Title of each class Trading Symbol Name of each exchange on which registered Common Stock, par value $0.01 per share CFB The Nasdaq Stock Market LLC |
Non-accelerated filer | ||||||
Item 1. | |||||
September 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
(Dollars in thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 128,126 | $ | 216,541 | |||
Available for sale securities - taxable | 323,531 | 296,133 | |||||
Available for sale securities - tax-exempt | 409,562 | 367,545 | |||||
Premises and equipment, held for sale | — | 3,444 | |||||
Loans, net of allowance for loan losses of $42,995 and $37,826 at September 30, 2019 and December 31, 2018, respectively | 3,586,797 | 3,022,921 | |||||
Premises and equipment, net | 71,314 | 74,945 | |||||
Restricted equity securities | 16,053 | 14,525 | |||||
Interest receivable | 15,909 | 14,092 | |||||
Foreclosed assets held for sale | 2,471 | — | |||||
Deferred tax asset | 7,429 | 16,316 | |||||
Goodwill and other intangible assets, net | 7,720 | 7,796 | |||||
Bank-owned life insurance | 65,228 | 63,811 | |||||
Other | 17,173 | 9,146 | |||||
Total assets | $ | 4,651,313 | $ | 4,107,215 | |||
Liabilities and stockholders’ equity | |||||||
Deposits | |||||||
Non-interest bearing | $ | 513,832 | $ | 484,284 | |||
Savings, NOW and money market | 1,922,522 | 1,714,136 | |||||
Time | 1,221,754 | 1,009,677 | |||||
Total deposits | 3,658,108 | 3,208,097 | |||||
Federal funds purchased and repurchase agreements | 49,810 | 75,406 | |||||
Federal Home Loan Bank advances | 307,804 | 312,985 | |||||
Other borrowings | 912 | 884 | |||||
Interest payable and other liabilities | 32,244 | 19,507 | |||||
Total liabilities | 4,048,878 | 3,616,879 | |||||
Stockholders’ equity | |||||||
Redeemable preferred stock, $0.01 par value, $25 liquidation value: | |||||||
authorized - 5,000,000 shares, issued - 0 and 1,200,000 shares at September 30, 2019 and December 31, 2018, respectively | — | 12 | |||||
Common stock, $0.01 par value: | |||||||
authorized - 200,000,000 shares, issued - 51,969,203 and 45,074,322 shares at September 30, 2019 and December 31, 2018, respectively | 520 | 451 | |||||
Additional paid-in capital | 518,816 | 454,512 | |||||
Retained earnings | 65,282 | 38,567 | |||||
Other | (84 | ) | (196 | ) | |||
Accumulated other comprehensive income (loss) | 17,901 | (3,010 | ) | ||||
Total stockholders’ equity | 602,435 | 490,336 | |||||
Total liabilities and stockholders’ equity | $ | 4,651,313 | $ | 4,107,215 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||
Interest Income | |||||||||||||||
Loans, including fees | $ | 49,327 | $ | 34,012 | $ | 142,319 | $ | 89,262 | |||||||
Available for sale securities - Taxable | 1,991 | 2,200 | 6,646 | 5,729 | |||||||||||
Available for sale securities - Tax-exempt | 2,969 | 3,586 | 8,820 | 11,622 | |||||||||||
Deposits with financial institutions | 970 | 723 | 2,452 | 2,481 | |||||||||||
Dividends on bank stocks | 272 | 254 | 801 | 718 | |||||||||||
Total interest income | 55,529 | 40,775 | 161,038 | 109,812 | |||||||||||
Interest Expense | |||||||||||||||
Deposits | 18,003 | 9,999 | 51,421 | 26,639 | |||||||||||
Fed funds purchased and repurchase agreements | 74 | 287 | 501 | 628 | |||||||||||
Advances from Federal Home Loan Bank | 1,629 | 1,468 | 4,739 | 4,308 | |||||||||||
Other borrowings | 37 | 53 | 112 | 184 | |||||||||||
Total interest expense | 19,743 | 11,807 | 56,773 | 31,759 | |||||||||||
Net Interest Income | 35,786 | 28,968 | 104,265 | 78,053 | |||||||||||
Provision for Loan Losses | 4,850 | 3,000 | 10,550 | 9,000 | |||||||||||
Net Interest Income after Provision for Loan Losses | 30,936 | 25,968 | 93,715 | 69,053 | |||||||||||
Non-Interest Income | |||||||||||||||
Service charges and fees (rebates) on customer accounts | 72 | (100 | ) | 441 | 506 | ||||||||||
Gain on sale of available for sale securities | 34 | 195 | 467 | 608 | |||||||||||
Impairment of premises and equipment held for sale | — | (171 | ) | (424 | ) | (171 | ) | ||||||||
Gain on sale of loans | 49 | 25 | 207 | 618 | |||||||||||
Income from bank-owned life insurance | 476 | 513 | 1,416 | 1,511 | |||||||||||
Swap fee income, net | 1,879 | 253 | 2,415 | 299 | |||||||||||
ATM and credit card interchange income | 476 | 301 | 1,312 | 827 | |||||||||||
Other non-interest income | 226 | 169 | 695 | 690 | |||||||||||
Total non-interest income | 3,212 | 1,185 | 6,529 | 4,888 | |||||||||||
Non-Interest Expense | |||||||||||||||
Salaries and employee benefits | 14,256 | 12,652 | 43,296 | 43,689 | |||||||||||
Occupancy | 2,080 | 2,132 | 6,301 | 6,199 | |||||||||||
Professional fees | 427 | 766 | 1,923 | 2,421 | |||||||||||
Deposit insurance premiums | 302 | 823 | 2,020 | 2,411 | |||||||||||
Data processing | 649 | 528 | 1,868 | 1,470 | |||||||||||
Advertising | 580 | 527 | 1,770 | 1,982 | |||||||||||
Software and communication | 900 | 630 | 2,407 | 1,958 | |||||||||||
Depreciation and amortization | 413 | 516 | 1,320 | 1,306 | |||||||||||
Other non-interest expense | 1,565 | 1,301 | 4,858 | 4,153 | |||||||||||
Total non-interest expense | 21,172 | 19,875 | 65,763 | 65,589 | |||||||||||
Net Income Before Taxes | 12,976 | 7,278 | 34,481 | 8,352 | |||||||||||
Income tax expense (benefit) | 2,592 | 924 | 5,308 | (904 | ) | ||||||||||
Net Income | $ | 10,384 | $ | 6,354 | $ | 29,173 | $ | 9,256 | |||||||
Basic Earnings Per Share(1) | $ | 0.22 | $ | 0.15 | $ | 0.63 | $ | 0.23 | |||||||
Diluted Earnings Per Share(1) | $ | 0.21 | $ | 0.15 | $ | 0.61 | $ | 0.22 | |||||||
(1) Share data has been adjusted to reflect a 2-for-1 stock split effected in the form of a dividend on December 21, 2018. |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Net Income | $ | 10,384 | $ | 6,354 | $ | 29,173 | $ | 9,256 | |||||||
Other Comprehensive Income (Loss) | |||||||||||||||
Unrealized gain (loss) on available-for-sale securities | 5,757 | (6,592 | ) | 28,084 | (22,062 | ) | |||||||||
Less: income tax (benefit) | 1,410 | (1,620 | ) | 6,890 | (5,414 | ) | |||||||||
Unrealized gain (loss) on available-for-sale securities, net of income tax (benefit) | 4,347 | (4,972 | ) | 21,194 | (16,648 | ) | |||||||||
Reclassification adjustment for realized gains included in income | 34 | 195 | 467 | 608 | |||||||||||
Less: income tax | 9 | 47 | 115 | 149 | |||||||||||
Less: reclassification adjustment for realized gains included in income, net of income tax | 25 | 148 | 352 | 459 | |||||||||||
Other comprehensive income (loss) | 4,322 | (5,120 | ) | 20,842 | (17,107 | ) | |||||||||
Comprehensive Income (Loss) | $ | 14,706 | $ | 1,234 | $ | 50,015 | $ | (7,851 | ) |
Accumulated | |||||||||||||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid in | Retained | Comprehensive | |||||||||||||||||||||||||||||
Shares | Amount | Shares(1) | Amount(1) | Capital | Earnings(1) | Other | Income (Loss) | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | 1,200,000 | $ | 12 | 35,496,278 | $ | 355 | $ | 321,544 | $ | 25,778 | $ | (191 | ) | $ | (4,961 | ) | $ | 342,537 | |||||||||||||||
Net income | — | — | — | — | — | 6,354 | — | — | 6,354 | ||||||||||||||||||||||||
Change in unrealized depreciation on available-for-sale securities | — | — | — | — | — | — | — | (5,120 | ) | (5,120 | ) | ||||||||||||||||||||||
Issuance of shares | — | — | 5,031,110 | 50 | 69,733 | (25 | ) | — | — | 69,758 | |||||||||||||||||||||||
Issuance of shares from equity-based awards | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Retired shares | — | — | (265,908 | ) | (3 | ) | (2,534 | ) | (1,253 | ) | — | — | (3,790 | ) | |||||||||||||||||||
Preferred dividends declared | — | — | — | — | — | (525 | ) | — | — | (525 | ) | ||||||||||||||||||||||
Employee receivables from sale of stock | — | — | — | — | 2 | — | (1 | ) | — | 1 | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | 527 | — | — | — | 527 | ||||||||||||||||||||||||
Employee stock purchase plan additions | — | — | — | — | 38 | — | — | — | 38 | ||||||||||||||||||||||||
Balance at September 30, 2018 | 1,200,000 | $ | 12 | 40,261,480 | $ | 402 | $ | 389,310 | $ | 30,329 | $ | (192 | ) | $ | (10,081 | ) | $ | 409,780 |
Balance at June 30, 2019 | — | $ | — | 45,367,641 | $ | 453 | $ | 430,347 | $ | 54,899 | $ | (83 | ) | $ | 13,579 | $ | 499,195 | ||||||||||||||||
Net income | — | — | — | — | — | 10,384 | — | — | 10,384 | ||||||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities | — | — | — | — | — | — | 4,322 | 4,322 | |||||||||||||||||||||||||
Issuance of shares | — | — | 6,600,245 | 67 | 87,154 | (1 | ) | — | — | 87,220 | |||||||||||||||||||||||
Issuance of shares from equity-based awards | — | — | 1,317 | — | (10 | ) | — | — | — | (10 | ) | ||||||||||||||||||||||
Employee receivables from sale of stock | — | — | — | — | 1 | — | (1 | ) | — | — | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | 1,324 | — | — | — | 1,324 | ||||||||||||||||||||||||
Employee stock purchase plan additions | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance at September 30, 2019 | — | $ | — | 51,969,203 | $ | 520 | $ | 518,816 | $ | 65,282 | $ | (84 | ) | $ | 17,901 | $ | 602,435 |
Accumulated | |||||||||||||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid in | Retained | Comprehensive | |||||||||||||||||||||||||||||
Shares | Amount | Shares(1) | Amount(1) | Capital | Earnings(1) | Other | Income (Loss) | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 1,200,000 | $ | 12 | 30,686,256 | $ | 307 | $ | 256,108 | $ | 23,950 | $ | (256 | ) | $ | 7,026 | $ | 287,147 | ||||||||||||||||
Net income | — | — | — | — | — | 9,256 | — | — | 9,256 | ||||||||||||||||||||||||
Change in unrealized depreciation on available-for-sale securities | — | — | — | — | — | — | (17,107 | ) | (17,107 | ) | |||||||||||||||||||||||
Issuance of shares | — | — | 9,557,054 | 95 | 132,868 | (48 | ) | — | — | 132,915 | |||||||||||||||||||||||
Issuance of shares from equity-based awards | — | — | 284,078 | 3 | (1,653 | ) | (1 | ) | — | — | (1,651 | ) | |||||||||||||||||||||
Retired shares | — | — | (265,908 | ) | (3 | ) | (2,534 | ) | (1,253 | ) | — | — | (3,790 | ) | |||||||||||||||||||
Preferred dividends declared | — | — | — | — | — | (1,575 | ) | — | — | (1,575 | ) | ||||||||||||||||||||||
Employee receivables from sale of stock | — | — | — | — | 8 | — | 64 | — | 72 | ||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 4,386 | — | — | — | 4,386 | ||||||||||||||||||||||||
Employee stock purchase plan additions | — | — | — | — | 127 | — | — | — | 127 | ||||||||||||||||||||||||
Balance at September 30, 2018 | 1,200,000 | $ | 12 | 40,261,480 | $ | 402 | $ | 389,310 | $ | 30,329 | $ | (192 | ) | $ | (10,081 | ) | $ | 409,780 |
Balance at December 31, 2018 | 1,200,000 | $ | 12 | 45,074,322 | $ | 451 | $ | 454,512 | $ | 38,567 | $ | (196 | ) | $ | (3,010 | ) | $ | 490,336 | |||||||||||||||
Net income | — | — | — | — | 29,173 | — | — | 29,173 | |||||||||||||||||||||||||
Change in unrealized appreciation on available-for-sale securities | — | — | — | — | — | — | 20,842 | 20,842 | |||||||||||||||||||||||||
Issuance of shares | — | — | 6,851,213 | 68 | 88,869 | — | — | — | 88,937 | ||||||||||||||||||||||||
