Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 07, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity Registrant Name | Eagle Bancorp, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity File Number | 0-25923 | ||
Entity Tax Identification Number | 52-2061461 | ||
Entity Address, State or Province | MD | ||
Entity Address, Address Line One | 7830 Old Georgetown Road | ||
Entity Address, Address Line Two | Third Floor | ||
Entity Address, City or Town | Bethesda | ||
Entity Address, Postal Zip Code | 20814 | ||
City Area Code | 301 | ||
Local Phone Number | 986-1800 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | EGBN | ||
Security Exchange Name | NASDAQ | ||
Entity a Well-known Seasoned Issuer | Yes | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,810 | ||
Entity Common Stock, Shares Outstanding | 32,809,197 | ||
Entity Central Index Key | 0001050441 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 7,539 | $ 6,773 |
Federal funds sold | 38,987 | 11,934 |
Interest bearing deposits with banks and other short-term investments | 195,447 | 303,157 |
Investment securities available-for-sale, at fair value | 843,363 | 784,139 |
Federal Reserve and Federal Home Loan Bank stock | 35,194 | 23,506 |
Loans held for sale | 56,707 | 19,254 |
Loans | 7,545,748 | 6,991,447 |
Less allowance for credit losses | (73,658) | (69,944) |
Loans, net | 7,472,090 | 6,921,503 |
Premises and equipment, net | 14,622 | 16,851 |
Operating lease right-of-use assets | 27,372 | |
Deferred income taxes | 29,804 | 33,027 |
Bank owned life insurance | 75,724 | 73,441 |
Intangible assets, net | 104,739 | 105,766 |
Other real estate owned | 1,487 | 1,394 |
Other assets | 85,644 | 88,392 |
Total Assets | 8,988,719 | 8,389,137 |
Deposits: | ||
Noninterest bearing demand | 2,064,367 | 2,104,220 |
Interest bearing deposits | 863,856 | 593,107 |
Savings and money market | 3,013,129 | 2,949,559 |
Time, $100,000 or more | 663,987 | 801,957 |
Other time | 619,052 | 525,442 |
Total deposits | 7,224,391 | 6,974,285 |
Customer repurchase agreements | 30,980 | 30,413 |
Other short-term borrowings | 250,000 | |
Long-term borrowings | 217,687 | 217,296 |
Operating lease liabilities | 29,959 | |
Other liabilities | 45,021 | 58,202 |
Total Liabilities | 7,798,038 | 7,280,196 |
Shareholders' Equity | ||
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 33,241,496 and 34,387,919, respectively | 331 | 342 |
Additional paid in capital | 482,286 | 528,380 |
Retained earnings | 705,105 | 584,494 |
Accumulated other comprehensive income (loss) | 2,959 | (4,275) |
Total Shareholders' Equity | 1,190,681 | 1,108,941 |
Total Liabilities and Shareholders' Equity | $ 8,988,719 | $ 8,389,137 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 33,241,496 | 34,387,919 |
Common stock, outstanding | 33,241,496 | 34,387,919 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest Income | |||
Interest and fees on loans | $ 400,923 | $ 368,606 | $ 308,510 |
Interest and dividends on investment securities | 21,037 | 17,907 | 12,214 |
Interest on balances with other banks and short-term investments | 7,438 | 6,616 | 3,258 |
Interest on federal funds sold | 232 | 157 | 52 |
Total interest income | 429,630 | 393,286 | 324,034 |
Interest Expense | |||
Interest on deposits | 91,026 | 60,210 | 27,286 |
Interest on customer repurchase agreements | 345 | 225 | 197 |
Interest on short-term borrowings | 2,298 | 3,942 | 748 |
Interest on long-term borrowings | 11,916 | 11,916 | 11,916 |
Total interest expense | 105,585 | 76,293 | 40,147 |
Net interest income | 324,045 | 316,993 | 283,887 |
Provision for Credit Losses | 13,091 | 8,660 | 8,971 |
Net Interest Income After Provision For Credit Losses | 310,954 | 308,333 | 274,916 |
Noninterest Income | |||
Service charges on deposits | 6,247 | 7,014 | 6,364 |
Gain on sale of loans | 8,474 | 5,963 | 9,275 |
Gain on sale of investment securities | 1,517 | 97 | 542 |
Increase in the cash surrender value of bank owned life insurance | 1,703 | 1,507 | 1,711 |
Other income | 7,758 | 8,005 | 11,480 |
Total noninterest income | 25,699 | 22,586 | 29,372 |
Noninterest Expense | |||
Salaries and employee benefits | 79,842 | 67,734 | 67,129 |
Premises and equipment expenses | 14,387 | 15,660 | 15,632 |
Marketing and advertising | 4,826 | 4,566 | 4,095 |
Data processing | 9,412 | 9,714 | 8,220 |
Legal, accounting and professional fees | 12,195 | 9,742 | 5,053 |
FDIC insurance | 3,206 | 3,512 | 2,554 |
Other expenses | 15,994 | 15,783 | 15,869 |
Total noninterest expense | 139,862 | 126,711 | 118,552 |
Income Before Income Tax Expense | 196,791 | 204,208 | 185,736 |
Income Tax Expense | 53,848 | 51,932 | 85,504 |
Net Income | $ 142,943 | $ 152,276 | $ 100,232 |
Earnings Per Common Share | |||
Basic (in dollars per share) | $ 4.18 | $ 4.44 | $ 2.94 |
Diluted (in dollars per share) | $ 4.18 | $ 4.42 | $ 2.92 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | |||
Net Income | $ 142,943 | $ 152,276 | $ 100,232 |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on securities available for sale | 11,254 | (3,841) | (840) |
Reclassification adjustment for net gains included in net income | (1,101) | (72) | (336) |
Total unrealized gain (loss) on investment securities | 10,153 | (3,913) | (1,176) |
Unrealized (loss) gain on derivatives | (2,049) | 1,806 | 2,794 |
Reclassification adjustment for amounts included in net income | (870) | (418) | (987) |
Total unrealized (loss) gain on derivatives | (2,919) | 1,388 | 1,807 |
Other comprehensive income (loss) | 7,234 | (2,525) | 631 |
Comprehensive Income | $ 150,177 | $ 149,751 | $ 100,863 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2016 | $ 338 | $ 513,531 | $ 331,311 | $ (2,381) | $ 842,799 |
Beginning balance (in shares) at Dec. 31, 2016 | 34,023,850 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 100,232 | 100,232 | |||
Other comprehensive income | 631 | 631 | |||
Stock-based compensation expense | 5,568 | 5,568 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 371 | 372 | ||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 69,040 | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 2 | (2) | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (17,801) | ||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 4,293 | ||||
Time based stock awards granted (in shares) | 91,097 | ||||
Issuance of common stock related to employee stock purchase plan | $ (1) | 836 | 1 | 836 | |
Issuance of common stock related to employee stock purchase plan (in shares) | 14,684 | ||||
Ending balance at Dec. 31, 2017 | $ 340 | 520,304 | 431,544 | (1,750) | 950,438 |
Ending balance (in shares) at Dec. 31, 2017 | 34,185,163 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 152,276 | 152,276 | |||
Other comprehensive income | (1,851) | (2,525) | |||
Stock-based compensation expense | 6,494 | 6,494 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 775 | 776 | ||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 108,201 | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 1 | (1) | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (14,162) | ||||
Time based stock awards granted (in shares) | 94,344 | ||||
Issuance of common stock related to employee stock purchase plan | 808 | 808 | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 14,373 | ||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from AOCI (ASU 2018-02) | 674 | (674) | |||
Ending balance at Dec. 31, 2018 | $ 342 | 528,380 | 584,494 | (4,275) | $ 1,108,941 |
Ending balance (in shares) at Dec. 31, 2018 | 34,387,919 | 34,387,919 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 142,943 | $ 142,943 | |||
Other comprehensive income | 7,234 | 7,234 | |||
Stock-based compensation expense | 7,684 | 7,684 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 332 | 332 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 26,784 | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 1 | (1) | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (15,127) | ||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 17,655 | ||||
Time based stock awards granted (in shares) | 112,636 | ||||
Issuance of common stock related to employee stock purchase plan | 782 | 782 | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 16,129 | ||||
Cash dividends declared ($0.66 per share) | (22,332) | (22,332) | |||
Common stock repurchased | $ (12) | (54,891) | (54,903) | ||
Common stock repurchased (in shares) | (1,304,500) | ||||
Ending balance at Dec. 31, 2019 | $ 331 | $ 482,286 | $ 705,105 | $ 2,959 | $ 1,190,681 |
Ending balance (in shares) at Dec. 31, 2019 | 33,241,496 | 33,241,496 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Consolidated Statements of Changes in Shareholders' Equity | |
Cash dividends declared ($0.66 per share) | $ 0.66 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 142,943 | $ 152,276 | $ 100,232 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 13,091 | 8,660 | 8,971 |
Depreciation and amortization | 6,174 | 6,969 | 6,883 |
Gains on sale of loans | (8,474) | (5,963) | (9,544) |
Gains on sale of GNMA loans | (139) | (342) | (2,450) |
Securities premium amortization (discount accretion), net | 5,186 | 4,445 | 3,986 |
Origination of loans held for sale | (665,726) | (325,109) | (707,489) |
Proceeds from sale of loans held for sale | 636,747 | 337,256 | 746,016 |
Net increase in cash surrender value of BOLI | (1,703) | (1,507) | (1,466) |
Deferred income tax (benefit) expense | (61) | (3,497) | 18,974 |
Net loss (gain) on sale of other real estate owned | 301 | ||
Net gain on sale of investment securities | (1,517) | (97) | (542) |
Stock-based compensation expense | 7,684 | 6,494 | 5,568 |
Net tax benefits from stock compensation | (48) | 110 | 460 |
Increase in other assets | (21,340) | (16,301) | (19,324) |
Increase in other liabilities | 19,809 | 2,061 | 10,348 |
Net cash provided by operating activities | 132,684 | 165,455 | 160,924 |
Cash Flows From Investing Activities: | |||
Purchases of available for sale investment securities | (374,648) | (331,884) | (202,974) |
Proceeds from maturities of available for sale securities | 214,204 | 93,848 | 75,922 |
Proceeds from sale/call of available for sale securities | 104,785 | 36,292 | 73,079 |
Purchases of Federal Reserve and Federal Home Loan Bank stock | (100,939) | (47,872) | (33,008) |
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 89,250 | 60,690 | 18,285 |
Net increase in loans | (563,771) | (583,393) | (738,067) |
Purchases of BOLI | (580) | (11,000) | |
Purchase of annuities | (2,589) | ||
Proceeds from sale of other real estate owned | 2,144 | ||
Increase in premises and equipment | (2,839) | (1,482) | (5,758) |
Net cash used in investing activities | (637,127) | (784,801) | (810,377) |
Cash Flows From Financing Activities: | |||
Increase in deposits | 250,106 | 1,120,301 | 137,870 |
Increase (decrease) in customer repurchase agreements | 567 | (46,148) | 7,685 |
Increase (decrease) in short-term borrowings | 250,000 | (325,000) | 325,000 |
Proceeds from exercise of equity compensation plans | 332 | 776 | 372 |
Proceeds from employee stock purchase plan | 782 | 808 | 836 |
Common stock repurchased | (54,903) | ||
Cash dividends paid | (22,332) | ||
Net cash provided by financing activities | 424,552 | 750,737 | 471,763 |
Net (Decrease) Increase In Cash and Cash Equivalents | (79,891) | 131,391 | (177,690) |
Cash and Cash Equivalents at Beginning of Period | 321,864 | 190,473 | 368,163 |
Cash and Cash Equivalents at End of Period | 241,973 | 321,864 | 190,473 |
Supplemental Cash Flows Information: | |||
Interest paid | 105,985 | 73,806 | 39,772 |
Income taxes paid | 54,650 | $ 55,200 | 69,200 |
Non-Cash Investing Activities | |||
Initial recognition of operating lease right-of-use assets | 29,574 | $ 1,145 | |
Transfers from loans to other real estate owned | $ 93 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”) with all significant intercompany transactions eliminated. EagleBank (the “Bank”), a Maryland chartered commercial bank, is the Company’s principal subsidiary. The investment in subsidiaries is recorded on the Company’s books (Parent Only) on the basis of its equity in the net assets of the subsidiary. The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America (“GAAP”) and to general practices in the banking industry. The following is a summary of the significant accounting policies. Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Authority (“FHA”) loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of December 31, 2019, the Bank offers its products and services through twenty banking offices, six lending centers and various electronic capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements. Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less. Loans Held for Sale The Company regularly engages in sales of residential mortgage loans held for sale and the guaranteed portion of SBA loans originated by the Bank. The Company has elected to carry loans held for sale at fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the Consolidated Statements of Operations. The Company’s current practice is to sell residential mortgage loans held for sale on a servicing released basis, and, therefore, it has no intangible asset recorded in the normal course of business for the value of such servicing as of December 31, 2019 and December 31, 2018. The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both “best efforts” and “mandatory delivery” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the investor commits to purchase a loan at a price representing a premium on the day the borrower commits to an interest rate with the intent that the buyer/investor has assumed the interest rate risk on the loan. As a result, the Bank is not generally exposed to losses on loans sold utilizing best efforts, nor will it realize gains related to rate lock commitments due to changes in interest rates. The market values of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded. Because of the high correlation between rate lock commitments and best efforts contracts, no gain or loss should occur on the interest rate lock commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage-backed securities, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value in derivative assets or liabilities, carried on the Consolidated Balance Sheet within other assets or other liabilities with changes in fair value recorded in other income within the Consolidated Statements of Operations. The period of time between issuance of a loan commitment to the customer and closing and sale of the loan to an investor generally ranges from 30 90 In circumstances where the Company does not deliver the whole loan to an investor, but rather elects to retain the loan in its portfolio, the loan is transferred from held for sale to loans at fair value at the date of transfer. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an excess servicing asset, which is computed on a loan by loan basis with the unamortized amount being included in intangible assets in the Consolidated Balance Sheets. This excess servicing asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in other income in the Consolidated Statements of Operations. The Company originates multifamily FHA loans through the Department of Housing and Urban Development’s Multifamily Accelerated Program (“MAP”). The Company securitizes these loans through the Government National Mortgage Association (”Ginnie Mae”) MBS I program and sells the resulting securities in the open market to authorized dealers in the normal course of business and periodically bundles and sells the servicing rights. When servicing is retained on multifamily FHA loans securitized and sold, the Company computes an excess servicing asset on a loan by loan basis with the unamortized amount being included in Intangible assets in the Consolidated Balance Sheets. Unamortized multifamily FHA MSRs totaled $310 thousand as of December 31, 2019 and $282 thousand as of December 31, 2018. Noninterest Income includes gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of multifamily FHA loans underlying the Ginnie Mae securities. Revenue from servicing commercial multifamily FHA mortgages is recognized as earned based on the specific contractual terms of the underlying servicing agreements, along with amortization of and changes in impairment of mortgage servicing rights. Investment Securities The Company has no securities classified as trading or as held-to-maturity. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations. Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include the: (1) duration and magnitude of the decline in value; (2) financial condition of the issuer or issuers; and (3) structure of the security. The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes. Loans Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan. Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures. Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (90 days or less) provided eventual collection of all amounts due is expected. The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral. In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis. Allowance for Credit Losses The allowance for credit losses is an estimate of the losses that may be sustained in our loan portfolio. The allowance is based on two principles of accounting: (a) ASC Topic 450, “Contingencies,” which requires that losses be accrued when they are probable of occurring and are estimable and (b) ASC Topic 310, “Receivables,” which requires that losses be accrued when it is probable that the Company will not collect all principal and interest payments according to the contractual terms of the loan. The loss, if any, can be determined by the difference between the loan balance and the value of collateral, the present value of expected future cash flows, or values observable in the secondary markets. Three components comprise our allowance for credit losses: a specific allowance, a formula allowance and a nonspecific or environmental factors allowance. Each component is determined based on estimates that can and do change when actual events occur. The specific allowance allocates a reserve to identified impaired loans. Impaired loans are assigned specific reserves based on an impairment analysis. Under ASC Topic 310, “Receivables,” a loan for which reserves are individually allocated may show deficiencies in the borrower’s overall financial condition, payment record, support available from financial guarantors and for the fair market value of collateral. When a loan is identified as impaired, a specific reserve is established based on the Company’s assessment of the loss that may be associated with the individual loan. The formula allowance is used to estimate the loss on internally risk rated loans, exclusive of those identified as requiring specific reserves. The portfolio of unimpaired loans is stratified by loan type and risk assessment. Allowance factors relate to the type of loan and level of the internal risk rating, with loans exhibiting higher risk and loss experience receiving a higher allowance factor. The environmental factors allowance is also used to estimate the loss associated with pools of non-classified loans. These non-classified loans are also stratified by loan type, and environmental allowance factors are assigned by management based upon a number of conditions, including delinquencies, loss history, changes in lending policy and procedures, changes in business and economic conditions, changes in the nature and volume of the portfolio, management expertise, concentrations within the portfolio, quality of internal and external loan review systems, competition, and legal and regulatory requirements. The allowance captures losses inherent in the loan portfolio, which have not yet been recognized. Allowance factors and the overall size of the allowance may change from period to period based upon management’s assessment of the above described factors, the relative weights given to each factor, and portfolio composition. Management has significant discretion in making the judgments inherent in the determination of the provision and allowance for credit losses, including in connection with the valuation of collateral, a borrower’s prospects of repayment, and in establishing allowance factors on the formula and environmental components of the allowance. The establishment of allowance factors involves a continuing evaluation, based on management’s ongoing assessment of the global factors discussed above and their impact on the portfolio. The allowance factors may change from period to period, resulting in an increase or decrease in the amount of the provision or allowance, based upon the same volume and classification of loans. Changes in allowance factors can have a direct impact on the amount of the provision, and a related after tax effect on net income. Errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs. Alternatively, errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance being in excess of amounts necessary to cover losses in the portfolio, and may result in lower provisions in the future. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization computed using the straight-line method for financial reporting purposes. Premises and equipment are depreciated over the useful lives of the assets, which generally range from three three five Other Real Estate Owned (OREO) Assets acquired through loan foreclosure are held for sale and are recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. The new basis is supported by appraisals that are generally no more than twelve months old. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through noninterest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in market conditions or appraised values. Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets and mortgage servicing rights (“MSRs”) that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which must be conducted at least annually or upon the occurrence of a triggering event. The Company’s reporting units were identified based upon an analysis of each of its individual operating segments. If the fair values of the reporting units exceed their book values, no write-down of recorded goodwill is required. If the fair value of a reporting unit is less than book value, an expense may be required to write-down the related goodwill to the proper carrying value. Any impairment would be realized through a reduction of goodwill or the intangible and an offsetting charge to non-interest expense. The Company performs impairment testing as of December 31, 2019, or when events or changes in circumstances indicate the assets might be impaired. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company assesses qualitative factors on a quarterly basis. Based on the assessment of these qualitative factors, if it is determined that it is more likely than not that the fair value of a reporting unit is not less than the carrying value, then performing the two-step impairment process, previously required, is unnecessary. Based on the results of qualitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2019. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. Interest Rate Swap Derivatives As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. Customer Repurchase Agreements The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, securities sold under agreements to repurchase are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The agreements are entered into primarily as accommodations for large commercial deposit customers. The obligation to repurchase the securities is reflected as a liability in the Company’s Consolidated Balance Sheets, while the securities underlying the securities sold under agreements to repurchase remain in the respective assets accounts and are delivered to and held as collateral by third party trustees. Marketing and Advertising Marketing and advertising costs are generally expensed as incurred. Income Taxes The Company employs the asset and liability method of accounting for income taxes as required by ASC Topic 740, “ Income Taxes The Company’s policy is to recognize interest and penalties on income taxes in other non-interest expenses. The Company remains subject to examination for income tax returns by the Internal Revenue Service, as well as all of the states where it conducts business, for the years ending after December 31, 2016. There are currently no examinations in process as of December 31, 2019. Transfer of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In certain cases, the recourse to the Bank to repurchase assets may exist but is deemed immaterial based on the specific facts and circumstances. Earnings per Common Share Basic net income per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents. Stock-Based Compensation In accordance with ASC Topic 718, “Compensation,” New Authoritative Accounting Guidance Accounting Standards Adopted in 2019 ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 has, among other things, required lessees to recognize a lease liability, which is a lessee's obligation to make lease payments, measured on a discounted basis; and a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 did not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 became effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) – Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we recognized ROU assets of $29.6 million and related lease liabilities of $33.5 million which reduced the March 31, 2019 total risk based capital ratio by six basis points. We elected to apply certain practical expedients provided under ASU 2016-02 whereby we did not reassess (i) whether any expired or existing contracts were or contained leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We also elected to not apply the recognition requirements of ASU 2016-02 to any short-term leases (as defined by related accounting guidance). We utilized the modified-retrospective transition approach prescribed by ASU 2018-11. Refer to Note 6 to the Consolidated Financial Statements for additional disclosure regarding leases. Accounting Standards Pending Adoption ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” Entities will apply any changes resulting from the application of the new standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). We plan to elect the Federal Reserve and FDIC’s rule providing for an optional three-year phase-in period for the day-one adverse regulatory capital effects upon adopting the standard. We preliminarily expect this rule to increase the reserve for credit losses 10-20% inclusive of the impact on commitments to lend upon implementation on January 1, 2020. The ultimate impact may change as we finalize our model validations as well as the execution of our implementation controls and processes. |
Cash and Due from Banks
Cash and Due from Banks | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Due from Banks | |
Cash and Due from Banks | Note 2 – Cash and Due from Banks Regulation D of the Federal Reserve Act requires that banks maintain noninterest reserve balances with the Federal Reserve Bank based principally on the type and amount of their deposits. During 2019, the Bank maintained balances at the Federal Reserve sufficient to meet reserve requirements, as well as significant excess reserves, on which interest is paid. The average balance maintained in 2019 was $307 million and in 2018 was $327 million. Additionally, the Bank maintains interest-bearing balances with the Federal Home Loan Bank of Atlanta and noninterest bearing balances with domestic correspondent banks as compensation for services they provide to the Bank. |
Investment Securities Available
Investment Securities Available-for-Sale | 12 Months Ended |
Dec. 31, 2019 | |
Investment Securities Available-for-Sale | |
Investment Securities Available-for-Sale | Note 3 – Investment Securities Available-for-Sale Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 180,228 $ 621 # $ 1,055 $ 179,794 Residential mortgage backed securities 541,490 4,337 1,975 543,852 Municipal bonds 71,902 2,034 5 73,931 Corporate bonds 10,530 203 — 10,733 U.S. Treasury 34,844 11 — 34,855 Other equity investments 198 — — 198 $ 839,192 $ 7,206 $ 3,035 $ 843,363 Gross Gross Estimated December 31, 2018 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 260,150 $ 228 # $ 4,033 $ 256,345 Residential mortgage backed securities 477,949 1,575 7,293 472,231 Municipal bonds 45,814 439 484 45,769 Corporate bonds 9,503 79 6 9,576 Other equity investments 218 — — 218 $ 793,634 $ 2,321 $ 11,816 $ 784,139 In addition, at December 31, 2019 and December 31, 2018, the Company held $35.2 million and $23.5 million in equity securities, respectively, in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost. The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.4 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of December 31, 2019 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2019 and 2018 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2019 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 36 $ 75,159 $ 439 $ 51,481 $ 616 $ 126,640 $ 1,055 Residential mortgage backed securities 111 197,794 1,148 90,742 827 288,536 1,975 Municipal bonds 1 1,994 5 — — 1,994 5 148 $ 274,947 $ 1,592 $ 142,223 $ 1,443 $ 417,170 $ 3,035 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2018 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 58 $ 72,679 $ 533 $ 144,636 $ 3,500 $ 217,315 $ 4,033 Residential mortgage backed securities 151 61,199 527 225,995 6,766 287,194 7,293 Municipal bonds 11 4,299 50 17,041 434 21,340 484 Corporate bonds 1 1,494 6 — — 1,494 6 221 $ 139,671 $ 1,116 $ 387,672 $ 10,700 $ 527,343 $ 11,816 The amortized cost and estimated fair value of investments available-for-sale at December 31, 2019 and 2018 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 96,332 $ 96,226 $ 128,148 $ 125,545 After one year through five years 76,121 75,821 119,856 118,883 Five years through ten years 7,775 7,747 12,146 11,917 Residential mortgage backed securities 541,490 543,852 477,949 472,231 Municipal bonds maturing: One year or less 5,897 5,969 8,097 8,167 After one year through five years 21,416 21,953 15,025 15,081 Five years through ten years 42,589 44,015 21,626 21,385 After ten years 2,000 1,994 1,066 1,136 Corporate bonds maturing: One year or less 502 508 — — After one year through five years 8,528 8,725 8,003 8,076 After ten years 1,500 1,500 1,500 1,500 U.S. treasury 34,844 34,855 — — Other equity investments 198 198 218 218 $ 839,192 $ 843,363 $ 793,634 $ 784,139 In 2019, gross realized gains on sales of investment securities were $1.7 million and gross realized losses on sales of investment securities were $153 thousand. In 2018, gross realized gains on sales of investment securities were $391 thousand and gross realized losses on sales of investment securities were $294 thousand. In 2017, gross realized gains on sales of investment securities were $796 thousand and gross realized losses on sales of investment securities were $254 thousand. Proceeds from sales and calls of investment securities for 2019, 2018 and 2017 were The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at December 31, 2019 was $378 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of December 31, 2019 and December 31, 2018, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2019 | |
Loans and Allowance for Credit Losses | |
