | |||||||||||
Long-term FHLB advances | 107,784 | 26.9 | % | 139,140 | 28.0 | % | (31,356 | ) | (22.5 | ) % | ||||||||||||||
Subordinated notes | 98,448 | 24.5 | % | 98,416 | 19.8 | % | 32 | 0.0 | % | |||||||||||||||
Junior subordinated debentures | 21,456 | 5.3 | % | 21,416 | 4.3 | % | 40 | 0.2 | % | |||||||||||||||
Total borrowed funds | $ | 401,392 | 100.0 | % | $ | 496,837 | 100.0 | % | $ | (95,445 | ) | (19.2 | ) % | |||||||||||
| June 30, 2018 | December 31, 2017 | Change | ||||||||||||||||||
| (dollars in thousands) | Balance | Percent of Borrowings | Balance | Percent of Borrowings | Amount | Percent | ||||||||||||||
| Short-term borrowings | $ | 227,059 | 52.2 | % | $ | 237,865 | 47.9 | % | $ | (10,806 | ) | (4.5 | )% | |||||||
| Long-term FHLB advances | 87,808 | 20.2 | % | 139,140 | 28.0 | % | (51,332 | ) | (36.9 | )% | ||||||||||
| Subordinated notes | 98,491 | 22.6 | % | 98,416 | 19.8 | % | 75 | 0.1 | % | |||||||||||
| Junior subordinated debentures | 21,497 | 4.9 | % | 21,416 | 4.3 | % | 81 | 0.4 | % | |||||||||||
| Total borrowed funds | $ | 434,855 | 100.0 | % | $ | 496,837 | 100.0 | % | $ | (61,982 | ) | (12.5 | )% | |||||||
Capital
Actual | Minimum to be Well Capitalized | |||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | ||||||||||||
March 31, 2018 | ||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||
Corporation | $ | 468,142 | 13.93 | % | $ | 336,154 | 10.00 | % | ||||||||
Bank | $ | 397,077 | 11.82 | % | $ | 335,856 | 10.00 | % | ||||||||
Tier I capital to risk weighted assets: | ||||||||||||||||
Corporation | $ | 351,781 | 10.46 | % | $ | 268,923 | 8.00 | % | ||||||||
Bank | $ | 379,164 | 11.29 | % | $ | 268,685 | 8.00 | % | ||||||||
Common equity Tier I risk weighted assets: | ||||||||||||||||
Corporation | $ | 331,009 | 9.85 | % | $ | 218,500 | 6.50 | % | ||||||||
Bank | $ | 379,164 | 11.29 | % | $ | 218,307 | 6.50 | % | ||||||||
Tier I leverage ratio (Tier I capital to total quarterly average assets): | ||||||||||||||||
Corporation | $ | 351,781 | 8.71 | % | $ | 202,050 | 5.00 | % | ||||||||
Bank | $ | 379,164 | 9.39 | % | $ | 201,868 | 5.00 | % | ||||||||
Tangible common equity to tangible assets(1) | ||||||||||||||||
Corporation | $ | 326,458 | 7.98 | % | — | — | ||||||||||
Bank | $ | 376,038 | 9.19 | % | — | — | ||||||||||
December 31, 2017 | ||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||
Corporation | $ | 463,637 | 13.92 | % | $ | 333,068 | 10.00 | % | ||||||||
Bank | $ | 387,067 | 11.65 | % | $ | 332,388 | 10.00 | % | ||||||||
Tier I capital to risk weighted assets: | ||||||||||||||||
Corporation | $ | 347,187 | 10.42 | % | $ | 266,454 | 8.00 | % | ||||||||
Bank | $ | 369,033 | 11.10 | % | $ | 265,910 | 8.00 | % | ||||||||
Common equity Tier I risk weighted assets: | ||||||||||||||||
Corporation | $ | 328,676 | 9.87 | % | $ | 216,494 | 6.50 | % | ||||||||
Bank | $ | 369,033 | 11.10 | % | $ | 216,052 | 6.50 | % | ||||||||
Tier I leverage ratio (Tier I capital to total quarterly average assets): | ||||||||||||||||
Corporation | $ | 347,187 | 10.10 | % | $ | 171,915 | 5.00 | % | ||||||||
Bank | $ | 369,033 | 10.76 | % | $ | 171,609 | 5.00 | % | ||||||||
Tangible common equity to tangible assets(1) | ||||||||||||||||
Corporation | $ | 322,964 | 7.61 | % | — | — | ||||||||||
Bank | $ | 367,457 | 8.67 | % | — | — | ||||||||||
| Actual | Minimum to be Well Capitalized | ||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | |||||||||
| June 30, 2018 | |||||||||||||
| Total capital to risk weighted assets: | |||||||||||||
| Corporation | $ | 480,659 | 13.87 | % | $ | 346,524 | 10.00 | % | |||||
| Bank | $ | 412,626 | 11.91 | % | $ | 346,376 | 10.00 | % | |||||
| Tier I capital to risk weighted assets: | |||||||||||||
| Corporation | $ | 362,504 | 10.46 | % | $ | 277,219 | 8.00 | % | |||||
| Bank | $ | 392,962 | 11.34 | % | $ | 277,101 | 8.00 | % | |||||
| Common equity Tier I risk weighted assets: | |||||||||||||