Issuance of shares from equity-based awards | — | — | 53,668 | 1 | (246 | ) | — | — | — | (245 | ) | ||||||||||||||||||||||
Retired shares | (1,200,000 | ) | (12 | ) | (10,000 | ) | — | (30,088 | ) | (55 | ) | — | (30,155 | ) | |||||||||||||||||||
Preferred dividends declared | — | — | — | — | — | (175 | ) | — | — | (175 | ) | ||||||||||||||||||||||
Employee receivables from sale of stock | — | — | — | — | 5 | — | 112 | — | 117 | ||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 3,569 | — | — | — | 3,569 | ||||||||||||||||||||||||
Employee receivables from sale of stock | — | — | — | — | 36 | — | — | — | 36 | ||||||||||||||||||||||||
Adoption of ASU 2016-01 | — | — | — | — | — | (69 | ) | — | 69 | — | |||||||||||||||||||||||
Adoption of ASU 2018-07 | — | — | — | — | 2,159 | (2,159 | ) | — | — | — | |||||||||||||||||||||||
Balance at September 30, 2019 | — | $ | — | 51,969,203 | $ | 520 | $ | 518,816 | $ | 65,282 | $ | (84 | ) | $ | 17,901 | $ | 602,435 |
Nine months ended | |||||||
September 30, | |||||||
2019 | 2018 | ||||||
(Dollars in thousands) | |||||||
Operating Activities | |||||||
Net income | $ | 29,173 | $ | 9,256 | |||
Items not requiring (providing) cash | |||||||
Depreciation and amortization | 4,015 | 3,299 | |||||
Provision for loan losses | 10,550 | 9,000 | |||||
Accretion of discounts and amortization of premiums on securities | 4,098 | 4,134 | |||||
Equity based compensation | 3,606 | 4,513 | |||||
(Gain) loss on disposal of fixed assets | 64 | (4 | ) | ||||
Gain on sale of loans | (207 | ) | (618 | ) | |||
Deferred income taxes | 2,088 | (1,105 | ) | ||||
Net increase in bank owned life insurance | (1,416 | ) | (1,511 | ) | |||
Net realized gains on available-for-sale securities | (539 | ) | (608 | ) | |||
Impairment of assets held for sale | 424 | 171 | |||||
Dividends on FHLB stock | (797 | ) | (713 | ) | |||
Stock dividends on CRA mutual fund | (38 | ) | (34 | ) | |||
Changes in | |||||||
Interest receivable | (1,817 | ) | (2,105 | ) | |||
Other assets | (7,795 | ) | (170 | ) | |||
Other liabilities | 13,261 | 4,237 | |||||
Net cash provided by operating activities | 54,670 | 27,742 | |||||
Investing Activities | |||||||
Net change in loans | (576,897 | ) | (741,784 | ) | |||
Purchases of available-for-sale securities | (157,492 | ) | (198,214 | ) | |||
Proceeds from maturities of available-for-sale securities | 48,658 | 35,755 | |||||
Proceeds from sale of available-for-sale securities | 63,515 | 149,271 | |||||
Purchase of premises and equipment | (649 | ) | (41,268 | ) | |||
Purchase of restricted equity securities | (1,673 | ) | (1,300 | ) | |||
Proceeds from the sale of fixed assets | 3,324 | 1,862 | |||||
Proceeds from sale of restricted equity securities | 941 | 942 | |||||
Net cash used in investing activities | (620,273 | ) | (794,736 | ) | |||
Financing Activities | |||||||
Net increase in demand deposits, savings, NOW and money market accounts | 237,934 | 456,487 | |||||
Net increase in time deposits | 212,077 | 46,729 | |||||
Net increase (decrease) in repurchase agreements and fed funds purchased | (50,596 | ) | 77,479 | ||||
Net increase in federal funds sold | 25,000 | 55,000 | |||||
Proceeds from line of credit | — | 30,000 | |||||
Repayment of line of credit | — | (30,000 | ) | ||||
Proceeds from Federal Home Loan Bank advances | 45,000 | 28,000 | |||||
Repayment of Federal Home Loan Bank advances | (50,181 | ) | (10,171 | ) | |||
Net repayments of Federal Home Loan Bank line of credit | — | (25,000 | ) |
Nine months ended | |||||||
September 30, | |||||||
2019 | 2018 | ||||||
(Dollars in thousands) | |||||||
Retirement of preferred stock | $ | (30,000 | ) | $ | — | ||
Issuance of common shares, net of issuance cost | 88,390 | 132,550 | |||||
Proceeds from employee stock purchase plan | 547 | 367 | |||||
Common stock purchased and retired | (155 | ) | (3,790 | ) | |||
Acquisition of common stock for tax withholding obligations | (245 | ) | (1,651 | ) | |||
Net decrease in employee receivables | 117 | 72 | |||||
Dividends paid on preferred stock | (700 | ) | (1,575 | ) | |||
Net cash provided by financing activities | 477,188 | 754,497 | |||||
Decrease in Cash and Cash Equivalents | (88,415 | ) | (12,497 | ) | |||
Cash and Cash Equivalents, Beginning of Period | 216,541 | 130,820 | |||||
Cash and Cash Equivalents, End of Period | $ | 128,126 | $ | 118,323 | |||
Supplemental Cash Flows Information | |||||||
Interest paid | $ | 54,998 | $ | 31,437 | |||
Income taxes paid | 1,030 | 19 | |||||
Foreclosed assets in settlement of loans | 2,471 | — | |||||
Dividends declared and unpaid on preferred stock | — | 525 |
Adoption of ASU 2018-07 required the Company to make a one-time transfer of $2.2 million from retained earnings to additional paid in capital. The Company will record forfeitures as they occur and base fair market values on the expected term, like the Company’s accounting for employee-based awards. |
The update did not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, which comprises a significant portion of the Company’s revenue stream. In addition, the Company’s non-interest income is generated by customer transactions or through the passage of time and as a result the pattern or timing of income recognition was not impacted. |
The Company gathered all potential lease and embedded lease agreements and is evaluating the applicability and impact to the financial statements. The Company’s current operating leases relate primarily to three branch locations. Based on these current leases, the Company anticipates recognizing a lease liability and related right-to-use asset on its balance sheet, with an immaterial impact to its income statement compared to the current lease accounting model. However, the ultimate impact of the standard will depend on the Company lease portfolio as of the adoption date. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Earnings per Share | |||||||||||||||
Net income | $ | 10,384 | $ | 6,354 | $ | 29,173 | $ | 9,256 | |||||||
Less: preferred stock dividends | — | 525 | 175 | 1,575 | |||||||||||
Net income available to common stockholders | $ | 10,384 | $ | 5,829 | $ | 28,998 | $ | 7,681 | |||||||
Weighted average common shares(1) | 48,351,553 | 37,790,614 | 46,239,021 | 33,918,540 | |||||||||||
Earnings per share | $ | 0.22 | $ | 0.15 | $ | 0.63 | $ | 0.23 | |||||||
Dilutive Earnings Per Share | |||||||||||||||
Net income available to common stockholders | $ | 10,384 | $ | 5,829 | $ | 28,998 | $ | 7,681 | |||||||
Weighted average common shares(1) | 48,351,553 | 37,790,614 | 46,239,021 | 33,918,540 | |||||||||||
Effect of dilutive shares(1) | 812,996 | 988,010 | 842,706 | 1,133,888 | |||||||||||
Weighted average dilutive common shares(1) | 49,164,549 | 38,778,624 | 47,081,727 | 35,052,428 | |||||||||||
Diluted earnings per share | $ | 0.21 | $ | 0.15 | $ | 0.61 | $ | 0.22 | |||||||
SARs, RSUs, RSAs, PRSUs, PSSs not included because to do so would be antidilutive(1) | 541,556 | 442,452 | 507,167 | 273,180 | |||||||||||
1 Share data has been adjusted to reflect a 2-for-1 stock split effected in the form of a dividend on December 21, 2018. |
September 30, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Approximate Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Available-for-sale debt securities | |||||||||||||||
Mortgage-backed - GSE residential | $ | 158,897 | $ | 2,009 | $ | 192 | $ | 160,714 | |||||||
Collateralized mortgage obligations - GSE residential | 147,917 | 1,002 | 244 | 148,675 | |||||||||||
State and political subdivisions | 398,963 | 21,051 | 5 | 420,009 | |||||||||||
Corporate bonds | 1,444 | 92 | — | 1,536 | |||||||||||
Total available-for-sale debt securities | 707,221 | 24,154 | 441 | 730,934 | |||||||||||
Equity securities | |||||||||||||||
Mutual funds | 2,179 | — | 20 | 2,159 | |||||||||||
Total equity securities | 2,179 | — | 20 | 2,159 | |||||||||||
Total available-for-sale securities | $ | 709,400 | $ | 24,154 | $ | 461 | $ | 733,093 |
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Approximate Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Available-for-sale debt securities | |||||||||||||||
Mortgage-backed - GSE residential | $ | 131,215 | $ | 162 | $ | 2,090 | $ | 129,287 | |||||||
Collateralized mortgage obligations - GSE residential | 154,110 | 287 | 1,771 | 152,626 | |||||||||||
State and political subdivisions | 378,595 | 3,908 | 4,445 | 378,058 | |||||||||||
Corporate bonds | 1,613 | 70 | 26 | 1,657 | |||||||||||
Total available-for-sale debt securities | 665,533 | 4,427 | 8,332 | 661,628 | |||||||||||
Equity securities | |||||||||||||||
Mutual funds | 2,141 | — | 91 | 2,050 | |||||||||||
Total equity securities | 2,141 | — | 91 | 2,050 | |||||||||||
Total available-for-sale securities | $ | 667,674 | $ | 4,427 | $ | 8,423 | $ | 663,678 |
September 30, 2019 | |||||||||||||||||||
Within | After One to | After Five to | After | ||||||||||||||||
One Year | Five Years | Ten Years | Ten Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Available-for-sale debt securities | |||||||||||||||||||
Mortgage-backed - GSE residential(1) | |||||||||||||||||||
Amortized cost | $ | — | $ | — | $ | 1,411 | $ | 157,486 | $ | 158,897 | |||||||||
Estimated fair value | — | — | 1,471 | 159,243 | 160,714 | ||||||||||||||
Collateralized mortgage obligations - GSE residential(1) | |||||||||||||||||||
Amortized cost | — | — | 2,876 | 145,041 | 147,917 | ||||||||||||||
Estimated fair value | — | — | 3,011 | 145,664 | 148,675 | ||||||||||||||
State and political subdivisions | |||||||||||||||||||
Amortized cost | — | 3,580 | 40,410 | 354,973 | 398,963 | ||||||||||||||
Estimated fair value | — | 3,674 | 43,071 | 373,264 | 420,009 | ||||||||||||||
Corporate bonds | |||||||||||||||||||
Amortized cost | — | — | 1,444 | — | 1,444 | ||||||||||||||
Estimated fair value | — | — | 1,536 | — | 1,536 | ||||||||||||||
Total available-for-sale debt securities | |||||||||||||||||||
Amortized cost | — | 3,580 | 46,141 | 657,500 | 707,221 | ||||||||||||||
Estimated fair value | $ | — | $ | 3,674 | $ | 49,089 | $ | 678,171 | $ | 730,934 | |||||||||
(1) Actual maturities may differ from contractual maturities because issuers may have the rights to call or prepay obligations with or without prepayment penalties. |
September 30, 2019 | ||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Number of Securities | Fair Value | Unrealized Losses | Number of Securities | Fair Value | Unrealized Losses | Number of Securities | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Available-for-Sale Debt Securities | ||||||||||||||||||||||||||||||||
Mortgage-backed - GSE residential | $ | 3,988 | $ | 4 | 1 | $ | 27,889 | $ | 188 | 5 | $ | 31,877 | $ | 192 | 6 | |||||||||||||||||
Collateralized mortgage obligations - GSE residential | 48,851 | 149 | 6 | 9,792 | 95 | 10 | 58,643 | 244 | 16 | |||||||||||||||||||||||
State and political subdivisions | 2,952 | 4 | 3 | 146 | 1 | 1 | 3,098 | 5 | 4 | |||||||||||||||||||||||
Corporate bonds | — | — | 0 | — | — | 0 | — | — | 0 | |||||||||||||||||||||||