Loans and Allowance for Credit Losses | Note 4 – Loans and Allowance for Credit Losses The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets. Loans, net of unamortized net deferred fees, at December 31, 2019 and 2018 are summarized by type as follows: December 31, 2019 December 31, 2018 (dollars in thousands) Amount % Amount % Commercial $ 1,545,906 20 % $ 1,553,112 22 % Income producing - commercial real estate 3,702,747 50 % 3,256,900 46 % Owner occupied - commercial real estate 985,409 13 % 887,814 13 % Real estate mortgage - residential 104,221 1 % 106,418 2 % Construction - commercial and residential 1,035,754 14 % 1,039,815 15 % Construction - C&I (owner occupied) 89,490 1 % 57,797 1 % Home equity 80,061 1 % 86,603 1 % Other consumer 2,160 — 2,988 — Total loans 7,545,748 100 % 6,991,447 100 % Less: allowance for credit losses (73,658) (69,944) Net loans $ 7,472,090 $ 6,921,503 Unamortized net deferred fees amounted to As of December 31, 2019 and 2018, the Bank serviced $99 million and $111 million, respectively, of multifamily FHA loans, SBA loans and other loan participations, which are not reflected as loan balances on the Consolidated Balance Sheets. Loan Origination/Risk Management The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations. The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and income producing. At December 31, 2019, owner occupied commercial real estate and construction – C&I (owner occupied) represent approximately 14% of the loan portfolio while non-owner occupied commercial real estate and real estate construction represented approximately 64% of the loan portfolio. The combined owner occupied and commercial real estate loans represented approximately 78% of the loan portfolio. Real estate also serves as collateral for loans made for other purposes, resulting in 85% of all loans being secured or partially secured by real estate. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank typically requires a maximum loan to value of 80% and minimum cash flow debt service coverage of 1.15 to 1.0. Personal guarantees may be required, but may be limited. In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years The Company is also an active traditional commercial lender providing loans for a variety of purposes, including working capital, equipment and account receivable financing. This loan category represents approximately 20% of the loan portfolio at December 31, 2019 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent approximately 1% of the commercial loan category. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA as well as internal loan size guidelines. Approximately 1% of the loan portfolio at December 31, 2019 consists of home equity loans and lines of credit and other consumer loans. These credits, while making up a small portion of the loan portfolio, demand the same emphasis on underwriting and credit evaluation as other types of loans advanced by the Bank. Approximately 1% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 22 months. These credits represent first liens on residential property loans originated by the Bank. While the Bank’s general practice is to originate and sell (servicing released) loans made by its Residential Lending department, from time to time certain loan characteristics do not meet the requirements of third party investors and these loans are instead maintained in the Bank’s portfolio until they are resold to another investor at a later date or mature. Loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required. Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects. Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures; and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination. Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months. Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition. Commercial permanent loans are generally secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels. Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $1.61 billion at December 31, 2019. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 65% of the outstanding ADC loan portfolio at December 31, 2019. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. The following tables detail activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2019 and 2018. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total Year Ended December 31, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (4,868) (1,847) — — (3,496) — (8) (10,219) Recoveries of loans previously charged-off 405 26 3 3 354 — 51 842 Net loans charged-off (4,463) (1,821) 3 3 (3,142) — 43 (9,377) Provision for credit losses 7,438 3,052 (407) 589 2,452 57 (90) 13,091 Ending balance $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 For the Year Ended December 31, 2019 Allowance for credit losses: Individually evaluated for impairment $ 5,714 $ 2,145 $ 415 $ 650 $ 100 $ 100 $ — $ 9,124 Collectively evaluated for impairment 13,118 27,120 5,423 907 17,385 556 25 64,534 Ending balance $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 Year Ended December 31, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (3,491) (121) (132) — (1,160) — (81) (4,985) Recoveries of loans previously charged-off 340 2 3 6 1,009 133 18 1,511 Net loans (charged-off) recoveries (3,151) (119) (129) 6 (151) 133 (63) (3,474) Provision for credit losses 5,906 2,777 437 15 (166) (304) (5) 8,660 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 For the Year Ended December 31, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,803 $ 2,465 $ 600 $ — $ 1,050 $ — $ — $ 8,918 Collectively evaluated for impairment 11,054 25,569 5,642 965 17,125 599 72 61,026 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 The Company’s recorded investments in loans as of December 31, 2019 and December 31, 2018 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology was as follows: Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total December 31, 2019 Recorded investment in loans: Individually evaluated for impairment $ 25,288 $ 19,093 $ 6,463 $ 5,365 $ 11,510 $ 487 $ — $ 68,206 Collectively evaluated for impairment 1,520,618 3,683,654 978,946 98,856 1,113,734 79,574 2,160 7,477,542 Ending balance $ 1,545,906 $ 3,702,747 $ 985,409 $ 104,221 $ 1,125,244 $ 80,061 $ 2,160 $ 7,545,748 December 31, 2018 Recorded investment in loans: Individually evaluated for impairment $ 8,738 $ 61,747 $ 5,307 $ 1,228 $ 7,012 $ 487 $ — $ 84,519 Collectively evaluated for impairment 1,544,374 3,195,153 882,507 105,190 1,090,600 86,116 2,988 6,906,928 Ending balance $ 1,553,112 $ 3,256,900 $ 887,814 $ 106,418 $ 1,097,612 $ 86,603 $ 2,988 $ 6,991,447 Credit Quality Indicators The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company’s primary credit quality indicators are to use an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment. The following are the definitions of the Company’s credit quality indicators: Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass. Watch: Loan is paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time. Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention. Classified: Classified (a) Substandard Classified (b) Doubtful and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined. The Company’s credit quality indicators are updated generally on a quarterly basis, but no less frequently than annually. The following table presents by class and by credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2019 and 2018. Total (dollars in thousands) Pass Watch Special Mention Substandard Doubtful Loans December 31, 2019 Commercial $ 1,470,636 $ 38,522 $ 11,460 $ 25,288 $ — $ 1,545,906 Income producing - commercial real estate 3,667,585 16,069 — 19,093 — 3,702,747 Owner occupied - commercial real estate 925,800 53,146 — 6,463 — 985,409 Real estate mortgage - residential 98,228 628 — 5,365 — 104,221 Construction - commercial and residential 1,113,734 — — 11,510 — 1,125,244 Home equity 78,626 948 — 487 — 80,061 Other consumer 2,160 — — — — 2,160 Total $ 7,356,769 $ 109,313 $ 11,460 $ 68,206 $ — $ 7,545,748 December 31, 2018 Commercial $ 1,505,477 $ 25,584 $ — $ 22,051 $ — $ 1,553,112 Income producing - commercial real estate 3,172,479 1,536 — 82,885 — 3,256,900 Owner occupied - commercial real estate 844,286 38,221 — 5,307 — 887,814 Real estate mortgage - residential 104,543 647 — 1,228 — 106,418 Construction - commercial and residential 1,090,600 — — 7,012 — 1,097,612 Home equity 85,434 682 — 487 — 86,603 Other consumer 2,988 — — — — 2,988 Total $ 6,805,807 $ 66,670 $ — $ 118,970 $ — $ 6,991,447 Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents, by class of loan, information related to nonaccrual loans as of December 31, 2019 and 2018. December 31, December 31, (dollars in thousands) 2019 2018 Commercial $ 14,928 $ 7,115 Income producing - commercial real estate 9,711 1,766 Owner occupied - commercial real estate 6,463 2,368 Real estate mortgage - residential 5,631 1,510 Construction - commercial and residential 11,509 3,031 Home equity 487 487 Total nonaccrual loans (1)(2) $ 48,729 $ 16,277 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $16.6 million at December 31, 2019, and $24.0 million at December 31, 2018. (2) Gross interest income of $3.0 million and $1.0 million would have been recorded for 2019 and 2018, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $630 thousand and 265 thousand at December 31, 2019 and 2018, respectively. See Note 1 to the Consolidated Financial Statements for a description of th e Company’s policy for placing loans on nonaccrual status. The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of December 31, 2019 and 2018. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans December 31, 2019 Commercial $ 3,063 $ 781 $ 14,928 $ 18,772 $ 1,527,134 $ 1,545,906 Income producing - commercial real estate — 5,542 9,711 15,253 3,687,494 3,702,747 Owner occupied - commercial real estate 13,008 — 6,463 19,471 965,938 985,409 Real estate mortgage – residential 3,533 — 5,631 9,164 95,057 104,221 Construction - commercial and residential — — 11,509 11,509 1,113,735 1,125,244 Home equity 136 192 487 815 79,246 80,061 Other consumer — 9 — 9 2,151 2,160 Total $ 19,740 $ 6,524 $ 48,729 $ 74,993 $ 7,470,755 $ 7,545,748 December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 Impaired Loans Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. The following table presents, by class of loan, information related to impaired loans for the years ended December 31, 2019 and 2018. Unpaid Recorded Recorded Contractual Investment Investment Total Average Recorded Investment Interest Income Recognized Principal With No With Recorded Related Year Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date December 31, 2019 Commercial $ 15,814 $ 11,858 $ 3,956 $ 15,814 $ 5,714 $ 15,682 $ 270 Income producing - commercial real estate 14,093 2,713 11,380 14,093 2,145 18,133 382 Owner occupied - commercial real estate 7,349 6,388 961 7,349 415 6,107 197 Real estate mortgage – residential 5,631 3,175 2,456 5,631 650 5,638 — Construction - commercial and residential 11,509 11,101 408 11,509 100 8,211 92 Home equity 487 — 487 487 100 487 — Other consumer — — — — — — — Total $ 54,883 $ 35,235 $ 19,648 $ 54,883 $ 9,124 $ 54,258 $ 941 December 31, 2018 Commercial $ 8,613 $ 2,057 $ 6,084 $ 8,141 $ 4,803 $ 8,359 $ 190 Income producing - commercial real estate 21,402 1,720 19,682 21,402 2,465 12,309 550 Owner occupied - commercial real estate 5,731 4,361 1,370 5,731 600 6,011 196 Real estate mortgage - residential 1,510 1,510 — 1,510 — 1,688 2 Construction - commercial and residential 3,031 3,031 — 3,031 1,050 2,028 68 Home equity 487 487 — 487 — 491 — Other consumer — — — — — 69 — Total $ 40,774 $ 13,166 $ 27,136 $ 40,302 $ 8,918 $ 30,955 $ 1,006 Modifications A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. As of December 31, 2019, all performing TDRs were categorized as interest-only modifications. Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. The following table presents, by class, the recorded investment of loans modified in TDRs held by the Company during the years ended December 31, 2019 and 2018. For the Year Ended December 31, 2019 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 7 $ 885 $ 14,806 $ 887 $ — $ 16,578 Restructured nonaccruing 2 142 — 2,370 — 2,512 Total 9 $ 1,027 $ 14,806 $ 3,257 $ — $ 19,090 Specific allowance $ — $ 1,000 $ — $ — $ 1,000 Restructured and subsequently defaulted $ — $ 7,115 $ 2,370 $ — $ 9,485 For the Year Ended December 31, 2018 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructings Restructured accruing 9 $ 1,026 $ 19,636 $ 3,363 $ — $ 24,025 Restructured nonaccruing 3 544 — — — 544 Total 12 $ 1,570 $ 19,636 $ 3,363 $ — $ 24,569 Specific allowance $ — $ 3,000 $ — $ — $ 3,000 Restructured and subsequently defaulted $ 408 $ 937 $ — $ — $ 1,345 The Company had nine TDRs at December 31, 2019, totaling approximately $19.1 million, as compared to twelve TDRs totaling approximately $24.6 million at December 31, 2018. At December 31, 2019, seven of these TDR loans, totaling approximately $16.6 million, are performing under their modified terms, as compared to December 31, 2018, when there were nine performing TDR loans totaling approximately $24.0 million. During 2019, there were three performing TDRs totaling $9.5 million The criteria used to determine if a loan should be considered for charge off relates to its ultimate collectability includes the following: ● All or a portion of the loan is deemed uncollectible; ● Repayment is dependent upon secondary sources, such as liquidation of collateral, other assets, or judgment liens that may require an indefinite time period to collect. Loans may be identified for charge off in whole or in part based upon an impairment analysis consistent with ASC 310. If all or a portion of a loan is deemed uncollectible, such amount shall be charged off in the month in which the loan or portion thereof is determined to be uncollectible. Loans approved for non-accrual status, or charge off, are managed by the Chief Credit Officer or as dictated by the Directors Loan Committee and/or Credit Review Committee. The Chief Credit Officer is expected to position the loan in the best possible posture for recovery, including, among other actions, liquidating collateral, obtaining additional collateral, filing suit to obtain judgment or restructuring of repayment terms. A review of charged off loans is made on a monthly basis to assess the possibility of recovery from renewed collection efforts. All charged off loans that are deemed to have the possibility of recovery, whether partial or full, are actively pursued. Charged off loans that are deemed uncollectible will be placed in an inactive file with documentation supporting the suspension of further collection efforts. In the process of collecting problem loans the Bank may resort to the acquisition of collateral through foreclosure and repossession actions, or may accept the transfer of assets in partial or full satisfaction of the debt. These actions may in turn result in the necessity of carrying real property or chattels as an asset of the Company pending sale. For purchased loans acquired that are not deemed impaired at acquisition, credit marks representing the principal losses expected over the life of the loans are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit mark. The differences between the initial fair value and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans. The following table presents changes in the credit mark accretable yield, which includes income recognized from contractual interest cash flows, for the dates indicated. (dollars in thousands) 2019 2018 Balance at January 1, $ (1,495) $ (2,459) Net reclassifications from nonaccretable yield — — Accretion 520 964 Balance at December 31, $ (975) $ (1,495) Related Party Loans Certain directors and executive officers of the Company and the Bank have had loan transactions with the Company. Such loans were made in the ordinary course of |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Premises and Equipment | |
Premises and Equipment | Note 5 - Premises and Equipment Premises and equipment include the following at December 31: (dollars in thousands) 2019 2018 Leasehold improvements $ 31,461 $ 31,026 Furniture and equipment 30,897 31,168 Less accumulated depreciation and amortization (47,738) (45,343) Total premises and equipment, net $ 14,620 $ 16,851 Total depreciation and amortization expense for the years ended December 31, 2019, 2018 and 2017, was $5.8 million, $5.6 million and $5.4 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | Note 6. Leases A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases” (Topic 842) Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branch offices, ATM locations, and corporate office space. Substantially all of our leases are classified as operating leases, and as such, were previously not recognized on the Company’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements were required to be recognized on the consolidated statements of condition as a right-of-use (“ROU”) asset and a corresponding lease liability. Our leases contain terms and conditions of options to extend or terminate the lease which are recognized as part of the ROU assets and lease liabilities when an economic benefit to exercise the option exists and there is a 90% probability that the Company will exercise the option. If these criteria are not met, the options are not included in our ROU assets and lease liabilities. As of December 31, 2019, our leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or the Company’s ability to incur additional financial obligations. As of December 31, 2019, there were no leases that have been signed but did not yet commence as of the reporting date that create significant rights and obligations for the Company. The following table presents lease costs and other lease information. Year Ended (dollars in thousands) 12/31/2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 7,829 Variable Lease Cost (Cost excluded from lease payments) 1,090 Sublease Income (348) Net Lease Cost $ 8,571 Operating Lease - Operating Cash Flows (Fixed Payments) 8,542 Right-of-Use Assets - Operating Leases 27,372 Weighted Average Lease Term - Operating Leases 4.94 yrs Weighted Average Discount Rate - Operating Leases 4.00 % Future minimum payments for operating leases with initial or remaining terms of one year or more as of December 31, 2019 were as follows: (dollars in thousands) Twelve Months Ended: December 31, 2020 $ 8,468 December 31, 2021 7,545 December 31, 2022 5,220 December 31, 2023 4,276 December 31, 2024 3,398 Thereafter 3,560 Total Future Minimum Lease Payments 32,467 Amounts Representing Interest (2,508) Present Value of Net Future Minimum Lease Payments $ 29,959 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets | |
Intangible Assets | Note 7 – Intangible Assets Intangible assets are included in the Consolidated Balance Sheets as a separate line item, net of accumulated amortization and consist of the following items: Gross Net Intangible Accumulated FHA Intangible (dollars in thousands) Assets Additions Amortization MSR Sales Assets December 31, 2019 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (7,027) — 43 Excess servicing (3) 1,465 1,013 (1,971) — 507 Non-compete agreements (4) 345 — (324) — 21 $ 113,048 $ 1,013 $ (9,322) $ — $ 104,739 December 31, 2018 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (6,312) — 758 Excess servicing (3) 1,465 838 (1,053) (672) 578 Non-compete agreements (4) 345 — (83) — 262 $ 113,048 $ 838 $ (7,448) $ (672) $ 105,766 The aggregate amortization expense was , (1) The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately $360 thousand. Based on allowable adjustments through August 31, 2009, the unidentified intangible (goodwill) amounted to approximately $2.2 million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately $102 million. (2) In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price to core deposit intangibles which were $2.3 million and $4.6 million, respectively, based off of an independent evaluation which is included in intangible assets, net of accumulated amortization on the Consolidated Balance Sheets. The initial amount recorded for the Fidelity acquisition was $2.3 million. The amount of the core deposit intangible relating to the Fidelity acquisition was fully amortized at December 31, 2018, as a component of other noninterest expense. The initial amount recorded for the Virginia Heritage acquisition was $4.6 million. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at December 31, 2019 was $43 thousand, which is being amortized over its remaining economic life through 2020 as a component of other noninterest expense. (3) The Company recognizes a servicing asset for the computed value of servicing fees on the sale of multifamily FHA loans and the sale of the guaranteed portion of SBA loans. Assumptions related to loan terms and amortization is made to arrive at the initial recorded values, which are included in other assets. (4) The Company entered into a non-compete agreement for three years with its former Vice Chairman of the Bank. The amount of the non-compete intangible was $21 thousand as of December 31, 2019, which is being amortized over its remaining term through 2020 as a component of professional fees. The future estimated annual amortization expense is presented below: Years ending December 31: (dollars in thousands) Amount 2020 139 2021 55 2022 55 2023 55 2024 55 Thereafter 212 Total annual amortization $ 571 |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate Owned | |
Other Real Estate Owned | Note 8 – Other Real Estate Owned The activity within OREO for the years ended December 31, 2019 and 2018 is presented in the table below. There were two residential real estate loans totaling $4.0 million in the process of foreclosure as of December 31, 2019. For the year ended December 31, 2019 and 2018, there were no sales of OREO. Years Ended December 31, (dollars in thousands) 2019 2018 Beginning Balance $ 1,394 $ 1,394 Real estate acquired from borrowers 93 — Properties sold — — Ending Balance $ 1,487 $ 1,394 |
Mortgage Banking Derivatives
Mortgage Banking Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Banking Derivatives | |
Mortgage Banking Derivatives | Note 9 – Mortgage Banking Derivatives As part of its mortgage banking activities, the Bank enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Bank then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Certain loans under interest rate lock commitments are covered under forward sales contracts of mortgage backed securities (“MBS”). Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Bank determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded. Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Bank does not expect any counterparty to any MBS to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Bank does not close the loans subject to interest rate risk lock commitments, it will still be obligated to deliver MBS to the counterparty under the forward sales agreement. Should this be required, the Bank could incur significant costs in acquiring replacement loans or MBS and such costs could have an adverse effect on mortgage banking operations. The fair value of the mortgage banking derivatives is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change. At December 31, 2019 the Bank had mortgage banking derivative financial instruments with a notional value of $71.7 million related to its forward contracts. The fair value of these mortgage banking derivative instruments at December 31, 2019 was $280 thousand included in other assets and $66 thousand included in other liabilities. At December 31, 2018 the Bank had mortgage banking derivative financial instruments with a notional value of $49.6 million related to its forward contracts. The fair value of these mortgage banking derivative instruments at December 31, 2018 was $229 thousand included in other assets and $269 thousand included in other liabilities. Included in gain on sale of loans for the year ended December 31, 2019 and 2018 was a net gain of $186 thousand and a net gain of $57 thousand, respectively, relating to mortgage banking derivative instruments. The amount included in gain on sale of loans for year ended December 31, 2019 and 2018 pertaining to its mortgage banking hedging activities was a net realized gain of $116 thousand and a net realized loss of $157 thousand, respectively. |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Interest Rate Swap Derivatives | |
Interest Rate Swap Derivatives | Note 10 – Interest Rate Swap Derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Cash Flow Hedges of Interest Rate Risk The Company uses interest rate swap agreements to assist in its interest rate risk management. The Company’s objective in using interest rate derivatives designated as cash flow hedges is to add stability to interest expense and to better manage its exposure to interest rate movements. To accomplish this objective, the Company utilizes interest rate swaps as part of its interest rate risk management strategy intended to mitigate the potential risk of rising interest rates on the Bank’s cost of funds. The notional amounts of the interest rate swaps designated as cash flow hedges do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties. The interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from one counterparty in exchange for the Company making fixed payments. The Company’s intent is to hedge its exposure to the variability in potential future interest rate conditions on existing financial instruments. For derivatives designated as cash flow hedges, changes in the fair value of the derivative are initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. As of December 31, 2019 and 2018, the Company had one and three designated cash flow hedge interest rate swap transactions outstanding, respectively, associated with the Company's variable rate deposits. The Company recognized $829 thousand in noninterest income during March 2019 due to the termination of two of its interest rate swap transactions as part of the Company’s asset liability strategy as well as declines in market interest rates. Amounts reported in accumulated other comprehensive income related to designated cash flow hedge derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the next twelve months Non-designated Hedges Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate caps and swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. The Company entered into credit risk participation agreements (“RPAs”) with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company is exposed to credit risk in the event of nonperformance by the interest rate swap counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate derivatives. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, "Derivatives and Hedging." The designated interest rate derivative agreements detail: 1) that collateral be posted when the market value exceeds certain threshold limits associated with the secured party's exposure; 2) if the Company defaults on any of its indebtedness (including default where repayment of the indebtedness has not been accelerated by the lender), then the Company could also be declared in default on its derivative obligations; As of December 31, 2019, the aggregate fair value of derivative contracts with credit risk contingent features (i.e., containing collateral posting or termination provisions based on our capital status) that was in a net liability position totaled $515 thousand. The aggregate fair value of all derivative contracts with credit risk contingent features that were a net asset position totaled $3.8 million as of December 31, 2018. The Company has minimum collateral posting thresholds with certain of its derivative counterparties. As of December 31, 2019 the Company posted $500 thousand with its derivative counterparties against its obligations under these agreements because these agreements were in a net liability position. At December 31, 2018, the Company was not required to post collateral with its derivative counterparties against its obligations under these agreements because these agreements were in a net asset position. If the Company had breached any provisions under the agreements at December 31, 2019 or December 31, 2018, it could have been required to settle its obligations under the agreements at the termination value. The table below identifies the balance sheet category and fair value of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of December 31, 2019 and December 31, 2018. December 31, 2019 December 31, 2018 Notional Balance Sheet Notional Balance Sheet Amount Fair Value Category Amount Fair Value Category Derivatives designated as hedging instruments (dollars in thousands) Interest rate product $ — $ — Other Assets $ 250,000 $ 3,840 Other Assets (dollars in thousands) Interest rate product $ 100,000 $ 206 Other Liabilities $ — $ — Other Liabilities Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 26,000 $ 10 Other Assets $ — $ — Other Assets Interest rate product 24,293 168 Other Assets — — Other Assets Interest rate product 6,513 133 Other Assets — — Other Assets $ 56,806 $ 311 Other Assets $ — $ — Other Assets Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 26,000 $ 10 Other Liabilities $ — $ — Other Liabilities Interest rate product 24,293 172 Other Liabilities — — Other Liabilities Interest rate product 6,513 137 Other Liabilities — — Other Liabilities Other Contracts 27,384 86 Other Liabilities 27,500 59 Other Liabilities $ 84,190 $ 405 $ 27,500 $ 59 Other Liabilities The table below presents the pre-tax net gains (losses) of the Company’s designated cash flow hedges for the years ended December 31, 2019 and December 31, 2018. The Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income Location of Gain or (Loss) Recognized from Accumulated Other Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Comprehensive Income into Reclassified from Accumulated OCI on Derivative Income into Income Year Ended December 31, Year Ended December 31, Derivatives in Subtopic 815-20 Hedging Relationships (dollars in thousands) 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,812) $ 2,070 Interest Expense $ 1,165 $ 560 Total $ (1,812) $ 2,070 $ 1,165 $ 560 Location of Gain or (Loss) Recognized from Accumulated Other Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Comprehensive Income into Reclassified from Accumulated OCI on Derivative Income into Income Year Ended December 31, Year Ended December 31, Derivatives in Subtopic 815-20 Hedging Relationships (dollars in thousands) 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,812) $ 2,070 Interest Expense $ 1,165 $ 560 Interest Rate Products — — Gain on sale of investment securities 829 — Total $ (1,812) $ 2,070 $ 1,994 $ 560 The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operation for the years ended December 31, 2019 and 2018. The Effect of Fair Value and Cash Flow Hedge Accounting on the Statements of Operation Year Ended December 31, 2019 2019 2018 Interest Gain on sale of Interest Expense investment securities Expense Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded $ 1,165 $ 829 $ 560 Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 1,165 $ — $ 560 Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring $ — $ 829 $ — Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component $ 1,165 $ 829 $ 560 Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Excluded Component $ — $ — $ — Effect of Derivatives Not Designated as Hedging Instruments on the Statements of Operation Amount of Gain or (Loss) Recognized in Income on Derivatives Not Designated as Location of Gain or Derivative Hedging Instruments under Subtopic (Loss) Recognized in Year Ended December 31, 815-20 Income on Derivative 2019 2018 Interest Rate Products Other income / (expense) (8) — Other Contracts Other income / (expense) (27) — Total (35) — Balance Sheet Offsetting The following table presents the liabilities subject to an enforceable master netting arrangement as of December 31, 2019 and December 31, 2018. As of December 31, 2019 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount $ 311 $ — $ 311 $ — $ — $ 311 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 611 $ — $ 611 $ — $ 500 $ 111 As of December 31, 2018 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount Derivatives $ 3,840 $ — $ 3,840 $ — $ — $ 3,840 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 59 $ — $ 59 $ — $ — $ 59 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits | |
Deposits | Note 11 – Deposits The following table provides information regarding the Bank’s deposit composition at December 31, 2019, 2018, and 2017 as well as the average rate being paid on interest bearing deposits at December 31, 2019, 2018, and 2017. 2019 2018 2017 Average Average Average (dollars in thousands) Balance Rate Balance Rate Balance Rate Noninterest bearing demand $ 2,064,367 — $ 2,104,220 — $ 1,982,912 — Interest bearing transaction 863,856 0.99 % 593,107 0.81 % 420,417 0.46 % Savings and money market 3,013,129 1.42 % 2,949,559 1.68 % 2,621,146 0.70 % Time, $100,000 or more 663,987 2.55 % 801,957 2.25 % 515,682 1.20 % Other time 619,052 2.21 % 525,442 2.25 % 313,827 1.17 % Total $ 7,224,391 $ 6,974,285 $ 5,853,984 The remaining maturity of time deposits at December 31, 2019, 2018 and 2017 are as follows: (dollars in thousands) 2019 2018 2017 Three months or less $ 260,028 $ 230,360 $ 180,459 More than three months through twelve months 538,352 663,085 437,067 Over twelve months 484,659 433,954 211,983 Total $ 1,283,039 $ 1,327,399 $ 829,509 Interest expense on deposits for the years ended December 31, 2019, 2018 and 2017 is as follows: (dollars in thousands) 2019 2018 2017 Interest bearing transaction $ 6,491 $ 3,348 $ 1,537 Savings and money market 50,042 35,534 17,284 Time, $100,000 or more 20,016 17,138 7,294 Other time 14,477 4,190 1,171 Total $ 91,026 $ 60,210 $ 27,286 Related Party deposits totaled $136.2 million and $141.4 million at December 31, 2019 and 2018, respectively. As of December 31, 2019, 2018 and 2017, time deposit accounts in excess of $250 thousand are as follows:. Time deposits $250,000 or more (dollars in thousands) 2019 2018 2017 Three months or less $ 63,099 $ 51,214 $ 44,348 More than three months through twelve months 197,141 286,300 136,822 Over twelve months 90,361 108,273 98,519 Total $ 350,601 $ 445,787 $ 279,689 |