| Corporation | $ | 341,685 | 9.86 | % | $ | 225,240 | 6.50 | % | |||||
| Bank | $ | 392,962 | 11.34 | % | $ | 225,145 | 6.50 | % | |||||
| Tier I leverage ratio (Tier I capital to total quarterly average assets): | |||||||||||||
| Corporation | $ | 362,504 | 8.75 | % | $ | 207,189 | 5.00 | % | |||||
| Bank | $ | 392,962 | 9.49 | % | $ | 207,120 | 5.00 | % | |||||
Tangible common equity to tangible assets(1) | |||||||||||||
| Corporation | $ | 335,042 | 8.00 | % | — | — | |||||||
| Bank | $ | 387,787 | 9.27 | % | — | — | |||||||
| December 31, 2017 | |||||||||||||
| Total capital to risk weighted assets: | |||||||||||||
| Corporation | $ | 463,637 | 13.92 | % | $ | 333,068 | 10.00 | % | |||||
| Bank | $ | 387,067 | 11.65 | % | $ | 332,388 | 10.00 | % | |||||
| Tier I capital to risk weighted assets: | |||||||||||||
| Corporation | $ | 347,187 | 10.42 | % | $ | 266,454 | 8.00 | % | |||||
| Bank | $ | 369,033 | 11.10 | % | $ | 265,910 | 8.00 | % | |||||
| Common equity Tier I risk weighted assets: | |||||||||||||
| Corporation | $ | 328,676 | 9.87 | % | $ | 216,494 | 6.50 | % | |||||
| Bank | $ | 369,033 | 11.10 | % | $ | 216,052 | 6.50 | % | |||||
| Tier I leverage ratio (Tier I capital to total quarterly average assets): | |||||||||||||
| Corporation | $ | 347,187 | 10.10 | % | $ | 171,915 | 5.00 | % | |||||
| Bank | $ | 369,033 | 10.76 | % | $ | 171,609 | 5.00 | % | |||||
Tangible common equity to tangible assets(1) | |||||||||||||
| Corporation | $ | 322,964 | 7.61 | % | — | — | |||||||
| Bank | $ | 367,457 | 8.67 | % | — | — | |||||||
(1)
(dollars in millions) | Available Funds as of March 31, 2018 | Percent of Total Borrowing Capacity | Available Funds as of December 31, 2017 | Percent of Total Borrowing Capacity | Dollar Change | Percent Change | ||||||||||||||||||
Federal Home Loan Bank of Pittsburgh | $ | 1,404.7 | 84.0 | % | $ | 1,020.0 | 74.4 | % | $ | 384.7 | 37.7 | % | ||||||||||||
Federal Reserve Bank of Philadelphia | 138.2 | 100.0 | % | 121.3 | 100.0 | % | 16.9 | 13.9 | % | |||||||||||||||
Fed Funds Lines (seven banks) | 79.0 | 100.0 | % | 79.0 | 100.0 | % | — | — | % | |||||||||||||||
Total | $ | 1,621.9 | 85.8 | % | $ | 1,220.3 | 77.6 | % | $ | 401.6 | 32.9 | % | ||||||||||||
| (dollars in millions) | Available Funds as of June 30, 2018 | Percent of Total Borrowing Capacity | Available Funds as of December 31, 2017 | Percent of Total Borrowing Capacity | Dollar Change | Percent Change | ||||||||||||||
| Federal Home Loan Bank of Pittsburgh | $ | 1,192.1 | 80.0 | % | $ | 1,020.0 | 74.4 | % | $ | 172.1 | 16.9 | % | ||||||||
| Federal Reserve Bank of Philadelphia | 145.5 | 100.0 | % | 121.3 | 100.0 | % | 24.2 | 20.0 | % | |||||||||||
| Fed Funds Lines (seven banks) | 79.0 | 100.0 | % | 79.0 | 100.0 | % | — | — | ||||||||||||
| Total | $ | 1,416.6 | 82.6 | % | $ | 1,220.3 | 77.6 | % | $ | 196.3 | 16.1 | % | ||||||||
Arrangements
(dollars in millions) | Total | Within | 2 - 3 | 4 - 5 | After | |||||||||||||||
Deposits without a stated maturity | $ | 2,621.0 | $ | 2,621.0 | $ | — | $ | — | $ | — | ||||||||||
Wholesale and retail time deposit | 694.5 | 581.4 | 87.0 | 25.1 | 0.9 | |||||||||||||||
Short-term borrowings | 173.7 | 173.7 | — | — | — | |||||||||||||||
Long-term FHLB Advances | 107.8 | 52.5 | 40.4 | 14.9 | — | |||||||||||||||
Subordinated Notes | 100.0 | — | — | — | 100.0 | |||||||||||||||
Junior subordinated debentures | 25.8 | — | — | — | 25.8 | |||||||||||||||
Operating leases | 30.5 | 5.6 | 8.4 | 6.1 | 10.4 | |||||||||||||||
Purchase obligations | 5.1 | 3.4 | 1.7 | — | — | |||||||||||||||
Total | $ | 3,758.4 | $ | 3,437.6 | $ | 137.5 | $ | 46.1 | $ | 137.1 | ||||||||||
June 30, 2018
:| (dollars in millions) | Total | Within 1 Year | 2 - 3 Years | 4 - 5 Years | After 5 Years | ||||||||||||||
| Deposits without a stated maturity | $ | 2,652.9 | $ | 2,652.9 | $ | — | $ | — | $ | — | |||||||||
| Wholesale and retail time deposit | 706.0 | 572.4 | 113.6 | 19.0 | 1.0 | ||||||||||||||