Total temporarily impaired debt securities | $ | 55,791 | $ | 157 | 10 | $ | 37,827 | $ | 284 | 16 | $ | 93,618 | $ | 441 | 26 |
December 31, 2018 | ||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Number of Securities | Fair Value | Unrealized Losses | Number of Securities | Fair Value | Unrealized Losses | Number of Securities | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Available-for-Sale Debt Securities | ||||||||||||||||||||||||||||||||
Mortgage-backed - GSE residential | $ | 66,232 | $ | 369 | 10 | $ | 44,280 | $ | 1,721 | 11 | $ | 110,512 | $ | 2,090 | 21 | |||||||||||||||||
Collateralized mortgage obligations - GSE residential | 4,639 | 42 | 1 | 68,362 | 1,729 | 20 | 73,001 | 1,771 | 21 | |||||||||||||||||||||||
State and political subdivisions | 85,181 | 1,210 | 68 | 97,721 | 3,235 | 74 | 182,902 | 4,445 | 142 | |||||||||||||||||||||||
Corporate bonds | 723 | 26 | 1 | — | — | 0 | 723 | 26 | 1 | |||||||||||||||||||||||
Total temporarily impaired debt securities | $ | 156,775 | $ | 1,647 | 80 | $ | 210,363 | $ | 6,685 | 105 | $ | 367,138 | $ | 8,332 | 185 |
September 30, 2019 | |||||||
Three months ended | Nine months ended | ||||||
(Dollars in thousands) | |||||||
Net gains recognized during the period on equity securities | $ | 16 | $ | 72 | |||
Less: net gains recognized during the period on equity securities sold during the period | — | — | |||||
Unrealized gain recognized during the reporting period on equity securities still held at the reporting date | $ | 16 | $ | 72 |
September 30, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
Commercial | $ | 1,312,647 | $ | 1,134,414 | |||
Energy | 396,132 | 358,283 | |||||
Commercial real estate | 993,153 | 846,561 | |||||
Construction and land development | 527,582 | 440,032 | |||||
Residential real estate | 365,435 | 246,275 | |||||
Equity lines of credit | 22,192 | 20,286 | |||||
Consumer installment | 21,552 | 23,528 | |||||
Gross loans | 3,638,693 | 3,069,379 | |||||
Less: Allowance for loan losses | 42,995 | 37,826 | |||||
Less: Net deferred loan fees and costs | 8,901 | 8,632 | |||||
Net loans | $ | 3,586,797 | $ | 3,022,921 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Three months ended September 30, 2019 | |||||||||||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Beginning balance | $ | 22,975 | $ | 7,300 | $ | 7,533 | $ | 2,602 | $ | 2,138 | $ | 155 | $ | 149 | $ | 42,852 | |||||||||||||||
Provision charged to expense | 3,535 | 1,077 | (249 | ) | 414 | 82 | 5 | (14 | ) | 4,850 | |||||||||||||||||||||
Charge-offs | (1,700 | ) | (3,000 | ) | — | — | — | — | (8 | ) | (4,708 | ) | |||||||||||||||||||
Recoveries | 1 | — | — | — | — | — | — | 1 | |||||||||||||||||||||||
Ending balance | $ | 24,811 | $ | 5,377 | $ | 7,284 | $ | 3,016 | $ | 2,220 | $ | 160 | $ | 127 | $ | 42,995 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Three months ended September 30, 2018 | |||||||||||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Beginning balance | $ | 11,739 | $ | 7,957 | $ | 6,584 | $ | 2,530 | $ | 1,103 | $ | 170 | $ | 114 | $ | 30,197 | |||||||||||||||
Provision charged to expense | 1,102 | 1,184 | 315 | 137 | 261 | 4 | (3 | ) | 3,000 | ||||||||||||||||||||||
Charge-offs | (97 | ) | — | — | — | — | — | — | (97 | ) | |||||||||||||||||||||
Recoveries | 439 | — | — | — | — | — | 1 | 440 | |||||||||||||||||||||||
Ending balance | $ | 13,183 | $ | 9,141 | $ | 6,899 | $ | 2,667 | $ | 1,364 | $ | 174 | $ | 112 | $ | 33,540 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Nine months ended September 30, 2019 | |||||||||||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Beginning balance | $ | 16,584 | $ | 10,262 | $ | 6,755 | $ | 2,475 | $ | 1,464 | $ | 159 | $ | 127 | $ | 37,826 | |||||||||||||||
Provision charged to expense | 11,166 | (2,461 | ) | 529 | 541 | 756 | 1 | 18 | 10,550 | ||||||||||||||||||||||
Charge-offs | (2,954 | ) | (3,000 | ) | — | — | — | — | (19 | ) | (5,973 | ) | |||||||||||||||||||
Recoveries | 15 | 576 | — | — | — | — | 1 | 592 | |||||||||||||||||||||||
Ending balance | $ | 24,811 | $ | 5,377 | $ | 7,284 | $ | 3,016 | $ | 2,220 | $ | 160 | $ | 127 | $ | 42,995 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Nine months ended September 30, 2018 | |||||||||||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||||||
Beginning balance | $ | 11,378 | $ | 7,726 | $ | 4,668 | $ | 1,200 | $ | 905 | $ | 122 | $ | 92 | $ | 26,091 | |||||||||||||||
Provision charged to expense | 2,031 | 2,671 | 2,231 | 1,467 | 459 | 77 | 64 | 9,000 | |||||||||||||||||||||||
Charge-offs | (681 | ) | (1,256 | ) | — | — | — | (25 | ) | (45 | ) | (2,007 | ) | ||||||||||||||||||
Recoveries | 455 | — | — | — | — | — | 1 | 456 | |||||||||||||||||||||||
Ending balance | $ | 13,183 | $ | 9,141 | $ | 6,899 | $ | 2,667 | $ | 1,364 | $ | 174 | $ | 112 | $ | 33,540 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||||||
Ending balance | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 10,398 | $ | 854 | $ | 343 | $ | — | $ | 219 | $ | — | $ | — | $ | 11,814 | |||||||||||||||
Collectively evaluated for impairment | $ | 14,413 | $ | 4,523 | $ | 6,941 | $ | 3,016 | $ | 2,001 | $ | 160 | $ | 127 | $ | 31,181 | |||||||||||||||
Allocated to loans: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 66,162 | $ | 10,226 | $ | 16,544 | $ | — | $ | 2,537 | $ | — | $ | — | $ | 95,469 | |||||||||||||||
Collectively evaluated for impairment | $ | 1,246,485 | $ | 385,906 | $ | 976,609 | $ | 527,582 | $ | 362,898 | $ | 22,192 | $ | 21,552 | $ | 3,543,224 | |||||||||||||||
Ending balance | $ | 1,312,647 | $ | 396,132 | $ | 993,153 | $ | 527,582 | $ | 365,435 | $ | 22,192 | $ | 21,552 | $ | 3,638,693 |
Commercial | Energy | Commercial Real Estate | Construction and Land Development | Residential Real Estate | Equity Lines of Credit | Consumer Installment | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||
Ending balance | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 5,814 | $ | 3,108 | $ | 473 | $ | — | $ | 5 | $ | — | $ | — | $ | 9,400 | |||||||||||||||
Collectively evaluated for impairment | $ | 10,770 | $ | 7,154 | $ | 6,282 | $ | 2,475 | $ | 1,459 | $ | 159 | $ | 127 | $ | 28,426 | |||||||||||||||
Allocated to loans: | |||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 78,147 | 16,250 | $ | 15,227 | $ | — | $ | 2,027 | $ | — | $ | — | $ | 111,651 | ||||||||||||||||
Collectively evaluated for impairment | $ | 1,056,267 | $ | 342,033 | $ | 831,334 | $ | 440,032 | $ | 244,248 | $ | 20,286 | $ | 23,528 | $ | 2,957,728 | |||||||||||||||
Ending balance | $ | 1,134,414 | $ | 358,283 | $ | 846,561 | $ | 440,032 | $ | 246,275 | $ | 20,286 | $ | 23,528 | $ | 3,069,379 |
● Pass (risk rating 1-4) - The category includes loans that are considered satisfactory. The category includes borrowers that generally maintaingood liquidity and financial condition, or the credit is currently protected with sales trends remainingflat or declining. Most ratios compare favorably with industry norms and Company policies. Debt is programmed and timely repayment is expected. ● Special Mention (risk rating 5) - The category includes borrowers that generally exhibit adverse trends in operations or an imbalancedposition in their balance sheet that has not reached a point where repayment is jeopardized. Credits are currently protectedbut, if left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the credit or in the Company’scredit or lien position at a future date. These credits are not adversely classified and do not expose the Company to enough risk to warrant adverse classification. ● Substandard (risk rating 6) - The category includes borrowers that generally exhibit well-defined weakness(es) that jeopardizerepayment. Credits are inadequately protected by the current worth and paying capacity of the obligor or of the collateral pledged. A distinct possibility exists that the Company will sustain some loss if deficiencies are not corrected. Loss potential, while existing in the aggregate amount ofsubstandard assets, does not have to exist in individual assets classified substandard. Substandard loans include both performing and non-performing loans andare broken out in the table below. ● Doubtful (risk rating 7) - The category includes borrowers that exhibit weaknesses inherent in a substandard creditand characteristics that these weaknesses make collection or liquidation in full highly questionable or improbable basedon existing facts, conditions, and values. Because of reasonably specific pendingfactors, which may work to the advantage and strengthening of the assets, classification as a loss isdeferred until its more exact status may be determined. 21 ● Loss (risk rating 8) - Credits that are considered uncollectible or of such little value that their continuance as a bankableasset is not warranted. |
Pass & Watch | Special Mention | Substandard | Doubtful | Loss | Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||
Commercial | $ | 1,217,280 | $ | 29,350 | $ | 66,017 | $ | — | $ | — | $ | 1,312,647 | |||||||||||
Energy | 378,533 | 10,342 | 2,580 | 4,677 | — | 396,132 | |||||||||||||||||
Commercial real estate | 976,262 | 7,529 | 8,402 | 960 | — | 993,153 | |||||||||||||||||
Construction and land development | 527,582 | — | — | — | — | 527,582 | |||||||||||||||||
Residential real estate | 362,625 | 273 | 2,537 | — | — | 365,435 | |||||||||||||||||
Equity lines of credit | 22,192 | — | — | — | — | 22,192 | |||||||||||||||||
Consumer installment | 21,552 | — | — | — | — | 21,552 | |||||||||||||||||
$ | 3,506,026 | $ | 47,494 | $ | 79,536 | $ | 5,637 | $ | — | $ | 3,638,693 |
Pass & Watch | Special Mention | Substandard | Doubtful | Loss | Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||
Commercial | $ | 1,056,505 | $ | — | $ | 73,824 | $ | 4,085 | $ | — | $ | 1,134,414 | |||||||||||
Energy | 339,720 | 5,376 | 13,187 | — | — | 358,283 | |||||||||||||||||
Commercial real estate | 831,290 | 6,950 | 7,209 | 1,112 | — | 846,561 | |||||||||||||||||
Construction and land development | 440,032 | — | — | — | — | 440,032 | |||||||||||||||||
Residential real estate | 244,178 | 70 | 2,027 | — | — | 246,275 | |||||||||||||||||
Equity lines of credit | 20,286 | — | — | — | — | 20,286 | |||||||||||||||||
Consumer installment | 23,528 | — | — | — | — | 23,528 | |||||||||||||||||
$ | 2,955,539 | $ | 12,396 | $ | 96,247 | $ | 5,197 | $ | — | $ | 3,069,379 |
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More | Total Past Due | Current | Total Loans Receivable | Loans >= 90 Days and Accruing | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||
Commercial | $ | 42,039 | $ | 2,785 | $ | 1,101 | $ | 45,925 | $ | 1,266,722 | $ | 1,312,647 | $ | — | |||||||||||||
Energy | 7,122 | — | 5,319 | 12,441 | 383,691 | 396,132 | 642 | ||||||||||||||||||||
Commercial real estate | 317 | — | 93 | 410 | 992,743 | 993,153 | — | ||||||||||||||||||||
Construction and land development | 12,345 | — | — | 12,345 | 515,237 | 527,582 | — | ||||||||||||||||||||
Residential real estate | 68 | — | 2,012 | 2,080 | 363,355 | 365,435 | — | ||||||||||||||||||||
Equity lines of credit | — | — | — | — | 22,192 | 22,192 | — | ||||||||||||||||||||