Affordable Housing Projects Tax
Affordable Housing Projects Tax Credit Partnerships | 12 Months Ended |
Dec. 31, 2019 | |
Affordable Housing Projects Tax Credit Partnerships | |
Affordable Housing Projects Tax Credit Partnerships | Note 12 – Affordable Housing Projects Tax Credit Partnerships Included in Other Assets, the Company makes equity investments in various limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (“LIHTC”) pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of affordable housing products offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity. The Company is a limited partner in each LIHTC limited partnership. Each limited partnership is managed by an unrelated third party general partner who exercises significant control over the affairs of the limited partnership. The general partner has all the rights, powers and authority granted or permitted to be granted to a general partner of a limited partnership. Duties entrusted to the general partner of each limited partnership include, but are not limited to: investment in operating companies, company expenditures, investment of excess funds, borrowing funds, employment of agents, disposition of fund property, prepayment and refinancing of liabilities, votes and consents, contract authority, disbursement of funds, accounting methods, tax elections, bank accounts, insurance, litigation, cash reserve, and use of working capital reserve funds. Except for limited rights granted to the limited partner(s) relating to the approval of certain transactions, the limited partner(s) may not participate in the operation, management, or control of the limited partnership’s business, transact any business in the limited partnership’s name or have any power to sign documents for or otherwise bind the limited partnership. In addition, the general partner may only be removed by the limited partner(s) in the event the general partner fails to comply with the terms of the agreement or is negligent in performing its duties. The general partner of each limited partnership has both the power to direct the activities which most significantly affect the performance of each partnership and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. Therefore, the Company has determined that it is not the primary beneficiary of any LIHTC partnership. The Company accounts for its affordable housing tax credit investments using the proportional amortization method. The Company’s net affordable housing tax credit investments were $29.7 million and related unfunded commitments were $11.3 million as of December 31, 2019, and are included in Other Assets and Other Liabilities in the Consolidated Statements of Condition. As of December 31, 2019, the expected payments for unfunded affordable housing commitments were as follows: Years ending December 31: (dollars in thousands) Amount 2020 3,690 2021 4,053 2022 373 2023 1,862 2024 485 Thereafter 797 Total unfunded commitments $ 11,260 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings | |
Borrowings | Note 13 – Borrowings Information relating to short-term and long-term borrowings is as follows for the years ended December 31: 2019 2018 2017 (dollars in thousands) Amount Rate Amount Rate Amount Rate Short-term: At Year-End: Customer repurchase agreements and federal funds purchased $ 30,980 1.18 % $ 30,413 0.86 % $ 76,561 0.33 % Federal Home Loan Bank – current portion 250,000 0.39 % — — 325,000 1.48 % Total $ 280,980 $ 30,413 $ 401,561 Average Daily Balance: Customer repurchase agreements and federal funds purchased $ 30,024 1.15 % $ 44,333 0.51 % $ 73,237 0.27 % Federal Home Loan Bank – current portion 135,699 1.67 % 192,131 2.02 % 65,416 1.13 % Total $ 165,723 $ 236,464 $ 138,653 Maximum Month-end Balance: Customer repurchase agreements and federal funds purchased $ 34,852 0.89 % $ 72,141 0.32 % $ 85,614 0.29 % Federal Home Loan Bank – current portion 440,000 0.92 % 325,000 1.62 % 325,000 1.48 % Total $ 474,852 $ 397,141 $ 410,614 Long-term: At Year-End: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % Average Daily Balance: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % Maximum Month-end Balance: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % The Company offers its business customers a repurchase agreement sweep account in which it collateralizes these funds with U.S. agency and mortgage backed securities segregated in its investment portfolio for this purpose. By entering into the agreement, the customer agrees to have the Bank repurchase the designated securities on the business day following the initial transaction in consideration of the payment of interest at the rate prevailing on the day of the transaction. The Bank can purchase up to $172.5 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding at December 31, 2019 and can borrow unsecured funds under one-way CDARS and ICS brokered deposits in the amount of $1.34 billion, against which there was $82.4 million outstanding at December 31, 2019. The Bank also has a commitment at December 31, 2019 from Promontory to place up to $700.0 million of brokered deposits from its Insured Network Deposits (“IND”) program in amounts requested by the Bank, as compared to an actual balance of $533.1 million at December 31, 2019. At December 31, 2019, the Bank was also eligible to make advances from the FHLB up to $1.54 billion based on collateral at the FHLB, of which there was $250 million outstanding at December 31, 2019. The Bank may enter into repurchase agreements as well as obtain additional borrowing capabilities from the FHLB provided adequate collateral exists to secure these lending relationships. The Bank also has a back-up borrowing facility through the Discount Window at the Federal Reserve Bank of Richmond (“Federal Reserve Bank”). This facility, which amounts to approximately $653.0 million, is collateralized with specific loan assets identified to the Federal Reserve Bank. It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only. On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the “2024 Notes”). The Notes were offered to the public at par. The 2024 Notes qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which are being amortized over the life of the 2024 Notes. On July 26, 2016, the Company completed the sale of $150.0 million of its 5.00% Fixed-to-Floating Rate Subordinated Notes, due August 1, 2026 (the “2026 Notes”). The 2026 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $147.35 million, which includes $2.6 million in deferred financing costs which is being amortized over the life of the 2026 Notes. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | Note 14 – Income Taxes The Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017 reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the Tax Act, we recorded a $14.6 million reduction in the value of our net deferred tax asset, which was recorded as additional income tax expense during 2017. We had net deferred tax assets (deferred tax assets in excess of deferred tax liabilities) of $29.8 million and $33.3 million at December 31, 2019 and 2018, respectively, which related primarily to our allowance for credit losses, and loan origination fees. Management believes it is more likely than not that all of the deferred tax assets will be realized. Federal and state income tax expense consists of the following for the years ended December 31: (dollars in thousands) 2019 2018 2017 Current federal income tax expense $ 39,756 $ 39,498 $ 59,019 Current state income tax expense 14,153 15,931 7,511 Total current tax expense 53,909 55,429 66,530 Deferred federal income tax expense (benefit) 78 (2,634) 18,459 Deferred state income tax expense (benefit) (139) (863) 515 Total deferred tax expense (benefit) (61) (3,497) 18,974 Total income tax expense $ 53,848 $ 51,932 $ 85,504 Temporary timing differences between the amounts reported in the financial statements and the tax bases of assets and liabilities result in deferred taxes. The table below summarizes significant components of our deferred tax assets and liabilities utilizing federal corporate income tax rates of 21% as of December 31, 2019, 2018, and 2017: (dollars in thousands) 2019 2018 2017 Deferred tax assets Allowance for credit losses $ 19,144 $ 18,101 $ 16,568 Deferred loan fees and costs 6,354 6,733 6,741 Deferred rent — 1,026 1,009 Leases 673 — — Stock-based compensation 674 1,722 847 Net operating loss 1,285 2,003 2,032 Unrealized loss on securities available-for-sale — 2,756 1,312 Unrealized loss on interest rate swap derivatives 53 — — SERP 1,541 1,497 1,373 Premises and equipment 914 795 33 Other assets 816 287 35 Total deferred tax assets 31,454 34,920 29,950 Deferred tax liabilities Unrealized net gain on securities available-for-sale (1,081) — — Unrealized gain on interest rate swap derivatives — (965) (578) Excess servicing (51) (77) (99) Intangible assets (9) (223) (503) Other liabilities (509) (328) — Total deferred tax liabilities (1,650) (1,593) (1,180) Net deferred income tax amount $ 29,804 $ 33,327 $ 28,770 A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31 follows: 2019 2018 2017 Statutory federal income tax rate 21.00 % 21.00 % 35.00 % Increase (decrease) due to: State income taxes 5.73 5.83 3.41 Deferred tax adjustment 0.49 — 7.85 Tax exempt interest and dividend income (0.35) (1.13) (0.61) Stock-based compensation expense 1.15 0.01 0.01 Other (0.61) (0.28) 0.38 Effective tax rate 27.41 % 25.43 % 46.04 % 2027 |
Net Income per Common Share
Net Income per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Net Income per Common Share | |
Net Income per Common Share | Note 15 – Net Income per Common Share The calculation of net income per common share for the years ended December 31 was as follows: (dollars and shares in thousands, except per share data) 2019 2018 2017 Basic: Net income $ 142,943 $ 152,276 $ 100,232 Average common shares outstanding 34,179 34,306 34,139 Basic net income per common share $ 4.18 $ 4.44 $ 2.94 Diluted: Net income $ 142,943 $ 152,276 $ 100,232 Average common shares outstanding 34,179 34,306 34,139 Adjustment for common share equivalents 32 137 182 Average common shares outstanding-diluted 34,211 34,443 34,321 Diluted net income per common share $ 4.18 $ 4.42 $ 2.92 Anti-dilutive shares 2 — — |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | Note 16– Related Party Transactions The Bank leases office space from a limited liability company in which a trust for the benefit of a former executive officer’s children has a 51% interest. During the fourth quarter of 2015, the Company entered into an agreement to lease office space for a second location with limited liability companies in which the executive officer indirectly owns a majority interest. The Company leased additional space at this location starting with the third quarter of 2017. The executive officer resigned during 2019. The Company paid $2.6 million, $2.2 million, and $2.1 million with respect to these leases, excluding certain pass-through expenses for the years ended December 31, 2019, 2018 and 2017, respectively. A director that resigned from Company during 2019 was a shareholder in a law firm which has provided, and continues to provide, legal services to the Company and its subsidiaries. During 2019, the Company and its subsidiaries paid aggregate fees of $929 thousand to that firm. Under the director’s arrangement with his firm, he did not participate significantly in the profits or revenues resulting from the provision of legal services to the Company and its subsidiaries. The EagleBank Foundation, a 501(c)(3) non-profit, seeks to improve the well being of our community by providing financial support to local charitable organizations that help foster and strengthen vibrant, healthy, cultural and sustainable communities. The Company paid $182 thousand, $150 thousand, and $145 thousand to the EagleBank Foundation for the years ended December 31, 2019, 2018 and 2017, respectively. Certain directors and executive officers of the Company and the Bank have had loan transactions with the Company. Such loans were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with outsiders. Please see further detail regarding Related Party Loans in Note 4 and Related Party Deposits in Note 11 to the Consolidated Financial Statements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 17 – Stock-Based Compensation The Company maintains the 2016 Stock Plan (“2016 Plan”), the 2006 Stock Plan (“2006 Plan”) and the 2011 Employee Stock Purchase Plan (“2011 ESPP”). In connection with the acquisition of Virginia Heritage, the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”). No additional options may be granted under the 2006 Plan or the Virginia Heritage Plans. The Company adopted the 2016 Plan upon approval by the shareholders at the 2016 Annual Meeting held on May 12, 2016. The 2016 Plan provides directors and selected employees of the Bank, the Company and their affiliates with the opportunity to acquire shares of stock, through awards of options, time vested restricted stock, performance-based restricted stock and stock appreciation rights. Under the 2016 Plan, 1,000,000 shares of common stock were initially reserved for issuance. For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model. For restricted stock awards granted under the 2006 plan, fair value is based on the average of the high and low stock price of the Company’s shares on the date of grant. For restricted stock awards granted under the 2016 plan, fair value is based on the Company’s closing price on the date of grant. For awards that are performance-based, compensation expense is recorded based on the probability of achievement of the goals underlying the grant. In February 2019, the Company awarded 112,636 shares of time vested restricted stock to senior officers, directors, and certain employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant. In February 2019, the Company awarded senior officers a targeted number of 43,145 performance vested restricted stock units (“PRSUs”). The vesting of PRSUs is 100% after three years with payouts based on threshold, target or maximum average performance targets over a three year period. There are two performance metrics: 1) average annual earnings per share growth; and 2) average annual net interest margin growth. Average annual earnings per share growth is measured compared to the Company’s budget. Average annual net interest margin growth is measured against peer companies in the KBW Regional Banking Index. The Company has unvested restricted stock awards and PRSU grants of 169,494 shares at December 31, 2019. Unrecognized stock based compensation expense related to restricted stock awards and PRSU grants totaled $5.3 million at December 31, 2019. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.76 years. The following tables summarize the unvested restricted stock awards at December 31, 2019 and 2018. Years Ended December 31, 2019 2018 Weighted- Weighted- Average Average Grant Date Grant Date Perfomance Awards Shares Fair Value Shares Fair Value Unvested at beginning 98,958 $ 54.76 62,338 $ 50.45 Issued 43,145 55.76 42,533 60.45 Forfeited (65,589) 55.25 (5,913) 50.28 Vested (17,734) — — — Unvested at end 58,780 $ 57.74 98,958 $ 54.76 Years Ended December 31, 2019 2018 Weighted- Weighted- Average Average Grant Date Grant Date Time Vested Awards Shares Fair Value Shares Fair Value Unvested at beginning 173,721 $ 58.93 164,043 $ 53.57 Issued 112,636 55.76 94,344 60.45 Forfeited (44,600) 58.73 (7,132) 56.48 Vested (131,043) 57.20 (77,534) 49.67 Unvested at end 110,714 $ 57.84 173,721 $ 58.93 Below is a summary of stock option activity for the twelve months ended December 31, 2019 , Years Ended December 31, 2019 2018 2017 Weighted- Weighted- Weighted- Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price Beginning balance 34,123 $ 14.69 143,224 $ 9.13 216,859 $ 8.80 Issued — — — — — — Exercised (26,784) 12.42 (108,201) 7.17 (72,535) 8.19 Forfeited (750) 49.08 (900) 34.47 — — Expired — — — — (1,100) 5.76 Ending balance 6,589 $ 19.99 34,123 $ 14.69 143,224 $ 9.13 The following summarizes information about stock options outstanding at December 31, 2019. The information excludes restricted stock units and awards. Weighted-Average Outstanding: Stock Options Weighted-Average Remaining Range of Exercise Prices Outstanding Exercise Price Contractual Life (Years) $ 5.76 $ 10.72 — — — $ 10.73 $ 11.40 5,089 11.17 1.88 $ 11.41 $ 24.86 — — — $ 24.87 $ 49.91 1,500 49.91 6.36 6,589 $ 19.99 2.90 Exercisable: Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $ 5.76 $ 10.72 — — $ 10.73 $ 11.40 5,089 11.17 $ 11.41 $ 24.86 — — $ 24.87 $ 49.91 1,125 49.91 6,214 $ 18.18 The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. There were no grants of stock options during the years ended December 31, 2019, 2018 and 2017. The total intrinsic value of outstanding stock options was $192 thousand and $1.2 million, respectively, at December 31, 2019 and 2018. The total fair value of stock options vested was $35 thousand, $80 thousand and $71 thousand, for 2019, 2018 and 2017, respectively. Unrecognized stock-based compensation expense related to stock options totaled $2 thousand at December 31, 2019. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 0.36 years. Cash proceeds, tax benefits and intrinsic value related to total stock options exercised is as follows: Years Ended December 31, (dollars in thousands) 2019 2018 2017 Proceeds from stock options exercised $ 332 $ 776 $ 372 Tax benefits realized from stock compensation 50 5 99 Intrinsic value of stock options exercised 1,022 4,958 3,888 Approved by shareholders in May 2011, the 2011 ESPP reserved 550,000 shares of common stock (as adjusted for stock dividends) for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2011 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $6,250 per offering period or $25,000 annually (not to exceed more than 10% of compensation per pay period). At December 31, 2019, the 2011 ESPP had 371,093 shares reserved for issuance. Included in salaries and employee benefits in the accompanying Consolidated Statements of Operations, the Company recognized $7.7 million, $6.6 million and $5.6 million in stock-based compensation expense for 2019, 2018 and 2017, respectively. In addition, during 2019 the Company accrued $4.5 million in stock-based compensation costs associated with the retirement of our former Chairman and Chief Executive Officer. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 18 – Employee Benefit Plans The Company has a qualified 401(k) Plan which covers all employees who have reached the age of 21 |
Supplemental Executive Retireme
Supplemental Executive Retirement Plan | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Executive Retirement Plan | |
Supplemental Executive Retirement Plan | Note 19 – Supplemental Executive Retirement Plan The Bank has entered into Supplemental Executive Retirement and Death Benefit Agreements (the “SERP Agreements”) with certain of the Bank’s executive officers, which upon the executive’s retirement, will provide for a stated monthly payment for such executive’s lifetime subject to certain death benefits described below. The retirement benefit is computed as a percentage of each executive’s projected average base salary over the five years preceding retirement, assuming retirement at age 67. The SERP Agreements provide that (a) the benefits vest ratably over six years of service to the Bank, with the executive receiving credit for years of service prior to entering into the SERP Agreement (b) death, disability and change-in-control shall result in immediate vesting, and (c) the monthly amount will be reduced if retirement occurs earlier than age 67 for any reason other than death, disability or change-in-control. The SERP Agreements further provide for a death benefit in the event the retired executive dies prior to receiving 180 monthly installments, paid either in a lump sum payment or continued monthly installment payments, such that the executive’s beneficiary has received payment(s) sufficient to equate to a cumulative 180 monthly installments. The SERP Agreements are unfunded arrangements maintained primarily to provide supplemental retirement benefits and comply with Section 409A of the Internal Revenue Code. The Bank financed the retirement benefits by purchasing fixed annuity contracts with four insurance carriers in 2013 totaling $11.4 million and two insurance carriers in 2019 totaling $2.6 million. These annuity contracts have been designed to provide a future source of funds for the lifetime retirement benefits of the SERP Agreements. The primary impetus for utilizing fixed annuities is a substantial savings in compensation expenses for the Bank as opposed to a traditional SERP Agreement. The annuity contracts accrued $23 thousand and $81 thousand of income for the years ended December 31, 2019 and 2018, respectively, which were included in other noninterest income on the Consolidated Statement of Operations. The cash surrender value of the annuity contracts was $14.7 million at December 31, 2019 and was included in other assets on the Consolidated Balance Sheet. For the years ended December 31, 2019 and 2018, the Company recorded benefit expense accruals of $404 thousand and $686 thousand, respectively, for this post retirement benefit. Upon death of a named executive, the annuity contract related to such executive terminates. The Bank has purchased additional bank owned life insurance contracts, which would effectively finance payments (up to a 15 year certain amount) to the executives’ named beneficiaries. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2019 | |
Financial Instruments With Off-balance Sheet Risk. | |
Financial Instruments with Off-Balance Sheet Risk | Note 20 – Financial Instruments with Off-Balance Sheet Risk Various commitments to extend credit are made in the normal course of banking business. Letters of credit are also issued for the benefit of customers. These commitments are subject to loan underwriting standards and geographic boundaries consistent with the Company’s loans outstanding. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Loan commitments outstanding and lines and letters of credit at December 31, 2019 and 2018 are as follows: (dollars in thousands) 2019 2018 Unfunded loan commitments $ 2,176,641 $ 2,228,689 Unfunded lines of credit 86,426 90,283 Letters of credit 69,723 83,162 Total $ 2,332,790 $ 2,402,134 Because most of the Company’s business activity is with customers located in the Washington, D.C., metropolitan area, a geographic concentration of credit risk exists within the loan portfolio, the performance of which will be influenced by the economy of the region. The Bank maintains a reserve for the potential repurchase of residential mortgage loans, which amounted to $79 thousand at December 31, 2019 and $45 thousand at December 31, 2018. These amounts are included in other liabilities in the accompanying Consolidated Balance Sheets. Changes in the balance of the reserve are a component of other expenses in the accompanying Consolidated Statements of Operations. The reserve is available to absorb losses on the repurchase of loans sold related to document and other fraud, early payment default and early payoff. Through December 31, 2019, no reserve charges have occurred related to fraud. The Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The residential mortgage division either locks in the loan and rate with an investor and commits to deliver the loan if settlement occurs under best efforts or commits to deliver the locked loan in a binding mandatory delivery program with an investor. Certain loans under rate lock commitments are covered under forward sales contracts of mortgage backed securities as a hedge of any interest rate risk. Forward sales contracts of mortgage backed securities are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates while taking into consideration the probability that the rate lock commitments will close or will be funded. These transactions are further detailed in Note 9 to the Consolidated Financial Statements. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingent Liabilities | |
Commitments and Contingent Liabilities | Note 21 – Commitments and Contingent Liabilities The Company has various financial obligations, including contractual obligations and commitments that may require future cash payments. Except for its loan commitments, as shown in Note 20 to the Consolidated Financial Statements, the following table shows details on these fixed and determinable obligations as of December 31, 2019 in the time period indicated. Within One One to Three to Over Five (dollars in thousands) Year Three Years Five Years Years Total Deposits without a stated maturity (1) $ 5,941,352 $ — $ — $ — $ 5,941,352 Time deposits (1) 798,380 375,879 108,780 — 1,283,039 Borrowed funds (2) 280,980 — 70,000 150,000 500,980 Operating lease obligations 8,468 12,765 7,674 3,560 32,467 Outside data processing (3) 5,037 9,814 5,261 — 20,112 George Mason sponsorship (4) 663 1,350 1,350 7,463 10,826 D.C. United (5) 796 1,663 — — 2,459 LIHTC investments (6) 3,690 4,426 2,347 797 11,260 Total $ 7,039,366 $ 405,897 $ 195,412 $ 161,820 $ 7,802,495 (1) Excludes accrued interest payable at December 31, 2019. (2) Borrowed funds include customer repurchase agreements, and other short-term and long-term borrowings. (3) The Bank has outstanding obligations under its current core data processing contract that expire in June 2024 and two other vendor arrangements that relate to network infrastructure and data center services, one expires in December 2021 and the other expires in December 2020. (4) The Bank has the option of terminating the George Mason agreement at the end of contract years 10 and 15 (that is, effective June 30, 2025 or June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, contractual obligations would decrease $3.5 million and $3.6 million for the first option period (years 11 - 15 ) and the second option period ( 16 - 20 ), respectively. (5) Marketing sponsorship agreement with D.C. United. (6) Low Income Housing Tax Credits (“LIHTC”) expected payments for unfunded affordable housing commitments. An accrual is recorded when it is both (a) probable that a loss has occurred and (b) the amount of loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings with respect to accruals, as well as the estimated range of possible losses. From time to time, the Company and its subsidiaries are involved in various legal proceedings incidental to their business in the ordinary course, including matters in which damages in various amounts are claimed. Based on information currently available, the Company does not believe that the liabilities (if any) resulting from such legal proceedings will have a material effect on the financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in such matters, ongoing legal expenses or an adverse outcome in one or more of these matters could materially and adversely affect the Company's financial condition, results of operations or cash flows in any particular reporting period, as well as its reputation. Certain legal proceedings involving us are described below. On July 24, 2019, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York against the Company, its current and former President and Chief Executive Officer and its current and former Chief Financial Officer, on behalf of persons similarly situated, who purchased or otherwise acquired Company securities between March 2, 2015 and July 17, 2019. On November 7, 2019, the court appointed a lead plaintiff and lead counsel in that matter, and on January 21, 2020, the lead plaintiff filed an amended complaint on behalf of the same class against the same defendants as well as the Company's former General Counsel. The plaintiff alleges that certain of the Company's 10-K reports and other public statements and disclosures contained materially false or misleading statements about, among other things, the effectiveness of its internal controls and related party loans, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 20 (a) of that act, resulting in injury to the purported class members as a result of the decline in the value of the Company's common stock following the disclosure of increased legal expenses associated with certain government investigations involving the Company. The Company intends to defend vigorously against the claims asserted. The Company has received various document requests and subpoenas from securities and banking regulators and U.S. Attorney’s offices in connection with investigations, which the Company believes relate to the Company's identification, classification and disclosure of related party transactions; the retirement of certain former officers and directors; and the relationship of the Company and certain of its former officers and directors with a local public official, among other things. The Company is cooperating with these investigations. There have been no regulatory restrictions placed on the Company's ability to fully engage in its banking business as presently conducted as a result of these ongoing investigations. We are, however, unable to predict the duration, scope or outcome of these investigations. Estimating an amount or range of possible losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve fines, penalties, or damages that are discretionary in amount, involve a large number of claimants or significant discretion by regulatory authorities, represent a change in regulatory policy or interpretation, present novel legal theories, are in the early stages of the proceedings, are subject to appeal or could result in a change in business practices. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses resulting from, the matters described above. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Matters | |
Regulatory Matters | Note 22 – Regulatory Matters The Company and Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain amounts and ratios (set forth in the table below) of Total capital, Tier 1 capital and CET1 (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined), referred to as the Leverage Ratio. Management believes, as of December 31, 2019 and 2018, that the Company and Bank met all capital adequacy requirements to which they are subject. The actual capital amounts and ratios for the Company and Bank as of December 31, 2019 and 2018 are presented in the table below: To Be Well Capitalized Company Bank Minimum Required Under Prompt Actual Actual For Capital Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Adequacy Purposes Regulations * As of December 31, 2019 CET1 capital (to risk weighted assets) $ 1,082,516 12.87 % $ 1,225,486 14.64 % 7.000 % 6.5 % Total capital (to risk weighted assets) 1,362,253 16.20 % 1,299,223 15.52 % 10.500 % 10.0 % Tier 1 capital (to risk weighted assets) 1,082,516 12.87 % 1,225,486 14.64 % 8.500 % 8.0 % Tier 1 capital (to average assets) 1,082,516 11.62 % 1,225,486 13.18 % 4.000 % 5.0 % As of December 31, 2018 CET1 capital (to risk weighted assets) $ 1,007,438 12.49 % $ 1,147,151 14.23 % 6.375 % 6.5 % Total capital (to risk weighted assets) 1,297,427 16.08 % 1,217,140 15.10 % 9.875 % 10.0 % Tier 1 capital (to risk weighted assets) 1,007,438 12.49 % 1,147,151 14.23 % 7.875 % 8.0 % Tier 1 capital (to average assets) 1,007,438 12.10 % 1,147,151 13.78 % 5.000 % 5.0 % * Applies to Bank only Federal bank and holding company regulations, as well as Maryland law, impose certain restrictions on capital distributions, including dividend payments and share repurchases by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. At December 31, 2019, the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained capital ratios above the required minimums and the capital conservation buffer. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income. | |