| Short-term borrowings | 227.1 | 227.1 | — | — | — | ||||||||||||||
| Long-term FHLB Advances | 87.8 | 39.9 | 47.9 | — | — | ||||||||||||||
| Subordinated Notes | 100.0 | — | — | — | 100.0 | ||||||||||||||
| Junior subordinated debentures | 25.8 | — | — | — | 25.8 | ||||||||||||||
| Operating leases | 29.1 | 5.3 | 8.1 | 5.9 | 9.8 | ||||||||||||||
| Purchase obligations | 5.1 | 3.4 | 1.7 | — | — | ||||||||||||||
| Total | $ | 3,833.8 | $ | 3,501.0 | $ | 171.3 | $ | 24.9 | $ | 136.6 | |||||||||
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statementsstatements attributed to the Corporation are expressly qualified in their entirety by the factors, risks, and uncertainties set forth in the foregoing cautionary statements, along with those set forth under the caption titled “Risk Factors” beginning on page 1112 of thisthe 2017 Annual Report. All forward-looking statements included in this Report and the documents incorporated by reference herein are based upon the Corporation’s beliefs and assumptions as of the date of this Report. The Corporation assumes no obligation to update any forward-looking statement, whether the result of new information, future events, uncertainties or otherwise, as of any future date. In light of these risks, uncertainties and assumptions, you should not put undue reliance on any forward-looking statements discussed in this Report or incorporated documents.
March 31,June 30, 2018.
Period Total Number of Average Price Paid Total Number of as Part of Publicly Maximum January 1, 2018 – January 31, 2018 February 1, 2018 – February 28, 2018 March 1, 2018 – March 31, 2018 Totalfirstsecond quarter of 2018:
Shares Purchased(1)(2)
Per Share
Shares Purchased
Announced Plans or
Programs(3)
Number of
Shares that
May Yet Be
Purchased
Under the Plan
or Programs — $ — — 189,300 16,635 $ 44.26 — 189,300 712 $ 44.36 — 189,300 17,347 $ 44.27 — 189,300 Period April 1, 2018 – April 30, 2018 268 $ 44.45 — 189,300 May 1, 2018 – May 31, 2018 2,030 $ 46.43 — 189,300 June 1, 2018 – June 30, 2018 1,617 $ 45.02 — 189,300 Total 3,915 $ 45.71 — 189,300 (1)(1) On MarchJune 30, 2018, 4371,617 shares were purchased by the Corporation’s deferred compensation plans through open market transactions.
| |
| (2) | Includes shares purchased to cover statutory tax withholding requirements on vested stock awards for certain officers of the Corporation or Bank as follows: |
| |
| (3) | On August 6, 2015, the Corporation announced a stock repurchase program (the “2015 Program”) under which the Corporation may repurchase up to 1,200,000 shares of the Corporation’s common stock, at an aggregate purchase price not to exceed $40 million. There is no expiration date on the 2015 Program and the Corporation has no plans for an early termination of the 2015 Program. All share repurchases under the 2015 Program were accomplished in open market transactions. As of March 31, 2018, the maximum number of shares remaining authorized for repurchase under the 2015 Program was 189,300. |
Page 61
| Exhibit No. | Description and References | |
3.1 | ||
3.2 | ||
| ||
| 31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS XBRL | Instance Document, filed herewith | |
101.SCH XBRL | Taxonomy Extension Schema Document, filed herewith | |
101.CAL XBRL | Taxonomy Extension Calculation Linkbase Document, filed herewith | |
101.DEF XBRL | Taxonomy Extension Definition Linkbase Document, filed herewith | |
101.LAB XBRL | Taxonomy Extension Label Linkbase Document, filed herewith | |
101.PRE XBRL | Taxonomy Extension Presentation Linkbase Document, filed herewith | |
Signatures
| Bryn Mawr Bank Corporation | ||||
Date: | By: | /s/ Francis J. Leto | ||
| ||||
| ||||
| Francis J. Leto | ||||
| President & Chief Executive Officer | ||||
| (Principal Executive Officer) | ||||
Date: | By: | /s/ Michael W. Harrington | ||
| ||||
| ||||
Michael W. Harrington | ||||
| Chief Financial Officer | ||||
| (Principal Financial Officer) | ||||