Consumer installment | 50 | — | — | 50 | 21,502 | 21,552 | — | ||||||||||||||||||||
$ | 61,941 | $ | 2,785 | $ | 8,525 | $ | 73,251 | $ | 3,565,442 | $ | 3,638,693 | $ | 642 |
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More | Total Past Due | Current | Total Loans Receivable | Loans >= 90 Days and Accruing | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||
Commercial | $ | 1,040 | $ | — | $ | 4,137 | $ | 5,177 | $ | 1,129,237 | $ | 1,134,414 | $ | — | |||||||||||||
Energy | 1,994 | — | 9,218 | 11,212 | 347,071 | 358,283 | — | ||||||||||||||||||||
Commercial real estate | — | 425 | 2,253 | 2,678 | 843,883 | 846,561 | — | ||||||||||||||||||||
Construction and land development | — | — | — | — | 440,032 | 440,032 | — | ||||||||||||||||||||
Residential real estate | 28 | 194 | — | 222 | 246,053 | 246,275 | — | ||||||||||||||||||||
Equity lines of credit | — | — | — | — | 20,286 | 20,286 | — | ||||||||||||||||||||
Consumer installment | — | — | — | — | 23,528 | 23,528 | — | ||||||||||||||||||||
$ | 3,062 | $ | 619 | $ | 15,608 | $ | 19,289 | $ | 3,050,090 | $ | 3,069,379 | $ | — |
Unpaid | |||||||||||
Recorded Balance | Principal Balance | Specific Allowance | |||||||||
(Dollars in thousands) | |||||||||||
September 30, 2019 | |||||||||||
Loans without a specific valuation | |||||||||||
Commercial | $ | 25,770 | $ | 25,770 | $ | — | |||||
Energy | 2,969 | 2,969 | — | ||||||||
Commercial real estate | 12,501 | 12,501 | — | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 2,195 | 2,195 | — | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
Loans with a specific valuation | |||||||||||
Commercial | 40,392 | 40,392 | 10,398 | ||||||||
Energy | 7,257 | 7,257 | 854 | ||||||||
Commercial real estate | 4,043 | 4,043 | 343 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 342 | 342 | 219 | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
Total | |||||||||||
Commercial | 66,162 | 66,162 | 10,398 | ||||||||
Energy | 10,226 | 10,226 | 854 | ||||||||
Commercial real estate | 16,544 | 16,544 | 343 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 2,537 | 2,537 | 219 | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
$ | 95,469 | $ | 95,469 | $ | 11,814 |
Unpaid | |||||||||||
Recorded Balance | Principal Balance | Specific Allowance | |||||||||
(Dollars in thousands) | |||||||||||
December 31, 2018 | |||||||||||
Loans without a specific valuation | |||||||||||
Commercial | $ | 40,151 | $ | 40,151 | $ | — | |||||
Energy | 2,789 | 2,789 | — | ||||||||
Commercial real estate | 7,059 | 7,059 | — | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 1,964 | 1,964 | — | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
Loans with a specific valuation | |||||||||||
Commercial | 37,996 | 37,996 | 5,814 | ||||||||
Energy | 13,461 | 13,461 | 3,108 | ||||||||
Commercial real estate | 8,168 | 8,168 | 473 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 63 | 63 | 5 | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
Total | |||||||||||
Commercial | 78,147 | 78,147 | 5,814 | ||||||||
Energy | 16,250 | 16,250 | 3,108 | ||||||||
Commercial real estate | 15,227 | 15,227 | 473 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential real estate | 2,027 | 2,027 | 5 | ||||||||
Equity lines of credit | — | — | — | ||||||||
Consumer installment | — | — | — | ||||||||
$ | 111,651 | $ | 111,651 | $ | 9,400 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Commercial | $ | 386 | $ | 402 | $ | 862 | $ | 1,110 | |||||||
Energy | 98 | 93 | 324 | 369 | |||||||||||
Commercial real estate | 200 | 88 | 613 | 291 | |||||||||||
Construction and land development | — | — | — | — | |||||||||||
Residential real estate | 8 | 17 | 17 | 52 | |||||||||||
Equity lines of credit | — | — | — | — | |||||||||||
Consumer installment | — | — | — | — | |||||||||||
Total interest income recognized | $ | 692 | $ | 600 | $ | 1,816 | $ | 1,822 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | |||||||||||||
(Dollars in thousands) | |||||||||||||||
Commercial | $ | 54,410 | $ | 27,671 | $ | 49,265 | $ | 26,849 | |||||||
Energy | 13,623 | 17,683 | 15,091 | 18,992 | |||||||||||
Commercial real estate | 16,690 | 8,055 | 16,528 | 8,101 | |||||||||||
Construction and land development | — | — | — | — | |||||||||||
Residential real estate | 2,538 | 2,046 | 2,354 | 2,059 | |||||||||||
Equity lines of credit | — | — | — | — | |||||||||||
Consumer installment | — | — | — | — | |||||||||||
Total average impaired loans | $ | 87,261 | $ | 55,455 | $ | 83,238 | $ | 56,001 |
September 30, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
Commercial | $ | 34,201 | $ | 4,781 | |||
Energy | 4,677 | 9,219 | |||||
Commercial real estate | 2,680 | 3,517 | |||||
Construction and land development | — | — | |||||
Residential real estate | 2,068 | 301 | |||||
Equity lines of credit | — | — | |||||
Consumer installment | — | — | |||||
Total non-accrual loans | $ | 43,626 | $ | 17,818 |
The Company’s leases primarily includebank branches located in Kansas City, Missouri; Tulsa, Oklahoma; Dallas, Texas; Frisco, Texas; Phoenix, Arizona; Denver,Colorado and Colorado Springs, Colorado.The remaining lease terms on these branch leases range from less than one year to eighteen years with certain options to renew. Renewal terms can extend the lease term between five years and twenty years . The exercise of lease renewal options is at the Company’ssole discretion. When it is reasonably certain that the Company will exercise its option to renew or extend the lease term, that option is included in the estimatedvalue of the right of use (“ROU”) asset and lease liability. The Company’s lease agreementsdo not contain any material residual value guarantees or material restrictive covenants. As of |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Commercial | |||||||||||||||
- Deferred payment | $ | — | $ | — | $ | — | $ | 61 | |||||||
- Reduction of monthly payment | — | — | 994 | — | |||||||||||
- Extension of maturity date | — | — | 30,005 | 300 | |||||||||||
Energy | |||||||||||||||
- Reduction of monthly payment | — | — | — | 2,972 | |||||||||||
Commercial real estate | |||||||||||||||
- Reduction of monthly payment | — | — | 3,767 | — | |||||||||||
- Interest rate reduction | — | 1,153 | — | 2,256 | |||||||||||
Total troubled debt restructurings | $ | — | $ | 1,153 | $ | 34,766 | $ | 5,589 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||
Number of Loans | Outstanding Balance | Balance 90 days past due at any time during previous 12 months(1) | Number of Loans | Outstanding Balance | Balance 90 days past due at any time during previous 12 months(1) | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial | 7 | $ | 36,865 | $ | — | 6 | $ | 5,022 | $ | 55 | |||||||||
Energy | 2 | 2,969 | — | 2 | 3,631 | — | |||||||||||||
Commercial real estate | 3 | 4,947 | — | 2 | 1,382 | — | |||||||||||||
Construction and land development | — | — | — | — | — | — | |||||||||||||
Residential real estate | — | — | — | 1 | 237 | — | |||||||||||||
Equity lines of credit | — | — | — | — | — | — | |||||||||||||
Consumer installment | — | — | — | — | — | — | |||||||||||||
Total restructured loans | 12 | $ | 44,781 | $ | — | 11 | $ | 10,272 | $ | 55 | |||||||||
(1) Default is considered to mean 90 days or more past due as to interest or principal. |
September 30, 2019 | December 31, 2018 | ||||||||||
Product | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | |||||||
(Dollars in thousands) | |||||||||||
Back-to-back swaps | 46 | $ | 308,960 | 20 | $ | 77,709 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Balance Sheet | September 30, | December 31, | Balance Sheet | September 30, | December 31, | ||||||||||||||
Location | 2019 | 2018 | Location | 2019 | 2018 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Interest rate products | Other assets | $ | 13,735 | $ | 1,051 | Other liabilities | $ | 13,782 | $ | 1,136 |
September 30, 2019 | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | |||||||||||||||||||||||
Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||
Offsetting of derivative assets | |||||||||||||||||||||||
Derivatives | $ | 13,735 | $ | — | $ | 13,735 | $ | — | $ | — | $ | 13,735 | |||||||||||
Offsetting of derivative liabilities | |||||||||||||||||||||||
Derivatives | $ | 13,782 | $ | — | $ | 13,782 | $ | — | $ | — | $ | 13,782 |
December 31, 2018 | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | |||||||||||||||||||||||
Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||
Offsetting of derivative assets | |||||||||||||||||||||||
Derivatives | $ | 1,051 | $ | — | $ | 1,051 | $ | 72 | $ | — | $ | 979 | |||||||||||
Offsetting of derivative liabilities | |||||||||||||||||||||||
Derivatives | $ | 1,136 | $ | — | $ | 1,136 | $ | 72 | $ | — | $ | 1,064 |
September 30, 2019 | |||||||||||||||||||||||||||
Within One Year | One to Two Years | Two to Three Years | Three to Four Years | Four to Five Years | After Five Years | Total | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Time deposits | $ | 822,439 | $ | 216,486 | $ | 105,559 | $ | 52,055 | $ | 25,215 | $ | — | $ | 1,221,754 | |||||||||||||
Fed funds purchased & repurchase agreements | 49,810 | — | — | — | — | — | 49,810 | ||||||||||||||||||||
FHLB borrowings | 24,000 | 76,500 | 16,500 | 39,704 | — | 151,100 | 307,804 | ||||||||||||||||||||
Trust preferred securities(1) | — | — | — | — | — | 912 | 912 | ||||||||||||||||||||
$ | 896,249 | $ | 292,986 | $ | 122,059 | $ | 91,759 | $ | 25,215 | $ | 152,012 | $ | 1,580,280 |
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | Affected Line Item in the | |||||||||||||||
2019 | 2018 | 2019 | 2018 | Statements of Income | |||||||||||||
(Dollars in thousands) | |||||||||||||||||
Unrealized gains on available-for-sale securities | $ | 34 | $ | 195 | $ | 467 | $ | 608 | Gain on sale of available for sale securities | ||||||||
Amount reclassified before tax | 34 | 195 | 467 | 608 | |||||||||||||
Less: tax effect | 9 | 47 | 115 | 149 | Income tax expense | ||||||||||||
Net reclassified amount | $ | 25 | $ | 148 | $ | 352 | $ | 459 |
Actual | Minimum Capital Required - Basel III Phase-In Schedule | Minimum Capital Required - Basel III Fully Phase-In | Required to be Considered Well Capitalized | ||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | $ | 618,407 | 13.9 | % | $ | 467,160 | 10.5 | % | $ | 467,160 | 10.5 | % | N/A | N/A | |||||||||||||
Bank | 567,667 | 12.8 | 467,085 | 10.5 | 467,085 | 10.5 | $ | 444,843 | 10.0 | % | |||||||||||||||||
Tier I Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | 575,412 | 12.9 | 378,177 | 8.5 | 378,177 | 8.5 | N/A | N/A | |||||||||||||||||||
Bank | 524,672 | 11.8 | 378,117 | 8.5 | 378,117 | 8.5 | 355,875 | 8.0 | |||||||||||||||||||
Common Equity Tier 1 to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | 574,500 | 12.9 | 311,440 | 7.0 | 311,440 | 7.0 | N/A | N/A | |||||||||||||||||||
Bank | 524,672 | 11.8 | 311,390 | 7.0 | 311,390 | 7.0 | 289,148 | 6.5 | |||||||||||||||||||
Tier I Capital to Average Assets | |||||||||||||||||||||||||||
Consolidated | 575,412 | 12.6 | 183,152 | 4.0 | 183,152 | 4.0 | N/A | N/A | |||||||||||||||||||