Other Comprehensive Income | Note 23 – Other Comprehensive Income The following table presents the components of other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017. (dollars in thousands) Before Tax Tax Effect Net of Tax Year Ended December 31, 2019 Net unrealized gain on securities available-for-sale $ 15,183 $ (3,929) $ 11,254 Less: Reclassification adjustment for net gains included in net income (1,517) (416) (1,101) Total unrealized gain 13,666 (4,345) 10,153 Net unrealized loss on derivatives (2,731) 682 (2,049) Less: Reclassification adjustment for gain included in net income (1,198) (328) (870) Total unrealized loss (3,929) 354 (2,919) Other Comprehensive Income $ 9,737 $ (3,991) $ 7,234 Year Ended December 31, 2018 Net unrealized loss on securities available-for-sale $ (4,279) $ (438) $ (3,841) Less: Reclassification adjustment for net gains included in net income (97) (25) (72) Total unrealized loss (4,376) (463) (3,913) Net unrealized gain on derivatives 2,033 227 1,806 Less: Reclassification adjustment for gain included in net income (560) (142) (418) Total unrealized gain 1,473 85 1,388 Other Comprehensive Loss $ (2,903) $ (378) $ (2,525) Year Ended December 31, 2017 Net unrealized loss on securities available-for-sale $ (1,319) $ (479) $ (840) Less: Reclassification adjustment for net gains included in net income (542) (206) (336) Total unrealized loss (1,861) (685) (1,176) Net unrealized gain on derivatives 4,559 1,765 2,794 Less: Reclassification adjustment for losses included in net income (1,592) (605) (987) Total unrealized gain 2,967 1,160 1,807 Other Comprehensive Income $ 1,106 $ 475 $ 631 The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2019, 2018 and 2017. Securities Accumulated Other Available Comprehensive Income (dollars in thousands) For Sale Derivatives (Loss) Year Ended December 31, 2019 Balance at Beginning of Period $ (7,044) $ 2,769 $ (4,275) Other comprehensive income (loss) before reclassifications 11,254 (2,049) 9,205 Amounts reclassified from accumulated other comprehensive income (1,101) (870) (1,971) Net other comprehensive income (loss) during period 10,153 (2,919) 7,234 Balance at End of Period $ 3,109 $ (150) $ 2,959 Year Ended December 31, 2018 Balance at Beginning of Period $ (3,131) $ 1,381 $ (1,750) Other comprehensive (loss) income before reclassifications (3,841) 1,806 (2,035) Amounts reclassified from accumulated other comprehensive income (72) (418) (490) Net other comprehensive (loss) income during period (3,913) 1,388 (2,525) Balance at End of Period $ (7,044) $ 2,769 $ (4,275) Year Ended December 31, 2017 Balance at Beginning of Period $ (1,955) $ (426) $ (2,381) Other comprehensive (loss) income before reclassifications (840) 2,794 1,954 Amounts reclassified from accumulated other comprehensive income (336) (987) (1,323) Net other comprehensive (loss) income during period (1,176) 1,807 631 Balance at End of Period $ (3,131) $ 1,381 $ (1,750) The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017. Amount Reclassified from Affected Line Item in Accumulated Other the Statement Where Details about Accumulated Other Comprehensive (Loss) Income Net Income is Presented Comprehensive Income Components Year Ended December 31, (dollars in thousands) 2019 2018 2017 Realized gain on sale of investment securities $ 1,517 $ 97 $ 542 Gain on sale of investment securities Interest income (expense) derivative deposits 1,198 560 (1,592) Interest expense on deposits Income tax (expense) benefit (744) (167) 399 Tax expense Total Reclassifications for the Period $ 1,971 $ 490 $ (651) Net Income |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | Note 24 – Fair Value Measurements The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, “Fair Value Measurements and Disclosures,” Level 1 Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale. Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018: Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 179,794 $ — $ 179,794 Residential mortgage backed securities — 543,852 — 543,852 Municipal bonds — 73,931 — 73,931 Corporate bonds — — 10,733 10,733 U.S. Treasury — 34,855 — 34,855 Other equity investments — — 198 198 Loans held for sale — 56,707 — 56,707 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 280 280 Total assets measured at fair value on a recurring basis as of December 31, 2019 $ — $ 889,456 $ 11,211 $ 900,667 Liabilities: Interest rate swap derivatives $ — $ 203 $ — $ 203 Derivative liability — 86 — 86 Interest Rate Caps — 312 — 312 Mortgage banking derivatives — — 66 66 Total liabilities measured at fair value on a recurring basis as of December 31, 2019 $ — $ 601 $ 66 $ 667 December 31, 2018 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ 269 $ 269 Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include U.S. agency debt securities, mortgage backed securities issued by Government Sponsored Entities (“GSE’s”) and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, the carrying amounts approximate the fair value. Loans held for sale The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of December 31, 2019 and 2018. December 31, 2019 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 52,927 $ 52,054 $ 873 FHA mortgage loans held for sale $ 3,780 $ 3,780 $ — December 31, 2018 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 19,254 $ 18,797 $ 457 FHA mortgage loans held for sale $ — $ — $ — No residential mortgage loans held for sale were 90 or more days past due or on nonaccrual status as of December 31, 2019 or December 31, 2018. Interest rate swap derivatives: Credit Risk Participation Agreements Interest Rate Caps: The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3): Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2019 $ 9,794 $ 229 $ 10,023 Realized (loss) gain included in earnings (20) 51 31 Unrealized gain included in other comprehensive income 131 — 131 Purchases of available -for-sale securities 4,030 — 4,030 Principal redemption (3,004) — (3,004) Ending balance at December 31, 2019 $ 10,931 $ 280 $ 11,211 Liabilities: Beginning balance at January 1, 2019 $ — $ 269 $ 269 Realized gain included in earnings — (203) (203) Principal redemption — — — Ending balance at December 31, 2019 $ — $ 66 $ 66 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2018 $ 1,718 $ 43 $ 1,761 Realized gain included in earnings — 186 186 Purchases of available-for-sale securities 8,076 — 8,076 Principal redemption — — — Ending balance at December 31, 2018 $ 9,794 $ 229 $ 10,023 Liabilities: Beginning balance at January 1, 2018 $ — $ 10 $ 10 Realized loss included in earnings — 259 259 Principal redemption — — — Ending balance at December 31, 2018 $ — $ 269 $ 269 Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value. The securities consist of $10.9 million in corporate bonds and equity investments in the form of common stock of two local banking companies which are not publicly traded, and for which the carrying amount approximates fair value. Mortgage banking derivatives: Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets. Impaired loans Other real estate owned Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Impaired loans: Commercial $ — $ — $ 10,100 $ 10,100 Income producing - commercial real estate — — 11,948 11,948 Owner occupied - commercial real estate — — 6,934 6,934 Real estate mortgage - residential — — 4,981 4,981 Construction - commercial and residential — — 11,409 11,409 Home equity — — 387 387 Other real estate owned — — 1,487 1,487 Total assets measured at fair value on a nonrecurring basis as of December 31, 2019 $ — $ — $ 47,246 $ 47,246 Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential — — 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 Loans The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is considered impaired and an allowance for loan loss is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, “Receivables.” Fair Value of Financial Instruments The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists. Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values and should not be considered an indication of the fair value of the Company taken as a whole. The following methods and assumptions were used to estimate the fair value of each category of financial instrument for which it is practicable to estimate value: Cash due from banks and federal funds sold: Interest bearing deposits with other banks: Investment securities: Federal Reserve and Federal Home Loan Bank stock: Loans held for sale: Loans: Bank owned life insurance: Annuity investment: Mortgage banking derivatives: Credit Risk Participation Agreements Interest Rate Caps: Interest rate swap derivatives: Noninterest bearing deposits: Interest bearing deposits: Certificates of deposit: Customer repurchase agreements: Borrowings: Off-balance sheet items: The estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018 are as follows: Fair Value Measurements Significant Other Significant Observable Unobservable Carrying Quoted Prices Inputs Inputs (dollars in thousands) Value Fair Value (Level 1) (Level 2) (Level 3) December 31, 2019 Assets Cash and due from banks $ 7,539 $ 7,539 $ — $ 7,539 $ — Federal funds sold 38,987 38,987 — 38,987 — Interest bearing deposits with other banks 195,447 195,447 — 195,447 — Investment securities 843,363 843,363 — 832,432 10,931 Federal Reserve and Federal Home Loan Bank stock 35,194 35,194 — 35,194 — Loans held for sale 56,707 56,707 — 56,707 — Loans 7,472,090 7,550,249 — — 7,550,249 Bank owned life insurance 75,724 75,724 — 75,724 — Annuity investment 14,697 14,697 — 14,697 — Interest Rate Caps 280 280 — 280 — Liabilities Noninterest bearing deposits 2,064,367 2,064,367 — 2,064,367 — Interest bearing deposits 3,876,985 3,876,985 — 3,876,985 — Certificates of deposit 1,283,039 1,291,688 — 1,291,688 — Customer repurchase agreements 30,980 30,980 — 30,980 — Borrowings 467,687 328,330 — 328,330 — Interest rate swap derivatives 203 203 — 203 — Derivative liability 86 86 — 86 — Interest Rate Caps 312 312 — 312 — Mortgage banking derivatives 66 66 — — 66 December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,400 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives 269 269 — — 269 |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations (unaudited) | |
Quarterly Results of Operations (unaudited) | Note 25 – Quarterly Results of Operations (unaudited) The following table reports quarterly results of operations (unaudited) for 2019, 2018 and 2017: 2019 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 107,183 $ 109,034 $ 108,279 $ 105,134 Total interest expense 26,473 28,045 26,950 24,117 Net interest income 80,710 80,989 81,329 81,017 Provision for credit losses 2,945 3,186 3,600 3,360 Net interest income after provision for credit losses 77,765 77,803 77,729 77,657 Noninterest income 6,734 6,314 6,360 6,291 Noninterest expense 34,726 33,473 33,359 38,304 Income before income tax expense 49,773 50,644 50,730 45,644 Income tax expense 14,317 14,149 13,487 11,895 Net income 35,456 36,495 37,243 33,749 Net income available to common shareholders $ 35,456 $ 36,495 $ 37,243 $ 33,749 Earnings per common share Basic (1) $ 1.06 $ 1.07 $ 1.08 $ 0.98 Diluted (1) $ 1.06 $ 1.07 $ 1.08 $ 0.98 2018 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 105,581 $ 102,360 $ 96,296 $ 89,049 Total interest expense 23,869 21,069 18,086 13,269 Net interest income 81,712 81,291 78,210 75,780 Provision for credit losses 2,600 2,441 1,650 1,969 Net interest income after provision for credit losses 79,112 78,850 76,560 73,811 Noninterest income 6,089 5,640 5,553 5,304 Noninterest expense 31,687 31,614 32,289 31,121 Income before income tax expense 53,514 52,876 49,824 47,994 Income tax expense 13,197 13,928 12,528 12,279 Net income 40,317 38,948 37,296 35,715 Net income available to common shareholders $ 40,317 $ 38,948 $ 37,296 $ 35,715 Earnings per common share Basic (1) $ 1.17 $ 1.14 $ 1.09 $ 1.04 Diluted (1) $ 1.17 $ 1.13 $ 1.08 $ 1.04 2017 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 86,526 $ 82,370 $ 79,344 $ 75,794 Total interest expense 11,167 10,434 9,646 8,900 Net interest income 75,359 71,936 69,698 66,894 Provision for credit losses 4,087 1,921 1,566 1,397 Net interest income after provision for credit losses 71,272 70,015 68,132 65,497 Noninterest income 9,496 6,784 7,023 6,070 Noninterest expense 29,803 29,516 30,001 29,232 Income before income tax expense 50,965 47,283 45,154 42,335 Income tax expense 35,396 17,409 17,382 15,318 Net income 15,569 29,874 27,772 27,017 Net income available to common shareholders $ 15,569 $ 29,874 $ 27,772 $ 27,017 Earnings per common share Basic (1) $ 0.46 $ 0.87 $ 0.81 $ 0.79 Diluted (1) $ 0.45 $ 0.87 $ 0.81 $ 0.79 (1) Earnings per common share are calculated on a quarterly basis and may not be additive to the year to date amount. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Financial Information | |
Parent Company Financial Information | Note 26 – Parent Company Financial Information Condensed financial information for Eagle Bancorp, Inc. (Parent Company only) is as follows: (dollars in thousands) December 31, 2019 December 31, 2018 Assets Cash $ 43,204 $ 72,783 Investment securities available-for-sale, at fair value 7,218 100 Investment in subsidiaries 1,334,197 1,249,704 Other assets 30,773 8,214 Total Assets $ 1,415,392 $ 1,330,801 Liabilities Other liabilities $ 7,024 $ 4,564 Long-term borrowings 217,687 217,296 Total liabilities 224,711 221,860 Shareholders’ Equity Common stock 331 342 Additional paid in capital 482,286 528,380 Retained earnings 705,105 584,494 Accumulated other comprehensive income (loss) 2,959 (4,275) Total Shareholders’ Equity 1,190,681 1,108,941 Total Liabilities and Shareholders’ Equity $ 1,415,392 $ 1,330,801 Years Ended December 31, (dollars in thousands) 2019 2018 2017 Income Other interest and dividends $ 85,851 $ 678 $ 234 Gain on sale of investment securities — — — Total Income $ 85,851 $ 678 $ 234 Expenses Interest expense 11,916 11,916 11,916 Legal and professional 2,779 870 118 Directors compensation 491 614 352 Other 1,294 1,287 1,246 Total Expenses $ 16,480 $ 14,687 $ 13,632 Income (Loss) Before Income Tax (Benefit) and Equity in Undistributed Income of Subsidiaries 69,371 (14,009) (13,398) Income Tax Benefit (3,176) (2,892) (4,689) Income (Loss) Before Equity in Undistributed Income of Subsidiaries 72,547 (11,117) (8,709) Equity in Undistributed Income of Subsidiaries 70,396 163,393 108,941 Net Income $ 142,943 $ 152,276 $ 100,232 Years Ended December 31, (dollars in thousands) 2019 2018 2017 Cash Flows From Operating Activities Net Income $ 142,943 $ 152,276 $ 100,232 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed income of subsidiary (70,396) (163,393) (108,941) Net tax benefits from stock compensation 10 110 460 Securities premium amortization (discount accretion), net 2 — — Increase in other assets (21,447) (2,508) (988) Increase (decrease) in other liabilities 2,460 (61) (189) Net cash provided by (used in) operating activities 53,572 (13,576) (9,426) Cash Flows From Investing Activities Purchases of available-for-sale investment securities (7,030) — — Investment in subsidiary (net) — 6,892 (460) Net cash (used in) provided by investing activities (7,030) 6,892 (460) Cash Flows From Financing Activities Proceeds from exercise of stock options 332 776 372 Proceeds from employee stock purchase plan 782 808 836 Common stock repurchased (54,903) — — Cash dividends paid (22,332) — — Net cash (used in) provided by financing activities (76,121) 1,584 1,208 Net (Decrease) in Cash (29,579) (5,100) (8,678) Cash and Cash Equivalents at Beginning of Year 72,783 77,883 86,561 Cash and Cash Equivalents at End of Year $ 43,204 $ 72,783 $ 77,883 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Nature of Operations | Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily Federal Housing Authority (“FHA”) loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of December 31, 2019, the Bank offers its products and services through twenty banking offices, six lending centers and various electronic capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements. |
Cash Flows | Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less. |
Loans Held for Sale | Loans Held for Sale The Company regularly engages in sales of residential mortgage loans held for sale and the guaranteed portion of SBA loans originated by the Bank. The Company has elected to carry loans held for sale at fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the Consolidated Statements of Operations. The Company’s current practice is to sell residential mortgage loans held for sale on a servicing released basis, and, therefore, it has no intangible asset recorded in the normal course of business for the value of such servicing as of December 31, 2019 and December 31, 2018. The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both “best efforts” and “mandatory delivery” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the investor commits to purchase a loan at a price representing a premium on the day the borrower commits to an interest rate with the intent that the buyer/investor has assumed the interest rate risk on the loan. As a result, the Bank is not generally exposed to losses on loans sold utilizing best efforts, nor will it realize gains related to rate lock commitments due to changes in interest rates. The market values of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded. Because of the high correlation between rate lock commitments and best efforts contracts, no gain or loss should occur on the interest rate lock commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage-backed securities, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value in derivative assets or liabilities, carried on the Consolidated Balance Sheet within other assets or other liabilities with changes in fair value recorded in other income within the Consolidated Statements of Operations. The period of time between issuance of a loan commitment to the customer and closing and sale of the loan to an investor generally ranges from 30 90 In circumstances where the Company does not deliver the whole loan to an investor, but rather elects to retain the loan in its portfolio, the loan is transferred from held for sale to loans at fair value at the date of transfer. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an excess servicing asset, which is computed on a loan by loan basis with the unamortized amount being included in intangible assets in the Consolidated Balance Sheets. This excess servicing asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in other income in the Consolidated Statements of Operations. The Company originates multifamily FHA loans through the Department of Housing and Urban Development’s Multifamily Accelerated Program (“MAP”). The Company securitizes these loans through the Government National Mortgage Association (”Ginnie Mae”) MBS I program and sells the resulting securities in the open market to authorized dealers in the normal course of business and periodically bundles and sells the servicing rights. When servicing is retained on multifamily FHA loans securitized and sold, the Company computes an excess servicing asset on a loan by loan basis with the unamortized amount being included in Intangible assets in the Consolidated Balance Sheets. Unamortized multifamily FHA MSRs totaled $310 thousand as of December 31, 2019 and $282 thousand as of December 31, 2018. Noninterest Income includes gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of multifamily FHA loans underlying the Ginnie Mae securities. Revenue from servicing commercial multifamily FHA mortgages is recognized as earned based on the specific contractual terms of the underlying servicing agreements, along with amortization of and changes in impairment of mortgage servicing rights. |
Investment Securities | Investment Securities The Company has no securities classified as trading or as held-to-maturity. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations. Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include the: (1) duration and magnitude of the decline in value; (2) financial condition of the issuer or issuers; and (3) structure of the security. The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes. |
Loans | Loans Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan. Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures. Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (90 days or less) provided eventual collection of all amounts due is expected. The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral. In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses is an estimate of the losses that may be sustained in our loan portfolio. The allowance is based on two principles of accounting: (a) ASC Topic 450, “Contingencies,” which requires that losses be accrued when they are probable of occurring and are estimable and (b) ASC Topic 310, “Receivables,” which requires that losses be accrued when it is probable that the Company will not collect all principal and interest payments according to the contractual terms of the loan. The loss, if any, can be determined by the difference between the loan balance and the value of collateral, the present value of expected future cash flows, or values observable in the secondary markets. Three components comprise our allowance for credit losses: a specific allowance, a formula allowance and a nonspecific or environmental factors allowance. Each component is determined based on estimates that can and do change when actual events occur. The specific allowance allocates a reserve to identified impaired loans. Impaired loans are assigned specific reserves based on an impairment analysis. Under ASC Topic 310, “Receivables,” a loan for which reserves are individually allocated may show deficiencies in the borrower’s overall financial condition, payment record, support available from financial guarantors and for the fair market value of collateral. When a loan is identified as impaired, a specific reserve is established based on the Company’s assessment of the loss that may be associated with the individual loan. The formula allowance is used to estimate the loss on internally risk rated loans, exclusive of those identified as requiring specific reserves. The portfolio of unimpaired loans is stratified by loan type and risk assessment. Allowance factors relate to the type of loan and level of the internal risk rating, with loans exhibiting higher risk and loss experience receiving a higher allowance factor. The environmental factors allowance is also used to estimate the loss associated with pools of non-classified loans. These non-classified loans are also stratified by loan type, and environmental allowance factors are assigned by management based upon a number of conditions, including delinquencies, loss history, changes in lending policy and procedures, changes in business and economic conditions, changes in the nature and volume of the portfolio, management expertise, concentrations within the portfolio, quality of internal and external loan review systems, competition, and legal and regulatory requirements. The allowance captures losses inherent in the loan portfolio, which have not yet been recognized. Allowance factors and the overall size of the allowance may change from period to period based upon management’s assessment of the above described factors, the relative weights given to each factor, and portfolio composition. Management has significant discretion in making the judgments inherent in the determination of the provision and allowance for credit losses, including in connection with the valuation of collateral, a borrower’s prospects of repayment, and in establishing allowance factors on the formula and environmental components of the allowance. The establishment of allowance factors involves a continuing evaluation, based on management’s ongoing assessment of the global factors discussed above and their impact on the portfolio. The allowance factors may change from period to period, resulting in an increase or decrease in the amount of the provision or allowance, based upon the same volume and classification of loans. Changes in allowance factors can have a direct impact on the amount of the provision, and a related after tax effect on net income. Errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs. Alternatively, errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance being in excess of amounts necessary to cover losses in the portfolio, and may result in lower provisions in the future. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization computed using the straight-line method for financial reporting purposes. Premises and equipment are depreciated over the useful lives of the assets, which generally range from three three five |
Other Real Estate Owned (OREO) | Other Real Estate Owned (OREO) Assets acquired through loan foreclosure are held for sale and are recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. The new basis is supported by appraisals that are generally no more than twelve months old. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through noninterest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in market conditions or appraised values. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets and mortgage servicing rights (“MSRs”) that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which must be conducted at least annually or upon the occurrence of a triggering event. The Company’s reporting units were identified based upon an analysis of each of its individual operating segments. If the fair values of the reporting units exceed their book values, no write-down of recorded goodwill is required. If the fair value of a reporting unit is less than book value, an expense may be required to write-down the related goodwill to the proper carrying value. Any impairment would be realized through a reduction of goodwill or the intangible and an offsetting charge to non-interest expense. The Company performs impairment testing as of December 31, 2019, or when events or changes in circumstances indicate the assets might be impaired. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company assesses qualitative factors on a quarterly basis. Based on the assessment of these qualitative factors, if it is determined that it is more likely than not that the fair value of a reporting unit is not less than the carrying value, then performing the two-step impairment process, previously required, is unnecessary. Based on the results of qualitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2019. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. |
Interest Rate Swap Derivatives | Interest Rate Swap Derivatives As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. |
Customer Repurchase Agreements | Customer Repurchase Agreements The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, securities sold under agreements to repurchase are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The agreements are entered into primarily as accommodations for large commercial deposit customers. The obligation to repurchase the securities is reflected as a liability in the Company’s Consolidated Balance Sheets, while the securities underlying the securities sold under agreements to repurchase remain in the respective assets accounts and are delivered to and held as collateral by third party trustees. |
Marketing and Advertising | Marketing and Advertising Marketing and advertising costs are generally expensed as incurred. |
Income Taxes | Income Taxes The Company employs the asset and liability method of accounting for income taxes as required by ASC Topic 740, “ Income Taxes The Company’s policy is to recognize interest and penalties on income taxes in other non-interest expenses. The Company remains subject to examination for income tax returns by the Internal Revenue Service, as well as all of the states where it conducts business, for the years ending after December 31, 2016. There are currently no examinations in process as of December 31, 2019. |
Transfer of Financial Assets | Transfer of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In certain cases, the recourse to the Bank to repurchase assets may exist but is deemed immaterial based on the specific facts and circumstances. |
Earnings per Common Share | Earnings per Common Share Basic net income per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents. |
Stock-Based Compensation | Stock-Based Compensation In accordance with ASC Topic 718, “Compensation,” |
New Authoritative Accounting Guidance | New Authoritative Accounting Guidance Accounting Standards Adopted in 2019 ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 has, among other things, required lessees to recognize a lease liability, which is a lessee's obligation to make lease payments, measured on a discounted basis; and a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 did not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 became effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) – Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we recognized ROU assets of $29.6 million and related lease liabilities of $33.5 million which reduced the March 31, 2019 total risk based capital ratio by six basis points. We elected to apply certain practical expedients provided under ASU 2016-02 whereby we did not reassess (i) whether any expired or existing contracts were or contained leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We also elected to not apply the recognition requirements of ASU 2016-02 to any short-term leases (as defined by related accounting guidance). We utilized the modified-retrospective transition approach prescribed by ASU 2018-11. Refer to Note 6 to the Consolidated Financial Statements for additional disclosure regarding leases. Accounting Standards Pending Adoption ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” Entities will apply any changes resulting from the application of the new standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). We plan to elect the Federal Reserve and FDIC’s rule providing for an optional three-year phase-in period for the day-one adverse regulatory capital effects upon adopting the standard. We preliminarily expect this rule to increase the reserve for credit losses 10-20% inclusive of the impact on commitments to lend upon implementation on January 1, 2020. The ultimate impact may change as we finalize our model validations as well as the execution of our implementation controls and processes. |
Investment Securities Availab_2
Investment Securities Available-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investment Securities Available-for-Sale | |
Schedule of amortized cost and estimated fair value of securities available-for-sale | Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 180,228 $ 621 # $ 1,055 $ 179,794 Residential mortgage backed securities 541,490 4,337 1,975 543,852 Municipal bonds 71,902 2,034 5 73,931 Corporate bonds 10,530 203 — 10,733 U.S. Treasury 34,844 11 — 34,855 Other equity investments 198 — — 198 $ 839,192 $ 7,206 $ 3,035 $ 843,363 Gross Gross Estimated December 31, 2018 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 260,150 $ 228 # $ 4,033 $ 256,345 Residential mortgage backed securities 477,949 1,575 7,293 472,231 Municipal bonds 45,814 439 484 45,769 Corporate bonds 9,503 79 6 9,576 Other equity investments 218 — — 218 $ 793,634 $ 2,321 $ 11,816 $ 784,139 |
Schedule of gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss | Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2019 and 2018 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2019 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 36 $ 75,159 $ 439 $ 51,481 $ 616 $ 126,640 $ 1,055 Residential mortgage backed securities 111 197,794 1,148 90,742 827 288,536 1,975 Municipal bonds 1 1,994 5 — — 1,994 5 148 $ 274,947 $ 1,592 $ 142,223 $ 1,443 $ 417,170 $ 3,035 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2018 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 58 $ 72,679 $ 533 $ 144,636 $ 3,500 $ 217,315 $ 4,033 Residential mortgage backed securities 151 61,199 527 225,995 6,766 287,194 7,293 Municipal bonds 11 4,299 50 17,041 434 21,340 484 Corporate bonds 1 1,494 6 — — 1,494 6 221 $ 139,671 $ 1,116 $ 387,672 $ 10,700 $ 527,343 $ 11,816 |
Schedule of amortized cost and estimated fair value of investments available-for-sale by contractual maturity | December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 96,332 $ 96,226 $ 128,148 $ 125,545 After one year through five years 76,121 75,821 119,856 118,883 Five years through ten years 7,775 7,747 12,146 11,917 Residential mortgage backed securities 541,490 543,852 477,949 472,231 Municipal bonds maturing: One year or less 5,897 5,969 8,097 8,167 After one year through five years 21,416 21,953 15,025 15,081 Five years through ten years 42,589 44,015 21,626 21,385 After ten years 2,000 1,994 1,066 1,136 Corporate bonds maturing: One year or less 502 508 — — After one year through five years 8,528 8,725 8,003 8,076 After ten years 1,500 1,500 1,500 1,500 U.S. treasury 34,844 34,855 — — Other equity investments 198 198 218 218 $ 839,192 $ 843,363 $ 793,634 $ 784,139 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loans and Allowance for Credit Losses | |