Bank | $ | 524,672 | 11.5 | % | $ | 183,109 | 4.0 | % | $ | 183,109 | 4.0 | % | $ | 228,886 | 5.0 | % | |||||||||||
December 31, 2018 | |||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | $ | 521,111 | 13.5 | % | $ | 380,873 | 9.9 | % | $ | 404,979 | 10.5 | % | N/A | N/A | |||||||||||||
Bank | 481,287 | 12.5 | 380,369 | 9.9 | 404,443 | 10.5 | $ | 385,184 | 10.0 | % | |||||||||||||||||
Tier I Capital to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | 483,285 | 12.5 | 303,734 | 7.9 | 327,840 | 8.5 | N/A | N/A | |||||||||||||||||||
Bank | 443,461 | 11.5 | 303,332 | 7.9 | 327,406 | 8.5 | 308,147 | 8.0 | |||||||||||||||||||
Common Equity Tier 1 to Risk-Weighted Assets | |||||||||||||||||||||||||||
Consolidated | 453,049 | 11.7 | 245,880 | 6.4 | 269,986 | 7.0 | N/A | N/A | |||||||||||||||||||
Bank | 443,461 | 11.5 | 245,555 | 6.4 | 269,629 | 7.0 | 250,369 | 6.5 | |||||||||||||||||||
Tier I Capital to Average Assets | |||||||||||||||||||||||||||
Consolidated | 483,285 | 12.4 | 155,538 | 4.0 | 155,538 | 4.0 | N/A | N/A | |||||||||||||||||||
Bank | $ | 443,461 | 11.4 | % | $ | 155,420 | 4.0 | % | $ | 155,420 | 4.0 | % | $ | 194,275 | 5.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Non-interest income subject to ASU 2014-09 | |||||||||||||||
Service charges and fees (rebates) on customer accounts | $ | 72 | $ | (100 | ) | $ | 441 | $ | 506 | ||||||
ATM and credit card interchange income | 476 | 301 | 1,312 | 827 | |||||||||||
International fees | 199 | 160 | 506 | 579 | |||||||||||
Other fees | 12 | 10 | 104 | 30 | |||||||||||
Total non-interest income from contracts with customers | 759 | 371 | 2,363 | 1,942 | |||||||||||
Non-interest income not subject to ASU 2014-09 | |||||||||||||||
Other non-interest income | 2,453 | 814 | 4,166 | 2,946 | |||||||||||
Total non-interest income | $ | 3,212 | $ | 1,185 | $ | 6,529 | $ | 4,888 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Stock appreciation rights | $ | 446 | $ | 220 | $ | 977 | $ | 1,905 | |||||||
Performance based restricted units and stock | 159 | 28 | 409 | 524 | |||||||||||
Restricted stock units | 510 | 280 | 1,528 | 1,957 | |||||||||||
Restricted stock awards | 209 | — | 656 | — | |||||||||||
Employee stock purchase plan | — | 38 | 36 | 127 | |||||||||||
Total stock-based compensation | $ | 1,324 | $ | 566 | $ | 3,606 | $ | 4,513 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Computed at the statutory rate (21%) | $ | 2,725 | $ | 1,529 | $ | 7,241 | $ | 1,754 | |||||||
Increase (decrease) resulting from | |||||||||||||||
Tax-exempt income | (722 | ) | (860 | ) | (2,147 | ) | (2,754 | ) | |||||||
Nondeductible expenses | 71 | 87 | 208 | 261 | |||||||||||
State tax credit | — | — | (1,361 | ) | — | ||||||||||
State income taxes | 566 | 124 | 1,526 | 245 | |||||||||||
Equity based compensation | (5 | ) | — | (66 | ) | (400 | ) | ||||||||
Other adjustments | (43 | ) | 44 | (93 | ) | (10 | ) | ||||||||
Actual tax expense (benefit) | $ | 2,592 | $ | 924 | $ | 5,308 | $ | (904 | ) |
September 30, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
Deferred tax assets | |||||||
Net unrealized loss on securities available-for-sale | $ | — | $ | 986 | |||
Allowance for loan losses | 10,637 | 9,358 | |||||
Lease incentive | 306 | 329 | |||||
Impairment of available for sale securities | 498 | 498 | |||||
Valuation allowance on real estate | — | 396 | |||||
Loan fees | 2,202 | 2,135 | |||||
Net operating loss carryover | 370 | 398 | |||||
Accrued expenses | 105 | 1,927 | |||||
Deferred compensation | 2,317 | 1,838 | |||||
Alternative minimum tax credits | — | 2,365 | |||||
State tax credit | 3,517 | 2,506 | |||||
Other | 63 | 79 | |||||
20,015 | 22,815 | ||||||
Deferred tax liability | |||||||
Fair market value adjustments - trust preferred securities | (350 | ) | (356 | ) | |||
Net unrealized gain on securities available-for-sale | (5,812 | ) | — | ||||
FHLB stock basis | (936 | ) | (739 | ) | |||
Premises and equipment | (4,301 | ) | (5,019 | ) | |||
Other | (1,187 | ) | (385 | ) | |||
(12,586 | ) | (6,499 | ) | ||||
Net deferred tax asset | $ | 7,429 | $ | 16,316 |
September 30, 2019 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Available-for-sale securities | |||||||||||||||
Mortgage-backed - GSE residential | $ | 160,714 | $ | — | $ | 160,714 | $ | — | |||||||
Collateralized mortgage obligations - GSE residential | 148,675 | — | 148,675 | — | |||||||||||
State and political subdivisions | 420,009 | — | 420,009 | — | |||||||||||
Corporate bonds | 1,536 | — | 1,536 | — | |||||||||||
Mutual funds | 2,159 | — | 2,159 | — | |||||||||||
Derivative assets | 13,735 | — | 13,735 | — | |||||||||||
Derivative liabilities | $ | 13,782 | $ | — | $ | 13,782 | $ | — |
December 31, 2018 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Available-for-sale securities | |||||||||||||||
Mortgage-backed - GSE residential | $ | 129,287 | $ | — | $ | 129,287 | $ | — | |||||||
Collateralized mortgage obligations - GSE residential | 152,626 | — | 152,626 | — | |||||||||||
State and political subdivisions | 378,058 | — | 378,058 | — | |||||||||||
Corporate bonds | 1,657 | — | 1,657 | — | |||||||||||
Mutual funds | 2,050 | — | 2,050 | — | |||||||||||
Derivative assets | 1,051 | — | 1,051 | — | |||||||||||
Derivative liabilities | $ | 1,136 | $ | — | $ | 1,136 | $ | — |
September 30, 2019 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Collateral-dependent impaired loans | $ | 40,220 | $ | — | $ | — | $ | 40,220 | |||||||
Premises and equipment held-for-sale | — | — | — | — | |||||||||||
Foreclosed assets held for sale | $ | 2,471 | $ | — | $ | — | $ | 2,471 |
December 31, 2018 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Collateral-dependent impaired loans | $ | 50,288 | $ | — | $ | — | $ | 50,288 | |||||||
Premises and equipment held-for-sale | 3,444 | — | 3,444 | — | |||||||||||
Foreclosed assets held for sale | $ | — | $ | — | $ | — | $ | — |
September 30, 2019 | |||||||||
Fair Value | Valuation Techniques | Unobservable Inputs | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Collateral-dependent impaired loans | $ | 40,220 | Market comparable properties | Marketability discount | 10% - 15% (12%) | ||||
Foreclosed assets held for sale | $ | 2,471 | Market comparable properties | Marketability discount | 25% |
December 31, 2018 | |||||||||
Fair Value | Valuation Techniques | Unobservable Inputs | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Collateral-dependent impaired loans | $ | 50,288 | Market comparable properties | Marketability discount | 10% - 15% (12%) | ||||
Foreclosed assets held for sale | $ | — |
September 30, 2019 | |||||||||||||||||||
Carrying | Fair Value Measurements | ||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 128,126 | $ | 128,126 | $ | — | $ | — | $ | 128,126 | |||||||||
Available-for-sale securities | 733,093 | — | 733,093 | — | 733,093 | ||||||||||||||
Loans, net of allowance for loan losses | 3,586,797 | — | — | 3,607,276 | 3,607,276 | ||||||||||||||
Restricted equity securities | 16,053 | — | — | 16,053 | 16,053 | ||||||||||||||
Interest receivable | 15,909 | — | 15,909 | — | 15,909 | ||||||||||||||
Derivative assets | 13,735 | — | 13,735 | — | 13,735 | ||||||||||||||
$ | 4,493,713 | $ | 128,126 | $ | 762,737 | $ | 3,623,329 | $ | 4,514,192 | ||||||||||
Financial Liabilities | |||||||||||||||||||
Deposits | $ | 3,658,108 | $ | 513,832 | $ | — | $ | 3,162,740 | $ | 3,676,572 | |||||||||
Federal funds purchased and repurchase agreements | 49,810 | — | 49,809 | — | 49,809 | ||||||||||||||
Federal Home Loan Bank advances | 307,804 | — | 311,583 | — | 311,583 | ||||||||||||||
Other borrowings | 912 | — | 2,054 | — | 2,054 | ||||||||||||||
Interest payable | 4,643 | — | 4,643 | — | 4,643 | ||||||||||||||
Derivative liabilities | 13,782 | — | 13,782 | — | 13,782 | ||||||||||||||
$ | 4,035,059 | $ | 513,832 | $ | 381,871 | $ | 3,162,740 | $ | 4,058,443 |
December 31, 2018 | |||||||||||||||||||
Carrying | Fair Value Measurements | ||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 216,541 | $ | 216,541 | $ | — | $ | — | $ | 216,541 | |||||||||
Available-for-sale securities | 661,628 | — | 661,628 | — | 661,628 | ||||||||||||||
Loans, net of allowance for loan losses | 3,022,921 | — | — | 3,027,930 | 3,027,930 | ||||||||||||||
Restricted equity securities | 14,525 | — | — | 14,525 | 14,525 | ||||||||||||||
Interest receivable | 14,092 | — | 14,092 | — | 14,092 | ||||||||||||||
Derivative assets | 1,051 | — | 1,051 | — | 1,051 | ||||||||||||||
$ | 3,930,758 | $ | 216,541 | $ | 676,771 | $ | 3,042,455 | $ | 3,935,767 | ||||||||||
Financial Liabilities | |||||||||||||||||||
Deposits | $ | 3,208,097 | $ | 484,284 | $ | — | $ | 2,696,212 | $ | 3,180,496 | |||||||||
Federal funds purchased and repurchase agreements | 75,406 | — | 75,404 | — | 75,404 | ||||||||||||||
Federal Home Loan Bank advances | 312,985 | — | 298,017 | — | 298,017 | ||||||||||||||
Other borrowings | 884 | — | 2,022 | — | 2,022 | ||||||||||||||
Interest payable | 2,868 | — | 2,868 | — | 2,868 | ||||||||||||||
Derivative liabilities | 1,136 | — | 1,136 | — | 1,136 | ||||||||||||||
$ | 3,601,376 | $ | 484,284 | $ | 379,447 | $ | 2,696,212 | $ | 3,559,943 |
September 30, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
Commitments to originate loans | $ | 176,598 | $ | 190,997 | |||
Standby letters of credit | 35,699 | 32,439 | |||||
Lines of credit | 1,255,764 | 1,174,166 | |||||
Future lease commitment | 19,054 | 19,054 | |||||
Total | $ | 1,487,115 | $ | 1,416,656 |
Third | Second | First | Fourth | Third | Nine Months Ended | ||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | September 30, | ||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Per Common Share Data | |||||||||||||||||||||||||||
Basic earnings per share | $ | 0.22 | $ | 0.21 | $ | 0.20 | $ | 0.22 | $ | 0.15 | $ | 0.63 | $ | 0.23 | |||||||||||||
Diluted earnings per share | 0.21 | 0.20 | 0.20 | 0.22 | 0.15 | 0.61 | 0.22 | ||||||||||||||||||||
Book value per share | 11.59 | 11.00 | 10.63 | 10.21 | 9.43 | 11.59 | 9.43 | ||||||||||||||||||||
Tangible book value per share(1) | $ | 11.44 | $ | 10.83 | $ | 10.46 | $ | 10.04 | $ | 9.24 | $ | 11.44 | $ | 9.24 | |||||||||||||
Selected Operating Ratios | |||||||||||||||||||||||||||
Yield on securities - tax equivalent(2) | 3.19 | % | 3.42 | % | 3.59 | % | 3.61 | % | 3.58 | % | 3.40 | % | 3.62 | % | |||||||||||||
Yield on loans | 5.53 | 5.66 | 5.75 | 5.56 | 5.35 | 5.64 | 5.25 | ||||||||||||||||||||
Yield on interest-earning assets(2) | 5.00 | 5.18 | 5.25 | 5.08 | 4.81 | 5.14 | 4.65 | ||||||||||||||||||||
Cost of interest-bearing deposits | 2.26 | 2.33 | 2.30 | 2.04 | 1.72 | 2.30 | 1.59 | ||||||||||||||||||||
Cost of total deposits | 1.94 | 1.99 | 1.96 | 1.70 | 1.42 | 1.96 | 1.35 | ||||||||||||||||||||
Cost of funds | 1.94 | 1.99 | 1.96 | 1.72 | 1.46 | 1.96 | 1.40 | ||||||||||||||||||||
Net interest margin(2) | 3.24 | 3.35 | 3.46 | 3.51 | 3.44 | 3.35 | 3.34 | ||||||||||||||||||||
Return on average assets | 0.89 | 0.86 | 0.91 | 1.06 | 0.70 | 0.89 | 0.37 | ||||||||||||||||||||