Schedule of loans, net of unamortized net deferred fees | Loans, net of unamortized net deferred fees, at December 31, 2019 and 2018 are summarized by type as follows: December 31, 2019 December 31, 2018 (dollars in thousands) Amount % Amount % Commercial $ 1,545,906 20 % $ 1,553,112 22 % Income producing - commercial real estate 3,702,747 50 % 3,256,900 46 % Owner occupied - commercial real estate 985,409 13 % 887,814 13 % Real estate mortgage - residential 104,221 1 % 106,418 2 % Construction - commercial and residential 1,035,754 14 % 1,039,815 15 % Construction - C&I (owner occupied) 89,490 1 % 57,797 1 % Home equity 80,061 1 % 86,603 1 % Other consumer 2,160 — 2,988 — Total loans 7,545,748 100 % 6,991,447 100 % Less: allowance for credit losses (73,658) (69,944) Net loans $ 7,472,090 $ 6,921,503 |
Schedule of detail activity in the allowance for credit losses by portfolio segment | The following tables detail activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2019 and 2018. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total Year Ended December 31, 2019 Allowance for credit losses: Balance at beginning of period $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Loans charged-off (4,868) (1,847) — — (3,496) — (8) (10,219) Recoveries of loans previously charged-off 405 26 3 3 354 — 51 842 Net loans charged-off (4,463) (1,821) 3 3 (3,142) — 43 (9,377) Provision for credit losses 7,438 3,052 (407) 589 2,452 57 (90) 13,091 Ending balance $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 For the Year Ended December 31, 2019 Allowance for credit losses: Individually evaluated for impairment $ 5,714 $ 2,145 $ 415 $ 650 $ 100 $ 100 $ — $ 9,124 Collectively evaluated for impairment 13,118 27,120 5,423 907 17,385 556 25 64,534 Ending balance $ 18,832 $ 29,265 $ 5,838 $ 1,557 $ 17,485 $ 656 $ 25 $ 73,658 Year Ended December 31, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (3,491) (121) (132) — (1,160) — (81) (4,985) Recoveries of loans previously charged-off 340 2 3 6 1,009 133 18 1,511 Net loans (charged-off) recoveries (3,151) (119) (129) 6 (151) 133 (63) (3,474) Provision for credit losses 5,906 2,777 437 15 (166) (304) (5) 8,660 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 For the Year Ended December 31, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,803 $ 2,465 $ 600 $ — $ 1,050 $ — $ — $ 8,918 Collectively evaluated for impairment 11,054 25,569 5,642 965 17,125 599 72 61,026 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 |
Schedule of recorded investments in loans related to each balance in the allowance for loan losses by portfolio segment | The Company’s recorded investments in loans as of December 31, 2019 and December 31, 2018 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology was as follows: Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total December 31, 2019 Recorded investment in loans: Individually evaluated for impairment $ 25,288 $ 19,093 $ 6,463 $ 5,365 $ 11,510 $ 487 $ — $ 68,206 Collectively evaluated for impairment 1,520,618 3,683,654 978,946 98,856 1,113,734 79,574 2,160 7,477,542 Ending balance $ 1,545,906 $ 3,702,747 $ 985,409 $ 104,221 $ 1,125,244 $ 80,061 $ 2,160 $ 7,545,748 December 31, 2018 Recorded investment in loans: Individually evaluated for impairment $ 8,738 $ 61,747 $ 5,307 $ 1,228 $ 7,012 $ 487 $ — $ 84,519 Collectively evaluated for impairment 1,544,374 3,195,153 882,507 105,190 1,090,600 86,116 2,988 6,906,928 Ending balance $ 1,553,112 $ 3,256,900 $ 887,814 $ 106,418 $ 1,097,612 $ 86,603 $ 2,988 $ 6,991,447 |
Schedule of loans by class and credit quality indicators | Total (dollars in thousands) Pass Watch Special Mention Substandard Doubtful Loans December 31, 2019 Commercial $ 1,470,636 $ 38,522 $ 11,460 $ 25,288 $ — $ 1,545,906 Income producing - commercial real estate 3,667,585 16,069 — 19,093 — 3,702,747 Owner occupied - commercial real estate 925,800 53,146 — 6,463 — 985,409 Real estate mortgage - residential 98,228 628 — 5,365 — 104,221 Construction - commercial and residential 1,113,734 — — 11,510 — 1,125,244 Home equity 78,626 948 — 487 — 80,061 Other consumer 2,160 — — — — 2,160 Total $ 7,356,769 $ 109,313 $ 11,460 $ 68,206 $ — $ 7,545,748 December 31, 2018 Commercial $ 1,505,477 $ 25,584 $ — $ 22,051 $ — $ 1,553,112 Income producing - commercial real estate 3,172,479 1,536 — 82,885 — 3,256,900 Owner occupied - commercial real estate 844,286 38,221 — 5,307 — 887,814 Real estate mortgage - residential 104,543 647 — 1,228 — 106,418 Construction - commercial and residential 1,090,600 — — 7,012 — 1,097,612 Home equity 85,434 682 — 487 — 86,603 Other consumer 2,988 — — — — 2,988 Total $ 6,805,807 $ 66,670 $ — $ 118,970 $ — $ 6,991,447 |
Schedule of information related to nonaccrual loans by class | The following table presents, by class of loan, information related to nonaccrual loans as of December 31, 2019 and 2018. December 31, December 31, (dollars in thousands) 2019 2018 Commercial $ 14,928 $ 7,115 Income producing - commercial real estate 9,711 1,766 Owner occupied - commercial real estate 6,463 2,368 Real estate mortgage - residential 5,631 1,510 Construction - commercial and residential 11,509 3,031 Home equity 487 487 Total nonaccrual loans (1)(2) $ 48,729 $ 16,277 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $16.6 million at December 31, 2019, and $24.0 million at December 31, 2018. (2) Gross interest income of $3.0 million and $1.0 million would have been recorded for 2019 and 2018, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $630 thousand and 265 thousand at December 31, 2019 and 2018, respectively. See Note 1 to the Consolidated Financial Statements for a description of th e Company’s policy for placing loans on nonaccrual status. |
Schedule by class of loan, an aging analysis and the recorded investments in loans past due | The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of December 31, 2019 and 2018. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans December 31, 2019 Commercial $ 3,063 $ 781 $ 14,928 $ 18,772 $ 1,527,134 $ 1,545,906 Income producing - commercial real estate — 5,542 9,711 15,253 3,687,494 3,702,747 Owner occupied - commercial real estate 13,008 — 6,463 19,471 965,938 985,409 Real estate mortgage – residential 3,533 — 5,631 9,164 95,057 104,221 Construction - commercial and residential — — 11,509 11,509 1,113,735 1,125,244 Home equity 136 192 487 815 79,246 80,061 Other consumer — 9 — 9 2,151 2,160 Total $ 19,740 $ 6,524 $ 48,729 $ 74,993 $ 7,470,755 $ 7,545,748 December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 |
Schedule of impaired loans, by class of loan | The following table presents, by class of loan, information related to impaired loans for the years ended December 31, 2019 and 2018. Unpaid Recorded Recorded Contractual Investment Investment Total Average Recorded Investment Interest Income Recognized Principal With No With Recorded Related Year Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date December 31, 2019 Commercial $ 15,814 $ 11,858 $ 3,956 $ 15,814 $ 5,714 $ 15,682 $ 270 Income producing - commercial real estate 14,093 2,713 11,380 14,093 2,145 18,133 382 Owner occupied - commercial real estate 7,349 6,388 961 7,349 415 6,107 197 Real estate mortgage – residential 5,631 3,175 2,456 5,631 650 5,638 — Construction - commercial and residential 11,509 11,101 408 11,509 100 8,211 92 Home equity 487 — 487 487 100 487 — Other consumer — — — — — — — Total $ 54,883 $ 35,235 $ 19,648 $ 54,883 $ 9,124 $ 54,258 $ 941 December 31, 2018 Commercial $ 8,613 $ 2,057 $ 6,084 $ 8,141 $ 4,803 $ 8,359 $ 190 Income producing - commercial real estate 21,402 1,720 19,682 21,402 2,465 12,309 550 Owner occupied - commercial real estate 5,731 4,361 1,370 5,731 600 6,011 196 Real estate mortgage - residential 1,510 1,510 — 1,510 — 1,688 2 Construction - commercial and residential 3,031 3,031 — 3,031 1,050 2,028 68 Home equity 487 487 — 487 — 491 — Other consumer — — — — — 69 — Total $ 40,774 $ 13,166 $ 27,136 $ 40,302 $ 8,918 $ 30,955 $ 1,006 |
Schedule of loans modified in troubled debt restructurings | The following table presents, by class, the recorded investment of loans modified in TDRs held by the Company during the years ended December 31, 2019 and 2018. For the Year Ended December 31, 2019 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructurings Restructured accruing 7 $ 885 $ 14,806 $ 887 $ — $ 16,578 Restructured nonaccruing 2 142 — 2,370 — 2,512 Total 9 $ 1,027 $ 14,806 $ 3,257 $ — $ 19,090 Specific allowance $ — $ 1,000 $ — $ — $ 1,000 Restructured and subsequently defaulted $ — $ 7,115 $ 2,370 $ — $ 9,485 For the Year Ended December 31, 2018 Income Owner Number Producing - Occupied - Construction - of Commercial Commercial Commercial (dollars in thousands) Contracts Commercial Real Estate Real Estate Real Estate Total Troubled debt restructings Restructured accruing 9 $ 1,026 $ 19,636 $ 3,363 $ — $ 24,025 Restructured nonaccruing 3 544 — — — 544 Total 12 $ 1,570 $ 19,636 $ 3,363 $ — $ 24,569 Specific allowance $ — $ 3,000 $ — $ — $ 3,000 Restructured and subsequently defaulted $ 408 $ 937 $ — $ — $ 1,345 |
Schedule of changes in the credit mark accretable yield | The following table presents changes in the credit mark accretable yield, which includes income recognized from contractual interest cash flows, for the dates indicated. (dollars in thousands) 2019 2018 Balance at January 1, $ (1,495) $ (2,459) Net reclassifications from nonaccretable yield — — Accretion 520 964 Balance at December 31, $ (975) $ (1,495) |
Schedule of activity in related party loans | The following table summarizes changes in amounts of loans outstanding, both direct and indirect, to those persons during 2019 and 2018. (dollars in thousands) 2019 2018 Balance at January 1, $ 167,884 $ 238,236 Additions 30,153 55,657 Repayments (38,204) (126,009) Additions due to Changes in Related Parties 9,034 — Deletions due to Changes in Related Parties (116,499) — Balance at December 31, $ 52,368 $ 167,884 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Premises and Equipment | |
Schedule of premises and equipment | Premises and equipment include the following at December 31: (dollars in thousands) 2019 2018 Leasehold improvements $ 31,461 $ 31,026 Furniture and equipment 30,897 31,168 Less accumulated depreciation and amortization (47,738) (45,343) Total premises and equipment, net $ 14,620 $ 16,851 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of lease costs and other lease information | The following table presents lease costs and other lease information. Year Ended (dollars in thousands) 12/31/2019 Lease Cost Operating Lease Cost (Cost resulting from lease payments) $ 7,829 Variable Lease Cost (Cost excluded from lease payments) 1,090 Sublease Income (348) Net Lease Cost $ 8,571 Operating Lease - Operating Cash Flows (Fixed Payments) 8,542 Right-of-Use Assets - Operating Leases 27,372 Weighted Average Lease Term - Operating Leases 4.94 yrs Weighted Average Discount Rate - Operating Leases 4.00 % |
Schedule of Future minimum payments for operating leases | Future minimum payments for operating leases with initial or remaining terms of one year or more as of December 31, 2019 were as follows: (dollars in thousands) Twelve Months Ended: December 31, 2020 $ 8,468 December 31, 2021 7,545 December 31, 2022 5,220 December 31, 2023 4,276 December 31, 2024 3,398 Thereafter 3,560 Total Future Minimum Lease Payments 32,467 Amounts Representing Interest (2,508) Present Value of Net Future Minimum Lease Payments $ 29,959 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets | |
Schedule of intangible assets | Intangible assets are included in the Consolidated Balance Sheets as a separate line item, net of accumulated amortization and consist of the following items: Gross Net Intangible Accumulated FHA Intangible (dollars in thousands) Assets Additions Amortization MSR Sales Assets December 31, 2019 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (7,027) — 43 Excess servicing (3) 1,465 1,013 (1,971) — 507 Non-compete agreements (4) 345 — (324) — 21 $ 113,048 $ 1,013 $ (9,322) $ — $ 104,739 December 31, 2018 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (6,312) — 758 Excess servicing (3) 1,465 838 (1,053) (672) 578 Non-compete agreements (4) 345 — (83) — 262 $ 113,048 $ 838 $ (7,448) $ (672) $ 105,766 |
Schedule of future estimated amortization expense | The future estimated annual amortization expense is presented below: Years ending December 31: (dollars in thousands) Amount 2020 139 2021 55 2022 55 2023 55 2024 55 Thereafter 212 Total annual amortization $ 571 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate Owned | |
Schedule of activity of other real estate owned | Years Ended December 31, (dollars in thousands) 2019 2018 Beginning Balance $ 1,394 $ 1,394 Real estate acquired from borrowers 93 — Properties sold — — Ending Balance $ 1,487 $ 1,394 |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Interest Rate Swap Derivatives | |
Schedule of balance sheet category and fair values of the derivative instruments | The table below identifies the balance sheet category and fair value of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of December 31, 2019 and December 31, 2018. December 31, 2019 December 31, 2018 Notional Balance Sheet Notional Balance Sheet Amount Fair Value Category Amount Fair Value Category Derivatives designated as hedging instruments (dollars in thousands) Interest rate product $ — $ — Other Assets $ 250,000 $ 3,840 Other Assets (dollars in thousands) Interest rate product $ 100,000 $ 206 Other Liabilities $ — $ — Other Liabilities Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 26,000 $ 10 Other Assets $ — $ — Other Assets Interest rate product 24,293 168 Other Assets — — Other Assets Interest rate product 6,513 133 Other Assets — — Other Assets $ 56,806 $ 311 Other Assets $ — $ — Other Assets Derivatives not designated as hedging instruments (dollars in thousands) Interest rate product $ 26,000 $ 10 Other Liabilities $ — $ — Other Liabilities Interest rate product 24,293 172 Other Liabilities — — Other Liabilities Interest rate product 6,513 137 Other Liabilities — — Other Liabilities Other Contracts 27,384 86 Other Liabilities 27,500 59 Other Liabilities $ 84,190 $ 405 $ 27,500 $ 59 Other Liabilities |
Schedule of pretax net gains (losses) of designated cash flow hedges | The table below presents the pre-tax net gains (losses) of the Company’s designated cash flow hedges for the years ended December 31, 2019 and December 31, 2018. The Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income Location of Gain or (Loss) Recognized from Accumulated Other Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Comprehensive Income into Reclassified from Accumulated OCI on Derivative Income into Income Year Ended December 31, Year Ended December 31, Derivatives in Subtopic 815-20 Hedging Relationships (dollars in thousands) 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,812) $ 2,070 Interest Expense $ 1,165 $ 560 Total $ (1,812) $ 2,070 $ 1,165 $ 560 Location of Gain or (Loss) Recognized from Accumulated Other Amount of Gain or (Loss) Amount of Gain or (Loss) Recognized in OCI Comprehensive Income into Reclassified from Accumulated OCI on Derivative Income into Income Year Ended December 31, Year Ended December 31, Derivatives in Subtopic 815-20 Hedging Relationships (dollars in thousands) 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationships Interest Rate Products $ (1,812) $ 2,070 Interest Expense $ 1,165 $ 560 Interest Rate Products — — Gain on sale of investment securities 829 — Total $ (1,812) $ 2,070 $ 1,994 $ 560 |
Schedule of the effect of derivative financial instruments on the Consolidated Statements of Operations | The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operation for the years ended December 31, 2019 and 2018. The Effect of Fair Value and Cash Flow Hedge Accounting on the Statements of Operation Year Ended December 31, 2019 2019 2018 Interest Gain on sale of Interest Expense investment securities Expense Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded $ 1,165 $ 829 $ 560 Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 1,165 $ — $ 560 Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring $ — $ 829 $ — Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component $ 1,165 $ 829 $ 560 Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Excluded Component $ — $ — $ — Effect of Derivatives Not Designated as Hedging Instruments on the Statements of Operation Amount of Gain or (Loss) Recognized in Income on Derivatives Not Designated as Location of Gain or Derivative Hedging Instruments under Subtopic (Loss) Recognized in Year Ended December 31, 815-20 Income on Derivative 2019 2018 Interest Rate Products Other income / (expense) (8) — Other Contracts Other income / (expense) (27) — Total (35) — |
Schedule of offsetting liabilities of derivatives | The following table presents the liabilities subject to an enforceable master netting arrangement as of December 31, 2019 and December 31, 2018. As of December 31, 2019 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount $ 311 $ — $ 311 $ — $ — $ 311 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 611 $ — $ 611 $ — $ 500 $ 111 As of December 31, 2018 Net Amounts of Gross Assets Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Assets (dollars in thousands) Assets Sheet Sheet Instruments Posted Amount Derivatives $ 3,840 $ — $ 3,840 $ — $ — $ 3,840 Net Amounts of Gross Liabilities Gross Amounts Not Offset in the Gross Amounts presented Balance Sheet Amounts of Offset in in the Cash Recognized the Balance Balance Financial Collateral Net Offsetting of Derivative Liabilities (dollars in thousands) Liabilities Sheet Sheet Instruments Posted Amount Derivatives $ 59 $ — $ 59 $ — $ — $ 59 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits | |
Schedule of deposit composition and average interest rates | The following table provides information regarding the Bank’s deposit composition at December 31, 2019, 2018, and 2017 as well as the average rate being paid on interest bearing deposits at December 31, 2019, 2018, and 2017. 2019 2018 2017 Average Average Average (dollars in thousands) Balance Rate Balance Rate Balance Rate Noninterest bearing demand $ 2,064,367 — $ 2,104,220 — $ 1,982,912 — Interest bearing transaction 863,856 0.99 % 593,107 0.81 % 420,417 0.46 % Savings and money market 3,013,129 1.42 % 2,949,559 1.68 % 2,621,146 0.70 % Time, $100,000 or more 663,987 2.55 % 801,957 2.25 % 515,682 1.20 % Other time 619,052 2.21 % 525,442 2.25 % 313,827 1.17 % Total $ 7,224,391 $ 6,974,285 $ 5,853,984 |
Schedule of maturity of time deposits | The remaining maturity of time deposits at December 31, 2019, 2018 and 2017 are as follows: (dollars in thousands) 2019 2018 2017 Three months or less $ 260,028 $ 230,360 $ 180,459 More than three months through twelve months 538,352 663,085 437,067 Over twelve months 484,659 433,954 211,983 Total $ 1,283,039 $ 1,327,399 $ 829,509 |
Schedule of interest expense on deposits | Interest expense on deposits for the years ended December 31, 2019, 2018 and 2017 is as follows: (dollars in thousands) 2019 2018 2017 Interest bearing transaction $ 6,491 $ 3,348 $ 1,537 Savings and money market 50,042 35,534 17,284 Time, $100,000 or more 20,016 17,138 7,294 Other time 14,477 4,190 1,171 Total $ 91,026 $ 60,210 $ 27,286 |
Schedule of time deposit accounts in excess of $250 thousand | As of December 31, 2019, 2018 and 2017, time deposit accounts in excess of $250 thousand are as follows:. Time deposits $250,000 or more (dollars in thousands) 2019 2018 2017 Three months or less $ 63,099 $ 51,214 $ 44,348 More than three months through twelve months 197,141 286,300 136,822 Over twelve months 90,361 108,273 98,519 Total $ 350,601 $ 445,787 $ 279,689 |
Affordable Housing Projects T_2
Affordable Housing Projects Tax Credit Partnerships (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Affordable Housing Projects Tax Credit Partnerships | |
Schedule of expected payments for unfunded affordable housing commitments | As of December 31, 2019, the expected payments for unfunded affordable housing commitments were as follows: Years ending December 31: (dollars in thousands) Amount 2020 3,690 2021 4,053 2022 373 2023 1,862 2024 485 Thereafter 797 Total unfunded commitments $ 11,260 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings | |
Schedule of short-term and long-term borrowings | Information relating to short-term and long-term borrowings is as follows for the years ended December 31: 2019 2018 2017 (dollars in thousands) Amount Rate Amount Rate Amount Rate Short-term: At Year-End: Customer repurchase agreements and federal funds purchased $ 30,980 1.18 % $ 30,413 0.86 % $ 76,561 0.33 % Federal Home Loan Bank – current portion 250,000 0.39 % — — 325,000 1.48 % Total $ 280,980 $ 30,413 $ 401,561 Average Daily Balance: Customer repurchase agreements and federal funds purchased $ 30,024 1.15 % $ 44,333 0.51 % $ 73,237 0.27 % Federal Home Loan Bank – current portion 135,699 1.67 % 192,131 2.02 % 65,416 1.13 % Total $ 165,723 $ 236,464 $ 138,653 Maximum Month-end Balance: Customer repurchase agreements and federal funds purchased $ 34,852 0.89 % $ 72,141 0.32 % $ 85,614 0.29 % Federal Home Loan Bank – current portion 440,000 0.92 % 325,000 1.62 % 325,000 1.48 % Total $ 474,852 $ 397,141 $ 410,614 Long-term: At Year-End: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % Average Daily Balance: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % Maximum Month-end Balance: Subordinated Notes $ 220,000 5.42 % $ 220,000 5.42 % $ 220,000 5.42 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of federal and state income tax expense | (dollars in thousands) 2019 2018 2017 Current federal income tax expense $ 39,756 $ 39,498 $ 59,019 Current state income tax expense 14,153 15,931 7,511 Total current tax expense 53,909 55,429 66,530 Deferred federal income tax expense (benefit) 78 (2,634) 18,459 Deferred state income tax expense (benefit) (139) (863) 515 Total deferred tax expense (benefit) (61) (3,497) 18,974 Total income tax expense $ 53,848 $ 51,932 $ 85,504 |
Schedule of significant components of deferred tax assets and liabilities | (dollars in thousands) 2019 2018 2017 Deferred tax assets Allowance for credit losses $ 19,144 $ 18,101 $ 16,568 Deferred loan fees and costs 6,354 6,733 6,741 Deferred rent — 1,026 1,009 Leases 673 — — Stock-based compensation 674 1,722 847 Net operating loss 1,285 2,003 2,032 Unrealized loss on securities available-for-sale — 2,756 1,312 Unrealized loss on interest rate swap derivatives 53 — — SERP 1,541 1,497 1,373 Premises and equipment 914 795 33 Other assets 816 287 35 Total deferred tax assets 31,454 34,920 29,950 Deferred tax liabilities Unrealized net gain on securities available-for-sale (1,081) — — Unrealized gain on interest rate swap derivatives — (965) (578) Excess servicing (51) (77) (99) Intangible assets (9) (223) (503) Other liabilities (509) (328) — Total deferred tax liabilities (1,650) (1,593) (1,180) Net deferred income tax amount $ 29,804 $ 33,327 $ 28,770 |
Schedule of reconciliation of the statutory federal income tax rate to effective income tax rate | A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31 follows: 2019 2018 2017 Statutory federal income tax rate 21.00 % 21.00 % 35.00 % Increase (decrease) due to: State income taxes 5.73 5.83 3.41 Deferred tax adjustment 0.49 — 7.85 Tax exempt interest and dividend income (0.35) (1.13) (0.61) Stock-based compensation expense 1.15 0.01 0.01 Other (0.61) (0.28) 0.38 Effective tax rate 27.41 % 25.43 % 46.04 % |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net Income per Common Share | |
Schedule of calculation of net income per common share | The calculation of net income per common share for the years ended December 31 was as follows: (dollars and shares in thousands, except per share data) 2019 2018 2017 Basic: Net income $ 142,943 $ 152,276 $ 100,232 Average common shares outstanding 34,179 34,306 34,139 Basic net income per common share $ 4.18 $ 4.44 $ 2.94 Diluted: Net income $ 142,943 $ 152,276 $ 100,232 Average common shares outstanding 34,179 34,306 34,139 Adjustment for common share equivalents 32 137 182 Average common shares outstanding-diluted 34,211 34,443 34,321 Diluted net income per common share $ 4.18 $ 4.42 $ 2.92 Anti-dilutive shares 2 — — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Schedule of unvested restricted stock awards | The following tables summarize the unvested restricted stock awards at December 31, 2019 and 2018. Years Ended December 31, 2019 2018 Weighted- Weighted- Average Average Grant Date Grant Date Perfomance Awards Shares Fair Value Shares Fair Value Unvested at beginning 98,958 $ 54.76 62,338 $ 50.45 Issued 43,145 55.76 42,533 60.45 Forfeited (65,589) 55.25 (5,913) 50.28 Vested (17,734) — — — Unvested at end 58,780 $ 57.74 98,958 $ 54.76 Years Ended December 31, 2019 2018 Weighted- Weighted- Average Average Grant Date Grant Date Time Vested Awards Shares Fair Value Shares Fair Value Unvested at beginning 173,721 $ 58.93 164,043 $ 53.57 Issued 112,636 55.76 94,344 60.45 Forfeited (44,600) 58.73 (7,132) 56.48 Vested (131,043) 57.20 (77,534) 49.67 Unvested at end 110,714 $ 57.84 173,721 $ 58.93 |
Schedule of activity of stock options | Below is a summary of stock option activity for the twelve months ended December 31, 2019 , Years Ended December 31, 2019 2018 2017 Weighted- Weighted- Weighted- Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price Beginning balance 34,123 $ 14.69 143,224 $ 9.13 216,859 $ 8.80 Issued — — — — — — Exercised (26,784) 12.42 (108,201) 7.17 (72,535) 8.19 Forfeited (750) 49.08 (900) 34.47 — — Expired — — — — (1,100) 5.76 Ending balance 6,589 $ 19.99 34,123 $ 14.69 143,224 $ 9.13 |
Schedule of stock option by exercise price range | The following summarizes information about stock options outstanding at December 31, 2019. The information excludes restricted stock units and awards. Weighted-Average Outstanding: Stock Options Weighted-Average Remaining Range of Exercise Prices Outstanding Exercise Price Contractual Life (Years) $ 5.76 $ 10.72 — — — $ 10.73 $ 11.40 5,089 11.17 1.88 $ 11.41 $ 24.86 — — — $ 24.87 $ 49.91 1,500 49.91 6.36 6,589 $ 19.99 2.90 Exercisable: Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $ 5.76 $ 10.72 — — $ 10.73 $ 11.40 5,089 11.17 $ 11.41 $ 24.86 — — $ 24.87 $ 49.91 1,125 49.91 6,214 $ 18.18 |
Schedule of cash proceeds, tax benefits and intrinsic value related to total stock options exercised | Cash proceeds, tax benefits and intrinsic value related to total stock options exercised is as follows: Years Ended December 31, (dollars in thousands) 2019 2018 2017 Proceeds from stock options exercised $ 332 $ 776 $ 372 Tax benefits realized from stock compensation 50 5 99 Intrinsic value of stock options exercised 1,022 4,958 3,888 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Instruments With Off-balance Sheet Risk | |
Schedule of loan commitments outstanding and lines and letters of credit | Loan commitments outstanding and lines and letters of credit at December 31, 2019 and 2018 are as follows: (dollars in thousands) 2019 2018 Unfunded loan commitments $ 2,176,641 $ 2,228,689 Unfunded lines of credit 86,426 90,283 Letters of credit 69,723 83,162 Total $ 2,332,790 $ 2,402,134 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingent Liabilities | |
Schedule of details on these fixed and determinable obligations | The Company has various financial obligations, including contractual obligations and commitments that may require future cash payments. Except for its loan commitments, as shown in Note 20 to the Consolidated Financial Statements, the following table shows details on these fixed and determinable obligations as of December 31, 2019 in the time period indicated. Within One One to Three to Over Five (dollars in thousands) Year Three Years Five Years Years Total Deposits without a stated maturity (1) $ 5,941,352 $ — $ — $ — $ 5,941,352 Time deposits (1) 798,380 375,879 108,780 — 1,283,039 Borrowed funds (2) 280,980 — 70,000 150,000 500,980 Operating lease obligations 8,468 12,765 7,674 3,560 32,467 Outside data processing (3) 5,037 9,814 5,261 — 20,112 George Mason sponsorship (4) 663 1,350 1,350 7,463 10,826 D.C. United (5) 796 1,663 — — 2,459 LIHTC investments (6) 3,690 4,426 2,347 797 11,260 Total $ 7,039,366 $ 405,897 $ 195,412 $ 161,820 $ 7,802,495 (1) Excludes accrued interest payable at December 31, 2019. (2) Borrowed funds include customer repurchase agreements, and other short-term and long-term borrowings. (3) The Bank has outstanding obligations under its current core data processing contract that expire in June 2024 and two other vendor arrangements that relate to network infrastructure and data center services, one expires in December 2021 and the other expires in December 2020. (4) The Bank has the option of terminating the George Mason agreement at the end of contract years 10 and 15 (that is, effective June 30, 2025 or June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, contractual obligations would decrease $3.5 million and $3.6 million for the first option period (years 11 - 15 ) and the second option period ( 16 - 20 ), respectively. (5) Marketing sponsorship agreement with D.C. United. (6) Low Income Housing Tax Credits (“LIHTC”) expected payments for unfunded affordable housing commitments. |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Matters | |
Schedule of regulatory capital requirements under banking regulations | The actual capital amounts and ratios for the Company and Bank as of December 31, 2019 and 2018 are presented in the table below: To Be Well Capitalized Company Bank Minimum Required Under Prompt Actual Actual For Capital Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Adequacy Purposes Regulations * As of December 31, 2019 CET1 capital (to risk weighted assets) $ 1,082,516 12.87 % $ 1,225,486 14.64 % 7.000 % 6.5 % Total capital (to risk weighted assets) 1,362,253 16.20 % 1,299,223 15.52 % 10.500 % 10.0 % Tier 1 capital (to risk weighted assets) 1,082,516 12.87 % 1,225,486 14.64 % 8.500 % 8.0 % Tier 1 capital (to average assets) 1,082,516 11.62 % 1,225,486 13.18 % 4.000 % 5.0 % As of December 31, 2018 CET1 capital (to risk weighted assets) $ 1,007,438 12.49 % $ 1,147,151 14.23 % 6.375 % 6.5 % Total capital (to risk weighted assets) 1,297,427 16.08 % 1,217,140 15.10 % 9.875 % 10.0 % Tier 1 capital (to risk weighted assets) 1,007,438 12.49 % 1,147,151 14.23 % 7.875 % 8.0 % Tier 1 capital (to average assets) 1,007,438 12.10 % 1,147,151 13.78 % 5.000 % 5.0 % * Applies to Bank only |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income | |
Schedule of components of other comprehensive income (loss) | The following table presents the components of other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017. (dollars in thousands) Before Tax Tax Effect Net of Tax Year Ended December 31, 2019 Net unrealized gain on securities available-for-sale $ 15,183 $ (3,929) $ 11,254 Less: Reclassification adjustment for net gains included in net income (1,517) (416) (1,101) Total unrealized gain 13,666 (4,345) 10,153 Net unrealized loss on derivatives (2,731) 682 (2,049) Less: Reclassification adjustment for gain included in net income (1,198) (328) (870) Total unrealized loss (3,929) 354 (2,919) Other Comprehensive Income $ 9,737 $ (3,991) $ 7,234 Year Ended December 31, 2018 Net unrealized loss on securities available-for-sale $ (4,279) $ (438) $ (3,841) Less: Reclassification adjustment for net gains included in net income (97) (25) (72) Total unrealized loss (4,376) (463) (3,913) Net unrealized gain on derivatives 2,033 227 1,806 Less: Reclassification adjustment for gain included in net income (560) (142) (418) Total unrealized gain 1,473 85 1,388 Other Comprehensive Loss $ (2,903) $ (378) $ (2,525) Year Ended December 31, 2017 Net unrealized loss on securities available-for-sale $ (1,319) $ (479) $ (840) Less: Reclassification adjustment for net gains included in net income (542) (206) (336) Total unrealized loss (1,861) (685) (1,176) Net unrealized gain on derivatives 4,559 1,765 2,794 Less: Reclassification adjustment for losses included in net income (1,592) (605) (987) Total unrealized gain 2,967 1,160 1,807 Other Comprehensive Income $ 1,106 $ 475 $ 631 |
Schedule of changes in each component of accumulated other comprehensive income (loss), net of tax | The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2019, 2018 and 2017. Securities Accumulated Other Available Comprehensive Income (dollars in thousands) For Sale Derivatives (Loss) Year Ended December 31, 2019 Balance at Beginning of Period $ (7,044) $ 2,769 $ (4,275) Other comprehensive income (loss) before reclassifications 11,254 (2,049) 9,205 Amounts reclassified from accumulated other comprehensive income (1,101) (870) (1,971) Net other comprehensive income (loss) during period 10,153 (2,919) 7,234 Balance at End of Period $ 3,109 $ (150) $ 2,959 Year Ended December 31, 2018 Balance at Beginning of Period $ (3,131) $ 1,381 $ (1,750) Other comprehensive (loss) income before reclassifications (3,841) 1,806 (2,035) Amounts reclassified from accumulated other comprehensive income (72) (418) (490) Net other comprehensive (loss) income during period (3,913) 1,388 (2,525) Balance at End of Period $ (7,044) $ 2,769 $ (4,275) Year Ended December 31, 2017 Balance at Beginning of Period $ (1,955) $ (426) $ (2,381) Other comprehensive (loss) income before reclassifications (840) 2,794 1,954 Amounts reclassified from accumulated other comprehensive income (336) (987) (1,323) Net other comprehensive (loss) income during period (1,176) 1,807 631 Balance at End of Period $ (3,131) $ 1,381 $ (1,750) |
Schedule of amounts reclassified out of accumulated other comprehensive (loss) income | The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017. Amount Reclassified from Affected Line Item in Accumulated Other the Statement Where Details about Accumulated Other Comprehensive (Loss) Income Net Income is Presented Comprehensive Income Components Year Ended December 31, (dollars in thousands) 2019 2018 2017 Realized gain on sale of investment securities $ 1,517 $ 97 $ 542 Gain on sale of investment securities Interest income (expense) derivative deposits 1,198 560 (1,592) Interest expense on deposits Income tax (expense) benefit (744) (167) 399 Tax expense Total Reclassifications for the Period $ 1,971 $ 490 $ (651) Net Income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Schedule of recorded amount of assets and liabilities measured at fair value on a recurring basis | The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018: Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 179,794 $ — $ 179,794 Residential mortgage backed securities — 543,852 — 543,852 Municipal bonds — 73,931 — 73,931 Corporate bonds — — 10,733 10,733 U.S. Treasury — 34,855 — 34,855 Other equity investments — — 198 198 Loans held for sale — 56,707 — 56,707 Interest Rate Caps — 317 — 317 Mortgage banking derivatives — — 280 280 Total assets measured at fair value on a recurring basis as of December 31, 2019 $ — $ 889,456 $ 11,211 $ 900,667 Liabilities: Interest rate swap derivatives $ — $ 203 $ — $ 203 Derivative liability — 86 — 86 Interest Rate Caps — 312 — 312 Mortgage banking derivatives — — 66 66 Total liabilities measured at fair value on a recurring basis as of December 31, 2019 $ — $ 601 $ 66 $ 667 December 31, 2018 Assets: Investment securities available-for-sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ 269 $ 269 |
Schedule of aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value | The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of December 31, 2019 and 2018. December 31, 2019 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 52,927 $ 52,054 $ 873 FHA mortgage loans held for sale $ 3,780 $ 3,780 $ — December 31, 2018 Aggregate Unpaid Principal (dollars in thousands) Fair Value Balance Difference Residential mortgage loans held for sale $ 19,254 $ 18,797 $ 457 FHA mortgage loans held for sale $ — $ — $ — |
Schedule of the reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3) | The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3): Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2019 $ 9,794 $ 229 $ 10,023 Realized (loss) gain included in earnings (20) 51 31 Unrealized gain included in other comprehensive income 131 — 131 Purchases of available -for-sale securities 4,030 — 4,030 Principal redemption (3,004) — (3,004) Ending balance at December 31, 2019 $ 10,931 $ 280 $ 11,211 Liabilities: Beginning balance at January 1, 2019 $ — $ 269 $ 269 Realized gain included in earnings — (203) (203) Principal redemption — — — Ending balance at December 31, 2019 $ — $ 66 $ 66 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2018 $ 1,718 $ 43 $ 1,761 Realized gain included in earnings — 186 186 Purchases of available-for-sale securities 8,076 — 8,076 Principal redemption — — — Ending balance at December 31, 2018 $ 9,794 $ 229 $ 10,023 Liabilities: Beginning balance at January 1, 2018 $ — $ 10 $ 10 Realized loss included in earnings — 259 259 Principal redemption — — — Ending balance at December 31, 2018 $ — $ 269 $ 269 |
Schedule of assets measured at fair value on nonrecurring basis | Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2019 Impaired loans: Commercial $ — $ — $ 10,100 $ 10,100 Income producing - commercial real estate — — 11,948 11,948 Owner occupied - commercial real estate — — 6,934 6,934 Real estate mortgage - residential — — 4,981 4,981 Construction - commercial and residential — — 11,409 11,409 Home equity — — 387 387 Other real estate owned — — 1,487 1,487 Total assets measured at fair value on a nonrecurring basis as of December 31, 2019 $ — $ — $ 47,246 $ 47,246 Significant Significant Other Other Observable Unobservable Quoted Prices Inputs Inputs Total (dollars in thousands) (Level 1) (Level 2) (Level 3) (Fair Value) December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential — — 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 |
Schedule of estimated fair values of financial instruments | The estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018 are as follows: Fair Value Measurements Significant Other Significant Observable Unobservable Carrying Quoted Prices Inputs Inputs (dollars in thousands) Value Fair Value (Level 1) (Level 2) (Level 3) December 31, 2019 Assets Cash and due from banks $ 7,539 $ 7,539 $ — $ 7,539 $ — Federal funds sold 38,987 38,987 — 38,987 — Interest bearing deposits with other banks 195,447 195,447 — 195,447 — Investment securities 843,363 843,363 — 832,432 10,931 Federal Reserve and Federal Home Loan Bank stock 35,194 35,194 — 35,194 — Loans held for sale 56,707 56,707 — 56,707 — Loans 7,472,090 7,550,249 — — 7,550,249 Bank owned life insurance 75,724 75,724 — 75,724 — Annuity investment 14,697 14,697 — 14,697 — Interest Rate Caps 280 280 — 280 — Liabilities Noninterest bearing deposits 2,064,367 2,064,367 — 2,064,367 — Interest bearing deposits 3,876,985 3,876,985 — 3,876,985 — Certificates of deposit 1,283,039 1,291,688 — 1,291,688 — Customer repurchase agreements 30,980 30,980 — 30,980 — Borrowings 467,687 328,330 — 328,330 — Interest rate swap derivatives 203 203 — 203 — Derivative liability 86 86 — 86 — Interest Rate Caps 312 312 — 312 — Mortgage banking derivatives 66 66 — — 66 December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,400 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives 269 269 — — 269 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations (unaudited) | |
Schedule of quarterly results of operations (unaudited) | The following table reports quarterly results of operations (unaudited) for 2019, 2018 and 2017: 2019 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 107,183 $ 109,034 $ 108,279 $ 105,134 Total interest expense 26,473 28,045 26,950 24,117 Net interest income 80,710 80,989 81,329 81,017 Provision for credit losses 2,945 3,186 3,600 3,360 Net interest income after provision for credit losses 77,765 77,803 77,729 77,657 Noninterest income 6,734 6,314 6,360 6,291 Noninterest expense 34,726 33,473 33,359 38,304 Income before income tax expense 49,773 50,644 50,730 45,644 Income tax expense 14,317 14,149 13,487 11,895 Net income 35,456 36,495 37,243 33,749 Net income available to common shareholders $ 35,456 $ 36,495 $ 37,243 $ 33,749 Earnings per common share Basic (1) $ 1.06 $ 1.07 $ 1.08 $ 0.98 Diluted (1) $ 1.06 $ 1.07 $ 1.08 $ 0.98 2018 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 105,581 $ 102,360 $ 96,296 $ 89,049 Total interest expense 23,869 21,069 18,086 13,269 Net interest income 81,712 81,291 78,210 75,780 Provision for credit losses 2,600 2,441 1,650 1,969 Net interest income after provision for credit losses 79,112 78,850 76,560 73,811 Noninterest income 6,089 5,640 5,553 5,304 Noninterest expense 31,687 31,614 32,289 31,121 Income before income tax expense 53,514 52,876 49,824 47,994 Income tax expense 13,197 13,928 12,528 12,279 Net income 40,317 38,948 37,296 35,715 Net income available to common shareholders $ 40,317 $ 38,948 $ 37,296 $ 35,715 Earnings per common share Basic (1) $ 1.17 $ 1.14 $ 1.09 $ 1.04 Diluted (1) $ 1.17 $ 1.13 $ 1.08 $ 1.04 2017 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 86,526 $ 82,370 $ 79,344 $ 75,794 Total interest expense 11,167 10,434 9,646 8,900 Net interest income 75,359 71,936 69,698 66,894 Provision for credit losses 4,087 1,921 1,566 1,397 Net interest income after provision for credit losses 71,272 70,015 68,132 65,497 Noninterest income 9,496 6,784 7,023 6,070 Noninterest expense 29,803 29,516 30,001 29,232 Income before income tax expense 50,965 47,283 45,154 42,335 Income tax expense 35,396 17,409 17,382 15,318 Net income 15,569 29,874 27,772 27,017 Net income available to common shareholders $ 15,569 $ 29,874 $ 27,772 $ 27,017 Earnings per common share Basic (1) $ 0.46 $ 0.87 $ 0.81 $ 0.79 Diluted (1) $ 0.45 $ 0.87 $ 0.81 $ 0.79 |
Parent Company Financial Info_2
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Financial Information | |
Schedule of Condensed Balance Sheet for Parent Company only | (dollars in thousands) December 31, 2019 December 31, 2018 Assets Cash $ 43,204 $ 72,783 Investment securities available-for-sale, at fair value 7,218 100 Investment in subsidiaries 1,334,197 1,249,704 Other assets 30,773 8,214 Total Assets $ 1,415,392 $ 1,330,801 Liabilities Other liabilities $ 7,024 $ 4,564 Long-term borrowings 217,687 217,296 Total liabilities 224,711 221,860 Shareholders’ Equity Common stock 331 342 Additional paid in capital 482,286 528,380 Retained earnings 705,105 584,494 Accumulated other comprehensive income (loss) 2,959 (4,275) Total Shareholders’ Equity 1,190,681 1,108,941 Total Liabilities and Shareholders’ Equity $ 1,415,392 $ 1,330,801 |
Schedule of Condensed Income Statement for Parent Company only | Years Ended December 31, (dollars in thousands) 2019 2018 2017 Income Other interest and dividends $ 85,851 $ 678 $ 234 Gain on sale of investment securities — — — Total Income $ 85,851 $ 678 $ 234 Expenses Interest expense 11,916 11,916 11,916 Legal and professional 2,779 870 118 Directors compensation 491 614 352 Other 1,294 1,287 1,246 Total Expenses $ 16,480 $ 14,687 $ 13,632 Income (Loss) Before Income Tax (Benefit) and Equity in Undistributed Income of Subsidiaries 69,371 (14,009) (13,398) Income Tax Benefit (3,176) (2,892) (4,689) Income (Loss) Before Equity in Undistributed Income of Subsidiaries 72,547 (11,117) (8,709) Equity in Undistributed Income of Subsidiaries 70,396 163,393 108,941 Net Income $ 142,943 $ 152,276 $ 100,232 |
Schedule of Condensed Cash Flow Statement for Parent Company only | Years Ended December 31, (dollars in thousands) 2019 2018 2017 Cash Flows From Operating Activities Net Income $ 142,943 $ 152,276 $ 100,232 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed income of subsidiary (70,396) (163,393) (108,941) Net tax benefits from stock compensation 10 110 460 Securities premium amortization (discount accretion), net 2 — — Increase in other assets (21,447) (2,508) (988) Increase (decrease) in other liabilities 2,460 (61) (189) Net cash provided by (used in) operating activities 53,572 (13,576) (9,426) Cash Flows From Investing Activities Purchases of available-for-sale investment securities (7,030) — — Investment in subsidiary (net) — 6,892 (460) Net cash (used in) provided by investing activities (7,030) 6,892 (460) Cash Flows From Financing Activities Proceeds from exercise of stock options 332 776 372 Proceeds from employee stock purchase plan 782 808 836 Common stock repurchased (54,903) — — Cash dividends paid (22,332) — — Net cash (used in) provided by financing activities (76,121) 1,584 1,208 Net (Decrease) in Cash (29,579) (5,100) (8,678) Cash and Cash Equivalents at Beginning of Year 72,783 77,883 86,561 Cash and Cash Equivalents at End of Year $ 43,204 $ 72,783 $ 77,883 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)store | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Intangible assets | $ 0 | ||
Unamortized multifamily FHA MSR's | 310 | $ 282 | |
Operating lease liabilities | 29,959 | ||
Operating lease right-of-use assets | $ 27,372 | ||
Banking Services | |||
Number of stores | store | 20 | ||
Lending Services | |||
Number of stores | store | 6 | ||
Adjustments for new authoritative accounting guidance | |||
Operating lease liabilities | $ 33,500 | ||
Operating lease right-of-use assets | $ 29,600 | ||
Minimum | |||
Increase in reserve for credit losses | 10.00% | ||
Days from commitment to closing | 30 days | ||
Maximum | |||
Increase in reserve for credit losses | 20.00% | ||
Days from commitment to closing | 90 days | ||
Furniture Fixtures and Equipment | Minimum | |||
Property, plant and equipment, useful life | 3 years | ||
Furniture Fixtures and Equipment | Maximum | |||
Property, plant and equipment, useful life | 7 years | ||
Computer Software and Hardware | Minimum | |||
Property, plant and equipment, useful life | 3 years | ||
Computer Software and Hardware | Maximum | |||
Property, plant and equipment, useful life | 5 years | ||
Building Improvements | Minimum | |||
Property, plant and equipment, useful life | 5 years | ||
Building Improvements | Maximum | |||
Property, plant and equipment, useful life | 20 years |
Investment Securities Availab_3
Investment Securities Available-for-Sale - Amortized cost and estimated fair value of securities available-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | $ 839,192 | $ 793,634 |
Gross Unrealized Gains | 7,206 | 2,321 |
Gross Unrealized Losses | 3,035 | 11,816 |
Estimated Fair Value | 843,363 | 784,139 |
U. S. agency securities | ||
Amortized Cost | 180,228 | 260,150 |
Gross Unrealized Gains | 621 | 228 |
Gross Unrealized Losses | 1,055 | 4,033 |
Estimated Fair Value | 179,794 | 256,345 |
Residential mortgage backed securities | ||
Amortized Cost | 541,490 | 477,949 |
Gross Unrealized Gains | 4,337 | 1,575 |
Gross Unrealized Losses | 1,975 | 7,293 |
Estimated Fair Value | 543,852 | 472,231 |
Municipal bonds | ||
Amortized Cost | 71,902 | 45,814 |
Gross Unrealized Gains | 2,034 | 439 |
Gross Unrealized Losses | 5 | 484 |
Estimated Fair Value | 73,931 | 45,769 |
Corporate bonds | ||
Amortized Cost | 10,530 | 9,503 |
Gross Unrealized Gains | 203 | 79 |
Gross Unrealized Losses | 6 | |
Estimated Fair Value | 10,733 | 9,576 |
U.S. Treasury | ||
Amortized Cost | 34,844 | |
Gross Unrealized Gains | 11 | |
Estimated Fair Value | 34,855 | |
Other equity investments | ||
Amortized Cost | 198 | 218 |
Estimated Fair Value | $ 198 | $ 218 |
Investment Securities Availab_4
Investment Securities Available-for-Sale - Gross unrealized losses and fair value (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)security |
Number of securities | 148 | 221 |
Less than 12 months, estimated fair value | $ 274,947 | $ 139,671 |
Less than 12 months, unrealized losses | 1,592 | 1,116 |
12 months or greater, estimated fair value | 142,223 | 387,672 |
12 months or greater, unrealized losses | 1,443 | 10,700 |
Estimated fair value | 417,170 | 527,343 |
Unrealized losses | $ 3,035 | $ 11,816 |
U. S. agency securities | ||
Number of securities | 36 | 58 |
Less than 12 months, estimated fair value | $ 75,159 | $ 72,679 |
Less than 12 months, unrealized losses | 439 | 533 |
12 months or greater, estimated fair value | 51,481 | 144,636 |
12 months or greater, unrealized losses | 616 | 3,500 |
Estimated fair value | 126,640 | 217,315 |
Unrealized losses | $ 1,055 | $ 4,033 |
Residential mortgage backed securities | ||
Number of securities | 111 | 151 |
Less than 12 months, estimated fair value | $ 197,794 | $ 61,199 |
Less than 12 months, unrealized losses | 1,148 | 527 |
12 months or greater, estimated fair value | 90,742 | 225,995 |
12 months or greater, unrealized losses | 827 | 6,766 |
Estimated fair value | 288,536 | 287,194 |
Unrealized losses | $ 1,975 | $ 7,293 |
Municipal bonds | ||
Number of securities | 1 | 11 |
Less than 12 months, estimated fair value | $ 1,994 | $ 4,299 |
Less than 12 months, unrealized losses | 5 | 50 |
12 months or greater, estimated fair value | 17,041 | |
12 months or greater, unrealized losses | 434 | |
Estimated fair value | 1,994 | 21,340 |
Unrealized losses | $ 5 | $ 484 |
Corporate bonds | ||
Number of securities | security | 1 | |
Less than 12 months, estimated fair value | $ 1,494 | |
Less than 12 months, unrealized losses | 6 | |
Estimated fair value | 1,494 | |
Unrealized losses | $ 6 |
Investment Securities Availab_5
Investment Securities Available-for-Sale - Expected maturities for residential mortgage backed securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized cost | $ 839,192 | $ 793,634 |
Estimated Fair Value | 843,363 | 784,139 |
U. S. agency securities | ||
One year or less, amortized cost | 96,332 | 128,148 |
After one year through five years, amortized cost | 76,121 | 119,856 |
Five years through ten years, amortized cost | 7,775 | 12,146 |
Amortized cost | 180,228 | 260,150 |
One year or less, estimated fair value | 96,226 | 125,545 |
After one year through five years, estimated fair value | 75,821 | 118,883 |
Five years through ten years, estimated fair value | 7,747 | 11,917 |
Estimated Fair Value | 179,794 | 256,345 |
Residential mortgage backed securities | ||
Amortized cost, without maturity date | 541,490 | 477,949 |
Amortized cost | 541,490 | 477,949 |
Estimated fair value, without maturity date | 543,852 | 472,231 |
Estimated Fair Value | 543,852 | 472,231 |
Municipal bonds | ||
One year or less, amortized cost | 5,897 | 8,097 |
After one year through five years, amortized cost | 21,416 | 15,025 |
Five years through ten years, amortized cost | 42,589 | 21,626 |
After ten years, amortized cost | 2,000 | 1,066 |
Amortized cost | 71,902 | 45,814 |
One year or less, estimated fair value | 5,969 | 8,167 |
After one year through five years, estimated fair value | 21,953 | 15,081 |
Five years through ten years, estimated fair value | 44,015 | 21,385 |
After ten years, estimated fair value | 1,994 | 1,136 |
Estimated Fair Value | 73,931 | 45,769 |
Corporate bonds | ||
One year or less, amortized cost | 502 | |
After one year through five years, amortized cost | 8,528 | 8,003 |
After ten years, amortized cost | 1,500 | 1,500 |
Amortized cost | 10,530 | 9,503 |
One year or less, estimated fair value | 508 | |
After one year through five years, estimated fair value | 8,725 | 8,076 |
After ten years, estimated fair value | 1,500 | 1,500 |
Estimated Fair Value | 10,733 | 9,576 |
U.S. Treasury | ||
Amortized cost, without maturity date | 34,844 | |
Amortized cost | 34,844 | |
Estimated fair value, without maturity date | 34,855 | |
Estimated Fair Value | 34,855 | |
Other equity investments | ||
Amortized cost, without maturity date | 198 | 218 |
Amortized cost | 198 | 218 |
Estimated fair value, without maturity date | 198 | 218 |
Estimated Fair Value | $ 198 | $ 218 |
Investment Securities Availab_6
Investment Securities Available-for-Sale - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal Reserve and Federal Home Loan Bank stock | $ 35,194 | $ 23,506 | |
Debt securities as percentage of total investment securities | 99.90% | ||
Debt securities weighted average duration | 3 years 4 months 24 days | ||
Proceeds from sale/call of available for sale securities | $ 104,785 | 36,292 | $ 73,079 |
Holdings of securities of any one issuer | 10.00% | ||
Available-for-sale Securities, Gross Realized Gains | $ 1,700 | 391 | 796 |
Available-for-sale Securities, Gross Realized Losses | 153 | $ 294 | $ 254 |
Collateral Pledged | |||
Available-for-sale securities pledged as collateral | $ 378,000 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans and leases receivable, net of deferred income | $ 7,545,748 | $ 6,991,447 | |
Loans, percent | 100.00% | 100.00% | |
Less allowance for credit losses | $ (73,658) | $ (69,944) | $ (64,758) |
Loans, net | 7,472,090 | 6,921,503 | |
Commercial | |||
Loans and leases receivable, net of deferred income | $ 1,545,906 | $ 1,553,112 | |
Loans, percent | 20.00% | 22.00% | |
Less allowance for credit losses | $ (18,832) | $ (15,857) | (13,102) |
Income Producing - Commercial Real Estate | |||
Loans and leases receivable, net of deferred income | $ 3,702,747 | $ 3,256,900 | |
Loans, percent | 50.00% | 46.00% | |
Less allowance for credit losses | $ (29,265) | $ (28,034) | (25,376) |
Owner Occupied - Commercial Real Estate | |||
Loans and leases receivable, net of deferred income | $ 985,409 | $ 887,814 | |
Loans, percent | 13.00% | 13.00% | |
Less allowance for credit losses | $ (5,838) | $ (6,242) | (5,934) |
Real Estate Mortgage Residential | |||
Loans and leases receivable, net of deferred income | $ 104,221 | $ 106,418 | |
Loans, percent | 1.00% | 2.00% | |
Less allowance for credit losses | $ (1,557) | $ (965) | (944) |
Construction - Commercial and Residential | |||
Loans and leases receivable, net of deferred income | 1,125,244 | 1,097,612 | |
Less allowance for credit losses | (17,485) | (18,175) | (18,492) |
Construction - Commercial and Residential | Commercial And Residential | |||
Loans and leases receivable, net of deferred income | $ 1,035,754 | $ 1,039,815 | |
Loans, percent | 14.00% | 15.00% | |
Construction - Commercial and Residential | C & I Owner Occupied | |||
Loans and leases receivable, net of deferred income | $ 89,490 | $ 57,797 | |
Loans, percent | 1.00% | 1.00% | |
Home Equity | |||
Loans and leases receivable, net of deferred income | $ 80,061 | $ 86,603 | |
Loans, percent | 1.00% | 1.00% | |
Less allowance for credit losses | $ (656) | $ (599) | (770) |
Other Consumer | |||
Loans and leases receivable, net of deferred income | 2,160 | 2,988 | |
Less allowance for credit losses | $ (25) | $ (72) | $ (140) |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Detail activity in the allowance for credit losses by portfolio segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Credit Losses, beginning balance | $ 69,944 | $ 64,758 |
Loans charged-off | (10,219) | (4,985) |
Recoveries of loans previously charged-off | 842 | 1,511 |
Net loans charged-off | (9,377) | (3,474) |
Provision for credit losses | 13,091 | 8,660 |
Individually evaluated for impairment | 9,124 | 8,918 |
Collectively evaluated for impairment | 64,534 | 61,026 |
Allowance for Credit Losses, ending balance | 73,658 | 69,944 |
Loans | 7,545,748 | 6,991,447 |
Commercial | ||
Allowance for Credit Losses, beginning balance | 15,857 | 13,102 |
Loans charged-off | (4,868) | (3,491) |
Recoveries of loans previously charged-off | 405 | 340 |
Net loans charged-off | (4,463) | (3,151) |
Provision for credit losses | 7,438 | 5,906 |
Individually evaluated for impairment | 5,714 | 4,803 |
Collectively evaluated for impairment | 13,118 | 11,054 |
Allowance for Credit Losses, ending balance | 18,832 | 15,857 |
Loans | 1,545,906 | 1,553,112 |
Income Producing - Commercial Real Estate | ||
Allowance for Credit Losses, beginning balance | 28,034 | 25,376 |
Loans charged-off | (1,847) | (121) |
Recoveries of loans previously charged-off | 26 | 2 |
Net loans charged-off | (1,821) | (119) |
Provision for credit losses | 3,052 | 2,777 |
Individually evaluated for impairment | 2,145 | 2,465 |
Collectively evaluated for impairment | 27,120 | 25,569 |
Allowance for Credit Losses, ending balance | 29,265 | 28,034 |
Loans | 3,702,747 | 3,256,900 |
Owner Occupied - Commercial Real Estate | ||
Allowance for Credit Losses, beginning balance | 6,242 | 5,934 |
Loans charged-off | (132) | |
Recoveries of loans previously charged-off | 3 | 3 |
Net loans charged-off | 3 | (129) |
Provision for credit losses | (407) | 437 |
Individually evaluated for impairment | 415 | 600 |
Collectively evaluated for impairment | 5,423 | 5,642 |
Allowance for Credit Losses, ending balance | 5,838 | 6,242 |
Loans | 985,409 | 887,814 |
Real Estate Mortgage Residential | ||
Allowance for Credit Losses, beginning balance | 965 | 944 |
Recoveries of loans previously charged-off | 3 | 6 |
Net loans charged-off | 3 | 6 |
Provision for credit losses | 589 | 15 |
Individually evaluated for impairment | 650 | |
Collectively evaluated for impairment | 907 | 965 |
Allowance for Credit Losses, ending balance | 1,557 | 965 |
Loans | 104,221 | 106,418 |
Construction - Commercial and Residential | ||
Allowance for Credit Losses, beginning balance | 18,175 | 18,492 |
Loans charged-off | (3,496) | (1,160) |
Recoveries of loans previously charged-off | 354 | 1,009 |
Net loans charged-off | (3,142) | (151) |
Provision for credit losses | 2,452 | (166) |
Individually evaluated for impairment | 100 | 1,050 |
Collectively evaluated for impairment | 17,385 | 17,125 |
Allowance for Credit Losses, ending balance | 17,485 | 18,175 |
Loans | 1,125,244 | 1,097,612 |
Home Equity | ||
Allowance for Credit Losses, beginning balance | 599 | 770 |
Recoveries of loans previously charged-off | 133 | |
Net loans charged-off | 133 | |
Provision for credit losses | 57 | (304) |
Individually evaluated for impairment | 100 | |
Collectively evaluated for impairment | 556 | 599 |
Allowance for Credit Losses, ending balance | 656 | 599 |
Loans | 80,061 | 86,603 |
Other Consumer | ||
Allowance for Credit Losses, beginning balance | 72 | 140 |
Loans charged-off | (8) | (81) |
Recoveries of loans previously charged-off | 51 | 18 |
Net loans charged-off | 43 | (63) |
Provision for credit losses | (90) | (5) |
Collectively evaluated for impairment | 25 | 72 |
Allowance for Credit Losses, ending balance | 25 | 72 |
Loans | $ 2,160 | $ 2,988 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Recorded investments in loans related to each balance in the allowance for loan losses by portfolio segment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Recorded investment in loans: | ||
Loans individually evaluated for impairment | $ 68,206 | $ 84,519 |
Loans collectively evaluated for impairment | 7,477,542 | 6,906,928 |
Net loans | 7,545,748 | 6,991,447 |
Commercial | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 25,288 | 8,738 |
Loans collectively evaluated for impairment | 1,520,618 | 1,544,374 |
Net loans | 1,545,906 | 1,553,112 |
Income Producing - Commercial Real Estate | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 19,093 | 61,747 |
Loans collectively evaluated for impairment | 3,683,654 | 3,195,153 |
Net loans | 3,702,747 | 3,256,900 |
Owner Occupied - Commercial Real Estate | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 6,463 | 5,307 |
Loans collectively evaluated for impairment | 978,946 | 882,507 |
Net loans | 985,409 | 887,814 |
Real Estate Mortgage Residential | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 5,365 | 1,228 |
Loans collectively evaluated for impairment | 98,856 | 105,190 |
Net loans | 104,221 | 106,418 |
Construction - Commercial and Residential | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 11,510 | 7,012 |
Loans collectively evaluated for impairment | 1,113,734 | 1,090,600 |
Net loans | 1,125,244 | 1,097,612 |
Home Equity | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 487 | 487 |
Loans collectively evaluated for impairment | 79,574 | 86,116 |
Net loans | 80,061 | 86,603 |
Other Consumer | ||
Recorded investment in loans: | ||
Loans collectively evaluated for impairment | 2,160 | 2,988 |
Net loans | $ 2,160 | $ 2,988 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Loans by class and credit quality indicators (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loans | $ 7,545,748 | $ 6,991,447 |
Pass | ||
Loans | 7,356,769 | 6,805,807 |
Watch | ||
Loans | 109,313 | 66,670 |
Special Mention | ||
Loans | 11,460 | |
Substandard | ||
Loans | 68,206 | 118,970 |
Commercial | ||
Loans | 1,545,906 | 1,553,112 |
Commercial | Pass | ||
Loans | 1,470,636 | 1,505,477 |
Commercial | Watch | ||
Loans | 38,522 | 25,584 |
Commercial | Special Mention | ||
Loans | 11,460 | |
Commercial | Substandard | ||
Loans | 25,288 | 22,051 |
Income Producing - Commercial Real Estate | ||
Loans | 3,702,747 | 3,256,900 |
Income Producing - Commercial Real Estate | Pass | ||
Loans | 3,667,585 | 3,172,479 |
Income Producing - Commercial Real Estate | Watch | ||
Loans | 16,069 | 1,536 |
Income Producing - Commercial Real Estate | Substandard | ||
Loans | 19,093 | 82,885 |
Owner Occupied - Commercial Real Estate | ||
Loans | 985,409 | 887,814 |
Owner Occupied - Commercial Real Estate | Pass | ||
Loans | 925,800 | 844,286 |
Owner Occupied - Commercial Real Estate | Watch | ||
Loans | 53,146 | 38,221 |
Owner Occupied - Commercial Real Estate | Substandard | ||
Loans | 6,463 | 5,307 |
Real Estate Mortgage Residential | ||
Loans | 104,221 | 106,418 |
Real Estate Mortgage Residential | Pass | ||
Loans | 98,228 | 104,543 |
Real Estate Mortgage Residential | Watch | ||
Loans | 628 | 647 |
Real Estate Mortgage Residential | Substandard | ||
Loans | 5,365 | 1,228 |
Construction - Commercial and Residential | ||
Loans | 1,125,244 | 1,097,612 |
Construction - Commercial and Residential | Pass | ||
Loans | 1,113,734 | 1,090,600 |
Construction - Commercial and Residential | Substandard | ||
Loans | 11,510 | 7,012 |
Home Equity | ||
Loans | 80,061 | 86,603 |
Home Equity | Pass | ||
Loans | 78,626 | 85,434 |
Home Equity | Watch | ||
Loans | 948 | 682 |
Home Equity | Substandard | ||
Loans | 487 | 487 |
Other Consumer | ||
Loans | 2,160 | 2,988 |
Other Consumer | Pass | ||
Loans | $ 2,160 | $ 2,988 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Information related to nonaccrual loans by class (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Nonaccrual loan, recorded investment | $ 48,729 | $ 16,277 |
Commercial | ||
Nonaccrual loan, recorded investment | 14,928 | 7,115 |
Income Producing - Commercial Real Estate | ||
Nonaccrual loan, recorded investment | 9,711 | 1,766 |
Owner Occupied - Commercial Real Estate | ||
Nonaccrual loan, recorded investment | 6,463 | 2,368 |
Real Estate Mortgage Residential | ||
Nonaccrual loan, recorded investment | 5,631 | 1,510 |
Construction - Commercial and Residential | ||
Nonaccrual loan, recorded investment | 11,509 | 3,031 |
Home Equity | ||
Nonaccrual loan, recorded investment | $ 487 | $ 487 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Class of loan, an aging analysis and the recorded investments in loans past due (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loans past due | $ 74,993 | $ 73,660 |
Current loans | 7,470,755 | 6,917,787 |
Total recorded investment in loans | 7,545,748 | 6,991,447 |
Real Estate Mortgage Residential | ||
Loans past due | 9,164 | 5,664 |
Current loans | 95,057 | 100,754 |
Total recorded investment in loans | 104,221 | 106,418 |
Owner Occupied - Commercial Real Estate | ||
Loans past due | 19,471 | 9,789 |
Current loans | 965,938 | 878,025 |
Total recorded investment in loans | 985,409 | 887,814 |
Other Consumer | ||
Loans past due | 9 | |
Current loans | 2,151 | 2,988 |
Total recorded investment in loans | 2,160 | 2,988 |
Income Producing - Commercial Real Estate | ||
Loans past due | 15,253 | 35,100 |
Current loans | 3,687,494 | 3,221,800 |
Total recorded investment in loans | 3,702,747 | 3,256,900 |
Home Equity | ||
Loans past due | 815 | 1,164 |
Current loans | 79,246 | 85,439 |
Total recorded investment in loans | 80,061 | 86,603 |
Construction - Commercial and Residential | ||
Loans past due | 11,509 | 7,423 |
Current loans | 1,113,735 | 1,090,189 |
Total recorded investment in loans | 1,125,244 | 1,097,612 |
Commercial | ||
Loans past due | 18,772 | 14,520 |
Current loans | 1,527,134 | 1,538,592 |
Total recorded investment in loans | 1,545,906 | 1,553,112 |
30 to 59 days past due | ||
Loans past due | 19,740 | 22,919 |
30 to 59 days past due | Real Estate Mortgage Residential | ||
Loans past due | 3,533 | 2,456 |
30 to 59 days past due | Owner Occupied - Commercial Real Estate | ||
Loans past due | 13,008 | 5,051 |
30 to 59 days past due | Income Producing - Commercial Real Estate | ||
Loans past due | 5,855 | |
30 to 59 days past due | Home Equity | ||
Loans past due | 136 | 630 |
30 to 59 days past due | Construction - Commercial and Residential | ||