Non-GAAP core operating return on average assets(3) | 0.89 | 0.89 | 0.78 | 0.67 | 0.72 | 0.86 | 0.53 | ||||||||||||||||||||
Return on average equity | 7.58 | 7.78 | 7.98 | 9.03 | 6.68 | 7.76 | 3.51 | ||||||||||||||||||||
Non-GAAP core operating return on average equity(4) | 7.58 | 8.04 | 6.79 | 5.59 | 6.83 | 7.48 | 5.38 | ||||||||||||||||||||
Non-interest expense to average assets | 1.82 | 2.00 | 2.20 | 2.06 | 2.20 | 2.00 | 2.61 | ||||||||||||||||||||
Efficiency ratio(5) | 54.29 | 60.09 | 64.20 | 60.18 | 65.91 | 59.36 | 79.08 | ||||||||||||||||||||
Non-GAAP core operating efficiency ratio(6) | 54.29 | 59.40 | 64.20 | 62.61 | 65.54 | 59.13 | 72.24 | ||||||||||||||||||||
Non-GAAP tax equivalent efficiency ratio(7) | 53.43 | 59.10 | 63.10 | 59.02 | 64.31 | 58.38 | 76.82 | ||||||||||||||||||||
Non-interest-bearing deposits to total deposits | 14.05 | 14.28 | 14.36 | 15.10 | 17.99 | 14.05 | 17.99 | ||||||||||||||||||||
Loans to deposits | 99.23 | % | 96.74 | % | 96.40 | % | 95.41 | % | 97.49 | % | 99.23 | % | 97.49 | % | |||||||||||||
Credit Quality Ratios | |||||||||||||||||||||||||||
Allowance for loan losses to total loans | 1.18 | % | 1.24 | % | 1.22 | % | 1.23 | % | 1.22 | % | 1.18 | % | 1.22 | % | |||||||||||||
Nonperforming assets to total assets | 1.00 | 1.18 | 0.36 | 0.43 | 0.35 | 1.00 | 0.35 | ||||||||||||||||||||
Nonperforming loans to total loans | 1.22 | 1.45 | 0.40 | 0.58 | 0.48 | 1.22 | 0.48 | ||||||||||||||||||||
Allowance for loan losses to nonperforming loans | 97.12 | 85.20 | 307.27 | 212.30 | 256.65 | 97.12 | 256.65 | ||||||||||||||||||||
Net charge-offs (recoveries) to average loans(8) | 0.53 | % | — | % | 0.09 | % | 0.03 | % | (0.05 | )% | 0.21 | % | 0.09 | % |
Third | Second | First | Fourth | Third | Nine Months Ended | ||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | September 30, | ||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Capital Ratios | |||||||||||||||||||||||||||
Total stockholders’ equity to total assets | 12.95 | % | 11.16 | % | 11.26 | % | 11.94 | % | 11.03 | % | 12.95 | % | 11.03 | % | |||||||||||||
Tier 1 leverage ratio | 12.57 | 10.87 | 11.15 | 12.43 | 11.39 | 12.57 | 11.39 | ||||||||||||||||||||
Common equity tier 1 capital ratio | 12.91 | 11.02 | 11.23 | 11.75 | 10.55 | 12.91 | 10.55 | ||||||||||||||||||||
Tier 1 risk-based capital ratio | 12.93 | 11.04 | 11.23 | 12.53 | 11.38 | 12.93 | 11.38 | ||||||||||||||||||||
Total risk-based capital ratio | 13.90 | % | 12.04 | % | 12.20 | % | 13.51 | % | 12.32 | % | 13.90 | % | 12.32 | % | |||||||||||||
(1) Tangible common stockholders’ equity and tangible book value per share are non-GAAP financial measures. The most directly comparable GAAP measure is stockholders’ equity and book value per share. See ’’GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. | |||||||||||||||||||||||||||
(2) Tax exempt income (tax-free municipal securities) is calculated on a tax equivalent basis. The incremental tax rate used is 21.0%. | |||||||||||||||||||||||||||
(3) Non-GAAP core operating income and non-GAAP core operating return on average assets are non-GAAP financial measures. The most directly comparable measure under GAAP is net income and return on average assets, respectively. See ‘‘GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. | |||||||||||||||||||||||||||
(4) Non-GAAP core operating return on average equity is a non-GAAP financial measure. The most directly comparable GAAP financial measure is return on average equity. See ‘‘GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. | |||||||||||||||||||||||||||
(5) We calculate efficiency ratio as non-interest expense divided by the sum of net interest income and non-interest income. | |||||||||||||||||||||||||||
(6) Non-GAAP core operating efficiency ratio is a non-GAAP financial measure. The most directly comparable GAAP financial measure is the efficiency ratio. See ‘‘GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. | |||||||||||||||||||||||||||
(7) Non-GAAP tax equivalent efficiency ratio is a non-GAAP financial measure. The most directly comparable measure is the efficiency ratio. See ‘‘GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. | |||||||||||||||||||||||||||
(8) Interim periods are annualized |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September | June | March | December | September | |||||||||||||||||||||||
30, | 30, | 31, | 31, | 30, | September 30, | ||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating income: | |||||||||||||||||||||||||||
Net Income | $ | 10,384 | $ | 9,439 | $ | 9,350 | $ | 10,334 | $ | 6,354 | $ | 29,173 | $ | 9,256 | |||||||||||||
Add: restructuring charges | — | — | — | (815 | ) | — | — | 5,548 | |||||||||||||||||||
Less: tax effect(1) | — | — | — | (210 | ) | — | — | 1,591 | |||||||||||||||||||
Restructuring charges, net of tax | — | — | — | (605 | ) | — | — | 3,957 | |||||||||||||||||||
Add: fixed asset impairments | — | 424 | — | — | 171 | 424 | 171 | ||||||||||||||||||||
Less: tax effect(2) | — | 109 | — | — | 44 | 109 | 44 | ||||||||||||||||||||
Fixed asset impairments, net of tax | — | 315 | — | — | 127 | 315 | 127 | ||||||||||||||||||||
Add: state tax credit(3) | — | — | (1,361 | ) | (3,129 | ) | — | (1,361 | ) | — | |||||||||||||||||
Non-GAAP core operating income | $ | 10,384 | $ | 9,754 | $ | 7,989 | $ | 6,600 | $ | 6,481 | $ | 28,127 | $ | 13,340 | |||||||||||||
(1) Represents the tax impact of the adjustments above at a tax rate of 25.73%, plus a permanent tax benefit associated with stock-based grants that were exercised prior to our former CEO’s departure. | |||||||||||||||||||||||||||
(2) Represents the tax impact of the adjustments above at a tax rate of 25.73%. | |||||||||||||||||||||||||||
(3) No tax effect. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September | June | March | December | September | |||||||||||||||||||||||
30, | 30, | 31, | 31, | 30, | September 30, | ||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP core operating return on average assets: | |||||||||||||||||||||||||||
Non-GAAP core operating income | $ | 10,384 | $ | 9,754 | $ | 7,989 | $ | 6,600 | $ | 6,481 | $ | 28,127 | $ | 13,340 | |||||||||||||
Average assets | 4,610,958 | 4,402,002 | 4,168,243 | 3,884,642 | 3,588,876 | 4,395,356 | 3,363,230 | ||||||||||||||||||||
Return on average assets | 0.89 | % | 0.86 | % | 0.91 | % | 1.06 | % | 0.70 | % | 0.89 | % | 0.37 | % | |||||||||||||
Non-GAAP core operating return on average assets | 0.89 | % | 0.89 | % | 0.78 | % | 0.67 | % | 0.72 | % | 0.86 | % | 0.53 | % | |||||||||||||
Non-GAAP core operating return on average equity: | |||||||||||||||||||||||||||
Non-GAAP core operating income | $ | 10,384 | $ | 9,754 | $ | 7,989 | $ | 6,600 | $ | 6,481 | $ | 28,127 | $ | 13,340 | |||||||||||||
Less: preferred dividends | — | — | 175 | 525 | 525 | 175 | 1,575 | ||||||||||||||||||||
Non-GAAP core operating income available to common stockholders | 10,384 | 9,754 | 7,814 | 6,075 | 5,956 | 27,952 | 11,765 | ||||||||||||||||||||
Average common equity | $ | 543,827 | $ | 486,880 | $ | 466,506 | $ | 430,881 | $ | 346,025 | $ | 499,354 | $ | 292,589 | |||||||||||||
Return on average equity | 7.58 | % | 7.78 | % | 7.98 | % | 9.03 | % | 6.68 | % | 7.76 | % | 3.51 | % | |||||||||||||
Non-GAAP core operating return on average equity | 7.58 | % | 8.04 | % | 6.79 | % | 5.59 | % | 6.83 | % | 7.48 | % | 5.38 | % |
Non-GAAP core operating efficiency ratio | |||||||||||||||||||||||||||
Non-interest expense | $ | 21,172 | $ | 21,960 | $ | 22,631 | $ | 20,166 | $ | 19,875 | $ | 65,763 | $ | 65,589 | |||||||||||||
Less: restructuring charges | — | — | — | (815 | ) | — | — | 5,548 | |||||||||||||||||||
Non-GAAP non-interest expense (numerator) | 21,172 | 21,960 | 22,631 | 20,981 | 19,875 | 65,763 | 60,041 | ||||||||||||||||||||
Net interest income | 35,786 | 34,874 | 33,605 | 32,315 | 28,968 | 104,265 | 78,053 | ||||||||||||||||||||
Non-interest income | 3,212 | 1,672 | 1,645 | 1,195 | 1,185 | 6,529 | 4,888 | ||||||||||||||||||||
Add: fixed asset impairments | — | 424 | — | — | 171 | 424 | 171 | ||||||||||||||||||||
Non-GAAP operating revenue (denominator) | $ | 38,998 | $ | 36,970 | $ | 35,250 | $ | 33,510 | $ | 30,324 | $ | 111,218 | $ | 83,112 | |||||||||||||
Efficiency ratio | 54.29 | % | 60.09 | % | 64.20 | % | 60.18 | % | 65.91 | % | 59.36 | % | 79.08 | % | |||||||||||||
Non-GAAP core operating efficiency ratio | 54.29 | % | 59.40 | % | 64.20 | % | 62.61 | % | 65.54 | % | 59.13 | % | 72.24 | % |
Period Ended | |||||||||||||||||||
September | June | March | December | September | |||||||||||||||
30, | 30, | 31, | 31, | 30, | |||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | |||||||||||||||
(Dollars in thousands except per share data) | |||||||||||||||||||
Tangible common stockholders’ equity: | |||||||||||||||||||
Stockholders’ equity | $ | 602,435 | $ | 499,195 | $ | 480,514 | $ | 490,336 | $ | 409,780 | |||||||||
Less: goodwill and other intangible assets | 7,720 | 7,745 | 7,770 | 7,796 | 7,821 | ||||||||||||||
Less: preferred stock | — | — | — | 30,000 | 30,000 | ||||||||||||||
Tangible common stockholders’ equity | $ | 594,715 | $ | 491,450 | $ | 472,744 | $ | 452,540 | $ | 371,959 | |||||||||
Tangible book value per share: | |||||||||||||||||||
Tangible common stockholders’ equity | $ | 594,715 | $ | 491,450 | $ | 472,744 | $ | 452,540 | $ | 371,959 | |||||||||
Shares outstanding at end of period | 51,969,203 | 45,367,641 | 45,202,370 | 45,074,322 | 40,261,480 | ||||||||||||||
Book value per share | $ | 11.59 | $ | 11.00 | $ | 10.63 | $ | 10.21 | $ | 9.43 | |||||||||
Tangible book value per share | $ | 11.44 | $ | 10.83 | $ | 10.46 | $ | 10.04 | $ | 9.24 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September | June | March | December | September | |||||||||||||||||||||||
30, | 30, | 31, | 31, | 30, | September 30, | ||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Non-GAAP Tax Equivalent Efficiency Ratio: | |||||||||||||||||||||||||||
Non-interest expense (Numerator) | $ | 21,172 | $ | 21,960 | $ | 22,631 | $ | 20,166 | $ | 19,875 | $ | 65,763 | $ | 65,589 | |||||||||||||
Net interest income | 35,786 | 34,874 | 33,605 | 32,315 | 28,968 | 104,265 | 78,053 | ||||||||||||||||||||
Tax equivalent interest income | 624 | 612 | 616 | 658 | 753 | 1,852 | 2,440 | ||||||||||||||||||||
Net interest income - tax equivalent | 36,410 | 35,486 | 34,221 | 32,973 | 29,721 | 106,117 | 80,493 | ||||||||||||||||||||
Non-interest income | 3,212 | 1,672 | 1,645 | 1,195 | 1,185 | 6,529 | 4,888 | ||||||||||||||||||||
Total tax-equivalent income (Denominator) | $ | 39,622 | $ | 37,158 | $ | 35,866 | $ | 34,168 | $ | 30,906 | $ | 112,646 | $ | 85,381 | |||||||||||||
Efficiency Ratio | 54.29 | % | 60.09 | % | 64.20 | % | 60.18 | % | 65.91 | % | 59.36 | % | 79.08 | % | |||||||||||||
Non-GAAP Tax Equivalent Efficiency Ratio | 53.43 | % | 59.10 | % | 63.10 | % | 59.02 | % | 64.31 | % | 58.38 | % | 76.82 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Net interest income | $ | 35,786 | $ | 28,968 | 23.5 | % | $ | 104,265 | $ | 78,053 | 33.6 | % | |||||||||
Provision for loan losses | 4,850 | 3,000 | 61.7 | 10,550 | 9,000 | 17.2 | |||||||||||||||