Loans past due | 4,392 | |
30 to 59 days past due | Commercial | ||
Loans past due | 3,063 | 4,535 |
60-89 days past due | ||
Loans past due | 6,524 | 34,464 |
60-89 days past due | Real Estate Mortgage Residential | ||
Loans past due | 1,698 | |
60-89 days past due | Owner Occupied - Commercial Real Estate | ||
Loans past due | 2,370 | |
60-89 days past due | Other Consumer | ||
Loans past due | 9 | |
60-89 days past due | Income Producing - Commercial Real Estate | ||
Loans past due | 5,542 | 27,479 |
60-89 days past due | Home Equity | ||
Loans past due | 192 | 47 |
60-89 days past due | Commercial | ||
Loans past due | 781 | 2,870 |
90 days or more past due | ||
Loans past due | 48,729 | 16,277 |
90 days or more past due | Real Estate Mortgage Residential | ||
Loans past due | 5,631 | 1,510 |
90 days or more past due | Owner Occupied - Commercial Real Estate | ||
Loans past due | 6,463 | 2,368 |
90 days or more past due | Income Producing - Commercial Real Estate | ||
Loans past due | 9,711 | 1,766 |
90 days or more past due | Home Equity | ||
Loans past due | 487 | 487 |
90 days or more past due | Construction - Commercial and Residential | ||
Loans past due | 11,509 | 3,031 |
90 days or more past due | Commercial | ||
Loans past due | $ 14,928 | $ 7,115 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Impaired loans, by class of loan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unpaid Contractual Principal Balance | $ 54,883 | $ 40,774 |
Recorded Investment With No Allowance | 35,235 | 13,166 |
Recorded Investment With Allowance | 19,648 | 27,136 |
Total Recorded Investment | 54,883 | 40,302 |
Related Allowance | 9,124 | 8,918 |
Average Recorded Investment | 54,258 | 30,955 |
Interest Income Recognized | 941 | 1,006 |
Commercial | ||
Unpaid Contractual Principal Balance | 15,814 | 8,613 |
Recorded Investment With No Allowance | 11,858 | 2,057 |
Recorded Investment With Allowance | 3,956 | 6,084 |
Total Recorded Investment | 15,814 | 8,141 |
Related Allowance | 5,714 | 4,803 |
Average Recorded Investment | 15,682 | 8,359 |
Interest Income Recognized | 270 | 190 |
Income Producing - Commercial Real Estate | ||
Unpaid Contractual Principal Balance | 14,093 | 21,402 |
Recorded Investment With No Allowance | 2,713 | 1,720 |
Recorded Investment With Allowance | 11,380 | 19,682 |
Total Recorded Investment | 14,093 | 21,402 |
Related Allowance | 2,145 | 2,465 |
Average Recorded Investment | 18,133 | 12,309 |
Interest Income Recognized | 382 | 550 |
Owner Occupied - Commercial Real Estate | ||
Unpaid Contractual Principal Balance | 7,349 | 5,731 |
Recorded Investment With No Allowance | 6,388 | 4,361 |
Recorded Investment With Allowance | 961 | 1,370 |
Total Recorded Investment | 7,349 | 5,731 |
Related Allowance | 415 | 600 |
Average Recorded Investment | 6,107 | 6,011 |
Interest Income Recognized | 197 | 196 |
Real Estate Mortgage Residential | ||
Unpaid Contractual Principal Balance | 5,631 | 1,510 |
Recorded Investment With No Allowance | 3,175 | 1,510 |
Recorded Investment With Allowance | 2,456 | |
Total Recorded Investment | 5,631 | 1,510 |
Related Allowance | 650 | |
Average Recorded Investment | 5,638 | 1,688 |
Interest Income Recognized | 2 | |
Construction - Commercial and Residential | ||
Unpaid Contractual Principal Balance | 11,509 | 3,031 |
Recorded Investment With No Allowance | 11,101 | 3,031 |
Recorded Investment With Allowance | 408 | |
Total Recorded Investment | 11,509 | 3,031 |
Related Allowance | 100 | 1,050 |
Average Recorded Investment | 8,211 | 2,028 |
Interest Income Recognized | 92 | 68 |
Home Equity | ||
Unpaid Contractual Principal Balance | 487 | 487 |
Recorded Investment With No Allowance | 487 | |
Recorded Investment With Allowance | 487 | |
Total Recorded Investment | 487 | 487 |
Related Allowance | 100 | |
Average Recorded Investment | $ 487 | 491 |
Other Consumer | ||
Average Recorded Investment | $ 69 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Loans modified in troubled debt restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)contract | Dec. 31, 2018USD ($)contract | |
Number of loans - restructured accruing | contract | 7 | 9 |
Number of loans - restructured nonaccruing | contract | 2 | 3 |
Number of loans | contract | 9 | 12 |
Restructured accruing | $ 16,578 | $ 24,025 |
Restructured nonaccruing | 2,512 | 544 |
Troubled Debt Restructured | 19,090 | 24,569 |
Specific allowance | 1,000 | 3,000 |
Restructured and subsequently defaulted | 9,485 | 1,345 |
Commercial | ||
Restructured accruing | 885 | 1,026 |
Restructured nonaccruing | 142 | 544 |
Troubled Debt Restructured | 1,027 | 1,570 |
Restructured and subsequently defaulted | 408 | |
Income Producing - Commercial Real Estate | ||
Restructured accruing | 14,806 | 19,636 |
Troubled Debt Restructured | 14,806 | 19,636 |
Specific allowance | 1,000 | 3,000 |
Restructured and subsequently defaulted | 7,115 | 937 |
Owner Occupied - Commercial Real Estate | ||
Restructured accruing | 887 | 3,363 |
Restructured nonaccruing | 2,370 | |
Troubled Debt Restructured | 3,257 | $ 3,363 |
Restructured and subsequently defaulted | $ 2,370 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses - Changes in the credit mark accretable yield (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Allowance for Credit Losses | ||
Balance at January 1, | $ (1,495) | $ (2,459) |
Accretion | 520 | 964 |
Balance at December 31, | $ (975) | $ (1,495) |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses - Activity in related party loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Allowance for Credit Losses | ||
Loans receivable-related parties, beginning | $ 167,884 | $ 238,236 |
Additions | 30,153 | 55,657 |
Repayments | (38,204) | (126,009) |
Additions due to Changes in Related Parties | 9,034 | |
Deletions due to Changes in Related Parties | (116,499) | |
Loans receivable-related parties, ending | $ 52,368 | $ 167,884 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Unamortized net deferred fees | $ 25,200 | $ 26,500 | |
Serving assets not reflected as loan balances | $ 99,000 | 111,000 | |
Stress test assumption increase interest rates | 2.00% | ||
Financing receivable, net | $ 7,545,748 | 6,991,447 | |
Financing receivable, modifications, recorded investment | $ 19,100 | 24,600 | |
Number Of Restructured Loans | loan | 3 | ||
Amount of loans restructured during the period. | $ 9,500 | ||
Number of restructured loans, whose collateral property sold | loan | 1 | ||
Recorded investment - restructured loans, whose collateral property sold | $ 4,800 | ||
Restructured loans, proceeds from sale of collateral property | 3,000 | ||
Recorded investment - Remaining amount charged-off | 1,800 | ||
Recorded investment - defaulted charged-off | $ 2,300 | 1,400 | |
Number of loans re-underwritten | loan | 1 | ||
Recorded investment - re-underwritten loans | $ 10,400 | ||
Loans Re-underwritten, number of new loans | loan | 2 | ||
Nonaccrual loans, gross interest income if in compliance | $ 3,000 | 1,000 | |
Nonaccrual loans, recorded interest income | $ 630 | 265 | |
Loans secured by real estate (percent) | 85.00% | ||
Loans receivable-related parties | $ 52,368 | 167,884 | $ 238,236 |
ADC Loans | |||
Percent of ADC loan portfolio using interest reserves | 65.00% | ||
Financing receivable, net | $ 1,610,000 | ||
Home Equity | |||
Unamortized net deferred fees | 32 | 60 | |
Financing receivable, net | $ 80,061 | 86,603 | |
Owner Occupied Commercial Real Estate and Construction | |||
Percent of loan portfolio | 14.00% | ||
Income Producing Commercial Real Estate and Real Estate Construction | |||
Percent of loan portfolio | 64.00% | ||
Minimum cash flow debt service coverage ratio | 1.15 | ||
Maximum loan to value (percent) | 80.00% | ||
Commercial Real Estate and Real Estate Construction Loans | |||
Percent of loan portfolio | 78.00% | ||
Commercial | |||
Percent of loan portfolio | 20.00% | ||
Financing receivable, net | $ 1,545,906 | 1,553,112 | |
Commercial | Minimum | Preferred Term | |||
Loan period | 5 years | ||
Commercial | Maximum | |||
Loan period | 10 years | ||
Amortization term | 25 years | ||
Commercial | Maximum | Preferred Term | |||
Loan period | 7 years | ||
Commercial | SBA Loans | |||
Percent of loan portfolio | 1.00% | ||
Consumer Portfolio Segment | |||
Percent of loan portfolio | 1.00% | ||
Consumer Portfolio Segment | Land Acquisition Development and Construction Loans | Maximum | |||
Loan period | 24 months | ||
Real Estate Mortgage Residential | |||
Financing receivable, net | $ 104,221 | 106,418 | |
Real Estate Mortgage Residential | Real Estate Loan | |||
Percent of loan portfolio | 1.00% | ||
Real Estate Mortgage Residential | Land Acquisition Development and Construction Loans | Maximum | |||
Loan period | 36 months | ||
Performing Loans | |||
Financing receivable, modifications, recorded investment | $ 16,600 | 24,000 | |
Non-Performing Loans | |||
Financing receivable, modifications, recorded investment | $ 9,500 | $ 460 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses - Additional Information II (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)loancontract | Dec. 31, 2018USD ($)contractloan | Dec. 31, 2017USD ($) | |
Financing receivable, modifications, recorded investment | $ 19,100 | $ 24,600 | |
Nonaccrual loans, gross interest income if in compliance | 3,000 | 1,000 | |
Nonaccrual loans, recorded interest income | $ 630 | $ 265 | |
Number of loans - restructured accruing | contract | 7 | 9 | |
Number of loans - restructured nonaccruing | contract | 2 | 3 | |
Number of loans | contract | 9 | 12 | |
Number of defaulted loans charged-off | loan | 4 | ||
Recorded investment - defaulted charged-off | $ 2,300 | $ 1,400 | |
Number of loans pay-off | loan | 1 | ||
Recorded investment - pay-offs | $ 309 | ||
Number of loans paydowns | loan | 1 | ||
Recorded investment - loans modified in TDR | $ 2,300 | $ 12,800 | |
Number of loans modified in TDR | loan | 1 | 2 | |
Performing Loans | |||
Financing receivable, modifications, recorded investment | $ 16,600 | $ 24,000 | |
Number of loans | loan | 7 | 9 | |
Number of loans pay-off | loan | 2 | ||
Recorded investment - pay-offs | $ 3,900 | ||
Non-Performing Loans | |||
Financing receivable, modifications, recorded investment | $ 9,500 | $ 460 | |
Number of loans subsequent defaults reclassified to non-performing | loan | 3 | 2 | |
Recorded investment - paydowns | $ 183 | ||
Paydown of nonperforming loan | $ 176 | ||
Third Loan | |||
Financing receivable, modifications, recorded investment | $ 2,400 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Premises and Equipment | ||
Leasehold improvements | $ 31,461 | $ 31,026 |
Furniture and equipment | 30,897 | 31,168 |
Less accumulated depreciation and amortization | (47,738) | (45,343) |
Total premises and equipment, net | $ 14,622 | $ 16,851 |
Premises and Equipment - Additi
Premises and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Premises and Equipment | |||
Depreciation | $ 5.8 | $ 5.6 | $ 5.4 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating lease right-of-use assets | $ 27,372 |
Operating lease liabilities | 29,959 |
Operating Lease Cost (Cost resulting from lease payments) | 7,829 |
Variable Lease Cost (Cost excluded from lease payments) | 1,090 |
Sublease Income | (348) |
Net Lease Cost | 8,571 |
Operating Lease - Operating Cash Flows (Fixed Payments) | $ 8,542 |
Weighted Average Lease Term - Operating Leases | 4 years 11 months 8 days |
Weighted Average Discount Rate - Operating Leases | 4.00% |
Leases - Future minimum payment
Leases - Future minimum payments for operating leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
December 31, 2020 | $ 8,468 |
December 31, 2021 | 7,545 |
December 31, 2022 | 5,220 |
December 31, 2023 | 4,276 |
December 31, 2024 | 3,398 |
Thereafter | 3,560 |
Total Future Minimum Lease Payments | 32,467 |
Amounts Representing Interest | (2,508) |
Present Value of Net Future Minimum Lease Payments | $ 29,959 |
Leases - Additional information
Leases - Additional information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Lease, Right-of-Use Asset | $ 27,372 |
Operating Lease, Liability | $ 29,959 |
Lessee Operating Lease Option To Extend Percent | 90.00% |
Intangible Assets - net of accu
Intangible Assets - net of accumulated amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill, gross | $ 104,168 | $ 104,168 |
Goodwill, net | 104,168 | 104,168 |
Intangible assets and goodwill, gross | 113,048 | 113,048 |
Intangible assets, additions | 1,013 | 838 |
Intangible assets, accumulated amortization | (9,322) | (7,448) |
FHA MSR Sales | (672) | |
Intangible assets, net | 104,739 | 105,766 |
Core Deposits | ||
Intangible assets and goodwill, gross | 7,070 | 7,070 |
Intangible assets, accumulated amortization | (7,027) | (6,312) |
Finite-Lived Intangible Assets, Net | 43 | 758 |
Excess Servicing | ||
Intangible assets and goodwill, gross | 1,465 | 1,465 |
Intangible assets, additions | 1,013 | 838 |
Intangible assets, accumulated amortization | (1,971) | (1,053) |
FHA MSR Sales | (672) | |
Finite-Lived Intangible Assets, Net | 507 | 578 |
Non-compete Agreements | ||
Intangible assets and goodwill, gross | 345 | 345 |
Intangible assets, accumulated amortization | (324) | (83) |
Finite-Lived Intangible Assets, Net | $ 21 | $ 262 |
Intangible Assets - Future esti
Intangible Assets - Future estimated amortization expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Intangible Assets | |
2020 | $ 139 |
2021 | 55 |
2022 | 55 |
2023 | 55 |
2024 | 55 |
Thereafter | 212 |
Total annual amortization | $ 571 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2014 | Aug. 31, 2009 | Aug. 31, 2008 | |
Amortization of intangible assets | $ 1,200 | $ 1,600 | $ 1,500 | |||
Goodwill | 104,168 | 104,168 | ||||
Virginia Heritage | ||||||
Goodwill | $ 102,000 | |||||
Fidelity | ||||||
Goodwill | $ 2,200 | $ 360 | ||||
Non-compete Agreements | ||||||
Finite-lived intangible assets, net | 21 | $ 262 | ||||
Agreement term | 3 years | |||||
Core Deposits | ||||||
Finite-lived intangible assets, net | 43 | $ 758 | ||||
Core Deposits | Virginia Heritage | ||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 4,600 | |||||
Core Deposits | Fidelity | ||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 43 | $ 2,300 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Real Estate [Roll Forward] | ||
Balance beginning of period | $ 1,394 | $ 1,394 |
Real estate acquired from borrowers | 93 | |
Properties sold | ||
Balance end of period | $ 1,487 | $ 1,394 |
Other Real Estate Owned - Addit
Other Real Estate Owned - Additional Information (Details) $ in Millions | Dec. 31, 2019USD ($) |
Other Real Estate Owned | |
Foreclosure of loan | $ 4 |
Mortgage Banking Derivatives (D
Mortgage Banking Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative asset | $ 311 | |
Derivative liability | 611 | |
Cash Flow Hedge | ||
Noninterest income (loss), other | 116 | $ 157 |
Mortgage Banking Derivative | ||
Derivative, notional amount | 71,700 | 49,600 |
Noninterest income (loss), other | 186 | 57 |
Mortgage Banking Derivative | Other Assets | ||
Derivative asset | 280 | $ 229 |
Mortgage Banking Derivative | Other Liabilities | ||
Derivative asset | 66 | |
Derivative liability | $ 269 |
Interest Rate Swap Derivative_2
Interest Rate Swap Derivatives (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Notional Amount | $ 27,500 | |
Fair value | $ 311 | 59 |
Other Assets | ||
Notional Amount | 56,806 | |
Fair value | 311 | |
Other Assets | Interest Rate Product | ||
Notional Amount | 250,000 | |
Fair value | 3,840 | |
Other Assets | Interest Rate Product 1 | ||
Notional Amount | 26,000 | |
Fair value | 10 | |
Other Assets | Interest Rate Product 2 | ||
Notional Amount | 24,293 | |
Fair value | 168 | |
Other Assets | Interest Rate Product 3 | ||
Notional Amount | 6,513 | |
Fair value | 133 | |
Other Liabilities | ||
Notional Amount | 84,190 | |
Fair value | 405 | |
Other Liabilities | Interest Rate Product | ||
Notional Amount | 100,000 | |
Fair value | 206 | |
Other Liabilities | Interest Rate Product 1 | ||
Notional Amount | 26,000 | |
Fair value | 10 | |
Other Liabilities | Interest Rate Product 2 | ||
Notional Amount | 24,293 | |
Fair value | 172 | |
Other Liabilities | Interest Rate Product 3 | ||
Notional Amount | 6,513 | |
Fair value | 137 | |
Other Liabilities | Other Contracts | ||
Notional Amount | 27,384 | 27,500 |
Fair value | $ 86 | $ 59 |
Interest Rate Swap Derivative_3
Interest Rate Swap Derivatives - Cash flow hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amount of Gain or (Loss) recognized in OCI | $ (2,731) | $ 2,033 | $ 4,559 |
Gain or (Loss) reclassified from AOCI into income | 829 | ||
Interest Rate Product | |||
Amount of Gain or (Loss) recognized in OCI | (1,812) | 2,070 | |
Gain or (Loss) reclassified from AOCI into income | 1,994 | 560 | |
Interest Rate Product | Interest Expense | |||
Amount of Gain or (Loss) recognized in OCI | (1,812) | 2,070 | |
Gain or (Loss) reclassified from AOCI into income | 1,165 | 560 | |
Interest Rate Product | Gain on sale of investment securities | |||
Gain or (Loss) reclassified from AOCI into income | 829 | ||
Interest Rate Product 3 | |||
Amount of Gain or (Loss) recognized in OCI | (1,812) | 2,070 | |
Gain or (Loss) reclassified from AOCI into income | $ 1,165 | $ 560 |
Interest Rate Swap Derivative_4
Interest Rate Swap Derivatives - Designated cash flow hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | $ 829 | |
Cash Flow Hedge | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring | 829 | |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component | 829 | |
Interest Expenses | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 1,165 | $ 560 |
Interest Expenses | Cash Flow Hedge | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 1,165 | 560 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income - Included Component | $ 1,165 | $ 560 |
Interest Rate Swap Derivative_5
Interest Rate Swap Derivatives - Hedging instruments on statements of operations (Details) - Nonoperating Income (Expense) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, Gain (Loss) on Derivative, Net | $ (35) |
Interest Rate Products | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, Gain (Loss) on Derivative, Net | (8) |
Other Contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, Gain (Loss) on Derivative, Net | $ (27) |
Interest Rate Swap Derivative_6
Interest Rate Swap Derivatives - Liabilities subject to master netting arrangement (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Gross Amount of Recognized Assets | $ 311 | $ 59 |
Gross Amount of Recognized Liabilities | 611 | |
Net amounts of assets presented in the balance sheet | 311 | |
Net amounts of liabilities presented in the balance sheet | 611 | |
Gross amounts not offset in the balance sheet cash collateral | 500 | |
Gross amounts not offset in the balance sheet net amount | 311 | |
Gross amounts not offset in the balance sheet net amount | 111 | |
Interest Rate Swap | ||
Net amounts of assets presented in the balance sheet | 3,727 | |
Net amounts of liabilities presented in the balance sheet | $ 203 | |
Derivative Instrument | ||
Gross Amount of Recognized Assets | 3,840 | |
Gross Amount of Recognized Liabilities | 59 | |
Net amounts of assets presented in the balance sheet | 3,840 | |
Net amounts of liabilities presented in the balance sheet | 59 | |
Gross amounts not offset in the balance sheet net amount | 3,840 | |
Gross amounts not offset in the balance sheet net amount | $ 59 |
Interest Rate Swap Derivative_7
Interest Rate Swap Derivatives - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Notional amount | $ 27,500,000 | ||
Unrealized gain (loss) on derivatives | $ 515,000 | $ 3,800,000 | |
Estimate of time to transfer from AOCI to interest income/expense for designated cash flow hedge derivatives | 12 months | ||
Aggregate Fair Value Of Derivative Contracts Net Contingent Liability | $ 500,000 | ||
Interest Rate Swap | |||
Derivative, number of instruments held | 1 | 3 | |
Non Interest income due to termination of interest rate swap | $ 829,000 | ||
Estimated amount to be reclassified to interest expense (based on existing interest rates) for cash flow hedges | $ 12,000,000 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits | |||
Noninterest bearing demand | $ 2,064,367 | $ 2,104,220 | $ 1,982,912 |
Interest bearing transaction, balance | 863,856 | 593,107 | 420,417 |
Savings and money market, balance | 3,013,129 | 2,949,559 | 2,621,146 |
Time, $100,000 or more, balance | 663,987 | 801,957 | 515,682 |
Other time, balance | 619,052 | 525,442 | 313,827 |
Total deposits | $ 7,224,391 | $ 6,974,285 | $ 5,853,984 |
Interest bearing transaction, average rate | 0.99% | 0.81% | 0.46% |
Savings and money market, average rate | 1.42% | 1.68% | 0.70% |
Time, $100,000 or more, average rate | 2.55% | 2.25% | 1.20% |
Other time, average rate | 2.21% | 2.25% | 1.17% |
Deposits - Remaining maturity o
Deposits - Remaining maturity of time deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits | |||
Three months or less | $ 260,028 | $ 230,360 | $ 180,459 |
More than three months through twelve months | 538,352 | 663,085 | 437,067 |
Over twelve months | 484,659 | 433,954 | 211,983 |
Total | $ 1,283,039 | $ 1,327,399 | $ 829,509 |
Deposits - Interest expense on
Deposits - Interest expense on deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deposits | |||
Interest bearing transaction | $ 6,491 | $ 3,348 | $ 1,537 |
Savings and money market | 50,042 | 35,534 | 17,284 |
Time, $100,000 or more | 20,016 | 17,138 | 7,294 |
Other time | 14,477 | 4,190 | 1,171 |
Total | $ 91,026 | $ 60,210 | $ 27,286 |
Deposits - Time deposit account
Deposits - Time deposit accounts in excess of $250 thousand (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Time deposits $250,000 or more | |||
Three months or less | $ 63,099 | $ 51,214 | $ 44,348 |
More than three months through twelve months | 197,141 | 286,300 | 136,822 |
Over twelve months | 90,361 | 108,273 | 98,519 |
Total | $ 350,601 | $ 445,787 | $ 279,689 |
Deposits - Additional Informati
Deposits - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits | |||
Related Party Deposit Liabilities | $ 136,200 | $ 141,400 | |
Time Deposits, $250,000 or More | $ 250 | $ 250 | $ 250 |
Affordable Housing Projects T_3
Affordable Housing Projects Tax Credit Partnerships (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Years ending December 31: | |
2020 | $ 3,690 |
2021 | 4,053 |
2022 | 373 |
2023 | 1,862 |
2024 | 485 |
Thereafter | 797 |
Total unfunded commitments | $ 11,260 |
Affordable Housing Projects T_4
Affordable Housing Projects Tax Credit Partnerships - Additional Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Affordable Housing Projects Tax Credit - Unfunded Commitments | $ 11,260 |
Other Liabilities | |
Affordable Housing Projects Tax Credit - Unfunded Commitments | 11,300 |
Affordable Housing Projects Tax Credit Partnership | Other Assets | |
Investments | $ 29,700 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 26, 2016 | Aug. 05, 2014 | |
Total short-term borrowings | $ 280,980 | $ 30,413 | $ 401,561 | ||
Average daily balance short-term borrowings | 165,723 | 236,464 | 138,653 | ||
Maximum month-end balance short-term borrowings | 474,852 | 397,141 | 410,614 | ||
Total long-term borrowings | 217,687 | 217,296 | |||
Subordinated Debt | |||||
Total long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Average daily balance long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Maximum month-end balance long-term borrowings | $ 220,000 | $ 220,000 | $ 220,000 | ||
Debt instrument, interest rate, stated percentage | 5.42% | 5.42% | 5.42% | 5.00% | 5.75% |
Average interest rate | 5.42% | 5.42% | 5.42% | ||
Month-end interest rate | 5.42% | 5.42% | 5.42% | ||
Customer Repos and Federal Funds Purchased | |||||
Total short-term borrowings | $ 30,980 | $ 30,413 | $ 76,561 | ||
Average daily balance short-term borrowings | 30,024 | 44,333 | 73,237 | ||
Maximum month-end balance short-term borrowings | $ 34,852 | $ 72,141 | $ 85,614 | ||
Debt instrument, interest rate, stated percentage | 1.18% | 0.86% | 0.33% | ||
Average interest rate | 1.15% | 0.51% | 0.27% | ||
Month-end interest rate | 0.89% | 0.32% | 0.29% | ||
Federal Home Loan Bank | |||||
Total short-term borrowings | $ 250,000 | $ 325,000 | |||
Average daily balance short-term borrowings | 135,699 | $ 192,131 | 65,416 | ||
Maximum month-end balance short-term borrowings | $ 440,000 | $ 325,000 | $ 325,000 | ||
Debt instrument, interest rate, stated percentage | 0.39% | 1.48% | |||
Average interest rate | 1.67% | 2.02% | 1.13% | ||
Month-end interest rate | 0.92% | 1.62% | 1.48% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||||||||||||||
Current federal income tax expense | $ 39,756 | $ 39,498 | $ 59,019 | ||||||||||||
Current state income tax expense | 14,153 | 15,931 | 7,511 | ||||||||||||
Total current tax expense | 53,909 | 55,429 | 66,530 | ||||||||||||
Deferred federal income tax expense (benefit) | 78 | (2,634) | 18,459 | ||||||||||||
Deferred state income tax expense (benefit) | (139) | (863) | 515 | ||||||||||||
Total deferred tax expense (benefit) | (61) | (3,497) | 18,974 | ||||||||||||
Total income tax expense | $ 14,317 | $ 14,149 | $ 13,487 | $ 11,895 | $ 13,197 | $ 13,928 | $ 12,528 | $ 12,279 | $ 35,396 | $ 17,409 | $ 17,382 | $ 15,318 | $ 53,848 | $ 51,932 | $ 85,504 |
Income Taxes - Significant comp
Income Taxes - Significant components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | |||
Allowance for credit losses | $ 19,144 | $ 18,101 | $ 16,568 |
Deferred loan fees and costs | 6,354 | 6,733 | 6,741 |
Deferred rent | 1,026 | 1,009 | |
Leases | 673 | ||
Stock-based compensation | 674 | 1,722 | 847 |
Net operating loss | 1,285 | 2,003 | 2,032 |
Unrealized loss on securities available-for-sale | 2,756 | 1,312 | |
Unrealized loss on interest rate swap derivatives | 53 | ||
SERP | 1,541 | 1,497 | 1,373 |
Premises and equipment | 914 | 795 | 33 |
Other | 816 | 287 | 35 |
Total deferred tax assets | 31,454 | 34,920 | 29,950 |
Deferred tax liabilities | |||
Unrealized net gain on securities available-for-sale | (1,081) | ||
Unrealized gain on interest rate swap derivatives | (965) | (578) | |
Excess servicing | (51) | (77) | (99) |
Intangible assets | (9) | (223) | (503) |
Other liabilities | (509) | (328) | |
Total deferred tax liabilities | (1,650) | (1,593) | (1,180) |
Net deferred income tax amount | $ 29,804 | $ 33,327 | $ 28,770 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income taxes (Details) | Dec. 21, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes | ||||
Statutory federal income tax rate | 35.00% | 21.00% | 21.00% | 35.00% |
Increase (decrease) due to: | ||||
State income taxes | 5.73% | 5.83% | 3.41% | |
Deferred tax adjustment related | 0.49% | 7.85% | ||
Tax exempt interest and dividend income | (0.35%) | (1.13%) | (0.61%) | |
Stock-based compensation expense | 1.15% | 0.01% | 0.01% | |
Other | (0.61%) | (0.28%) | 0.38% | |
Effective tax rate | 27.41% | 25.43% | 46.04% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 21, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes. | ||||
Federal income tax rate | 35.00% | 21.00% | 21.00% | 35.00% |
Effective tax rates | 27.41% | 25.43% | 46.04% | |
Reduction in deferred tax asset | $ 14,600 | |||
Net deferred tax assets | 29,800 | $ 33,300 | ||
Operating loss carryforward | $ 718 | |||
Operating loss carryforward date | Dec. 31, 2027 |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic: | |||||||||||||||
Net income | $ 35,456 | $ 36,495 | $ 37,243 | $ 33,749 | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 142,943 | $ 152,276 | $ 100,232 |
Average common shares outstanding (in shares) | 34,179 | 34,306 | 34,139 | ||||||||||||
Basic net income per common share (in dollars per share) | $ 1.06 | $ 1.07 | $ 1.08 | $ 0.98 | $ 1.17 | $ 1.14 | $ 1.09 | $ 1.04 | $ 0.46 | $ 0.87 | $ 0.81 | $ 0.79 | $ 4.18 | $ 4.44 | $ 2.94 |
Diluted: | |||||||||||||||
Net income | $ 35,456 | $ 36,495 | $ 37,243 | $ 33,749 | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 142,943 | $ 152,276 | $ 100,232 |
Average common shares outstanding (in shares) | 34,179 | 34,306 | 34,139 | ||||||||||||
Adjustment for common share equivalents (in shares) | 32 | 137 | 182 | ||||||||||||
Average common shares outstanding-diluted (in shares) | 34,211 | 34,443 | 34,321 | ||||||||||||
Diluted net income per common share (in dollars per share) | $ 1.06 | $ 1.07 | $ 1.08 | $ 0.98 | $ 1.17 | $ 1.13 | $ 1.08 | $ 1.04 | $ 0.45 | $ 0.87 | $ 0.81 | $ 0.79 | $ 4.18 | $ 4.42 | $ 2.92 |
Anti-dilutive shares (in shares) | 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related party transaction, expenses from transactions with related party | $ 2,600 | $ 2,200 | $ 2,100 |
Related party transaction, amounts of transaction | 929 | ||
Donation paid | $ 182 | $ 150 | $ 145 |
Limited Liability Company A | |||
Ownership interest in trust | 51.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Performance Awards | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 98,958 | 62,338 | |
Issued | 43,145 | 43,145 | 42,533 |
Forfeited | (65,589) | (5,913) | |
Vested | (17,734) | ||
Unvested at end | 58,780 | 98,958 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 54.76 | $ 50.45 | |
Issued | 55.76 | 60.45 | |
Forfeited | 55.25 | 50.28 | |
Unvested at end | $ 57.74 | $ 54.76 | |
Time Vested Awards | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 173,721 | 164,043 | |
Issued | 112,636 | 94,344 | |
Forfeited | (44,600) | (7,132) | |
Vested | (131,043) | (77,534) | |
Unvested at end | 110,714 | 173,721 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 58.93 | $ 53.57 | |
Issued | 55.76 | 60.45 | |
Forfeited | 58.73 | 56.48 | |
Vested | 57.20 | 49.67 | |
Unvested at end | $ 57.84 | $ 58.93 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options, Outstanding: | |||
Beginning balance | 34,123 | 143,224 | 216,859 |
Exercised | (26,784) | (108,201) | (72,535) |
Forfeited | (750) | (900) | |
Expired | (1,100) | ||
Ending balance | 6,589 | 34,123 | 143,224 |
Options, Outstanding, Weighted Average Exercise Price: | |||
Beginning balance | $ 14.69 | $ 9.13 | $ 8.80 |
Exercised | 12.42 | 7.17 | 8.19 |
Forfeited | 49.08 | 34.47 | |
Expired | 5.76 | ||
Ending balance | $ 19.99 | $ 14.69 | $ 9.13 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock options by exercise price range (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options outstanding (in shares) | 6,589 | 34,123 | 143,224 | 216,859 |
Outstanding options, weighted-average exercise price (in dollars per share) | $ 19.99 | $ 14.69 | $ 9.13 | $ 8.80 |
Outstanding options, weighted-average remaining contractual life (Year) | 2 years 10 months 24 days | |||
Stock options exercisable (in shares) | 6,214 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 18.18 | |||
Range 1 | ||||
Outstanding options, exercise price range, lower limit (in dollars per share) | 5.76 | |||
Outstanding options, exercise price range, upper limit (in dollars per share) | 10.72 | |||
Range 2 | ||||
Outstanding options, exercise price range, lower limit (in dollars per share) | 10.73 | |||
Outstanding options, exercise price range, upper limit (in dollars per share) | $ 11.40 | |||
Stock options outstanding (in shares) | 5,089 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 11.17 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 1 year 10 months 17 days | |||
Stock options exercisable (in shares) | 5,089 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 11.17 | |||
Range 3 | ||||
Outstanding options, exercise price range, lower limit (in dollars per share) | 11.41 | |||
Outstanding options, exercise price range, upper limit (in dollars per share) | 24.86 | |||
Range 4 | ||||
Outstanding options, exercise price range, lower limit (in dollars per share) | 24.87 | |||
Outstanding options, exercise price range, upper limit (in dollars per share) | $ 49.91 | |||
Stock options outstanding (in shares) | 1,500 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 49.91 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 6 years 4 months 9 days | |||
Stock options exercisable (in shares) | 1,125 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 49.91 |
Stock-based Compensation - Cash
Stock-based Compensation - Cash proceeds, tax benefits and intrinsic value related to total stock options exercised (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Proceeds from stock options exercised | $ 332 | $ 776 | $ 372 |
Tax benefits realized from stock compensation | 50 | 5 | 99 |
Intrinsic value of stock options exercised | $ 1,022 | $ 4,958 | $ 3,888 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019 | May 31, 2011 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 12, 2016 | |