Non-interest income | 3,212 | 1,185 | 171.1 | 6,529 | 4,888 | 33.6 | |||||||||||||||
Non-interest expense | 21,172 | 19,875 | 6.5 | 65,763 | 65,589 | 0.3 | |||||||||||||||
Income taxes | 2,592 | 924 | 180.5 | 5,308 | (904 | ) | (687.2 | ) | |||||||||||||
Net income | $ | 10,384 | $ | 6,354 | 63.4 | % | $ | 29,173 | $ | 9,256 | 215.2 | % | |||||||||
Preferred dividends | — | 525 | (100.0 | ) | 175 | 1,575 | (88.9 | ) | |||||||||||||
Net income available to common shareholders | $ | 10,384 | $ | 5,829 | 78.1 | % | $ | 28,998 | $ | 7,681 | 277.5 | % | |||||||||
Non-GAAP core operating income(1) | $ | 10,384 | $ | 6,481 | 60.2 | % | $ | 28,127 | $ | 13,340 | 110.8 | % | |||||||||
(1) Non-GAAP core operating income is a non-GAAP financial measure. The most directly comparable measure under GAAP is net income. See ‘‘GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures’’ for a reconciliation of this measure. |
Three Months Ended | |||||||||||||||||||||
September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(4) | Average Balance | Interest Income / Expense | Average Yield / Rate(4) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 335,045 | $ | 2,263 | 2.68 | % | $ | 304,937 | $ | 2,454 | 3.19 | % | |||||||||
Securities - tax-exempt(1) | 392,644 | 3,592 | 3.63 | 447,333 | 4,338 | 3.85 | |||||||||||||||
Federal funds sold | 16,315 | 89 | 2.16 | 20,674 | 110 | 2.10 | |||||||||||||||
Interest-bearing deposits in other banks | 171,913 | 881 | 2.03 | 132,585 | 613 | 1.84 | |||||||||||||||
Gross loans, net of unearned income(2)(3) | 3,540,707 | 49,327 | 5.53 | 2,523,107 | 34,012 | 5.35 | |||||||||||||||
Total interest-earning assets(1) | 4,456,624 | $ | 56,152 | 5.00 | % | 3,428,636 | $ | 41,527 | 4.81 | % | |||||||||||
Allowance for loan losses | (43,327 | ) | (31,716 | ) | |||||||||||||||||
Other non-interest-earning assets | 197,661 | 191,956 | |||||||||||||||||||
Total assets | $ | 4,610,958 | $ | 3,588,876 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 134,987 | $ | 386 | 1.13 | % | $ | 56,072 | $ | 33 | 0.24 | % | |||||||||
Savings and money market deposits | 1,743,575 | 9,553 | 2.17 | 1,450,397 | 6,139 | 1.68 | |||||||||||||||
Time deposits | 1,276,571 | 8,064 | 2.51 | 801,416 | 3,827 | 1.89 | |||||||||||||||
Total interest-bearing deposits | 3,155,133 | 18,003 | 2.26 | 2,307,885 | 9,999 | 1.72 | |||||||||||||||
FHLB and short-term borrowings | 345,794 | 1,703 | 1.95 | 397,252 | 1,772 | 1.77 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 904 | 37 | 16.06 | 868 | 36 | 16.21 | |||||||||||||||
Non-interest-bearing deposits | 535,467 | — | — | 491,942 | — | — | |||||||||||||||
Cost of funds | 4,037,298 | $ | 19,743 | 1.94 | % | 3,197,947 | $ | 11,807 | 1.46 | % | |||||||||||
Other liabilities | 29,833 | 14,904 | |||||||||||||||||||
Stockholders’ equity | 543,827 | 376,025 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,610,958 | $ | 3,588,876 | |||||||||||||||||
Net interest income(1) | $ | 36,409 | $ | 29,720 | |||||||||||||||||
Net interest spread(1) | 3.06 | % | 3.35 | % | |||||||||||||||||
Net interest margin(1) | 3.24 | % | 3.44 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Loans, net of unearned income includes non-accrual loans of $43.6 million and $12.5 million as of September 30, 2019 and 2018, respectively. | |||||||||||||||||||||
(3) Loan interest income includes loan fees of $2.4 million and $1.8 million for the three months ended September 30, 2019 and 2018, respectively. | |||||||||||||||||||||
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. |
Nine Months Ended | |||||||||||||||||||||
September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Average Yield / Rate(4) | Average Balance | Interest Income / Expense | Average Yield / Rate(4) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Securities - taxable | $ | 334,272 | $ | 7,447 | 2.98 | % | $ | 273,525 | $ | 6,447 | 3.15 | % | |||||||||
Securities - tax-exempt(1) | 378,651 | 10,672 | 3.77 | 484,090 | 14,062 | 3.88 | |||||||||||||||
Federal funds sold | 18,714 | 345 | 2.46 | 18,782 | 281 | 2.00 | |||||||||||||||
Interest-bearing deposits in other banks | 135,030 | 2,107 | 2.09 | 174,740 | 2,200 | 1.68 | |||||||||||||||
Gross loans, net of unearned income(2)(3) | 3,373,118 | 142,319 | 5.64 | 2,275,039 | 89,262 | 5.25 | |||||||||||||||
Total interest-earning assets(1) | 4,239,785 | $ | 162,890 | 5.14 | % | 3,226,176 | $ | 112,252 | 4.65 | % | |||||||||||
Allowance for loan losses | (41,329 | ) | (29,607 | ) | |||||||||||||||||
Other non-interest-earning assets | 196,900 | 166,661 | |||||||||||||||||||
Total assets | $ | 4,395,356 | $ | 3,363,230 | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Transaction deposits | $ | 127,785 | $ | 1,139 | 1.19 | % | $ | 53,995 | $ | 101 | 0.25 | % | |||||||||
Savings and money market deposits | 1,616,558 | 27,326 | 2.26 | 1,381,291 | 15,658 | 1.52 | |||||||||||||||
Time deposits | 1,249,219 | 22,956 | 2.46 | 809,550 | 10,880 | 1.80 | |||||||||||||||
Total interest-bearing deposits | 2,993,562 | 51,421 | 2.30 | 2,244,836 | 26,639 | 1.59 | |||||||||||||||
FHLB and short-term borrowings | 366,708 | 5,240 | 1.91 | 381,166 | 5,020 | 1.76 | |||||||||||||||
Trust preferred securities, net of fair value adjustments | 895 | 112 | 16.74 | 860 | 100 | 15.47 | |||||||||||||||
Non-interest-bearing deposits | 508,888 | — | — | 402,850 | — | — | |||||||||||||||
Cost of funds | 3,870,053 | $ | 56,773 | 1.96 | % | 3,029,712 | $ | 31,759 | 1.40 | % | |||||||||||
Other liabilities | 22,762 | 10,929 | |||||||||||||||||||
Stockholders’ equity | 502,541 | 322,589 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,395,356 | $ | 3,363,230 | |||||||||||||||||
Net interest income(1) | $ | 106,117 | $ | 80,493 | |||||||||||||||||
Net interest spread(1) | 3.18 | % | 3.25 | % | |||||||||||||||||
Net interest margin(1) | 3.35 | % | 3.34 | % | |||||||||||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||
(2) Loans, net of unearned income includes non-accrual loans of $43.6 million and $12.5 million as of September 30, 2019 and 2018, respectively. | |||||||||||||||||||||
(3) Loan interest income includes loan fees of $6.6 million and $5.1 million for the nine months ended September 30, 2019 and 2018, respectively. | |||||||||||||||||||||
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2019 over 2018 | September 30, 2019 over 2018 | ||||||||||||||||||||||
Average Volume | Yield/Rate | Net Change(2) | Average Volume | Yield/Rate | Net Change(2) | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Securities - taxable | $ | 227 | $ | (418 | ) | $ | (191 | ) | $ | 1,364 | $ | (364 | ) | $ | 1,000 | ||||||||
Securities - tax-exempt(1) | (509 | ) | (237 | ) | (746 | ) | (3,000 | ) | (390 | ) | (3,390 | ) | |||||||||||
Federal funds sold | (24 | ) | 3 | (21 | ) | (1 | ) | 65 | 64 | ||||||||||||||
Interest-bearing deposits in other banks | 199 | 69 | 268 | (562 | ) | 469 | (93 | ) | |||||||||||||||
Gross loans, net of unearned income | 14,136 | 1,179 | 15,315 | 45,980 | 7,077 | 53,057 | |||||||||||||||||
Total interest income(1) | 14,029 | 596 | 14,625 | 43,781 | 6,857 | 50,638 | |||||||||||||||||
Interest Expense | |||||||||||||||||||||||
Transaction deposits | 97 | 256 | 353 | 277 | 761 | 1,038 | |||||||||||||||||
Savings and money market deposits | 1,397 | 2,017 | 3,414 | 3,024 | 8,644 | 11,668 | |||||||||||||||||
Time deposits | 2,728 | 1,509 | 4,237 | 7,209 | 4,867 | 12,076 | |||||||||||||||||
Total interest-bearing deposits | 4,222 | 3,782 | 8,004 | 10,510 | 14,272 | 24,782 | |||||||||||||||||
FHLB and short-term borrowings | (241 | ) | 172 | (69 | ) | (195 | ) | 415 | 220 | ||||||||||||||
Trust preferred securities, net of fair value adjustments | 1 | — | 1 | 4 | 8 | 12 | |||||||||||||||||
Total interest expense | 3,982 | 3,954 | 7,936 | 10,319 | 14,695 | 25,014 | |||||||||||||||||
Net interest income(1) | $ | 10,047 | $ | (3,358 | ) | $ | 6,689 | $ | 33,462 | $ | (7,838 | ) | $ | 25,624 | |||||||||
(1) Tax exempt income is calculated on a tax equivalent basis. Tax-free municipal securities are exempt from Federal taxes. The incremental tax rate used is 21.0%. | |||||||||||||||||||||||
(2) The change in interest not due solely to volume or rate has been allocated in proportion to the respective absolute dollar amounts of the change in volume or rate. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
2019 | 2018 | $ Change | % Change | 2019 | 2018 | $ Change | % Change | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Provision for loan losses | $ | 4,850 | $ | 3,000 | $ | 1,850 | 61.7 | % | $ | 10,550 | $ | 9,000 | $ | 1,550 | 17.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Service charges and fees (rebates) on customer accounts | $ | 72 | $ | (100 | ) | $ | 172 | NA | $ | 441 | $ | 506 | $ | (65 | ) | (12.8 | )% | ||||||||||||
Gain on sale of available for sale securities | 34 | 195 | (161 | ) | (82.6 | )% | 467 | 608 | (141 | ) | (23.2 | ) | |||||||||||||||||
Impairment of premises and equipment held for sale | — | (171 | ) | 171 | (100.0 | ) | (424 | ) | (171 | ) | (253 | ) | NA | ||||||||||||||||
Gain on sale of loans | 49 | 25 | 24 | 96.0 | 207 | 618 | (411 | ) | (66.5 | ) | |||||||||||||||||||
Income from bank-owned life insurance | 476 | 513 | (37 | ) | (7.2 | ) | 1,416 | 1,511 | (95 | ) | (6.3 | ) | |||||||||||||||||
Swap fee income, net | 1,879 | 253 | 1,626 | 642.7 | 2,415 | 299 | 2,116 | 707.7 | |||||||||||||||||||||
ATM and credit card interchange income | 476 | 301 | 175 | 58.1 | 1,312 | 827 | 485 | 58.6 | |||||||||||||||||||||
Other non-interest income | 226 | 169 | 57 | 33.7 | 695 | 690 | 5 | 0.7 | |||||||||||||||||||||
Total non-interest income | $ | 3,212 | $ | 1,185 | $ | 2,027 | 171.1 | % | $ | 6,529 | $ | 4,888 | $ | 1,641 | 33.6 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Salary and employee benefits | $ | 14,256 | $ | 12,652 | $ | 1,604 | 12.7 | % | $ | 43,296 | $ | 43,689 | (393 | ) | (0.9 | )% | |||||||||||||
Occupancy | 2,080 | 2,132 | (52 | ) | (2.4 | ) | 6,301 | 6,199 | 102 | 1.6 | |||||||||||||||||||
Professional fees | 427 | 766 | (339 | ) | (44.3 | ) | 1,923 | 2,421 | (498 | ) | (20.6 | ) | |||||||||||||||||
Deposit insurance premiums | 302 | 823 | (521 | ) | (63.3 | ) | 2,020 | 2,411 | (391 | ) | (16.2 | ) | |||||||||||||||||
Data processing | 649 | 528 | 121 | 22.9 | 1,868 | 1,470 | 398 | 27.1 | |||||||||||||||||||||
Advertising | 580 | 527 | 53 | 10.1 | 1,770 | 1,982 | (212 | ) | (10.7 | ) | |||||||||||||||||||
Software and communication | 900 | 630 | 270 | 42.9 | 2,407 | 1,958 | 449 | 22.9 | |||||||||||||||||||||
Depreciation and amortization | 413 | 516 | (103 | ) | (20.0 | ) | 1,320 | 1,306 | 14 | 1.1 | |||||||||||||||||||
Other non-interest expense | 1,565 | 1,301 | 264 | 20.3 | 4,858 | 4,153 | 705 | 17.0 | |||||||||||||||||||||
Total non-interest expense | $ | 21,172 | $ | 19,875 | $ | 1,297 | 6.5 | % | $ | 65,763 | $ | 65,589 | $ | 174 | 0.3 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||