Options, outstanding, intrinsic value | $ 192,000 | $ 1,200 | ||||
Options, vested in period, fair value | 35 | 80 | $ 71 | |||
Stock options compensation not yet recognized | $ 2 | |||||
Compensation cost not yet recognized period for recognition | 4 months 9 days | |||||
Chief Executive Officer | ||||||
stock-based compensation costs | $ 4,500 | |||||
Salaries and Employee Benefits | ||||||
Allocated share-based compensation expense | $ 7,700 | $ 6,600 | $ 5,600 | |||
Restricted Stock | ||||||
Common stock, grants in period | 112,636 | |||||
Performance Awards | ||||||
Common stock, grants in period | 43,145 | 43,145 | 42,533 | |||
Award vesting period | 3 years | |||||
Award vesting rights, percentage | 100.00% | |||||
Nonvested awards, number of shares outstanding | 58,780 | 98,958 | 62,338 | |||
The 2016 Plan | ||||||
Common stock, capital shares reserved for future issuance | 1,000,000 | |||||
Stock Plan 2006 | Restricted Stock and PRSU | ||||||
Compensation cost not yet recognized period for recognition | 1 year 9 months 3 days | |||||
Nonvested awards, number of shares outstanding | 169,494 | |||||
Common stock awards, compensation not yet recognized | $ 5,300 | |||||
The 2011 ESPP | ||||||
Number of additional shares authorized | 550,000 | |||||
ESPP percentage of market value of offering period | 85.00% | |||||
Number of shares available for grant | 371,093 | |||||
The 2011 ESPP | Maximum | ||||||
Maximum employee subscription rate ESPP (percent) | 10.00% | |||||
The 2011 ESPP | Maximum | Annually | ||||||
Amount contributed to ESPP for participants | $ 25,000 | |||||
The 2011 ESPP | Maximum | Offering Period | ||||||
Amount contributed to ESPP for participants | 6,250 | |||||
The 2011 ESPP | Minimum | Pay Period | ||||||
Amount contributed to ESPP for participants | $ 10 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefit Plans | |||
Deferred compensation arrangement with individual minimum age | 21 years | ||
Deferred compensation arrangement with individual, requisite service period | 1 month | ||
Defined contribution plan, cost recognized | $ 1.3 | $ 894 | $ 1.2 |
Supplemental Executive Retire_2
Supplemental Executive Retirement Plan (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)ageinstallment | Dec. 31, 2018USD ($) | Dec. 31, 2013USD ($) | |
Defined benefit plan, net periodic benefit cost | $ 404 | $ 686 | |
Supplemental Executive Retirement and Death Benefit Agreements | |||
Time period for calculating base salary under SERP agreements | 5 years | ||
Retirement age | age | 67 | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 6 years | ||
Retirement plan monthly instalments | installment | 180 | ||
Purchased Fixed Annuity for Financing Retirement Benefits | Supplemental Executive Retirement and Death Benefit Agreements | |||
Other investments | $ 2,600 | $ 11,400 | |
Annuity contracts accrued income | 23 | $ 81 | |
Purchased Fixed Annuity for Financing Retirement Benefits | Supplemental Executive Retirement and Death Benefit Agreements | Other Assets | |||
Cash surrender value of life insurance | $ 14,700 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial Instruments with Off-Balance Sheet Risk | ||
Unfunded loan commitments | $ 2,176,641 | $ 2,228,689 |
Unfunded lines of credit | 86,426 | 90,283 |
Letters of credit | 69,723 | 83,162 |
Total | $ 2,332,790 | $ 2,402,134 |
Financial Instruments with Of_4
Financial Instruments with Off-Balance Sheet Risk - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
FinancialInstrumentsWithOffbalanceSheetRiskDetailsNarrativesAbstract | ||
Mortgage loans on real estate, write-down or reserve, amount | $ 79 | $ 45 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Within one year | $ 7,039,366 |
One to three years | 405,897 |
Three to five years | 195,412 |
Over five years | 161,820 |
Total | 7,802,495 |
Deposits Without a Stated Maturity | |
Within one year | 5,941,352 |
Total | 5,941,352 |
Time Deposits [Member] | |
Within one year | 798,380 |
One to three years | 375,879 |
Three to five years | 108,780 |
Total | 1,283,039 |
Borrowed Funds [Member] | |
Within one year | 280,980 |
Three to five years | 70,000 |
Over five years | 150,000 |
Total | 500,980 |
Operating Lease Obligations [Member] | |
Within one year | 8,468 |
One to three years | 12,765 |
Three to five years | 7,674 |
Over five years | 3,560 |
Total | 32,467 |
Outside Data Processing [Member] | |
Within one year | 5,037 |
One to three years | 9,814 |
Three to five years | 5,261 |
Total | 20,112 |
George Mason Sponsorship | |
Within one year | 663 |
One to three years | 1,350 |
Three to five years | 1,350 |
Over five years | 7,463 |
Total | 10,826 |
D.C. United [Member] | |
Within one year | 796 |
One to three years | 1,663 |
Total | 2,459 |
LIHTC Investments [Member] | |
Within one year | 3,690 |
One to three years | 4,426 |
Three to five years | 2,347 |
Over five years | 797 |
Total | $ 11,260 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities - Additional Information (Details) - George Mason Sponsorship $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Termination Option One | |
Increase (decrease) in contractual obligation, termination option | $ 3.5 |
Termination Option One | Minimum | |
Contractual obligation, option period | 11 years |
Termination Option One | Maximum | |
Contractual obligation, option period | 15 years |
Termination Option Two | |
Increase (decrease) in contractual obligation, termination option | $ 3.6 |
Termination Option Two | Minimum | |
Contractual obligation, option period | 16 years |
Termination Option Two | Maximum | |
Contractual obligation, option period | 20 years |
Effective June 30, 2025 | |
Option to terminate | 10 years |
Effective June 30, 2030 | |
Option to terminate | 15 years |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CET1 capital (to risk weighted assets) minimum required for capital adequacy purposes | 7.00% | 6.375% |
CET1 capital (to risk weighted assets) to be well capitalized under prompt corrective action regulations | 6.50% | 6.50% |
Total capital (to risk weighted assets) minimum required for capital adequacy purposes | 10.50% | 9.875% |
Total capital (to risk weighted assets) to be well capitalized under prompt corrective action regulations | 10.00% | 10.00% |
Tier 1 capital (to risk weighted assets) minimum required for capital adequacy purposes | 8.50% | 7.875% |
Tier 1 capital (to risk weighted assets) to be well capitalized under prompt corrective action regulations | 8.00% | 8.00% |
Tier 1 capital (to average assets) minimum required for capital adequacy purposes | 4.00% | 5.00% |
Tier 1 capital (to average assets) to be well capitalized under prompt corrective action regulations | 5.00% | 5.00% |
Bank [Member] | ||
CET1 capital (to risk weighted assets) actual amount | $ 1,225,486 | $ 1,147,151 |
CET1 capital (to risk weighted assets) actual ratio | 14.64% | 14.23% |
Total capital (to risk weighted assets) actual amount | $ 1,299,223 | $ 1,217,140 |
Total capital (to risk weighted assets) actual ratio | 15.52% | 15.10% |
Tier 1 capital (to risk weighted assets) actual amount | $ 1,225,486 | $ 1,147,151 |
Tier 1 capital (to risk weighted assets) actual ratio | 14.64% | 14.23% |
Tier 1 capital (to average assets) actual amount | $ 1,225,486 | $ 1,147,151 |
Tier 1 capital (to average assets) actual ratio | 13.18% | 13.78% |
Parent Company [Member] | ||
CET1 capital (to risk weighted assets) actual amount | $ 1,082,516 | $ 1,007,438 |
CET1 capital (to risk weighted assets) actual ratio | 12.87% | 12.49% |
Total capital (to risk weighted assets) actual amount | $ 1,362,253 | $ 1,297,427 |
Total capital (to risk weighted assets) actual ratio | 16.20% | 16.08% |
Tier 1 capital (to risk weighted assets) actual amount | $ 1,082,516 | $ 1,007,438 |
Tier 1 capital (to risk weighted assets) actual ratio | 12.87% | 12.49% |
Tier 1 capital (to average assets) actual amount | $ 1,082,516 | $ 1,007,438 |
Tier 1 capital (to average assets) actual ratio | 11.62% | 12.10% |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Comprehensive Income. | |||
Net unrealized gain (loss) on securities available-for-sale, before tax | $ 15,183 | $ (4,279) | $ (1,319) |
Less: Reclassification adjustment for net gains/loss included in net income, before tax | (1,517) | (97) | (542) |
Total unrealized gain (loss), before tax | 13,666 | (4,376) | (1,861) |
Net unrealized gain (loss) on derivatives, before tax | (2,731) | 2,033 | 4,559 |
Less: Reclassification adjustment for gains/losses included in net income, before tax | (1,198) | (560) | (1,592) |
Total unrealized gain (loss) on derivatives, before tax | (3,929) | 1,473 | 2,967 |
Other Comprehensive Income (Loss), before tax | 9,737 | (2,903) | 1,106 |
Net unrealized gain (loss) on securities available-for-sale, tax effect | (3,929) | (438) | (479) |
Less: Reclassification adjustment for net gains/loss included in net income, tax | (416) | (25) | (206) |
Total unrealized gain (loss), tax effect | (4,345) | (463) | (685) |
Net unrealized gain (loss) on derivatives, tax effect | 682 | 227 | 1,765 |
Less: Reclassification adjustment for gains/losses included in net income, tax effect | (328) | (142) | (605) |
Total unrealized gain (loss) on derivatives, tax effect | 354 | 85 | 1,160 |
Other Comprehensive Income (Loss), tax effect | (3,991) | (378) | 475 |
Net unrealized gain (loss) on securities available-for-sale, net of tax | 11,254 | (3,841) | (840) |
Less: Reclassification adjustment for net gains/loss included in net income, net of tax | (1,101) | (72) | (336) |
Total unrealized gain (loss) on investment securities | 10,153 | (3,913) | (1,176) |
Net unrealized gain (loss) on derivatives, net of tax | (2,049) | 1,806 | 2,794 |
Less: Reclassification adjustment for gains/losses included in net income, net of tax | (870) | (418) | (987) |
Total unrealized gain (loss) on derivatives, net of tax | (2,919) | 1,388 | 1,807 |
Other comprehensive income | $ 7,234 | $ (2,525) | $ 631 |
Other Comprehensive Income - Ch
Other Comprehensive Income - Changes in accumulated other comprehensive income (loss), net of tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Securities Available for Sale | |||
Beginning balance | $ (7,044) | $ (3,131) | $ (1,955) |
Other comprehensive income (loss) before reclassifications | 11,254 | (3,841) | (840) |
Amounts reclassified from accumulated other comprehensive income | (1,101) | (72) | (336) |
Net other comprehensive income (loss) during the period | 10,153 | (3,913) | (1,176) |
Ending balance | 3,109 | (7,044) | (3,131) |
Derivatives | |||
Beginning balance | 2,769 | 1,381 | (426) |
Other comprehensive income (loss) before reclassifications | (2,049) | 1,806 | 2,794 |
Amounts reclassified from accumulated other comprehensive income | (870) | (418) | (987) |
Net other comprehensive (loss) income during the period | (2,919) | 1,388 | 1,807 |
Ending balance | (150) | 2,769 | 1,381 |
Accumulated Other Comprehensive Income (Loss) | |||
Beginning balance | (4,275) | (1,750) | (2,381) |
Other comprehensive income (loss) before reclassifications | 9,205 | (2,035) | 1,954 |
Amounts reclassified from accumulated other comprehensive income | (1,971) | (490) | (1,323) |
Other comprehensive income (loss) | 7,234 | (2,525) | 631 |
Ending balance | $ 2,959 | $ (4,275) | $ (1,750) |
Other Comprehensive Income - Am
Other Comprehensive Income - Amounts reclassified from accumulated other comprehensive income (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized gain on sale of investment securities | $ 1,517 | $ 97 | $ 542 | ||||||||||||
Interest income (expense) derivative deposits | (91,026) | (60,210) | (27,286) | ||||||||||||
Income tax (expense) benefit | $ (14,317) | $ (14,149) | $ (13,487) | $ (11,895) | $ (13,197) | $ (13,928) | $ (12,528) | $ (12,279) | $ (35,396) | $ (17,409) | $ (17,382) | $ (15,318) | (53,848) | (51,932) | (85,504) |
Amounts reclassified from accumulated other comprehensive income (loss) | (1,971) | (490) | (1,323) | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||||||
Realized gain on sale of investment securities | 1,517 | 97 | 542 | ||||||||||||
Interest income (expense) derivative deposits | 1,198 | 560 | (1,592) | ||||||||||||
Income tax (expense) benefit | (744) | (167) | 399 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | $ 1,971 | $ 490 | $ (651) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities recorded at fair value on recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investment securities available-for-sale, at fair value | $ 843,363 | $ 784,139 |
Loans held for sale | 56,707 | 19,254 |
Other equity investments | 198 | 218 |
Derivative asset | 311 | |
Assets measured at a fair value | 900,667 | 807,349 |
Derivative liability | 611 | |
Liabilities measured at a fair value | 667 | 269 |
Derivative Financial Instruments, Liability [Member] | ||
Derivative liability | 86 | |
Interest Rate Swap | ||
Derivative asset | 3,727 | |
Derivative liability | 203 | |
Interest Rate Caps | ||
Derivative liability | 312 | |
U. S. agency securities | ||
Investment securities available-for-sale, at fair value | 179,794 | 256,345 |
Residential mortgage backed securities | ||
Investment securities available-for-sale, at fair value | 543,852 | 472,231 |
Loans held for sale | 52,927 | 19,254 |
Municipal bonds | ||
Investment securities available-for-sale, at fair value | 73,931 | 45,769 |
Corporate bonds | ||
Investment securities available-for-sale, at fair value | 10,733 | 9,576 |
U.S. Treasury | ||
Investment securities available-for-sale, at fair value | 34,855 | |
Mortgage Banking Derivative | ||
Derivative asset | 280 | 229 |
Derivative liability | 66 | 269 |
Fair Value, Inputs, Level 2 [Member] | ||
Investment securities available-for-sale, at fair value | 832,432 | 774,345 |
Loans held for sale | 56,707 | 19,254 |
Derivative liability | 86 | |
Liabilities measured at a fair value | 601 | |
Fair Value, Inputs, Level 2 [Member] | Recurring [Member] | ||
Assets measured at a fair value | 889,456 | 797,326 |
Fair Value, Inputs, Level 2 [Member] | Derivative Financial Instruments, Liability [Member] | ||
Derivative liability | 86 | |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap | ||
Derivative asset | 3,727 | |
Derivative liability | 203 | |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Caps | ||
Derivative asset | 280 | |
Derivative liability | 312 | |
Fair Value, Inputs, Level 2 [Member] | U. S. agency securities | ||
Investment securities available-for-sale, at fair value | 179,794 | 256,345 |
Fair Value, Inputs, Level 2 [Member] | Residential mortgage backed securities | ||
Investment securities available-for-sale, at fair value | 543,852 | 472,231 |
Fair Value, Inputs, Level 2 [Member] | Municipal bonds | ||
Investment securities available-for-sale, at fair value | 73,931 | 45,769 |
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury | ||
Investment securities available-for-sale, at fair value | 34,855 | |
Fair Value, Inputs, Level 3 [Member] | ||
Investment securities available-for-sale, at fair value | 10,931 | 9,794 |
Other equity investments | 198 | 218 |
Fair Value, Inputs, Level 3 [Member] | Recurring [Member] | ||
Assets measured at a fair value | 11,211 | 10,023 |
Liabilities measured at a fair value | 66 | 269 |
Fair Value, Inputs, Level 3 [Member] | Corporate bonds | ||
Investment securities available-for-sale, at fair value | 10,733 | 9,576 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative | ||
Derivative asset | 280 | 229 |
Derivative liability | $ 66 | $ 269 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of difference between aggregate fair value and aggregate unpaid principal balance (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loans held for sale | $ 56,707 | $ 19,254 |
Residential mortgage backed securities | ||
Loans held for sale | 52,927 | 19,254 |
Aggregate Unpaid Principal Balance | 52,054 | 18,797 |
Difference | 873 | $ 457 |
FHA Mortgage Backed Securities [Member] | ||
Loans held for sale | 3,780 | |
Aggregate Unpaid Principal Balance | $ 3,780 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of activity for assets and liabilities measured at fair value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Assets - Beginning balance | $ 10,023 | $ 1,761 |
Realized (loss) gain included in earnings | 31 | 186 |
Unrealized gain included in other comprehensive income | 131 | |
Purchases of available -for-sale securities | 4,030 | (8,076) |
Principal redemption | (3,004) | |
Assets - Ending balance | 11,211 | 10,023 |
Liabilities - Beginning balance | 269 | 10 |
Realized gain (loss) included in earnings | (203) | 259 |
Liabilities - Ending balance | 66 | 269 |
Other equity investments | ||
Assets - Beginning balance | 9,794 | 1,718 |
Realized (loss) gain included in earnings | (20) | |
Unrealized gain included in other comprehensive income | 131 | |
Purchases of available -for-sale securities | 4,030 | (8,076) |
Principal redemption | (3,004) | |
Assets - Ending balance | 10,931 | 9,794 |
Mortgage Banking Derivatives [Member] | ||
Assets - Beginning balance | 229 | 43 |
Realized (loss) gain included in earnings | 51 | 186 |
Assets - Ending balance | 280 | 229 |
Liabilities - Beginning balance | 269 | 10 |
Realized gain (loss) included in earnings | (203) | 259 |
Liabilities - Ending balance | $ 66 | $ 269 |
Fair Value Measurements - Ass_2
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other real estate owned | $ 1,487 | $ 1,394 |
Assets measured at a fair value | 900,667 | 807,349 |
Non Recurring [Member] | ||
Assets measured at a fair value | 47,246 | 32,778 |
Fair Value, Inputs, Level 3 [Member] | ||
Other real estate owned | 1,487 | 1,394 |
Fair Value, Inputs, Level 3 [Member] | Non Recurring [Member] | ||
Assets measured at a fair value | 47,246 | 32,778 |
Commercial | ||
Impaired loans | 10,100 | 3,338 |
Commercial | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 10,100 | 3,338 |
Income Producing - Commercial Real Estate | ||
Impaired loans | 11,948 | 18,937 |
Income Producing - Commercial Real Estate | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 11,948 | 18,937 |
Owner Occupied - Commercial Real Estate | ||
Impaired loans | 6,934 | 5,131 |
Owner Occupied - Commercial Real Estate | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 6,934 | 5,131 |
Real Estate Mortgage Residential | ||
Impaired loans | 4,981 | 1,510 |
Real Estate Mortgage Residential | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 4,981 | 1,510 |
Construction - Commercial and Residential | ||
Impaired loans | 11,409 | 1,981 |
Construction - Commercial and Residential | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 11,409 | 1,981 |
Home Equity | ||
Impaired loans | 387 | 487 |
Home Equity | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | $ 387 | $ 487 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated fair value of company's financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Federal funds sold | $ 38,987 | $ 11,934 | |
Interest bearing deposits with other banks | 195,447 | 303,157 | |
Investment securities available-for-sale, at fair value | 843,363 | 784,139 | |
Loans held for sale | 56,707 | 19,254 | |
Bank owned life insurance | 75,724 | 73,441 | |
Derivative asset | 311 | ||
Interest bearing deposits | 863,856 | 593,107 | $ 420,417 |
Customer repurchase agreements | 30,980 | 30,413 | |
Derivative liability | 611 | ||
Interest Rate Swap | |||
Derivative asset | 3,727 | ||
Derivative liability | 203 | ||
Interest Rate Caps | |||
Derivative liability | 312 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Cash and due from banks | 7,539 | 6,773 | |
Federal funds sold | 38,987 | 11,934 | |
Interest bearing deposits with other banks | 195,447 | 303,157 | |
Investment securities available-for-sale, at fair value | 832,432 | 774,345 | |
Federal Reserve and Federal Home Loan Bank stock | 35,194 | 23,506 | |
Loans held for sale | 56,707 | 19,254 | |
Bank owned life insurance | 75,724 | 73,441 | |
Annuity investment | 14,697 | 12,417 | |
Noninterest bearing deposits | 2,064,367 | 2,104,220 | |
Interest bearing deposits | 3,876,985 | 3,542,666 | |
Certificates of deposit | 1,291,688 | 1,325,209 | |
Customer repurchase agreements | 30,980 | 30,413 | |
Borrowings | 328,330 | 218,006 | |
Derivative liability | 86 | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap | |||
Derivative asset | 3,727 | ||
Derivative liability | 203 | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Caps | |||
Derivative asset | 280 | ||
Derivative liability | 312 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Investment securities available-for-sale, at fair value | 10,931 | 9,794 | |
Loans, net | 7,550,249 | 6,921,048 | |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative | |||
Derivative asset | 229 | ||
Derivative liability | 66 | 269 | |
Carrying Value [Member] | |||
Cash and due from banks | 7,539 | 6,773 | |
Federal funds sold | 38,987 | 11,934 | |
Interest bearing deposits with other banks | 195,447 | 303,157 | |
Investment securities available-for-sale, at fair value | 843,363 | 784,139 | |
Federal Reserve and Federal Home Loan Bank stock | 35,194 | 23,506 | |
Loans held for sale | 56,707 | 19,254 | |
Loans, net | 7,472,090 | 6,921,503 | |
Bank owned life insurance | 75,724 | 73,441 | |
Annuity investment | 14,697 | 12,417 | |
Noninterest bearing deposits | 2,064,367 | 2,104,220 | |
Interest bearing deposits | 3,876,985 | 3,542,666 | |
Certificates of deposit | 1,283,039 | 1,327,400 | |
Customer repurchase agreements | 30,980 | 30,413 | |
Borrowings | 467,687 | 217,196 | |
Derivative liability | 86 | ||
Carrying Value [Member] | Interest Rate Swap | |||
Derivative asset | 3,727 | ||
Derivative liability | 203 | ||
Carrying Value [Member] | Mortgage Banking Derivative | |||
Derivative asset | 229 | ||
Derivative liability | 66 | 269 | |
Carrying Value [Member] | Interest Rate Caps | |||
Derivative asset | 280 | ||
Derivative liability | 312 | ||
Fair Value [Member] | |||
Cash and due from banks | 7,539 | 6,773 | |
Federal funds sold | 38,987 | 11,934 | |
Interest bearing deposits with other banks | 195,447 | 303,157 | |
Investment securities available-for-sale, at fair value | 843,363 | 784,139 | |
Federal Reserve and Federal Home Loan Bank stock | 35,194 | 23,506 | |
Loans held for sale | 56,707 | 19,254 | |
Loans, net | 7,550,249 | 6,921,048 | |
Bank owned life insurance | 75,724 | 73,441 | |
Annuity investment | 14,697 | 12,417 | |
Noninterest bearing deposits | 2,064,367 | 2,104,220 | |
Interest bearing deposits | 3,876,985 | 3,542,666 | |
Certificates of deposit | 1,291,688 | 1,325,209 | |
Customer repurchase agreements | 30,980 | 30,413 | |
Borrowings | 328,330 | 218,006 | |
Derivative liability | 86 | ||
Fair Value [Member] | Interest Rate Swap | |||
Derivative asset | 3,727 | ||
Derivative liability | 203 | ||
Fair Value [Member] | Mortgage Banking Derivative | |||
Derivative asset | 229 | ||
Derivative liability | 66 | $ 269 | |
Fair Value [Member] | Interest Rate Caps | |||
Derivative asset | 280 | ||
Derivative liability | $ 312 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Results Of Operations Unaudited | |||||||||||||||
Total interest income | $ 107,183 | $ 109,034 | $ 108,279 | $ 105,134 | $ 105,581 | $ 102,360 | $ 96,296 | $ 89,049 | $ 86,526 | $ 82,370 | $ 79,344 | $ 75,794 | $ 429,630 | $ 393,286 | $ 324,034 |
Total interest expense | 26,473 | 28,045 | 26,950 | 24,117 | 23,869 | 21,069 | 18,086 | 13,269 | 11,167 | 10,434 | 9,646 | 8,900 | 105,585 | 76,293 | 40,147 |
Net interest income | 80,710 | 80,989 | 81,329 | 81,017 | 81,712 | 81,291 | 78,210 | 75,780 | 75,359 | 71,936 | 69,698 | 66,894 | 324,045 | 316,993 | 283,887 |
Provision for credit losses | 2,945 | 3,186 | 3,600 | 3,360 | 2,600 | 2,441 | 1,650 | 1,969 | 4,087 | 1,921 | 1,566 | 1,397 | |||
Net interest income after provision for credit losses | 77,765 | 77,803 | 77,729 | 77,657 | 79,112 | 78,850 | 76,560 | 73,811 | 71,272 | 70,015 | 68,132 | 65,497 | 310,954 | 308,333 | 274,916 |
Noninterest income | 6,734 | 6,314 | 6,360 | 6,291 | 6,089 | 5,640 | 5,553 | 5,304 | 9,496 | 6,784 | 7,023 | 6,070 | 25,699 | 22,586 | 29,372 |
Noninterest expense | 34,726 | 33,473 | 33,359 | 38,304 | 31,687 | 31,614 | 32,289 | 31,121 | 29,803 | 29,516 | 30,001 | 29,232 | 139,862 | 126,711 | 118,552 |
Income before income tax expense | 49,773 | 50,644 | 50,730 | 45,644 | 53,514 | 52,876 | 49,824 | 47,994 | 50,965 | 47,283 | 45,154 | 42,335 | 196,791 | 204,208 | 185,736 |
Income Tax Expense | 14,317 | 14,149 | 13,487 | 11,895 | 13,197 | 13,928 | 12,528 | 12,279 | 35,396 | 17,409 | 17,382 | 15,318 | 53,848 | 51,932 | 85,504 |
Net Income | 35,456 | 36,495 | 37,243 | 33,749 | 40,317 | 38,948 | 37,296 | 35,715 | 15,569 | 29,874 | 27,772 | 27,017 | 142,943 | 152,276 | 100,232 |
Net Income Available to Common Shareholders | $ 35,456 | $ 36,495 | $ 37,243 | $ 33,749 | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 142,943 | $ 152,276 | $ 100,232 |
Net Income per Common Share | |||||||||||||||
Basic (in dollars per share) | $ 1.06 | $ 1.07 | $ 1.08 | $ 0.98 | $ 1.17 | $ 1.14 | $ 1.09 | $ 1.04 | $ 0.46 | $ 0.87 | $ 0.81 | $ 0.79 | $ 4.18 | $ 4.44 | $ 2.94 |
Diluted (in dollars per share) | $ 1.06 | $ 1.07 | $ 1.08 | $ 0.98 | $ 1.17 | $ 1.13 | $ 1.08 | $ 1.04 | $ 0.45 | $ 0.87 | $ 0.81 | $ 0.79 | $ 4.18 | $ 4.42 | $ 2.92 |
Parent Company Financial Info_3
Parent Company Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Investment securities available-for-sale, at fair value | $ 843,363 | $ 784,139 | ||
Other assets | 85,644 | 88,392 | ||
Total Assets | 8,988,719 | 8,389,137 | ||
Liabilities | ||||
Other liabilities | 45,021 | 58,202 | ||
Long-term borrowings | 217,687 | 217,296 | ||
Total Liabilities | 7,798,038 | 7,280,196 | ||
Shareholders' Equity | ||||
Common stock | 331 | 342 | ||
Additional paid in capital | 482,286 | 528,380 | ||
Retained earnings | 705,105 | 584,494 | ||
Accumulated other comprehensive income (loss) | 2,959 | (4,275) | $ (1,750) | $ (2,381) |
Total Shareholders' Equity | 1,190,681 | 1,108,941 | $ 950,438 | $ 842,799 |
Total Liabilities and Shareholders' Equity | 8,988,719 | 8,389,137 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash | 43,204 | 72,783 | ||
Investment securities available-for-sale, at fair value | 7,218 | 100 | ||
Investment in subsidiaries | 1,334,197 | 1,249,704 | ||
Other assets | 30,773 | 8,214 | ||
Total Assets | 1,415,392 | 1,330,801 | ||
Liabilities | ||||
Other liabilities | 7,024 | 4,564 | ||
Long-term borrowings | 217,687 | 217,296 | ||
Total Liabilities | 224,711 | 221,860 | ||
Shareholders' Equity | ||||
Common stock | 331 | 342 | ||
Additional paid in capital | 482,286 | 528,380 | ||
Retained earnings | 705,105 | 584,494 | ||
Accumulated other comprehensive income (loss) | 2,959 | (4,275) | ||
Total Shareholders' Equity | 1,190,681 | 1,108,941 | ||
Total Liabilities and Shareholders' Equity | $ 1,415,392 | $ 1,330,801 |
Parent Company Financial Info_4
Parent Company Financial Information - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gain on sale of investment securities | $ 1,517 | $ 97 | $ 542 | ||||||||||||
Interest expense | $ 26,473 | $ 28,045 | $ 26,950 | $ 24,117 | $ 23,869 | $ 21,069 | $ 18,086 | $ 13,269 | $ 11,167 | $ 10,434 | $ 9,646 | $ 8,900 | 105,585 | 76,293 | 40,147 |
Legal and professional | 12,195 | 9,742 | 5,053 | ||||||||||||
Other | 15,994 | 15,783 | 15,869 | ||||||||||||
Income Tax Benefit | 14,317 | 14,149 | 13,487 | 11,895 | 13,197 | 13,928 | 12,528 | 12,279 | 35,396 | 17,409 | 17,382 | 15,318 | 53,848 | 51,932 | 85,504 |
Net Income | $ 35,456 | $ 36,495 | $ 37,243 | $ 33,749 | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | 142,943 | 152,276 | 100,232 |
Parent Company [Member] | |||||||||||||||
Other interest and dividends | 85,851 | 678 | 234 | ||||||||||||
Gain on sale of investment securities | |||||||||||||||
Total Income | 85,851 | 678 | 234 | ||||||||||||
Interest expense | 11,916 | 11,916 | 11,916 | ||||||||||||
Legal and professional | 2,779 | 870 | 118 | ||||||||||||
Directors compensation | 491 | 614 | 352 | ||||||||||||
Other | 1,294 | 1,287 | 1,246 | ||||||||||||
Total Expenses | 16,480 | 14,687 | 13,632 | ||||||||||||
Income (Loss) Before Income Tax (Benefit) and Equity in Undistributed Income of Subsidiaries | 69,371 | (14,009) | (13,398) | ||||||||||||
Income Tax Benefit | (3,176) | (2,892) | (4,689) | ||||||||||||
Income (Loss) Before Equity in Undistributed Income of Subsidiaries | 72,547 | (11,117) | (8,709) | ||||||||||||
Equity in Undistributed Income of Subsidiaries | 70,396 | 163,393 | 108,941 | ||||||||||||
Net Income | $ 142,943 | $ 152,276 | $ 100,232 |
Parent Company Financial Info_5
Parent Company Financial Information- Cash flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Cash Provided By Used In Operating Activities Abstract | |||||||||||||||
Net Income | $ 35,456 | $ 36,495 | $ 37,243 | $ 33,749 | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 142,943 | $ 152,276 | $ 100,232 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Net tax benefits from stock compensation | (48) | 110 | 460 | ||||||||||||
Securities premium amortization (discount accretion), net | 5,186 | 4,445 | 3,986 | ||||||||||||
Increase in other assets | (21,340) | (16,301) | (19,324) | ||||||||||||
(Decrease) increase in other liabilities | 19,809 | 2,061 | 10,348 | ||||||||||||
Net cash provided by operating activities | 132,684 | 165,455 | 160,924 | ||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Net cash provided by (used in) investing activities | (637,127) | (784,801) | (810,377) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||
Common stock repurchased | (54,903) | ||||||||||||||
Net cash provided by financing activities | 424,552 | 750,737 | 471,763 | ||||||||||||
Net (Decrease) Increase in Cash | (79,891) | 131,391 | (177,690) | ||||||||||||
Cash and Cash Equivalents at Beginning of Period | 321,864 | 190,473 | 368,163 | 321,864 | 190,473 | 368,163 | |||||||||
Cash and Cash Equivalents at End of Period | 241,973 | 321,864 | 190,473 | 241,973 | 321,864 | 190,473 | |||||||||
Parent Company [Member] | |||||||||||||||
Net Cash Provided By Used In Operating Activities Abstract | |||||||||||||||
Net Income | 142,943 | 152,276 | 100,232 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Equity in undistributed income of subsidiary | (70,396) | (163,393) | (108,941) | ||||||||||||
Net tax benefits from stock compensation | 10 | 110 | 460 | ||||||||||||
Securities premium amortization (discount accretion), net | 2 | ||||||||||||||
Increase in other assets | (21,447) | (2,508) | (988) | ||||||||||||
(Decrease) increase in other liabilities | 2,460 | (61) | (189) | ||||||||||||
Net cash provided by operating activities | 53,572 | (13,576) | (9,426) | ||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Purchases of available for sale investment securities | (7,030) | ||||||||||||||
Investment in subsidiary (net) | 6,892 | (460) | |||||||||||||
Net cash provided by (used in) investing activities | (7,030) | 6,892 | (460) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||
Common stock repurchased | (54,903) | ||||||||||||||
Net cash provided by financing activities | (76,121) | 1,584 | 1,208 | ||||||||||||
Net (Decrease) Increase in Cash | (29,579) | (5,100) | (8,678) | ||||||||||||
Cash and Cash Equivalents at Beginning of Period | $ 72,783 | $ 77,883 | $ 86,561 | 72,783 | 77,883 | 86,561 | |||||||||
Cash and Cash Equivalents at End of Period | $ 43,204 | $ 72,783 | $ 77,883 | $ 43,204 | $ 72,783 | $ 77,883 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) $ in Thousands | Jul. 26, 2016 | Aug. 05, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Long-term line of credit | $ 86,426 | $ 90,283 | |||
Proceeds from issuance of subordinated long-term debt | $ 147,350 | $ 68,800 | |||
Subordinated Debt | |||||
Debt instrument, interest rate, stated percentage | 5.00% | 5.75% | 5.42% | 5.42% | 5.42% |
Debt instrument, face amount | $ 150,000 | $ 70,000 | |||
Payments of debt issuance costs | $ 2,600 | $ 1,200 | |||
Maximum | |||||
Federal Home Loan Bank, advances, branch of FHLB bank, amount of advances | $ 1,540,000 | ||||
C D A R S [Member] | |||||
Line of credit facility, maximum borrowing capacity | 1,340,000 | ||||
Long-term line of credit | 82,400 | ||||
I N D [Member] | |||||
Line of credit facility, maximum borrowing capacity | 700,000 | ||||
Long-term line of credit | 533,100 | ||||
Loan Agreement and Related Stock Security Agreement [Member] | |||||
Long-term line of credit | 250,000 | ||||
Federal Reserve Bank of Richmond [Member] | |||||
Line of credit facility, maximum borrowing capacity | 653,000 | ||||
Federal Funds [Member] | |||||
Debt instrument, unused borrowing capacity, amount | $ 172,500 |