2019 | 2018 | $ Change | % Change | 2019 | 2018 | $ Change | % Change | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Income tax expense (benefit) | $ | 2,592 | $ | 924 | $ | 1,668 | 180.5 | % | $ | 5,308 | $ | (904 | ) | $ | 6,212 | NA | ||||||||||||
Effective tax rate | 20.0 | % | 12.7 | % | 15.4 | % | (10.8 | )% |
As of | Change | |||||||||||||
September 30, 2019 | December 31, 2018 | $ | % | |||||||||||
(Dollars in thousands) | ||||||||||||||
Total assets | $ | 4,651,313 | $ | 4,107,215 | $ | 544,098 | 13.2 | % | ||||||
Cash and cash equivalents | 128,126 | 216,541 | (88,415 | ) | (40.8 | ) | ||||||||
Available-for-sale securities | 733,093 | 663,678 | 69,415 | 10.5 | ||||||||||
Gross loans, net of unearned income | 3,629,792 | 3,060,747 | 569,045 | 18.6 | ||||||||||
Total deposits | 3,658,108 | 3,208,097 | 450,011 | 14.0 | ||||||||||
Federal funds purchased and repurchase agreements | 49,810 | 75,406 | (25,596 | ) | (33.9 | ) | ||||||||
Federal Home Loan Bank advances | 307,804 | 312,985 | (5,181 | ) | (1.7 | ) | ||||||||
Total stockholders’ equity | $ | 602,435 | $ | 490,336 | $ | 112,099 | 22.9 | % |
September 30, 2019 | December 31, 2018 | September 30, 2019 vs. December 31, 2018 | ||||||||||||||||||
Amount | % of Gross Loans | Amount | % of Gross Loans | $ increase (decrease) | % increase (decrease) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 1,312,647 | 36.1 | % | 1,134,414 | 36.9 | % | $ | 178,233 | 15.7 | % | |||||||||
Energy | 396,132 | 10.9 | 358,283 | 11.7 | 37,849 | 10.6 | ||||||||||||||
Commercial real estate | 993,153 | 27.3 | 846,561 | 27.6 | 146,592 | 17.3 | ||||||||||||||
Construction and land development | 527,582 | 14.5 | 440,032 | 14.3 | 87,550 | 19.9 | ||||||||||||||
Residential real estate | 365,435 | 10.0 | 246,275 | 8.0 | 119,160 | 48.4 | ||||||||||||||
Equity lines of credit | 22,192 | 0.6 | 20,286 | 0.7 | 1,906 | 9.4 | ||||||||||||||
Consumer installment | 21,552 | 0.6 | 23,528 | 0.8 | (1,976 | ) | (8.4 | ) | ||||||||||||
Gross loans | 3,638,693 | 100.0 | % | 3,069,379 | 100.0 | % | 569,314 | 18.5 | ||||||||||||
Less: Allowance for loan losses | 42,995 | 37,826 | 5,169 | 13.7 | ||||||||||||||||
Less: Net deferred loan fees and costs | 8,901 | 8,632 | 269 | 3.1 | ||||||||||||||||
Net loans | $ | 3,586,797 | $ | 3,022,921 | $ | 563,876 | 18.7 | % |
September 30, 2019 | December 31, 2018 | |||||||||||
Amount | Percent of Allowance to Total Allowance | Amount | Percent of Allowance to Total Allowance | |||||||||
(Dollars in thousands) | ||||||||||||
Commercial | $ | 24,811 | 57.7 | % | 16,584 | 43.9 | % | |||||
Energy | 5,377 | 12.5 | % | 10,262 | 27.1 | % | ||||||
Commercial real estate | 7,284 | 16.9 | % | 6,755 | 17.9 | % | ||||||
Construction and land development | 3,016 | 7.0 | % | 2,475 | 6.5 | % | ||||||
Residential real estate | 2,220 | 5.2 | % | 1,464 | 3.9 | % | ||||||
Equity lines of credit | 160 | 0.4 | % | 159 | 0.4 | % | ||||||
Consumer installment | $ | 127 | 0.3 | % | 127 | 0.3 | % | |||||
Gross loans | $ | 42,995 | 100.0 | % | 37,826 | 100.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, 2019 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Allowance for loan losses: | |||||||||||||||
Balance at beginning of period | $ | 42,852 | $ | 30,197 | $ | 37,826 | $ | 26,091 | |||||||
Provision for loan losses | 4,850 | 3,000 | 10,550 | 9,000 | |||||||||||
Charge-offs: | |||||||||||||||
Commercial | (1,700 | ) | (97 | ) | (2,954 | ) | (681 | ) | |||||||
Energy | (3,000 | ) | — | (3,000 | ) | (1,256 | ) | ||||||||
Commercial real estate | — | — | — | — | |||||||||||
Construction and land development | — | — | — | — | |||||||||||
Residential real estate | — | — | — | — | |||||||||||
Equity lines of credit | — | — | — | (25 | ) | ||||||||||
Consumer installment | (8 | ) | — | (19 | ) | (45 | ) | ||||||||
Total charge-offs | (4,708 | ) | (97 | ) | (5,973 | ) | (2,007 | ) | |||||||
Recoveries: | |||||||||||||||
Commercial | 1 | 439 | 15 | 455 | |||||||||||
Energy | — | — | 576 | — | |||||||||||
Commercial real estate | — | — | — | — | |||||||||||
Construction and land development | — | — | — | — | |||||||||||
Residential real estate | — | — | — | — | |||||||||||
Equity lines of credit | — | — | — | — | |||||||||||
Consumer installment | — | 1 | 1 | 1 | |||||||||||
Total recoveries | 1 | 440 | 592 | 456 | |||||||||||
Net (charge-offs) recoveries | (4,707 | ) | 343 | (5,381 | ) | (1,551 | ) | ||||||||
Balance at end of period | $ | 42,995 | $ | 33,540 | $ | 42,995 | $ | 33,540 | |||||||
Allowance for loan losses to total loans | 1.18 | % | 1.22 | % | 1.18 | % | 1.22 | % | |||||||
Allowance for loan losses to nonperforming loans | 97.1 | 256.7 | 97.1 | 256.7 | |||||||||||
Net charge-offs (recoveries) to average loans(1) | 0.53 | % | (0.05 | )% | 0.21 | % | 0.09 | % | |||||||
(1) Interim periods annualized |
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Non-accrual loans | $ | 43,626 | $ | 50,044 | $ | 13,018 | $ | 17,818 | $ | 12,625 | |||||||||
Loans past due 90 days or more and still accruing | 642 | 238 | — | — | 443 | ||||||||||||||
Total nonperforming loans | 44,268 | 50,282 | 13,018 | 17,818 | 13,068 | ||||||||||||||
Foreclosed assets held for sale | 2,471 | 2,471 | 2,471 | — | — | ||||||||||||||
Impaired securities | — | — | — | — | — | ||||||||||||||
Total nonperforming assets | $ | 46,739 | $ | 52,753 | $ | 15,489 | $ | 17,818 | $ | 13,068 | |||||||||
Nonperforming assets to total assets | 1.00 | % | 1.18 | % | 0.36 | % | 0.43 | % | 0.35 | % | |||||||||
Nonperforming loans to total loans | 1.22 | % | 1.45 | % | 0.40 | % | 0.58 | % | 0.48 | % |
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Loan Past Due Detail | |||||||||||||||||||
30 - 59 days past due | $ | 61,941 | $ | 15,967 | $ | 30,450 | $ | 3,062 | $ | 19,838 | |||||||||
60 - 89 days past due | 2,785 | 7,640 | 616 | 619 | 6,505 | ||||||||||||||
Total 30 - 89 days past due | $ | 64,726 | $ | 23,607 | $ | 31,066 | $ | 3,681 | $ | 26,343 | |||||||||
Loans 30 - 89 days past due to loans | 1.78 | % | 0.68 | % | 0.95 | % | 0.12 | % | 0.96 | % | |||||||||
Classified Loans | |||||||||||||||||||
Substandard | $ | 79,536 | $ | 79,190 | $ | 92,450 | $ | 96,247 | $ | 48,845 | |||||||||
Doubtful | 5,637 | 9,115 | 5,083 | 5,197 | 5,502 | ||||||||||||||
Loss | — | — | — | — | — | ||||||||||||||
Total classified loans | $ | 85,173 | $ | 88,305 | $ | 97,533 | $ | 101,444 | $ | 54,347 | |||||||||
Classified Loans / (Total Capital + ALLL) | 13.2 | % | 16.3 | % | 18.7 | % | 19.2 | % | 12.3 | % |
September 30, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
On-balance sheet | |||||||
Cash and cash equivalents | $ | 109,961 | $ | 216,541 | |||
Unpledged securities available-for-sale | 696,519 | 552,950 | |||||
Total on-balance sheet liquidity | 806,480 | 769,491 | |||||
Off-balance sheet | |||||||
FHLB available funds | 157,302 | 68,704 | |||||
Federal Reserve available funds | 285,187 | 286,397 | |||||
Other available funds | 105,000 | 95,000 | |||||
Total off-balance sheet liquidity | 547,489 | 450,101 | |||||
Total liquidity | $ | 1,353,969 | $ | 1,219,592 | |||
On-balance sheet liquidity as a percent of assets | 17.3 | % | 18.8 | % | |||
Total liquidity as a percent of assets | 29.1 | % | 29.7 | % |
September 30, 2019 | |||||||||||||||||||
Payments Due by Period | |||||||||||||||||||
Less than 1 Year | 1 to 2 Years | 2 to 5 Years | More than 5 Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Time deposits | $ | 822,439 | $ | 216,486 | $ | 182,832 | $ | — | $ | 1,221,757 | |||||||||
Fed funds purchased & repurchase agreements | 49,810 | — | — | — | 49,810 | ||||||||||||||
FHLB borrowings and line of credit | 24,000 | 76,500 | 56,204 | 151,100 | 307,804 | ||||||||||||||
Trust preferred security | — | — | — | 2,500 | 2,500 | ||||||||||||||
Operating leases | 1,718 | 1,564 | 4,607 | 6,479 | 14,368 | ||||||||||||||
Total | $ | 897,967 | $ | 294,550 | $ | 243,643 | $ | 160,079 | $ | 1,596,239 |
December 31, 2018 | |||||||||||||||||||
Payments Due by Period | |||||||||||||||||||
Less than 1 Year | 1 to 2 Years | 2 to 5 Years | More than 5 Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Time deposits | $ | 444,824 | $ | 287,451 | $ | 267,856 | $ | 9,546 | $ | 1,009,677 | |||||||||
Fed funds purchased & repurchase agreements | 75,406 | — | — | — | 75,406 | ||||||||||||||
FHLB borrowings and line of credit | 44,000 | 45,000 | 72,885 | 151,100 | 312,985 | ||||||||||||||
Trust preferred security | — | — | — | 2,500 | 2,500 | ||||||||||||||
Operating leases | 1,876 | 1,633 | 4,812 | 7,450 | 15,771 | ||||||||||||||
Total | $ | 566,106 | $ | 334,084 | $ | 345,553 | $ | 170,596 | $ | 1,416,339 |
September 30, 2019 | December 31, 2018 | |||||||
(Dollars in thousands) | ||||||||
Commitments to fund C&I loans | $ | 507,195 | $ | 597,534 | ||||
Other loan commitments | 925,167 | 767,629 | ||||||
Standby letters of credit | 35,699 | 32,439 | ||||||
Lease agreements | 19,054 | 19,054 | ||||||
Total | $ | 1,487,115 | $ | 1,416,656 |
Hypothetical Change in Interest Rate - Rate Shock | |||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||
Change in Interest Rate (Basis Points) | Percent change in net interest income | Percent change in fair value of equity | Percent change in net interest income | Percent change in fair value of equity | |||||||
+300 | 12.0 | % | (2.6 | )% | 10.3 | % | (8.3 | )% | |||
+200 | 8.6 | (0.4 | ) | 7.1 | (4.6 | ) | |||||
+100 | 4.7 | 0.5 | 3.8 | (0.8 | ) | ||||||
Base | — | — | — | — | |||||||
-100 | (5.0 | ) | 0.1 | (4.2 | ) | (1.1 | ) | ||||
-200 | (11.3 | )% | 1.2 | % | (6.2 | )% | 0.3 | % |
Hypothetical Change in Interest Rate - Rate Ramp | |||||
September 30, 2019 | September 30, 2018 | ||||
Change in Interest Rate (Basis Points) | Percent change in net interest income | Percent change in net interest income | |||
+300 | 7.4 | % | 4.9 | % | |
+200 | 5.1 | 3.4 | |||
+100 | 2.6 | 1.7 | |||
Base | — | — | |||
-100 | (2.8 | ) | (1.8 | ) | |
-200 | (6.2 | )% | (3.6 | )% |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date/Period End Date | ||||
S-1 | 10.1 | July 18, 2019 | ||||||
S-1 | 10.2 | July 18, 2019 | ||||||
S-1 | 10.3 | July 18, 2019 | ||||||
S-1 | 10.4 | July 18, 2019 | ||||||
S-1 | 10.5 | July 18, 2019 | ||||||
S-1 | 10.6 | July 18, 2019 | ||||||
S-1 | 10.7 | July 18, 2019 | ||||||
S-1 | 10.8 | July 18, 2019 | ||||||
S-1 | 10.9 | July 18, 2019 | ||||||
S-1 | 10.10 | July 18, 2019 | ||||||
S-1 | 10.11 | July 18, 2019 | ||||||
S-1 | 10.12 | July 18, 2019 | ||||||
S-1 | 10.13 | July 18, 2019 | ||||||
S-1 | 10.14 | July 18, 2019 | ||||||
S-1 | 10.15 | July 18, 2019 | ||||||
S-1 | 10.16 | July 18, 2019 | ||||||
S-1 | 10.17 | July 18, 2019 | ||||||
S-1 | 10.18 | July 18, 2019 | ||||||
S-1 | 10.19 | July 18, 2019 | ||||||
S-1 | 10.20 | July 18, 2019 | ||||||
S-1 | 10.21 | July 18, 2019 | ||||||
S-1 | 10.22 | July 18, 2019 | ||||||
S-1 | 10.23 | July 18, 2019 | ||||||
S-1 | 10.24 | July 18, 2019 | ||||||
S-1 | 10.25 | July 18, 2019 |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date/Period End Date | ||||
S-1 | 10.26 | July 18, 2019 | ||||||
S-1 | 10.27 | July 18, 2019 | ||||||
S-1 | 10.28 | July 18, 2019 | ||||||
S-1 | 21.1 | July 18, 2019 | ||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |