Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | EAGLE BANCORP INC | |
Entity Central Index Key | 1,050,441 | |
Document Type | 10-Q | |
Trading Symbol | EGBN | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,178,014 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Assets | |||
Cash and due from banks | $ 8,246 | $ 10,285 | $ 8,678 |
Federal funds sold | 8,548 | 2,397 | 5,262 |
Interest bearing deposits with banks and other short-term investments | 432,156 | 355,481 | 505,087 |
Investment securities available-for-sale, at fair value | 556,026 | 538,108 | 430,668 |
Federal Reserve and Federal Home Loan Bank stock | 30,980 | 21,600 | 19,920 |
Loans held for sale | 25,980 | 51,629 | 78,118 |
Loans | 6,084,204 | 5,677,893 | 5,481,975 |
Less allowance for credit losses | (62,967) | (59,074) | (56,864) |
Loans, net | 6,021,237 | 5,618,819 | 5,425,111 |
Premises and equipment, net | 19,546 | 20,661 | 19,370 |
Deferred income taxes | 45,432 | 48,220 | 41,065 |
Bank owned life insurance | 61,238 | 60,130 | 59,747 |
Intangible assets, net | 107,150 | 107,419 | 107,694 |
Other real estate owned | 1,394 | 2,694 | 5,194 |
Other assets | 75,723 | 52,653 | 56,218 |
Total Assets | 7,393,656 | 6,890,096 | 6,762,132 |
Deposits: | |||
Noninterest bearing demand | 1,843,157 | 1,775,684 | 1,668,271 |
Interest bearing transaction | 429,247 | 289,122 | 297,973 |
Savings and money market | 2,818,871 | 2,902,560 | 2,802,519 |
Time, $100,000 or more | 482,325 | 464,842 | 452,015 |
Other time | 340,352 | 283,906 | 337,371 |
Total deposits | 5,913,952 | 5,716,114 | 5,558,149 |
Customer repurchase agreements | 73,569 | 68,876 | 71,642 |
Other short-term borrowings | 200,000 | 50,000 | |
Long-term borrowings | 216,807 | 216,514 | 216,419 |
Other liabilities | 55,346 | 45,793 | 50,283 |
Total Liabilities | 6,459,674 | 6,047,297 | 5,946,493 |
Shareholders' Equity | |||
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 34,174,009, 34,023,850 and 33,590,880, respectively | 340 | 338 | 333 |
Warrant | 946 | ||
Additional paid in capital | 518,616 | 513,531 | 509,706 |
Retained earnings | 415,975 | 331,311 | 305,594 |
Accumulated other comprehensive loss | (949) | (2,381) | (940) |
Total Shareholders' Equity | 933,982 | 842,799 | 815,639 |
Total Liabilities and Shareholders' Equity | $ 7,393,656 | $ 6,890,096 | $ 6,762,132 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, issued | 34,174,009 | 34,023,850 | 33,590,880 |
Common stock, outstanding | 34,174,009 | 34,023,850 | 33,590,880 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest Income | ||||
Interest and fees on loans | $ 78,176 | $ 69,869 | $ 226,543 | $ 202,002 |
Interest and dividends on investment securities | 3,194 | 2,177 | 8,854 | 7,121 |
Interest on balances with other banks and short-term investments | 991 | 376 | 2,084 | 856 |
Interest on federal funds sold | 9 | 9 | 27 | 31 |
Total interest income | 82,370 | 72,431 | 237,508 | 210,010 |
Interest Expense | ||||
Interest on deposits | 7,233 | 4,840 | 19,466 | 13,513 |
Interest on customer repurchase agreements | 58 | 39 | 136 | 115 |
Interest on short-term borrowings | 164 | 383 | 441 | 727 |
Interest on long-term borrowings | 2,979 | 2,441 | 8,937 | 4,515 |
Total interest expense | 10,434 | 7,703 | 28,980 | 18,870 |
Net Interest Income | 71,936 | 64,728 | 208,528 | 191,140 |
Provision for Credit Losses | 1,921 | 2,288 | 4,884 | 9,219 |
Net Interest Income After Provision For Credit Losses | 70,015 | 62,440 | 203,644 | 181,921 |
Noninterest Income | ||||
Service charges on deposits | 1,626 | 1,431 | 4,641 | 4,303 |
Gain on sale of loans | 2,173 | 3,009 | 6,740 | 8,464 |
Gain on sale of investment securities | 11 | 1 | 542 | 1,123 |
Increase in the cash surrender value of bank owned life insurance | 369 | 391 | 1,108 | 1,171 |
Other income | 2,605 | 1,573 | 6,846 | 5,209 |
Total noninterest income | 6,784 | 6,405 | 19,877 | 20,270 |
Noninterest Expense | ||||
Salaries and employee benefits | 16,905 | 17,130 | 50,451 | 49,157 |
Premises and equipment expenses | 3,846 | 3,786 | 11,613 | 11,419 |
Marketing and advertising | 732 | 857 | 2,873 | 2,551 |
Data processing | 2,019 | 1,879 | 6,057 | 5,716 |
Legal, accounting and professional fees | 1,240 | 771 | 3,539 | 2,845 |
FDIC insurance | 929 | 629 | 2,063 | 2,193 |
Other expenses | 3,845 | 3,786 | 12,153 | 11,354 |
Total noninterest expense | 29,516 | 28,838 | 88,749 | 85,235 |
Income Before Income Tax Expense | 47,283 | 40,007 | 134,772 | 116,956 |
Income Tax Expense | 17,409 | 15,484 | 50,109 | 44,966 |
Net Income | $ 29,874 | $ 24,523 | $ 84,663 | $ 71,990 |
Earnings Per Common Share | ||||
Basic (in dollars per share) | $ 0.87 | $ 0.73 | $ 2.48 | $ 2.14 |
Diluted (in dollars per share) | $ 0.87 | $ 0.72 | $ 2.47 | $ 2.11 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 29,874 | $ 24,523 | $ 84,663 | $ 71,990 |
Other comprehensive income, net of tax: | ||||
Unrealized gain (loss) on securities available for sale | 15 | (907) | 1,243 | 4,110 |
Reclassification adjustment for net gains included in net income | (7) | 1 | (340) | (674) |
Total unrealized gain (loss) on investment securities | 8 | (906) | 903 | 3,436 |
Unrealized gain (loss) on derivatives | 347 | 1,756 | 1,350 | (5,478) |
Reclassification adjustment for amounts included in net income | (183) | (466) | (821) | 911 |
Total unrealized gain (loss) on derivatives | 164 | 1,290 | 529 | (4,567) |
Other comprehensive income (loss) | 172 | 384 | 1,432 | (1,131) |
Comprehensive Income | $ 30,046 | $ 24,907 | $ 86,095 | $ 70,859 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common [Member] | Warrant [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balace at Dec. 31, 2015 | $ 331 | $ 946 | $ 503,529 | $ 233,604 | $ 191 | $ 738,601 |
Beginning balace (in shares) at Dec. 31, 2015 | 33,467,893 | |||||
Net Income | 71,990 | 71,990 | ||||
Other comprehensive income (loss) | (1,131) | (1,131) | ||||
Stock-based compensation expense | 5,159 | 5,159 | ||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | 282 | 282 | ||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 23,614 | |||||
Excess tax benefits from stock compensation | 166 | 166 | ||||
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) | (17,556) | |||||
Time based stock awards granted (in shares) | 104,775 | |||||
Issuance of common stock related to employee stock purchase plan | 572 | 572 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 12,154 | |||||
Ending balance at Sep. 30, 2016 | $ 333 | 946 | 509,706 | 305,594 | (940) | $ 815,639 |
Ending balance (in shares) at Sep. 30, 2016 | 33,590,880 | 33,590,880 | ||||
Beginning balace at Dec. 31, 2016 | $ 338 | 513,531 | 331,311 | (2,381) | $ 842,799 | |
Beginning balace (in shares) at Dec. 31, 2016 | 34,023,850 | 34,023,850 | ||||
Net Income | 84,663 | $ 84,663 | ||||
Other comprehensive income (loss) | 1,432 | 1,432 | ||||
Stock-based compensation expense | 4,198 | 1 | 4,199 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 258 | 259 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 60,925 | |||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 1 | (2) | (1) | |||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (16,962) | |||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 3,589 | |||||
Time based stock awards granted (in shares) | 91,097 | |||||
Issuance of common stock related to employee stock purchase plan | 631 | 631 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 11,510 | |||||
Ending balance at Sep. 30, 2017 | $ 340 | $ 518,616 | $ 415,975 | $ (949) | $ 933,982 | |
Ending balance (in shares) at Sep. 30, 2017 | 34,174,009 | 34,174,009 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 84,663 | $ 71,990 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision for credit losses | 4,884 | 9,219 |
Depreciation and amortization | 4,868 | 4,628 |
Gains on sale of loans | (6,740) | (8,464) |
Securities premium amortization (discount accretion), net | 2,799 | 3,412 |
Origination of loans held for sale | (481,917) | (606,213) |
Proceeds from sale of loans held for sale | 514,306 | 584,051 |
Net increase in cash surrender value of BOLI | (1,108) | (1,171) |
Decrease (increase) deferred income tax benefit | 1,293 | (754) |
Decrease in value of other real estate owned | 200 | |
Net loss (gain) on sale of other real estate owned | 301 | (657) |
Net gain on sale of investment securities | (542) | (1,123) |
Stock-based compensation expense | 4,199 | 5,159 |
Net tax benefits from stock compensation | 460 | |
Excess tax benefits realized from stock compensation | (166) | |
Increase in other assets | (23,059) | (8,590) |
Increase in other liabilities | 9,553 | 13,035 |
Net cash provided by operating activities | 113,960 | 64,556 |
Cash Flows From Investing Activities: | ||
Decrease in interest bearing deposits with other banks and short-term investments | 784 | |
Purchases of available for sale investment securities | (144,554) | (106,163) |
Proceeds from maturities of available for sale securities | 55,732 | 65,727 |
Proceeds from sale/call of available for sale securities | 70,079 | 94,217 |
Purchases of Federal Reserve and Federal Home Loan Bank stock | (27,665) | (3,017) |
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 18,285 | |
Net increase in loans | (408,447) | (491,720) |
Proceeds from sale of other real estate owned | 2,144 | 3,614 |
Bank premises and equipment acquired | (2,459) | (4,836) |
Net cash used in investing activities | (436,885) | (441,394) |
Cash Flows From Financing Activities: | ||
Increase in deposits | 197,838 | 399,705 |
Increase (decrease) in customer repurchase agreements | 4,693 | (714) |
Increase in short-term borrowings | 200,000 | 50,000 |
Increase in long-term borrowings | 293 | 147,491 |
Proceeds from exercise of equity compensation plans | 257 | 282 |
Excess tax benefits realized from stock compensation | 166 | |
Proceeds from employee stock purchase plan | 631 | 572 |
Net cash provided by financing activities | 403,712 | 597,502 |
Net Increase In Cash and Cash Equivalents | 80,787 | 220,664 |
Cash and Cash Equivalents at Beginning of Period | 368,163 | 298,363 |
Cash and Cash Equivalents at End of Period | 448,950 | 519,027 |
Supplemental Cash Flows Information: | ||
Interest paid | 31,257 | 18,196 |
Income taxes paid | 52,800 | 47,950 |
Non-Cash Investing Activities | ||
Transfers from loans to other real estate owned | $ 1,145 | $ 2,500 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Basis of Presentation The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated. The Consolidated Financial Statements of the Company included herein are unaudited. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2016 were derived from audited Consolidated Financial Statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. There have been no significant changes to the Company’s Accounting Policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results of operations to be expected for the remainder of the year, or for any other period. Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in the metropolitan Washington, D.C area. 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 FHA loans. The Bank offers its products and services through twenty-one banking offices, five 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. Eagle Commercial Ventures, LLC, a direct subsidiary of the Company, provides subordinated financing for the acquisition, development and construction of real estate projects; these transactions involve higher levels of risk, together with commensurate higher returns. Refer to Higher Risk Lending – Revenue Recognition below. 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. 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 if any. 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 Held for Sale The Company regularly engages in sales of residential mortgage loans held for sale and the guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), and 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 September 30, 2017, December 31, 2016 and September 30, 2016. The sale of the guaranteed portion of SBA loans on a servicing retained basis, in a transaction apart from the loan’s origination, 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 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 to 90 days under current market conditions. The gross gains on loan sales are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed. 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 date of transfer. The Company originates a small number of 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 generally retains the servicing rights. When servicing is retained on 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. Revenue represents gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of FHA loans securitizing the Ginnie Mae securities. The gains on Ginnie Mae securities include the realized and unrealized gains and losses on sales of FHA mortgage loans, as well as the changes in fair value of FHA interest rate lock commitments and FHA forward loan sale commitments. Revenue from servicing commercial 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. 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. Higher Risk Lending – Revenue Recognition The Company had occasionally made higher risk acquisition, development, and construction (“ADC”) loans that entailed higher risks than ADC loans made following normal underwriting practices (“higher risk loan transactions”). These higher risk loan transactions were made through the Company’s subsidiary, ECV. This activity was limited as to individual transaction amount and total exposure amounts, based on capital levels, and is carefully monitored. The loans are carried on the balance sheet at amounts outstanding. ECV had three higher risk loan transactions outstanding as of September 30, 2017 and December 31, 2016, amounting to $9.5 million and $9.3 million, respectively. Allowance for Credit Losses The allowance for credit losses represents an amount which, in management’s judgment, is adequate to absorb probable losses on loans and other extensions of credit that may become uncollectible. The adequacy of the allowance for credit losses is determined through careful and continuous review and evaluation of the loan portfolio and involves the balancing of a number of factors to establish a prudent level of allowance. Among the factors considered in evaluating the adequacy of the allowance for credit losses are lending risks associated with growth and entry into new markets, loss allocations for specific credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, changes in the size and character of the loan portfolio, and management’s judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Allowances for impaired loans are generally determined based on collateral values. Loans or any portion thereof deemed uncollectible are charged against the allowance, while recoveries are credited to the allowance. Management adjusts the level of the allowance through the provision for credit losses, which is recorded as a current period operating expense. The allowance for credit losses consists of allocated and unallocated components. The components of the allowance for credit losses represent an estimation done pursuant to Accounting Standards Codification (“ASC”) Topic 450, “Contingencies,” “Receivables.” Management believes that the allowance for credit losses is adequate; however, determination of the allowance is inherently subjective and requires significant estimates. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. Evaluation of the potential effects of these factors on estimated losses involves a high degree of uncertainty, including the strength and timing of economic cycles and concerns over the effects of a prolonged economic downturn in the current cycle. In addition, various banking agencies, as an integral part of their examination process, and independent consultants engaged by the Bank, periodically review the Bank’s loan portfolio and allowance for credit losses. Such review may result in recognition of additions to the allowance based on their judgments of information available to them at the time of their examination. 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 to seven years for furniture, fixtures and equipment, three to five years for computer software and hardware, and five to twenty years for building improvements. Leasehold improvements are amortized over the terms of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is shorter. The costs of major renewals and betterments are capitalized, while the costs of ordinary maintenance and repairs are expensed as incurred. These costs are included as a component of premises and equipment expenses on the Consolidated Statements of Operations. 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 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. The Company performs impairment testing during the fourth quarter of each year 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. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of qualitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2016. 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 The Company is exposed to certain risks 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 through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments designated as cash flow hedges are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate deposits. Refer to the “Loans Held for Sale” section for a discussion on forward commitment contracts, which are also considered derivatives. At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). Regarding Interest Rate Swap Derivatives, the Company has no fair value hedges, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same period(s) during which the hedged transaction affects earnings (i.e. the period when cash flows are exchanged between counterparties). For both fair value and cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as noninterest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income or expense. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. 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 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 by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income 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 ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2016-01, “Financial Instruments—(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-02, “Leases (Topic 842).” ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting (Topic 718).” ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities ” |
Cash and Due from Banks
Cash and Due from Banks | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
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 2017, the Bank maintained balances at the Federal Reserve sufficient to meet reserve requirements, as well as significant excess reserves, on which interest is paid. 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 | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
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 September 30, 2017 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 179,100 $ 342 $ 1,524 $ 177,918 Residential mortgage backed securities 303,822 374 2,670 301,526 Municipal bonds 61,593 1,673 119 63,147 Corporate bonds 13,011 206 — 13,217 Other equity investments 218 — — 218 $ 557,744 $ 2,595 $ 4,313 $ 556,026 Gross Gross Estimated December 31, 2016 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 107,425 $ 519 $ 1,802 $ 106,142 Residential mortgage backed securities 329,606 324 3,691 326,239 Municipal bonds 94,607 1,723 400 95,930 Corporate bonds 9,508 82 11 9,579 Other equity investments 218 — — 218 $ 541,364 $ 2,648 $ 5,904 $ 538,108 In addition, at September 30, 2017, the Company held $31.0 million in equity securities 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. 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 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated September 30, 2017 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 32 $ 97,832 $ 1,101 $ 28,299 $ 423 $ 126,131 $ 1,524 Residential mortgage backed securities 113 198,670 1,523 55,920 1,147 254,590 2,670 Municipal bonds 5 13,301 119 — — 13,301 119 150 $ 309,803 $ 2,743 $ 84,219 $ 1,570 $ 394,022 $ 4,313 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2016 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 27 $ 88,991 $ 1,764 $ 3,768 $ 38 $ 92,759 $ 1,802 Residential mortgage backed securities 112 232,347 3,110 19,402 581 251,749 3,691 Municipal bonds 16 34,743 400 — — 34,743 400 Corporate bonds 2 4,998 11 — — 4,998 11 157 $ 361,079 $ 5,285 $ 23,170 $ 619 $ 384,249 $ 5,904 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 3.5 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 September 30, 2017 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. The amortized cost and estimated fair value of investments available-for-sale at September 30, 2017 and December 31, 2016 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. September 30, 2017 December 31, 2016 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 90,495 $ 89,503 $ 83,885 $ 82,548 After one year through five years 74,481 74,433 20,736 20,897 Five years through ten years 14,124 13,982 2,804 2,697 Residential mortgage backed securities 303,822 301,526 329,606 326,239 Municipal bonds maturing: One year or less 2,537 2,586 1,056 1,070 After one year through five years 21,116 21,875 45,808 46,865 Five years through ten years 36,868 37,493 46,668 46,839 After ten years 1,072 1,193 1,075 1,156 Corporate bonds After one year through five years 11,511 11,717 8,008 8,079 After ten years 1,500 1,500 1,500 1,500 Other equity investments 218 218 218 218 $ 557,744 $ 556,026 $ 541,364 $ 538,108 For the nine months ended September 30, 2017, gross realized gains on sales of investments securities were $795 thousand and gross realized losses on sales of investment securities were $254 thousand. For the nine months ended September 30, 2016, gross realized gains on sales of investments securities were $1.3 million and gross realized losses on sales of investment securities were $202 thousand. Proceeds from sales and calls of investment securities for the nine months ended September 30, 2017 were $70.1 million, and in 2016 were $94.2 million. 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 September 30, 2017 was $459.9 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of September 30, 2017 and December 31, 2016, 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. |
Mortgage Banking Derivative
Mortgage Banking Derivative | 9 Months Ended |
Sep. 30, 2017 | |
Mortgage Banking Derivative | |
Mortgage Banking Derivative | Note 4. Mortgage Banking Derivative 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 September 30, 2017 the Bank had mortgage banking derivative financial instruments with a notional value of $59.6 million related to its forward contracts as compared to $81.7 million at September 30, 2016. The fair value of these mortgage banking derivative instruments at September 30, 2017 was $63 thousand included in other assets and $36 thousand included in other liabilities as compared to $217 thousand included in other assets and $222 thousand included in other liabilities at September 30, 2016. Included in other noninterest income for the three and nine months ended September 30, 2017 was a net gain of $71 thousand and a net gain of $335 thousand, relating to mortgage banking derivative instruments as compared to a net loss of $46 thousand and a net gain of $274 thousand for the three and nine months ended September 30, 2016. The amount included in other noninterest income for the three and nine months ended September 30, 2017 pertaining to its mortgage banking hedging activities was a net realized loss of $14 thousand and $912 thousand as compared to a net realized gain of $151 thousand and net unrealized loss of $156 thousand for the same periods in September 30, 2016. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Loans and Allowance for Credit Losses | Note 5. 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 September 30, 2017, December 31, 2016, and September 30, 2016 are summarized by type as follows: September 30, 2017 December 31, 2016 September 30, 2016 (dollars in thousands) Amount % Amount % Amount % Commercial $ 1,244,184 20 % $ 1,200,728 21 % $ 1,130,042 21 % Income producing - commercial real estate 2,898,948 48 % 2,509,517 44 % 2,551,186 46 % Owner occupied - commercial real estate 749,580 12 % 640,870 12 % 590,427 11 % Real estate mortgage - residential 109,460 2 % 152,748 3 % 154,439 3 % Construction - commercial and residential* 915,493 15 % 932,531 16 % 838,137 15 % Construction - C&I (owner occupied) 55,828 1 % 126,038 2 % 104,676 2 % Home equity 101,898 2 % 105,096 2 % 106,856 2 % Other consumer 8,813 — 10,365 — 6,212 — Total loans 6,084,204 100 % 5,677,893 100 % 5,481,975 100 % Less: allowance for credit losses (62,967 ) (59,074 ) (56,864 ) Net loans $ 6,021,237 $ 5,618,819 $ 5,425,111 *Includes land loans. Unamortized net deferred fees amounted to $23.3 million, $22.3 million, and $20.9 million at September 30, 2017, December 31, 2016, and September 30, 2016, respectively. As of September 30, 2017 and December 31, 2016, the Bank serviced $176.5 million and $128.8 million, respectively, of 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 real estate. At September 30, 2017, owner occupied - commercial real estate and construction - C&I (owner occupied) represent approximately 13% of the loan portfolio. At September 30, 2017, non-owner occupied commercial real estate and real estate construction represented approximately 63% of the loan portfolio. The combined owner occupied and commercial real estate loans represent approximately 76% of the loan portfolio. 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 September 30, 2017 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent approximately 2% of the commercial loan category of loans. 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. Approximately 2% of the loan portfolio at September 30, 2017 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 2% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 15 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. 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. 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 to 7 years, with amortization to a maximum of 25 years. The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $1.44 billion at September 30, 2017. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans are serviced by loan funded interest reserves and represent approximately 79% of the outstanding ADC loan portfolio at September 30, 2017. 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. From time to time the Company may make loans for its own portfolio or through its higher risk loan affiliate, ECV. Such loans, which are made to finance projects (which may also be financed at the Bank level), may have higher risk characteristics than loans made by the Bank, such as lower priority interests and/or higher loan to value ratios. The Company seeks an overall financial return on these transactions commensurate with the risks and structure of each individual loan. Certain transactions may bear current interest at a rate with a significant premium to normal market rates. Other loan transactions may carry a standard rate of current interest, but also earn additional interest based on a percentage of the profits of the underlying project or a fixed accrued rate of interest. Allowance for Credit Losses The following tables detail activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2017 and 2016. 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 Three months ended September 30, 2017 Allowance for credit losses: Balance at beginning of period $ 14,225 $ 23,308 $ 4,189 $ 1,081 $ 16,727 $ 1,216 $ 301 $ 61,047 Loans charged-off (522 ) — — — (39 ) — (32 ) (593 ) Recoveries of loans previously charged-off 407 30 — 2 146 1 6 592 Net loans (charged-off) recoveries (115 ) 30 — 2 107 1 (26 ) (1 ) Provision for credit losses (2,266 ) (963 ) 1,273 (126 ) 4,052 (120 ) 71 1,921 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 Nine months ended September 30, 2017 Allowance for credit losses: Balance at beginning of period $ 14,700 $ 21,105 $ 4,010 $ 1,284 $ 16,487 $ 1,328 $ 160 $ 59,074 Loans charged-off (659 ) (1,470 ) — — (39 ) — (98 ) (2,266 ) Recoveries of loans previously charged-off 675 80 2 5 491 4 18 1,275 Net loans charged-off 16 (1,390 ) 2 5 452 4 (80 ) (991 ) Provision for credit losses (2,872 ) 2,660 1,450 (332 ) 3,947 (235 ) 266 4,884 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 As of September 30, 2017 Allowance for credit losses: Individually evaluated for impairment $ 3,246 $ 1,378 $ 1,005 $ — $ 2,900 $ 90 $ 81 $ 8,700 Collectively evaluated for impairment 8,598 20,997 4,457 957 17,986 1,007 265 54,267 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 Three months ended September 30, 2016 Allowance for credit losses: Balance at beginning of period $ 13,386 $ 19,072 $ 4,202 $ 1,061 $ 17,024 $ 1,556 $ 235 $ 56,536 Loans charged-off (109 ) (1,751 ) — — — (121 ) (12 ) (1,993 ) Recoveries of loans previously charged-off 7 10 — 2 3 3 8 33 Net loans (charged-off) recoveries (102 ) (1,741 ) — 2 3 (118 ) (4 ) (1,960 ) Provision for credit losses (523 ) 3,178 59 47 (513 ) (69 ) 109 2,288 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 Nine months ended September 30, 2016 Allowance for credit losses: Balance at beginning of period $ 11,563 $ 14,122 $ 3,279 $ 1,268 $ 21,088 $ 1,292 $ 75 $ 52,687 Loans charged-off (2,802 ) (2,342 ) — — — (217 ) (37 ) (5,398 ) Recoveries of loans previously charged-off 93 14 2 5 207 11 24 356 Net loans charged-off (2,709 ) (2,328 ) 2 5 207 (206 ) (13 ) (5,042 ) Provision for credit losses 3,907 8,715 980 (163 ) (4,781 ) 283 278 9,219 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 As of September 30, 2016 Allowance for credit losses: Individually evaluated for impairment $ 1,997 $ 1,714 $ 360 $ — $ 300 $ — $ 100 $ 4,471 Collectively evaluated for impairment 10,764 18,795 3,901 1,110 16,214 1,369 240 52,393 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 The Company’s recorded investments in loans as of September 30, 2017, December 31, 2016 and September 30, 2016 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 September 30, 2017 Recorded investment in loans: Individually evaluated for impairment $ 8,309 $ 10,241 $ 6,570 $ — $ 7,728 $ 594 $ 92 $ 33,534 Collectively evaluated for impairment 1,235,875 2,888,707 743,010 109,460 963,593 101,304 8,721 6,050,670 Ending balance $ 1,244,184 $ 2,898,948 $ 749,580 $ 109,460 $ 971,321 $ 101,898 $ 8,813 $ 6,084,204 December 31, 2016 Recorded investment in loans: Individually evaluated for impairment $ 10,437 $ 15,057 $ 2,093 $ 241 $ 6,517 $ — $ 126 $ 34,471 Collectively evaluated for impairment 1,190,291 2,494,460 638,777 152,507 1,052,052 105,096 10,239 5,643,422 Ending balance $ 1,200,728 $ 2,509,517 $ 640,870 $ 152,748 $ 1,058,569 $ 105,096 $ 10,365 $ 5,677,893 September 30, 2016 Recorded investment in loans: Individually evaluated for impairment $ 12,448 $ 14,648 $ 2,517 $ 244 $ 4,878 $ 113 $ — $ 34,848 Collectively evaluated for impairment 1,117,594 2,536,538 587,910 154,195 937,935 106,743 6,212 5,447,127 Ending balance $ 1,130,042 $ 2,551,186 $ 590,427 $ 154,439 $ 942,813 $ 106,856 $ 6,212 $ 5,481,975 At September 30, 2017, nonperforming loans acquired from Fidelity & Trust Financial Corporation (“Fidelity”) and Virginia Heritage Bank (“Virginia Heritage”) have a carrying value of $476 thousand and $507 thousand, and an unpaid principal balance of $533 thousand and $1.5 million, respectively, and were evaluated separately in accordance with ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality 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 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 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 September 30, 2017, December 31, 2016 and September 30, 2016. Watch and Total (dollars in thousands) Pass Special Mention Substandard Doubtful Loans September 30, 2017 Commercial $ 1,204,850 $ 31,025 $ 8,309 $ — $ 1,244,184 Income producing - commercial real estate 2,861,346 27,361 10,241 — 2,898,948 Owner occupied - commercial real estate 720,693 22,317 6,570 — 749,580 Real estate mortgage – residential 108,797 663 — — 109,460 Construction - commercial and residential 963,593 — 7,728 — 971,321 Home equity 100,618 686 594 — 101,898 Other consumer 8,719 2 92 — 8,813 Total $ 5,968,616 $ 82,054 $ 33,534 $ — $ 6,084,204 December 31, 2016 Commercial $ 1,160,185 $ 30,106 $ 10,437 $ — $ 1,200,728 Income producing - commercial real estate 2,489,407 5,053 15,057 — 2,509,517 Owner occupied - commercial real estate 630,827 7,950 2,093 — 640,870 Real estate mortgage – residential 151,831 676 241 — 152,748 Construction - commercial and residential 1,051,445 607 6,517 — 1,058,569 Home equity 103,484 1,612 — — 105,096 Other consumer 10,237 2 126 — 10,365 Total $ 5,597,416 $ 46,006 $ 34,471 $ — $ 5,677,893 September 30, 2016 Commercial $ 1,099,894 $ 18,599 $ 11,549 $ — $ 1,130,042 Income producing - commercial real estate 2,527,318 9,220 14,648 — 2,551,186 Owner occupied - commercial real estate 577,925 10,399 2,103 — 590,427 Real estate mortgage – residential 153,515 680 244 — 154,439 Construction - commercial and residential 937,198 737 4,878 — 942,813 Home equity 105,126 1,617 113 — 106,856 Other consumer 6,209 3 — — 6,212 Total $ 5,407,185 $ 41,255 $ 33,535 $ — $ 5,481,975 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 September 30, 2017, December 31, 2016 and September 30, 2016. (dollars in thousands) September 30, 2017 December 31, 2016 September 30, 2016 Commercial $ 3,242 $ 2,490 $ 2,986 Income producing - commercial real estate 880 10,539 10,098 Owner occupied - commercial real estate 6,570 2,093 2,103 Real estate mortgage - residential 301 555 562 Construction - commercial and residential 4,930 2,072 6,412 Home equity 594 — 113 Other consumer 92 126 — Total nonaccrual loans (1)(2) $ 16,609 $ 17,875 $ 22,274 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $12.3 million at September 30, 2017, as compared to $7.9 million at December 31, 2016 and $2.9 million at September 30, 2016. (2) Gross interest income of $176 thousand and $802 thousand would have been recorded for the three and nine months ended September 30, 2017, if nonaccrual loans shown above had been current and in accordance with their original terms while interest actually recorded on such loans was $31 thousand and $56 thousand for the three and nine months ended September 30, 2017. See Note 1 to the Consolidated Financial Statements for a description of the 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 September 30, 2017 and December 31, 2016. 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 September 30, 2017 Commercial $ 401 $ 662 $ 3,242 $ 4,305 $ 1,239,879 $ 1,244,184 Income producing - commercial real estate 3,160 770 880 4,810 2,894,138 2,898,948 Owner occupied - commercial real estate 817 3,268 6,570 10,655 738,925 749,580 Real estate mortgage – residential 1,480 2,123 301 3,904 105,556 109,460 Construction - commercial and residential 197 — 4,930 5,127 966,194 971,321 Home equity 637 100 594 1,331 100,567 101,898 Other consumer 21 4 92 117 8,696 8,813 Total $ 6,713 $ 6,927 $ 16,609 $ 30,249 $ 6,053,955 $ 6,084,204 December 31, 2016 Commercial $ 1,634 $ 757 $ 2,490 $ 4,881 $ 1,195,847 $ 1,200,728 Income producing - commercial real estate 511 — 10,539 11,050 2,498,467 2,509,517 Owner occupied - commercial real estate 3,987 3,328 2,093 9,408 631,462 640,870 Real estate mortgage – residential 1,015 163 555 1,733 151,015 152,748 Construction - commercial and residential 360 1,342 2,072 3,774 1,054,795 1,058,569 Home equity — — — — 105,096 105,096 Other consumer 101 9 126 236 10,129 10,365 Total $ 7,608 $ 5,599 $ 17,875 $ 31,082 $ 5,646,811 $ 5,677,893 September 30, 2016 Commercial $ 1,173 $ 495 $ 2,986 $ 4,654 $ 1,125,388 $ 1,130,042 Income producing - commercial real estate — — 10,098 10,098 2,541,088 2,551,186 Owner occupied - commercial real estate — 3,338 2,103 5,441 584,986 590,427 Real estate mortgage – residential — 164 562 726 153,713 154,439 Construction - commercial and residential — — 6,412 6,412 936,401 942,813 Home equity 562 620 113 1,295 105,561 106,856 Other consumer 8 16 — 24 6,188 6,212 Total $ 1,743 $ 4,633 $ 22,274 $ 28,650 $ 5,453,325 $ 5,481,975 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 periods ended September 30, 2017, December 31, 2016 and September 30, 2016. Unpaid Recorded Recorded Contractual Investment Investment Total Average Recorded Investment Interest Income Recognized Principal With No With Recorded Related Quarter Year Quarter Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date To Date To Date September 30, 2017 Commercial $ 6,047 $ 2,363 $ 3,640 $ 6,003 $ 3,246 $ 5,977 $ 5,790 $ 31 $ 97 Income producing - commercial real estate 10,092 828 9,264 10,092 1,378 10,222 11,350 121 373 Owner occupied - commercial real estate 6,890 1,612 5,278 6,890 1,005 5,623 4,182 26 46 Real estate mortgage – residential 301 301 — 301 — 304 368 — — Construction - commercial and residential 4,930 1,534 3,396 4,930 2,900 4,808 3,736 — 14 Home equity 594 494 100 594 90 446 223 — 2 Other consumer 92 — 92 92 81 93 101 — — Total $ 28,946 $ 7,132 $ 21,770 $ 28,902 $ 8,700 $ 27,473 $ 25,750 $ 178 $ 532 December 31, 2016 Commercial $ 8,296 $ 2,532 $ 3,095 $ 5,627 $ 2,671 $ 12,620 $ 12,755 $ 79 $ 191 Income producing - commercial real estate 14,936 5,048 9,888 14,936 1,943 16,742 17,533 54 198 Owner occupied - commercial real estate 2,483 1,691 792 2,483 350 2,233 2,106 — 13 Real estate mortgage – residential 555 555 — 555 — 246 249 — — Construction - commercial and residential 2,072 1,535 537 2,072 522 5,091 5,174 — — Home equity — — — — — 78 89 — — Other consumer 126 — 126 126 113 42 32 2 4 Total $ 28,468 $ 11,361 $ 14,438 $ 25,799 $ 5,599 $ 37,052 $ 37,938 $ 135 $ 406 September 30, 2016 Commercial $ 15,517 $ 2,370 $ 10,078 $ 12,448 $ 1,997 $ 12,838 $ 12,879 $ 54 $ 112 Income producing - commercial real estate 14,648 — 14,648 14,648 1,714 17,584 15,298 28 144 Owner occupied - commercial real estate 2,517 — 2,517 2,517 360 2,108 1,923 13 13 Real estate mortgage – residential 244 244 — 244 — 249 271 — — Construction - commercial and residential 4,878 4,340 538 4,878 300 5,146 6,542 — — Home equity 113 — 113 113 100 117 129 2 2 Other consumer — — — — — — 6 — — Total $ 37,917 $ 6,954 $ 27,894 $ 34,848 $ 4,471 $ 38,042 $ 37,048 $ 97 $ 271 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 September 30, 2017, 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 a TDR during the three months ended September 30, 2017 and 2016. For the Three Months Ended September 30, 2017 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing — $ (356 ) $ — $ (23 ) $ — $ (379 ) Restructured nonaccruing 2 586 (560 ) — — 26 Total 2 $ 230 $ (560 ) $ (23 ) $ — $ (353 ) Specific allowance $ (185 ) $ (559 ) $ — $ — $ (744 ) Restructured and subsequently defaulted $ — $ — $ — $ — $ — For the Three Months Ended September 30, 2016 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 1 $ 801 $ — $ — $ — $ 801 Restructured nonaccruing — — — — — — Total 1 $ 801 $ — $ — $ — $ 801 Specific allowance $ 363 $ — $ — $ — $ 363 Restructured and subsequently defaulted $ — $ — $ — $ — $ — The following table presents by class, the recorded investment of loans modified in TDRs held by the Company at September 30, 2017 and September 30, 2016. September 30, 2017 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 9 $ 2,761 $ 9,212 $ 320 $ — $ 12,293 Restructured nonaccruing 4 776 136 — — 912 Total 13 $ 3,537 $ 9,348 $ 320 $ — $ 13,205 Specific allowance $ 685 $ 1,341 $ — $ — $ 2,026 Restructured and subsequently defaulted $ 237 $ — $ — $ — $ 237 September 30, 2016 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 7 $ 1,725 $ 742 $ 414 $ — $ 2,881 Restructured nonaccruing 2 199 — — 4,948 5,147 Total 9 $ 1,924 $ 742 $ 414 $ 4,948 $ 8,028 Specific allowance $ 456 $ — $ — $ — $ 456 Restructured and subsequently defaulted $ — $ — $ — $ 4,948 $ 4,948 The Company had thirteen TDR’s at September 30, 2017 totaling approximately $13.2 million. Nine of these loans, totaling approximately $12.3 million, are performing under their modified terms. During the nine months of 2017, there was one default on a $237 thousand restructured loan which was charged off, as compared to the same period in 2016, which had one default on a $5.0 million restructured loan. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. There were two nonperforming TDRs totaling $588 thousand reclassified to nonperforming loans during the nine months ended September 30, 2017. There was one nonperforming TDR totaling $5.0 million reclassified to nonperforming loans during the nine months ended September 30, 2016. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made i |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap Derivatives | Note 6. Interest Rate Swap Derivatives 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 manage its exposure to interest rate movements. To accomplish this objective, the Company entered into forward starting interest rate swaps in April 2015 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 two counterparties in exchange for the Company making fixed payments beginning in April 2016. The Company’s intent is to hedge its exposure to the variability in potential future interest rate conditions on existing financial instruments. As of September 30, 2017, the Company had three forward starting designated cash flow hedge interest rate swap transactions outstanding that had an aggregate notional amount of $250 million associated with the Company’s variable rate deposits. The net unrealized gain before income tax on the swaps was $167 thousand at September 30, 2017 compared to a net unrealized loss before income tax of $692 thousand at December 31, 2016. The net unrealized gain at September 30, 2017 compared to the net unrealized loss at December 31, 2016 is due to the increase in current market expectation of short term interest rates for the remaining term of the designated cash flow hedge interest rate swap. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in 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. The Company recognized an immaterial amount in earnings due to hedge ineffectiveness during both the nine month periods ended September 30, 2017 and September 30, 2016. 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 quarter ended September 30, 2017, the Company reclassified $307 thousand related to designated cash flow hedge derivatives from accumulated other comprehensive income to interest expense. During the next twelve months, the Company estimates (based on existing interest rates) that $657 thousand will be reclassified as an increase in interest expense. 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 swaps. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.” The designated cash flow hedge interest rate swap 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; 3) if the Company fails to maintain its status as a well/adequately capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. As of September 30, 2017, the aggregate fair value of all designated cash flow hedge derivative contracts with credit risk contingent features (i.e., those containing collateral posting or termination provisions based on our capital status) were in a net asset position of $167 thousand (none of these contracts were in a net liability position as of September 30, 2017). As of September 30, 2017, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $890 thousand against its obligations under these agreements. If the Company had breached any provisions under the agreements at September 30, 2017, 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 values of the Company’s designated cash flow hedge derivative instruments as of September 30, 2017 and December 31, 2016. Swap Notional Balance Sheet September 30, 2017 Number Amount Fair Value Category Receive Rate Pay Rate Maturity (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ 116 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.71 % March 31, 2020 Interest rate swap (2 ) 100,000 (24 ) Other Liabilities Federal Funds Effective Rate +10 basis points 1.74 % April 15, 2021 Interest rate swap (3 ) 75,000 75 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.92 % March 31, 2022 Total $ 250,000 $ 167 Swap Notional Balance Sheet December 31, 2016 Number Amount Fair Value Category Receive Rate Pay Rate Maturity (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ (197 ) Other Liabilities 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.71 % March 31, 2020 Interest rate swap (2 ) 100,000 (514 ) Other Liabilities Federal Funds Effective Rate +10 basis points 1.74 % April 15, 2021 Interest rate swap (3 ) 75,000 19 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.92 % March 31, 2022 Total $ 250,000 $ (692 ) The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the nine months ended September 30, 2017 and for the year ended December 31, 2016. Nine Months Ended September 30, 2017 Effective Portion Ineffective Portion Reclassified from AOCI Recognized in Income Amount of into income on Derivatives Swap Pre-tax gain (loss) Amount of Amount of Number Recognized in OCI Category Gain (Loss) Category Gain (Loss) (dollars in thousands) Interest rate swap (1 ) $ 116 Interest Expense $ (338 ) Other Expense $ — Interest rate swap (2 ) (24 ) Interest Expense (525 ) Other Expense — Interest rate swap (3 ) 75 Interest Expense (458 ) Other Expense (1 ) Total $ 167 $ (1,321 ) $ (1 ) Year Ended December 31, 2016 Effective Portion Ineffective Portion Reclassified from AOCI Recognized in Income Amount of into income on Derivatives Swap Pre-tax gain (loss) Amount of Amount of Number Recognized in OCI Category Gain (Loss) Category Gain (Loss) (dollars in thousands) Interest rate swap (1 ) $ (197 ) Interest Expense $ (628 ) Other Expense $ — Interest rate swap (2 ) (514 ) Interest Expense (880 ) Other Expense — Interest rate swap (3 ) 19 Interest Expense (747 ) Other Expense 1 Total $ (692 ) $ (2,255 ) $ 1 Balance Sheet Offsetting Nine Months Ended September 30, 2017 Offsetting of Derivative Liabilities (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 24 $ (75 ) $ (51 ) $ — $ (560 ) $ (611 ) Counterparty 2 (116 ) — (116 ) — (330 ) (446 ) $ (92 ) $ (75 ) $ (167 ) $ — $ (890 ) $ (1,057 ) Year Ended December 31, 2016 Offsetting of Derivative Liabilities (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 514 $ (19 ) $ 495 $ — $ (380 ) $ 115 Counterparty 2 197 — 197 — (170 ) 27 $ 711 $ (19 ) $ 692 $ — $ (550 ) $ 142 |
Other Real Estate Owned
Other Real Estate Owned | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Other Real Estate Owned | Note 7. Other Real Estate Owned The activity within Other Real Estate Owned (“OREO”) for the three and nine months ended September 30, 2017 and 2016 is presented in the table below. There were no residential real estate loans in the process of foreclosure as of September 30, 2017. For the three and nine months ended September 30, 2017, proceeds on sale of OREO were $1.2 million and $2.1 million. For the three months ended September 30, 2017, there were two OREO properties with a total carrying value of $1.1 million were sold for a net gain of $60 thousand. For the nine months ended September 30, 2017, there were a total of three OREO properties sold for a net loss of $301 thousand. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2017 2016 2017 2016 Balance beginning of period $ 1,394 $ 3,152 $ 2,694 $ 5,852 Real estate acquired from borrowers 1,145 2,500 1,145 2,500 Valuation allowance — — — (200 ) Properties sold (1,145 ) (458 ) (2,445 ) (2,958 ) Balance end of period $ 1,394 $ 5,194 $ 1,394 $ 5,194 |
Long-Term Borrowings
Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Borrowings | Note 8. Long-Term Borrowings The following table presents information related to the Company’s long-term borrowings as of September 30, 2017, December 31, 2016 and September 30, 2016. (dollars in thousands) September 30, 2017 December 31, 2016 September 30, 2016 Subordinated Notes, 5.75% $ 70,000 $ 70,000 $ 70,000 Subordinated Notes, 5.0% 150,000 150,000 150,000 Less: debt issuance costs (3,193 ) (3,486 ) (3,581 ) Long-term borrowings $ 216,807 $ 216,514 $ 216,419 On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the “Notes”). The Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which are being amortized over the life of the 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 are being amortized over the life of the 2026 Notes. |
Net Income per Common Share
Net Income per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Common Share | |
Net Income per Common Share | Note 9. Net Income per Common Share The calculation of net income per common share for the three and nine months ended September 30, 2017 and 2016 was as follows. Three Months Ended September 30, Nine Months Ended September 30, (dollars and shares in thousands, except per share data) 2017 2016 2017 2016 Basic: Net income $ 29,874 $ 24,523 $ 84,663 $ 71,990 Average common shares outstanding 34,174 33,590 34,124 33,566 Basic net income per common share $ 0.87 $ 0.73 $ 2.48 $ 2.14 Diluted: Net income $ 29,874 $ 24,523 $ 84,663 $ 71,990 Average common shares outstanding 34,174 33,590 34,124 33,566 Adjustment for common share equivalents 164 597 192 596 Average common shares outstanding-diluted 34,338 34,187 34,316 34,162 Diluted net income per common share $ 0.87 $ 0.72 $ 2.47 $ 2.11 Anti-dilutive shares — 8 — 8 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 10. 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 2017, the Company awarded 91,097 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 2017, the Company awarded senior officers a targeted number of 36,523 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 the three year period relative to a peer index. There are three performance metrics: 1) average annual earnings per share growth; 2) average annual total shareholder return; and 3) average annual return on average assets. Each metric is measured against companies in the KBW Regional Banking Index. The Company has unvested restricted stock awards and PRSU grants of 227,324 shares at September 30, 2017. Unrecognized stock based compensation expense related to restricted stock awards totaled $9.3 million at September 30, 2017. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 2.13 years. The following tables summarize the unvested restricted stock awards at September 30, 2017 and 2016. Nine Months Ended September 30, 2017 2016 Perfomance Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 33,226 $ 42.60 — $ — Issued 36,523 57.49 34,957 42.60 Forfeited (3,097 ) 42.60 (1,731 ) 42.60 Vested (4,314 ) 54.92 — — Unvested at end 62,338 $ 50.45 33,226 $ 42.60 Nine Months Ended September 30, 2017 2016 Time Vested Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 262,966 $ 33.60 369,093 $ 24.43 Issued 91,097 62.70 104,775 46.39 Forfeited (1,477 ) 47.69 (7,815 ) 40.17 Vested (187,600 ) 30.07 (195,738 ) 22.53 Unvested at end 164,986 $ 53.56 270,315 $ 33.87 Below is a summary of stock option activity for the nine months ended September 30, 2017 and 2016. The information excludes restricted stock units and awards. Nine Months Ended September 30, 2017 2016 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Beginning balance 216,859 $ 8.80 298,740 $ 9.97 Issued — — 3,000 49.49 Exercised (64,420 ) 7.46 (24,458 ) 13.10 Forfeited — — (1,100 ) 15.48 Expired — — (6,637 ) 12.87 Ending balance 152,439 $ 9.36 269,545 $ 10.03 The following summarizes information about stock options outstanding at September 30, 2017. 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 $5.76 $10.72 101,075 $ 5.76 1.26 $10.73 $11.40 41,389 10.84 0.77 $11.41 $24.86 3,225 22.79 6.02 $24.87 $49.91 6,750 47.83 8.37 152,439 $ 9.36 1.54 Exercisable Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $5.76 $10.72 66,377 $ 5.76 $10.73 $11.40 41,389 10.84 $11.41 $24.86 2,065 23.18 $24.87 $49.91 750 49.49 110,581 $ 8.28 The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model with the assumptions as shown in the table below used for grants during the years ended December 31, 2016 and 2015. There were no grants of stock options during the nine months ended September 30, 2017. Nine Months Ended Years Ended December 31, September 30, 2017 2016 2015 Expected volatility n/a 24.23 % 31.21 % Weighted-Average volatility n/a 24.23 % 31.21 % Expected dividends — — — Expected term (in years) n/a 7.0 7.0 Risk-free rate n/a 1.37 % 1.64 % Weighted-average fair value (grant date) n/a $ 14.27 $ 16.73 The total intrinsic value of outstanding stock options was $8.8 million at September 30, 2017. The total intrinsic value of stock options exercised during the nine months ended September 30, 2017 and 2016 was $3.5 million and $855 thousand, respectively. The total fair value of stock options vested was $50 thousand and $45 thousand for the nine months ended September 30, 2017 and 2016, respectively. Unrecognized stock-based compensation expense related to stock options totaled $90 thousand at September 30, 2017. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 2.09 years. 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 September 30, 2017, the 2011 ESPP had 406,081 shares remaining for issuance. Included in salaries and employee benefits in the accompanying Consolidated Statements of Operations, the Company recognized $4.2 million and $5.2 million in stock-based compensation expense for the nine months ended September 30, 2017 and 2016, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2017 | |
Other Comprehensive Income Details 1 | |
Other Comprehensive Income | Note 11. Other Comprehensive Income The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016. (dollars in thousands) Before Tax Tax Effect Net of Tax Three Months Ended September 30, 2017 Net unrealized gain on securities available-for-sale $ 25 $ 10 $ 15 Less: Reclassification adjustment for net gains included in net income (11 ) (4 ) (7 ) Total unrealized gain 14 6 8 Net unrealized gain on derivatives 557 210 347 Less: Reclassification adjustment for gain included in net income (289 ) (106 ) (183 ) Total unrealized gain 268 104 164 Other Comprehensive Income $ 282 $ 110 $ 172 Three Months Ended September 30, 2016 Net unrealized loss on securities available-for-sale $ (1,512 ) $ (605 ) $ (907 ) Less: Reclassification adjustment for net gains included in net income 1 — 1 Total unrealized loss (1,511 ) ( 605 ) (906 ) Net unrealized gain on derivatives 2,927 1,171 1,756 Less: Reclassification adjustment for losses included in net income (777 ) (311 ) (466 ) Total unrealized gain 2,150 860 1,290 Other Comprehensive Income $ 639 $ 255 $ 384 Nine Months Ended September 30, 2017 Net unrealized gain on securities available-for-sale $ 2,080 $ 837 $ 1,243 Less: Reclassification adjustment for net gains included in net income (542 ) (202 ) (340 ) Total unrealized gain 1,538 635 903 Net unrealized gain on derivatives 2,186 836 1,350 Less: Reclassification adjustment for gain included in net income (1,308 ) (487 ) (821 ) Total unrealized gain 878 349 529 Other Comprehensive Income $ 2,416 $ 984 $ 1,432 Nine Months Ended September 30, 2016 Net unrealized gain on securities available-for-sale $ 6,850 $ 2,740 $ 4,110 Less: Reclassification adjustment for net gains included in net income (1,123 ) (449 ) (674 ) Total unrealized gain 5,727 2,291 3,436 Net unrealized loss on derivatives (9,132 ) (3,654 ) (5,478 ) Less: Reclassification adjustment for losses included in net income (1,519 ) (608 ) (911 ) Total unrealized loss (7,613 ) (3,046 ) (4,567 ) Other Comprehensive Loss $ (1,886 ) $ (755 ) $ (1,131 ) The following table presents the changes in each component of accumulated other comprehensive (loss) income, net of tax, for the three and nine months ended September 30, 2017 and 2016. Securities Accumulated Other (dollars in thousands) Available For Sale Derivatives Comprehensive (Loss) Income Three Months Ended September 30, 2017 Balance at Beginning of Period $ (1,060 ) $ (61 ) $ (1,121 ) Other comprehensive income before reclassifications 15 347 362 Amounts reclassified from accumulated other comprehensive loss (7 ) (183 ) (190 ) Net other comprehensive income during period 8 164 172 Balance at End of Period $ (1,052 ) $ 103 $ (949 ) Three Months Ended September 30, 2016 Balance at Beginning of Period $ 5,383 $ (6,707 ) $ (1,324 ) Other comprehensive (loss) income before reclassifications (907 ) 1,756 849 Amounts reclassified from accumulated other comprehensive (loss) income 1 ( 466 ) (465 ) Net other comprehensive (loss) income during period (906 ) 1,290 384 Balance at End of Period $ 4,477 $ (5,417 ) $ (940 ) Nine Months Ended September 30, 2017 Balance at Beginning of Period $ (1,955 ) $ (426 ) $ (2,381 ) Other comprehensive income before reclassifications 1,243 1,350 2,593 Amounts reclassified from accumulated other comprehensive loss (340 ) (821 ) (1,161 ) Net other comprehensive income during period 903 529 1,432 Balance at End of Period $ (1,052 ) $ 103 $ (949 ) Nine Months Ended September 30, 2016 Balance at Beginning of Period $ 1,041 $ (850 ) $ 191 Other comprehensive income (loss) before reclassifications 4,110 (5,478 ) (1,368 ) Amounts reclassified from accumulated other comprehensive (loss) income (674 ) 911 237 Net other comprehensive income (loss) during period 3,436 (4,567 ) (1,131 ) Balance at End of Period $ 4,477 $ (5,417 ) $ (940 ) The following table presents the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016. Details about Accumulated Other Amount Reclassified from Affected Line Item in Comprehensive Income Components Accumulated Other the Statement Where (dollars in thousands) Comprehensive (Loss) Income Net Income is Presented Three Months Ended September 30, 2017 2016 Realized gain on sale of investment securities $ (11 ) $ (1 ) Gain on sale of investment securities Interest expense derivative deposits (289 ) (470 ) Interest expense on deposits Interest expense derivative borrowings — (306 ) Interest expense on short-term borrowings Income tax expense 110 311 Tax expense Total Reclassifications for the Period $ (190 ) $ (466 ) Net Income Details about Accumulated Other Amount Reclassified from Affected Line Item in Comprehensive Income Components Accumulated Other the Statement Where (dollars in thousands) Comprehensive (Loss) Income Net Income is Presented Nine Months Ended September 30, 2017 2016 Realized gain on sale of investment securities $ (542 ) $ (1,123 ) Gain on sale of investment securities Interest expense derivative deposits (1,308 ) (952 ) Interest expense on deposits Interest expense derivative borrowings — (567 ) Interest expense on short-term borrowings Income tax expense 689 2,405 Tax expense Total Reclassifications for the Period $ (1,161 ) $ (237 ) Net Income |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 12. 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 September 30, 2017 and December 31, 2016. (dollars in thousands) Quoted Prices Significant Other Significant Other Total September 30, 2017 Assets: Investment securities available for sale: U. S. agency securities $ — $ 177,918 $ — $ 177,918 Residential mortgage backed securities — 301,526 — 301,526 Municipal bonds — 63,147 — 63,147 Corporate bonds — 11,717 1,500 13,217 Other equity investments — — 218 218 Loans held for sale — 25,980 — 25,980 Mortgage banking derivatives — — 63 63 Interest rate swap derivatives — 191 — 191 Total assets measured at fair value on a recurring basis as of September 30, 2017 $ — $ 580,479 $ 1,781 $ 582,260 Liabilities: Mortgage banking derivatives $ — $ — $ 36 $ 36 Interest rate swap derivatives — 24 — 24 Total liabilities measured at fair value on a recurring basis as of September 30, 2017 $ — $ 24 $ 36 $ 60 December 31, 2016 Assets: Investment securities available for sale: U. S. agency securities $ — $ 106,142 $ — $ 106,142 Residential mortgage backed securities — 326,239 — 326,239 Municipal bonds — 95,930 — 95,930 Corporate bonds — 8,079 1,500 9,579 Other equity investments — — 218 218 Loans held for sale — 51,629 — 51,629 Mortgage banking derivatives — — 114 114 Total assets measured at fair value on a recurring basis as of December 31, 2016 $ — $ 588,019 $ 1,832 $ 589,851 Liabilities: Mortgage banking derivatives $ — $ — $ 55 $ 55 Interest rate swap derivatives — 692 — 692 Total liabilities measured at fair value on a recurring basis as of December 31, 2016 $ — $ 692 $ 55 $ 747 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, 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 residential real estate loans held for sale measured at fair value as of September 30, 2017 and December 31, 2016. September 30, 2017 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 25,980 $ 25,473 $ 507 FHA mortgage loans held for sale $ — $ — $ — December 31, 2016 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 51,629 $ 51,021 $ 608 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 September 30, 2017 or December 31, 2016. Interest rate swap derivatives: Mortgage banking derivatives: 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, 2017 $ 1,718 $ 114 $ 1,832 Realized loss included in earnings - net mortgage banking derivatives — (51 ) (51 ) Purchases of available-for-sale securities — — — Principal redemption — — — Ending balance at September 30, 2017 $ 1,718 $ 63 $ 1,781 Liabilities: Beginning balance at January 1, 2017 $ — $ 55 $ 55 Realized loss included in earnings - net mortgage banking derivatives — (19 ) (19 ) Principal redemption — — — Ending balance at September 30, 2017 $ — $ 36 $ 36 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2016 $ 219 $ 24 $ 243 Realized gain included in earnings - net mortgage banking derivatives — 90 90 Purchases of available-for-sale securities 1,500 — 1,500 Principal redemption (1 ) — (1 ) Ending balance at December 31, 2016 $ 1,718 $ 114 $ 1,832 Liabilities: Beginning balance at January 1, 2016 $ — $ 30 $ 30 Realized loss included in earnings - net mortgage banking derivatives — 25 25 Principal redemption — — — Ending balance at December 31, 2016 $ — $ 55 $ 55 The other equity securities classified as Level 3 consist of 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. 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 (dollars in thousands) Quoted Prices Significant Other Significant Other Total September 30, 2017 Impaired loans: Commercial $ — $ — $ 2,757 $ 2,757 Income producing - commercial real estate — — 8,714 8,714 Owner occupied - commercial real estate — — 5,885 5,885 Real estate mortgage - residential — — 301 301 Construction - commercial and residential — — 2,030 2,030 Home equity — — 504 504 Other consumer — — 11 11 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of September 30, 2017 $ — $ — $ 21,596 $ 21,596 (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2016 Impaired loans: Commercial $ — $ — $ 2,956 $ 2,956 Income producing - commercial real estate — — 12,993 12,993 Owner occupied - commercial real estate — — 2,133 2,133 Real estate mortgage - residential — — 555 555 Construction - commercial and residential — — 1,550 1,550 Other consumer — — 13 13 Other real estate owned — — 2,694 2,694 Total assets measured at fair value on a nonrecurring basis as of December 31, 2016 $ — $ — $ 22,894 $ 22,894 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: 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 September 30, 2017 and December 31, 2016 are as follows: Fair Value Measurements Quoted Prices in Significant Other Significant (dollars in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) September 30, 2017 Assets Cash and due from banks $ 8,246 $ 8,246 $ — $ 8,246 $ — Federal funds sold 8,548 8,548 — 8,548 — Interest bearing deposits with other banks 432,156 432,156 — 432,156 — Investment securities 556,026 556,026 — 554,308 1,718 Federal Reserve and Federal Home Loan Bank stock 30,980 30,980 — 30,980 — Loans held for sale 25,980 25,980 — 25,980 — Loans, net 6,021,237 6,075,997 — — 6,075,997 Bank owned life insurance 61,238 61,238 — 61,238 — Annuity investment 11,591 11,591 — 11,591 — Mortgage banking derivatives 63 63 — — 63 Interst rate swap derivatives 191 191 — 191 — Liabilities Noninterest bearing deposits 1,843,157 1,843,157 — 1,843,157 — Interest bearing deposits 3,248,118 3,248,118 — 3,248,118 — Certificates of deposit 822,677 821,892 — 821,892 — Customer repurchase agreements 73,569 73,569 — 73,569 — Borrowings 416,807 448,768 — 448,768 — Mortgage banking derivatives 36 36 — — 36 Interest rate swap derivatives 24 24 — 24 — December 31, 2016 Assets Cash and due from banks $ 10,285 $ 10,285 $ — $ 10,285 $ — Federal funds sold 2,397 2,397 — 2,397 — Interest bearing deposits with other banks 355,481 355,481 — 355,481 — Investment securities 538,108 538,108 — 536,390 1,718 Federal Reserve and Federal Home Loan Bank stock 21,600 21,600 — 21,600 — Loans held for sale 51,629 51,629 — 51,629 — Loans, net 5,618,819 5,624,084 — — 5,624,084 Bank owned life insurance 60,130 60,130 — 60,130 — Annuity investment 11,929 11,929 — 11,929 — Mortgage banking derivatives 114 114 — — 114 Liabilities Noninterest bearing deposits 1,775,684 1,775,684 — 1,775,684 — Interest bearing deposits 3,191,682 3,191,682 — 3,191,682 — Certificates of deposit 748,748 745,985 — 745,985 — Customer repurchase agreements 68,876 68,876 — 68,876 — Borrowings 216,514 203,657 — 203,657 — Mortgage banking derivatives 55 55 — — 55 Interest rate swap derivatives 692 692 — 692 — |
Supplemental Executive Retireme
Supplemental Executive Retirement Plan | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Supplemental Executive Retirement Plan | Note 13. 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 other than Mr. Paul, 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 in 2013 carriers totaling $11.4 million that 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. For the quarter ended September 30, 2017, the annuity contracts accrued $54 thousand of income, which was included in other noninterest income on the Consolidated Statement of Operations. The cash surrender value of the annuity contracts was $11.6 million at September 30, 2017 and is included in other assets on the Consolidated Balance Sheet. For the three and nine months ended September 30, 2017, the Company recorded benefit expense accruals of $103 thousand and $308 thousand, 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. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated. The Consolidated Financial Statements of the Company included herein are unaudited. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2016 were derived from audited Consolidated Financial Statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. There have been no significant changes to the Company’s Accounting Policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results of operations to be expected for the remainder of the year, or for any other period. |
Nature of Operations | Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in the metropolitan Washington, D.C area. 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 FHA loans. The Bank offers its products and services through twenty-one banking offices, five 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. Eagle Commercial Ventures, LLC, a direct subsidiary of the Company, provides subordinated financing for the acquisition, development and construction of real estate projects; these transactions involve higher levels of risk, together with commensurate higher returns. Refer to Higher Risk Lending – Revenue Recognition below. |
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. |
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 if any. 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 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 small business loans, guaranteed by the Small Business Administration (“SBA”), and 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 September 30, 2017, December 31, 2016 and September 30, 2016. The sale of the guaranteed portion of SBA loans on a servicing retained basis, in a transaction apart from the loan’s origination, 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 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 to 90 days under current market conditions. The gross gains on loan sales are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed. 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 date of transfer. The Company originates a small number of 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 generally retains the servicing rights. When servicing is retained on 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. Revenue represents gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of FHA loans securitizing the Ginnie Mae securities. The gains on Ginnie Mae securities include the realized and unrealized gains and losses on sales of FHA mortgage loans, as well as the changes in fair value of FHA interest rate lock commitments and FHA forward loan sale commitments. Revenue from servicing commercial 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. |
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. |
Higher Risk Lending - Revenue Recognition | Higher Risk Lending – Revenue Recognition The Company had occasionally made higher risk acquisition, development, and construction (“ADC”) loans that entailed higher risks than ADC loans made following normal underwriting practices (“higher risk loan transactions”). These higher risk loan transactions were made through the Company’s subsidiary, ECV. This activity was limited as to individual transaction amount and total exposure amounts, based on capital levels, and is carefully monitored. The loans are carried on the balance sheet at amounts outstanding. ECV had three higher risk loan transactions outstanding as of September 30, 2017 and December 31, 2016, amounting to $9.5 million and $9.3 million, respectively. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses represents an amount which, in management’s judgment, is adequate to absorb probable losses on loans and other extensions of credit that may become uncollectible. The adequacy of the allowance for credit losses is determined through careful and continuous review and evaluation of the loan portfolio and involves the balancing of a number of factors to establish a prudent level of allowance. Among the factors considered in evaluating the adequacy of the allowance for credit losses are lending risks associated with growth and entry into new markets, loss allocations for specific credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, changes in the size and character of the loan portfolio, and management’s judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Allowances for impaired loans are generally determined based on collateral values. Loans or any portion thereof deemed uncollectible are charged against the allowance, while recoveries are credited to the allowance. Management adjusts the level of the allowance through the provision for credit losses, which is recorded as a current period operating expense. The allowance for credit losses consists of allocated and unallocated components. The components of the allowance for credit losses represent an estimation done pursuant to Accounting Standards Codification (“ASC”) Topic 450, “Contingencies,” “Receivables.” Management believes that the allowance for credit losses is adequate; however, determination of the allowance is inherently subjective and requires significant estimates. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. Evaluation of the potential effects of these factors on estimated losses involves a high degree of uncertainty, including the strength and timing of economic cycles and concerns over the effects of a prolonged economic downturn in the current cycle. In addition, various banking agencies, as an integral part of their examination process, and independent consultants engaged by the Bank, periodically review the Bank’s loan portfolio and allowance for credit losses. Such review may result in recognition of additions to the allowance based on their judgments of information available to them at the time of their examination. |
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 to seven years for furniture, fixtures and equipment, three to five years for computer software and hardware, and five to twenty years for building improvements. Leasehold improvements are amortized over the terms of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is shorter. The costs of major renewals and betterments are capitalized, while the costs of ordinary maintenance and repairs are expensed as incurred. These costs are included as a component of premises and equipment expenses on the Consolidated Statements of Operations. |
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 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. The Company performs impairment testing during the fourth quarter of each year 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. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of qualitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2016. 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 The Company is exposed to certain risks 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 through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments designated as cash flow hedges are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate deposits. Refer to the “Loans Held for Sale” section for a discussion on forward commitment contracts, which are also considered derivatives. At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). Regarding Interest Rate Swap Derivatives, the Company has no fair value hedges, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same period(s) during which the hedged transaction affects earnings (i.e. the period when cash flows are exchanged between counterparties). For both fair value and cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as noninterest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income or expense. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. |
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 |
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 by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income 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 ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2016-01, “Financial Instruments—(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-02, “Leases (Topic 842).” ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting (Topic 718).” ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities ” |
Investment Securities Availab22
Investment Securities Available-for-Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available-for-sale securities reconciliation | Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated September 30, 2017 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 179,100 $ 342 $ 1,524 $ 177,918 Residential mortgage backed securities 303,822 374 2,670 301,526 Municipal bonds 61,593 1,673 119 63,147 Corporate bonds 13,011 206 — 13,217 Other equity investments 218 — — 218 $ 557,744 $ 2,595 $ 4,313 $ 556,026 Gross Gross Estimated December 31, 2016 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 107,425 $ 519 $ 1,802 $ 106,142 Residential mortgage backed securities 329,606 324 3,691 326,239 Municipal bonds 94,607 1,723 400 95,930 Corporate bonds 9,508 82 11 9,579 Other equity investments 218 — — 218 $ 541,364 $ 2,648 $ 5,904 $ 538,108 |
Schedule of unrealized loss on investments | 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 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated September 30, 2017 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 32 $ 97,832 $ 1,101 $ 28,299 $ 423 $ 126,131 $ 1,524 Residential mortgage backed securities 113 198,670 1,523 55,920 1,147 254,590 2,670 Municipal bonds 5 13,301 119 — — 13,301 119 150 $ 309,803 $ 2,743 $ 84,219 $ 1,570 $ 394,022 $ 4,313 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2016 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 27 $ 88,991 $ 1,764 $ 3,768 $ 38 $ 92,759 $ 1,802 Residential mortgage backed securities 112 232,347 3,110 19,402 581 251,749 3,691 Municipal bonds 16 34,743 400 — — 34,743 400 Corporate bonds 2 4,998 11 — — 4,998 11 157 $ 361,079 $ 5,285 $ 23,170 $ 619 $ 384,249 $ 5,904 |
Schedule of available-for-sale securities by contractual maturity | The amortized cost and estimated fair value of investments available-for-sale at September 30, 2017 and December 31, 2016 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. September 30, 2017 December 31, 2016 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 90,495 $ 89,503 $ 83,885 $ 82,548 After one year through five years 74,481 74,433 20,736 20,897 Five years through ten years 14,124 13,982 2,804 2,697 Residential mortgage backed securities 303,822 301,526 329,606 326,239 Municipal bonds maturing: One year or less 2,537 2,586 1,056 1,070 After one year through five years 21,116 21,875 45,808 46,865 Five years through ten years 36,868 37,493 46,668 46,839 After ten years 1,072 1,193 1,075 1,156 Corporate bonds After one year through five years 11,511 11,717 8,008 8,079 After ten years 1,500 1,500 1,500 1,500 Other equity investments 218 218 218 218 $ 557,744 $ 556,026 $ 541,364 $ 538,108 |
Loans and Allowance for Credi23
Loans and Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of loans, net of unamortized net deferred fees | Loans, net of unamortized net deferred fees, at September 30, 2017, December 31, 2016, and September 30, 2016 are summarized by type as follows: September 30, 2017 December 31, 2016 September 30, 2016 (dollars in thousands) Amount % Amount % Amount % Commercial $ 1,244,184 20 % $ 1,200,728 21 % $ 1,130,042 21 % Income producing - commercial real estate 2,898,948 48 % 2,509,517 44 % 2,551,186 46 % Owner occupied - commercial real estate 749,580 12 % 640,870 12 % 590,427 11 % Real estate mortgage - residential 109,460 2 % 152,748 3 % 154,439 3 % Construction - commercial and residential* 915,493 15 % 932,531 16 % 838,137 15 % Construction - C&I (owner occupied) 55,828 1 % 126,038 2 % 104,676 2 % Home equity 101,898 2 % 105,096 2 % 106,856 2 % Other consumer 8,813 — 10,365 — 6,212 — Total loans 6,084,204 100 % 5,677,893 100 % 5,481,975 100 % Less: allowance for credit losses (62,967 ) (59,074 ) (56,864 ) Net loans $ 6,021,237 $ 5,618,819 $ 5,425,111 *Includes land loans. |
Schedule of allowance for credit losses on financing receivables | The following tables detail activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2017 and 2016. 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 Three months ended September 30, 2017 Allowance for credit losses: Balance at beginning of period $ 14,225 $ 23,308 $ 4,189 $ 1,081 $ 16,727 $ 1,216 $ 301 $ 61,047 Loans charged-off (522 ) — — — (39 ) — (32 ) (593 ) Recoveries of loans previously charged-off 407 30 — 2 146 1 6 592 Net loans (charged-off) recoveries (115 ) 30 — 2 107 1 (26 ) (1 ) Provision for credit losses (2,266 ) (963 ) 1,273 (126 ) 4,052 (120 ) 71 1,921 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 Nine months ended September 30, 2017 Allowance for credit losses: Balance at beginning of period $ 14,700 $ 21,105 $ 4,010 $ 1,284 $ 16,487 $ 1,328 $ 160 $ 59,074 Loans charged-off (659 ) (1,470 ) — — (39 ) — (98 ) (2,266 ) Recoveries of loans previously charged-off 675 80 2 5 491 4 18 1,275 Net loans charged-off 16 (1,390 ) 2 5 452 4 (80 ) (991 ) Provision for credit losses (2,872 ) 2,660 1,450 (332 ) 3,947 (235 ) 266 4,884 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 As of September 30, 2017 Allowance for credit losses: Individually evaluated for impairment $ 3,246 $ 1,378 $ 1,005 $ — $ 2,900 $ 90 $ 81 $ 8,700 Collectively evaluated for impairment 8,598 20,997 4,457 957 17,986 1,007 265 54,267 Ending balance $ 11,844 $ 22,375 $ 5,462 $ 957 $ 20,886 $ 1,097 $ 346 $ 62,967 Three months ended September 30, 2016 Allowance for credit losses: Balance at beginning of period $ 13,386 $ 19,072 $ 4,202 $ 1,061 $ 17,024 $ 1,556 $ 235 $ 56,536 Loans charged-off (109 ) (1,751 ) — — — (121 ) (12 ) (1,993 ) Recoveries of loans previously charged-off 7 10 — 2 3 3 8 33 Net loans (charged-off) recoveries (102 ) (1,741 ) — 2 3 (118 ) (4 ) (1,960 ) Provision for credit losses (523 ) 3,178 59 47 (513 ) (69 ) 109 2,288 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 Nine months ended September 30, 2016 Allowance for credit losses: Balance at beginning of period $ 11,563 $ 14,122 $ 3,279 $ 1,268 $ 21,088 $ 1,292 $ 75 $ 52,687 Loans charged-off (2,802 ) (2,342 ) — — — (217 ) (37 ) (5,398 ) Recoveries of loans previously charged-off 93 14 2 5 207 11 24 356 Net loans charged-off (2,709 ) (2,328 ) 2 5 207 (206 ) (13 ) (5,042 ) Provision for credit losses 3,907 8,715 980 (163 ) (4,781 ) 283 278 9,219 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 As of September 30, 2016 Allowance for credit losses: Individually evaluated for impairment $ 1,997 $ 1,714 $ 360 $ — $ 300 $ — $ 100 $ 4,471 Collectively evaluated for impairment 10,764 18,795 3,901 1,110 16,214 1,369 240 52,393 Ending balance $ 12,761 $ 20,509 $ 4,261 $ 1,110 $ 16,514 $ 1,369 $ 340 $ 56,864 |
Schedule of recorded investment in loans | The Company’s recorded investments in loans as of September 30, 2017, December 31, 2016 and September 30, 2016 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 September 30, 2017 Recorded investment in loans: Individually evaluated for impairment $ 8,309 $ 10,241 $ 6,570 $ — $ 7,728 $ 594 $ 92 $ 33,534 Collectively evaluated for impairment 1,235,875 2,888,707 743,010 109,460 963,593 101,304 8,721 6,050,670 Ending balance $ 1,244,184 $ 2,898,948 $ 749,580 $ 109,460 $ 971,321 $ 101,898 $ 8,813 $ 6,084,204 December 31, 2016 Recorded investment in loans: Individually evaluated for impairment $ 10,437 $ 15,057 $ 2,093 $ 241 $ 6,517 $ — $ 126 $ 34,471 Collectively evaluated for impairment 1,190,291 2,494,460 638,777 152,507 1,052,052 105,096 10,239 5,643,422 Ending balance $ 1,200,728 $ 2,509,517 $ 640,870 $ 152,748 $ 1,058,569 $ 105,096 $ 10,365 $ 5,677,893 September 30, 2016 Recorded investment in loans: Individually evaluated for impairment $ 12,448 $ 14,648 $ 2,517 $ 244 $ 4,878 $ 113 $ — $ 34,848 Collectively evaluated for impairment 1,117,594 2,536,538 587,910 154,195 937,935 106,743 6,212 5,447,127 Ending balance $ 1,130,042 $ 2,551,186 $ 590,427 $ 154,439 $ 942,813 $ 106,856 $ 6,212 $ 5,481,975 |
Schedule of loans by class and credit quality indicators | 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 September 30, 2017, December 31, 2016 and September 30, 2016. Watch and Total (dollars in thousands) Pass Special Mention Substandard Doubtful Loans September 30, 2017 Commercial $ 1,204,850 $ 31,025 $ 8,309 $ — $ 1,244,184 Income producing - commercial real estate 2,861,346 27,361 10,241 — 2,898,948 Owner occupied - commercial real estate 720,693 22,317 6,570 — 749,580 Real estate mortgage – residential 108,797 663 — — 109,460 Construction - commercial and residential 963,593 — 7,728 — 971,321 Home equity 100,618 686 594 — 101,898 Other consumer 8,719 2 92 — 8,813 Total $ 5,968,616 $ 82,054 $ 33,534 $ — $ 6,084,204 December 31, 2016 Commercial $ 1,160,185 $ 30,106 $ 10,437 $ — $ 1,200,728 Income producing - commercial real estate 2,489,407 5,053 15,057 — 2,509,517 Owner occupied - commercial real estate 630,827 7,950 2,093 — 640,870 Real estate mortgage – residential 151,831 676 241 — 152,748 Construction - commercial and residential 1,051,445 607 6,517 — 1,058,569 Home equity 103,484 1,612 — — 105,096 Other consumer 10,237 2 126 — 10,365 Total $ 5,597,416 $ 46,006 $ 34,471 $ — $ 5,677,893 September 30, 2016 Commercial $ 1,099,894 $ 18,599 $ 11,549 $ — $ 1,130,042 Income producing - commercial real estate 2,527,318 9,220 14,648 — 2,551,186 Owner occupied - commercial real estate 577,925 10,399 2,103 — 590,427 Real estate mortgage – residential 153,515 680 244 — 154,439 Construction - commercial and residential 937,198 737 4,878 — 942,813 Home equity 105,126 1,617 113 — 106,856 Other consumer 6,209 3 — — 6,212 Total $ 5,407,185 $ 41,255 $ 33,535 $ — $ 5,481,975 |
Schedule of loans, non accrual status | The following table presents, by class of loan, information related to nonaccrual loans as of September 30, 2017, December 31, 2016 and September 30, 2016. (dollars in thousands) September 30, 2017 December 31, 2016 September 30, 2016 Commercial $ 3,242 $ 2,490 $ 2,986 Income producing - commercial real estate 880 10,539 10,098 Owner occupied - commercial real estate 6,570 2,093 2,103 Real estate mortgage - residential 301 555 562 Construction - commercial and residential 4,930 2,072 6,412 Home equity 594 — 113 Other consumer 92 126 — Total nonaccrual loans (1)(2) $ 16,609 $ 17,875 $ 22,274 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $12.3 million at September 30, 2017, as compared to $7.9 million at December 31, 2016 and $2.9 million at September 30, 2016. (2) Gross interest income of $176 thousand and $802 thousand would have been recorded for the three and nine months ended September 30, 2017, if nonaccrual loans shown above had been current and in accordance with their original terms while interest actually recorded on such loans was $31 thousand and $56 thousand for the three and nine months ended September 30, 2017. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. |
Schedule of past due loans | The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of September 30, 2017 and December 31, 2016. 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 September 30, 2017 Commercial $ 401 $ 662 $ 3,242 $ 4,305 $ 1,239,879 $ 1,244,184 Income producing - commercial real estate 3,160 770 880 4,810 2,894,138 2,898,948 Owner occupied - commercial real estate 817 3,268 6,570 10,655 738,925 749,580 Real estate mortgage – residential 1,480 2,123 301 3,904 105,556 109,460 Construction - commercial and residential 197 — 4,930 5,127 966,194 971,321 Home equity 637 100 594 1,331 100,567 101,898 Other consumer 21 4 92 117 8,696 8,813 Total $ 6,713 $ 6,927 $ 16,609 $ 30,249 $ 6,053,955 $ 6,084,204 December 31, 2016 Commercial $ 1,634 $ 757 $ 2,490 $ 4,881 $ 1,195,847 $ 1,200,728 Income producing - commercial real estate 511 — 10,539 11,050 2,498,467 2,509,517 Owner occupied - commercial real estate 3,987 3,328 2,093 9,408 631,462 640,870 Real estate mortgage – residential 1,015 163 555 1,733 151,015 152,748 Construction - commercial and residential 360 1,342 2,072 3,774 1,054,795 1,058,569 Home equity — — — — 105,096 105,096 Other consumer 101 9 126 236 10,129 10,365 Total $ 7,608 $ 5,599 $ 17,875 $ 31,082 $ 5,646,811 $ 5,677,893 September 30, 2016 Commercial $ 1,173 $ 495 $ 2,986 $ 4,654 $ 1,125,388 $ 1,130,042 Income producing - commercial real estate — — 10,098 10,098 2,541,088 2,551,186 Owner occupied - commercial real estate — 3,338 2,103 5,441 584,986 590,427 Real estate mortgage – residential — 164 562 726 153,713 154,439 Construction - commercial and residential — — 6,412 6,412 936,401 942,813 Home equity 562 620 113 1,295 105,561 106,856 Other consumer 8 16 — 24 6,188 6,212 Total $ 1,743 $ 4,633 $ 22,274 $ 28,650 $ 5,453,325 $ 5,481,975 |
Schedule of impaired loans | The following table presents, by class of loan, information related to impaired loans for the periods ended September 30, 2017, December 31, 2016 and September 30, 2016. Unpaid Recorded Recorded Contractual Investment Investment Total Average Recorded Investment Interest Income Recognized Principal With No With Recorded Related Quarter Year Quarter Year (dollars in thousands) Balance Allowance Allowance Investment Allowance To Date To Date To Date To Date September 30, 2017 Commercial $ 6,047 $ 2,363 $ 3,640 $ 6,003 $ 3,246 $ 5,977 $ 5,790 $ 31 $ 97 Income producing - commercial real estate 10,092 828 9,264 10,092 1,378 10,222 11,350 121 373 Owner occupied - commercial real estate 6,890 1,612 5,278 6,890 1,005 5,623 4,182 26 46 Real estate mortgage – residential 301 301 — 301 — 304 368 — — Construction - commercial and residential 4,930 1,534 3,396 4,930 2,900 4,808 3,736 — 14 Home equity 594 494 100 594 90 446 223 — 2 Other consumer 92 — 92 92 81 93 101 — — Total $ 28,946 $ 7,132 $ 21,770 $ 28,902 $ 8,700 $ 27,473 $ 25,750 $ 178 $ 532 December 31, 2016 Commercial $ 8,296 $ 2,532 $ 3,095 $ 5,627 $ 2,671 $ 12,620 $ 12,755 $ 79 $ 191 Income producing - commercial real estate 14,936 5,048 9,888 14,936 1,943 16,742 17,533 54 198 Owner occupied - commercial real estate 2,483 1,691 792 2,483 350 2,233 2,106 — 13 Real estate mortgage – residential 555 555 — 555 — 246 249 — — Construction - commercial and residential 2,072 1,535 537 2,072 522 5,091 5,174 — — Home equity — — — — — 78 89 — — Other consumer 126 — 126 126 113 42 32 2 4 Total $ 28,468 $ 11,361 $ 14,438 $ 25,799 $ 5,599 $ 37,052 $ 37,938 $ 135 $ 406 September 30, 2016 Commercial $ 15,517 $ 2,370 $ 10,078 $ 12,448 $ 1,997 $ 12,838 $ 12,879 $ 54 $ 112 Income producing - commercial real estate 14,648 — 14,648 14,648 1,714 17,584 15,298 28 144 Owner occupied - commercial real estate 2,517 — 2,517 2,517 360 2,108 1,923 13 13 Real estate mortgage – residential 244 244 — 244 — 249 271 — — Construction - commercial and residential 4,878 4,340 538 4,878 300 5,146 6,542 — — Home equity 113 — 113 113 100 117 129 2 2 Other consumer — — — — — — 6 — — Total $ 37,917 $ 6,954 $ 27,894 $ 34,848 $ 4,471 $ 38,042 $ 37,048 $ 97 $ 271 |
Schedule of loans modified in troubled debt restructurings | The following table presents by class, the recorded investment of loans modified in a TDR during the three months ended September 30, 2017 and 2016. For the Three Months Ended September 30, 2017 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing — $ (356 ) $ — $ (23 ) $ — $ (379 ) Restructured nonaccruing 2 586 (560 ) — — 26 Total 2 $ 230 $ (560 ) $ (23 ) $ — $ (353 ) Specific allowance $ (185 ) $ (559 ) $ — $ — $ (744 ) Restructured and subsequently defaulted $ — $ — $ — $ — $ — For the Three Months Ended September 30, 2016 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 1 $ 801 $ — $ — $ — $ 801 Restructured nonaccruing — — — — — — Total 1 $ 801 $ — $ — $ — $ 801 Specific allowance $ 363 $ — $ — $ — $ 363 Restructured and subsequently defaulted $ — $ — $ — $ — $ — The following table presents by class, the recorded investment of loans modified in TDRs held by the Company at September 30, 2017 and September 30, 2016. September 30, 2017 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 9 $ 2,761 $ 9,212 $ 320 $ — $ 12,293 Restructured nonaccruing 4 776 136 — — 912 Total 13 $ 3,537 $ 9,348 $ 320 $ — $ 13,205 Specific allowance $ 685 $ 1,341 $ — $ — $ 2,026 Restructured and subsequently defaulted $ 237 $ — $ — $ — $ 237 September 30, 2016 Income Owner Construction - (dollars in thousands) Number of Commercial Commercial Commercial Commercial Total Troubled debt restructings Restructured accruing 7 $ 1,725 $ 742 $ 414 $ — $ 2,881 Restructured nonaccruing 2 199 — — 4,948 5,147 Total 9 $ 1,924 $ 742 $ 414 $ 4,948 $ 8,028 Specific allowance $ 456 $ — $ — $ — $ 456 Restructured and subsequently defaulted $ — $ — $ — $ 4,948 $ 4,948 |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The table below identifies the balance sheet category and fair values of the Company’s designated cash flow hedge derivative instruments as of September 30, 2017 and December 31, 2016. Swap Notional Balance Sheet September 30, 2017 Number Amount Fair Value Category Receive Rate Pay Rate Maturity (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ 116 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.71 % March 31, 2020 Interest rate swap (2 ) 100,000 (24 ) Other Liabilities Federal Funds Effective Rate +10 basis points 1.74 % April 15, 2021 Interest rate swap (3 ) 75,000 75 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.92 % March 31, 2022 Total $ 250,000 $ 167 Swap Notional Balance Sheet December 31, 2016 Number Amount Fair Value Category Receive Rate Pay Rate Maturity (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ (197 ) Other Liabilities 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.71 % March 31, 2020 Interest rate swap (2 ) 100,000 (514 ) Other Liabilities Federal Funds Effective Rate +10 basis points 1.74 % April 15, 2021 Interest rate swap (3 ) 75,000 19 Other Assets 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points 1.92 % March 31, 2022 Total $ 250,000 $ (692 ) |
Schedule of pretax net gain (loss) of derivative instruments | The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the nine months ended September 30, 2017 and for the year ended December 31, 2016. Nine Months Ended September 30, 2017 Effective Portion Ineffective Portion Reclassified from AOCI Recognized in Income Amount of into income on Derivatives Swap Pre-tax gain (loss) Amount of Amount of Number Recognized in OCI Category Gain (Loss) Category Gain (Loss) (dollars in thousands) Interest rate swap (1 ) $ 116 Interest Expense $ (338 ) Other Expense $ — Interest rate swap (2 ) (24 ) Interest Expense (525 ) Other Expense — Interest rate swap (3 ) 75 Interest Expense (458 ) Other Expense (1 ) Total $ 167 $ (1,321 ) $ (1 ) Year Ended December 31, 2016 Effective Portion Ineffective Portion Reclassified from AOCI Recognized in Income Amount of into income on Derivatives Swap Pre-tax gain (loss) Amount of Amount of Number Recognized in OCI Category Gain (Loss) Category Gain (Loss) (dollars in thousands) Interest rate swap (1 ) $ (197 ) Interest Expense $ (628 ) Other Expense $ — Interest rate swap (2 ) (514 ) Interest Expense (880 ) Other Expense — Interest rate swap (3 ) 19 Interest Expense (747 ) Other Expense 1 Total $ (692 ) $ (2,255 ) $ 1 |
Schedule of offsetting liabilities of derivatives | The Company generally offsets such financial instruments for financial reporting purposes. Nine Months Ended September 30, 2017 Offsetting of Derivative Liabilities (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 24 $ (75 ) $ (51 ) $ — $ (560 ) $ (611 ) Counterparty 2 (116 ) — (116 ) — (330 ) (446 ) $ (92 ) $ (75 ) $ (167 ) $ — $ (890 ) $ (1,057 ) Year Ended December 31, 2016 Offsetting of Derivative Liabilities (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 514 $ (19 ) $ 495 $ — $ (380 ) $ 115 Counterparty 2 197 — 197 — (170 ) 27 $ 711 $ (19 ) $ 692 $ — $ (550 ) $ 142 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of activity of other real estate owned | For the nine months ended September 30, 2017, there were a total of three OREO properties sold for a net loss of $301 thousand. Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2017 2016 2017 2016 Balance beginning of period $ 1,394 $ 3,152 $ 2,694 $ 5,852 Real estate acquired from borrowers 1,145 2,500 1,145 2,500 Valuation allowance — — — (200 ) Properties sold (1,145 ) (458 ) (2,445 ) (2,958 ) Balance end of period $ 1,394 $ 5,194 $ 1,394 $ 5,194 |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following table presents information related to the Company’s long-term borrowings as of September 30, 2017, December 31, 2016 and September 30, 2016. (dollars in thousands) September 30, 2017 December 31, 2016 September 30, 2016 Subordinated Notes, 5.75% $ 70,000 $ 70,000 $ 70,000 Subordinated Notes, 5.0% 150,000 150,000 150,000 Less: debt issuance costs (3,193 ) (3,486 ) (3,581 ) Long-term borrowings $ 216,807 $ 216,514 $ 216,419 |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Common Share | |
Schedule of net income per share | The calculation of net income per common share for the three and nine months ended September 30, 2017 and 2016 was as follows. Three Months Ended September 30, Nine Months Ended September 30, (dollars and shares in thousands, except per share data) 2017 2016 2017 2016 Basic: Net income $ 29,874 $ 24,523 $ 84,663 $ 71,990 Average common shares outstanding 34,174 33,590 34,124 33,566 Basic net income per common share $ 0.87 $ 0.73 $ 2.48 $ 2.14 Diluted: Net income $ 29,874 $ 24,523 $ 84,663 $ 71,990 Average common shares outstanding 34,174 33,590 34,124 33,566 Adjustment for common share equivalents 164 597 192 596 Average common shares outstanding-diluted 34,338 34,187 34,316 34,162 Diluted net income per common share $ 0.87 $ 0.72 $ 2.47 $ 2.11 Anti-dilutive shares — 8 — 8 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of unvested restricted stock awards | The following tables summarize the unvested restricted stock awards at September 30, 2017 and 2016. Nine Months Ended September 30, 2017 2016 Perfomance Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 33,226 $ 42.60 — $ — Issued 36,523 57.49 34,957 42.60 Forfeited (3,097 ) 42.60 (1,731 ) 42.60 Vested (4,314 ) 54.92 — — Unvested at end 62,338 $ 50.45 33,226 $ 42.60 Nine Months Ended September 30, 2017 2016 Time Vested Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 262,966 $ 33.60 369,093 $ 24.43 Issued 91,097 62.70 104,775 46.39 Forfeited (1,477 ) 47.69 (7,815 ) 40.17 Vested (187,600 ) 30.07 (195,738 ) 22.53 Unvested at end 164,986 $ 53.56 270,315 $ 33.87 |
Schedule of activity of stock options | Below is a summary of stock option activity for the nine months ended September 30, 2017 and 2016. The information excludes restricted stock units and awards. Nine Months Ended September 30, 2017 2016 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Beginning balance 216,859 $ 8.80 298,740 $ 9.97 Issued — — 3,000 49.49 Exercised (64,420 ) 7.46 (24,458 ) 13.10 Forfeited — — (1,100 ) 15.48 Expired — — (6,637 ) 12.87 Ending balance 152,439 $ 9.36 269,545 $ 10.03 |
Schedule of stock option by exercise price range | The following summarizes information about stock options outstanding at September 30, 2017. 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 $5.76 $10.72 101,075 $ 5.76 1.26 $10.73 $11.40 41,389 10.84 0.77 $11.41 $24.86 3,225 22.79 6.02 $24.87 $49.91 6,750 47.83 8.37 152,439 $ 9.36 1.54 Exercisable Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $5.76 $10.72 66,377 $ 5.76 $10.73 $11.40 41,389 10.84 $11.41 $24.86 2,065 23.18 $24.87 $49.91 750 49.49 110,581 $ 8.28 |
Schedule of valuation assumptions used for stock options | There were no grants of stock options during the nine months ended September 30, 2017. Nine Months Ended Years Ended December 31, September 30, 2017 2016 2015 Expected volatility n/a 24.23 % 31.21 % Weighted-Average volatility n/a 24.23 % 31.21 % Expected dividends — — — Expected term (in years) n/a 7.0 7.0 Risk-free rate n/a 1.37 % 1.64 % Weighted-average fair value (grant date) n/a $ 14.27 $ 16.73 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Comprehensive Income Details 1 | |
Schedule of components of other comprehensive income (loss) | The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016. (dollars in thousands) Before Tax Tax Effect Net of Tax Three Months Ended September 30, 2017 Net unrealized gain on securities available-for-sale $ 25 $ 10 $ 15 Less: Reclassification adjustment for net gains included in net income (11 ) (4 ) (7 ) Total unrealized gain 14 6 8 Net unrealized gain on derivatives 557 210 347 Less: Reclassification adjustment for gain included in net income (289 ) (106 ) (183 ) Total unrealized gain 268 104 164 Other Comprehensive Income $ 282 $ 110 $ 172 Three Months Ended September 30, 2016 Net unrealized loss on securities available-for-sale $ (1,512 ) $ ( 605 ) $ (907 ) Less: Reclassification adjustment for net gains included in net income 1 — 1 Total unrealized loss (1,511 ) ( 605 ) (906 ) Net unrealized gain on derivatives 2,927 1,171 1,756 Less: Reclassification adjustment for losses included in net income (777 ) (311 ) (466 ) Total unrealized gain 2,150 860 1,290 Other Comprehensive Income $ 639 $ 255 $ 384 Nine Months Ended September 30, 2017 Net unrealized gain on securities available-for-sale $ 2,080 $ 837 $ 1,243 Less: Reclassification adjustment for net gains included in net income (542 ) (202 ) (340 ) Total unrealized gain 1,538 635 903 Net unrealized gain on derivatives 2,186 836 1,350 Less: Reclassification adjustment for gain included in net income (1,308 ) (487 ) (821 ) Total unrealized gain 878 349 529 Other Comprehensive Income $ 2,416 $ 984 $ 1,432 Nine Months Ended September 30, 2016 Net unrealized gain on securities available-for-sale $ 6,850 $ 2,740 $ 4,110 Less: Reclassification adjustment for net gains included in net income (1,123 ) (449 ) (674 ) Total unrealized gain 5,727 2,291 3,436 Net unrealized loss on derivatives (9,132 ) (3,654 ) (5,478 ) Less: Reclassification adjustment for losses included in net income (1,519 ) (608 ) (911 ) Total unrealized loss (7,613 ) (3,046 ) (4,567 ) Other Comprehensive Loss $ (1,886 ) $ (755 ) $ (1,131 ) |
Schedule of changes in accumulated other comprehensive income (loss) | The following table presents the changes in each component of accumulated other comprehensive (loss) income, net of tax, for the three and nine months ended September 30, 2017 and 2016. Securities Accumulated Other (dollars in thousands) Available For Sale Derivatives Comprehensive (Loss) Income Three Months Ended September 30, 2017 Balance at Beginning of Period $ (1,060 ) $ (61 ) $ (1,121 ) Other comprehensive income before reclassifications 15 347 362 Amounts reclassified from accumulated other comprehensive loss (7 ) (183 ) (190 ) Net other comprehensive income during period 8 164 172 Balance at End of Period $ (1,052 ) $ 103 $ (949 ) Three Months Ended September 30, 2016 Balance at Beginning of Period $ 5,383 $ (6,707 ) $ (1,324 ) Other comprehensive (loss) income before reclassifications (907 ) 1,756 849 Amounts reclassified from accumulated other comprehensive (loss) income 1 (466 ) ( 465 ) Net other comprehensive (loss) income during period (906 ) 1,290 384 Balance at End of Period $ 4,477 $ (5,417 ) $ (940 ) Nine Months Ended September 30, 2017 Balance at Beginning of Period $ (1,955 ) $ (426 ) $ (2,381 ) Other comprehensive income before reclassifications 1,243 1,350 2,593 Amounts reclassified from accumulated other comprehensive loss (340 ) (821 ) (1,161 ) Net other comprehensive income during period 903 529 1,432 Balance at End of Period $ (1,052 ) $ 103 $ (949 ) Nine Months Ended September 30, 2016 Balance at Beginning of Period $ 1,041 $ (850 ) $ 191 Other comprehensive income (loss) before reclassifications 4,110 (5,478 ) (1,368 ) Amounts reclassified from accumulated other comprehensive (loss) income (674 ) 911 237 Net other comprehensive income (loss) during period 3,436 (4,567 ) (1,131 ) Balance at End of Period $ 4,477 $ (5,417 ) $ (940 ) |
Schedule of amounts reclassified out of accumulated other comprehensive income (loss) | The following table presents the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016. Details about Accumulated Other Amount Reclassified from Affected Line Item in Comprehensive Income Components Accumulated Other the Statement Where (dollars in thousands) Comprehensive (Loss) Income Net Income is Presented Three Months Ended September 30, 2017 2016 Realized gain on sale of investment securities $ (11 ) $ (1 ) Gain on sale of investment securities Interest expense derivative deposits (289 ) (470 ) Interest expense on deposits Interest expense derivative borrowings — (306 ) Interest expense on short-term borrowings Income tax expense 110 311 Tax expense Total Reclassifications for the Period $ (190 ) $ (466 ) Net Income Details about Accumulated Other Amount Reclassified from Affected Line Item in Comprehensive Income Components Accumulated Other the Statement Where (dollars in thousands) Comprehensive (Loss) Income Net Income is Presented Nine Months Ended September 30, 2017 2016 Realized gain on sale of investment securities $ (542 ) $ (1,123 ) Gain on sale of investment securities Interest expense derivative deposits (1,308 ) (952 ) Interest expense on deposits Interest expense derivative borrowings — (567 ) Interest expense on short-term borrowings Income tax expense 689 2,405 Tax expense Total Reclassifications for the Period $ (1,161 ) $ (237 ) Net Income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016. (dollars in thousands) Quoted Prices Significant Other Significant Other Total September 30, 2017 Assets: Investment securities available for sale: U. S. agency securities $ — $ 177,918 $ — $ 177,918 Residential mortgage backed securities — 301,526 — 301,526 Municipal bonds — 63,147 — 63,147 Corporate bonds — 11,717 1,500 13,217 Other equity investments — — 218 218 Loans held for sale — 25,980 — 25,980 Mortgage banking derivatives — — 63 63 Interest rate swap derivatives — 191 — 191 Total assets measured at fair value on a recurring basis as of September 30, 2017 $ — $ 580,479 $ 1,781 $ 582,260 Liabilities: Mortgage banking derivatives $ — $ — $ 36 $ 36 Interest rate swap derivatives — 24 — 24 Total liabilities measured at fair value on a recurring basis as of September 30, 2017 $ — $ 24 $ 36 $ 60 December 31, 2016 Assets: Investment securities available for sale: U. S. agency securities $ — $ 106,142 $ — $ 106,142 Residential mortgage backed securities — 326,239 — 326,239 Municipal bonds — 95,930 — 95,930 Corporate bonds — 8,079 1,500 9,579 Other equity investments — — 218 218 Loans held for sale — 51,629 — 51,629 Mortgage banking derivatives — — 114 114 Total assets measured at fair value on a recurring basis as of December 31, 2016 $ — $ 588,019 $ 1,832 $ 589,851 Liabilities: Mortgage banking derivatives $ — $ — $ 55 $ 55 Interest rate swap derivatives — 692 — 692 Total liabilities measured at fair value on a recurring basis as of December 31, 2016 $ — $ 692 $ 55 $ 747 |
the aggregate fair value and the aggregate unpaid principal balance for residential real estate loans | The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate loans held for sale measured at fair value as of September 30, 2017 and December 31, 2016. September 30, 2017 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 25,980 $ 25,473 $ 507 FHA mortgage loans held for sale $ — $ — $ — December 31, 2016 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 51,629 $ 51,021 $ 608 FHA mortgage loans held for sale $ — $ — $ — |
Schedule of reconciliation of activity of siginificant 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, 2017 $ 1,718 $ 114 $ 1,832 Realized loss included in earnings - net mortgage banking derivatives — (51 ) (51 ) Purchases of available-for-sale securities — — — Principal redemption — — — Ending balance at September 30, 2017 $ 1,718 $ 63 $ 1,781 Liabilities: Beginning balance at January 1, 2017 $ — $ 55 $ 55 Realized loss included in earnings - net mortgage banking derivatives — (19 ) (19 ) Principal redemption — — — Ending balance at September 30, 2017 $ — $ 36 $ 36 Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2016 $ 219 $ 24 $ 243 Realized gain included in earnings - net mortgage banking derivatives — 90 90 Purchases of available-for-sale securities 1,500 — 1,500 Principal redemption (1 ) — (1 ) Ending balance at December 31, 2016 $ 1,718 $ 114 $ 1,832 Liabilities: Beginning balance at January 1, 2016 $ — $ 30 $ 30 Realized loss included in earnings - net mortgage banking derivatives — 25 25 Principal redemption — — — Ending balance at December 31, 2016 $ — $ 55 $ 55 |
Schedule of assets measured at fair value on nonrecurring basis | Assets measured at fair value on a nonrecurring basis are included in the table below: (dollars in thousands) Quoted Prices Significant Other Significant Other Total September 30, 2017 Impaired loans: Commercial $ — $ — $ 2,757 $ 2,757 Income producing - commercial real estate — — 8,714 8,714 Owner occupied - commercial real estate — — 5,885 5,885 Real estate mortgage - residential — — 301 301 Construction - commercial and residential — — 2,030 2,030 Home equity — — 504 504 Other consumer — — 11 11 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of September 30, 2017 $ — $ — $ 21,596 $ 21,596 (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2016 Impaired loans: Commercial $ — $ — $ 2,956 $ 2,956 Income producing - commercial real estate — — 12,993 12,993 Owner occupied - commercial real estate — — 2,133 2,133 Real estate mortgage - residential — — 555 555 Construction - commercial and residential — — 1,550 1,550 Other consumer — — 13 13 Other real estate owned — — 2,694 2,694 Total assets measured at fair value on a nonrecurring basis as of December 31, 2016 $ — $ — $ 22,894 $ 22,894 |
Schedule of fair value by balance sheet grouping | The estimated fair values of the Company’s financial instruments at September 30, 2017 and December 31, 2016 are as follows: Fair Value Measurements Quoted Prices in Significant Other Significant (dollars in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) September 30, 2017 Assets Cash and due from banks $ 8,246 $ 8,246 $ — $ 8,246 $ — Federal funds sold 8,548 8,548 — 8,548 — Interest bearing deposits with other banks 432,156 432,156 — 432,156 — Investment securities 556,026 556,026 — 554,308 1,718 Federal Reserve and Federal Home Loan Bank stock 30,980 30,980 — 30,980 — Loans held for sale 25,980 25,980 — 25,980 — Loans, net 6,021,237 6,075,997 — — 6,075,997 Bank owned life insurance 61,238 61,238 — 61,238 — Annuity investment 11,591 11,591 — 11,591 — Mortgage banking derivatives 63 63 — — 63 Interst rate swap derivatives 191 191 — 191 — Liabilities Noninterest bearing deposits 1,843,157 1,843,157 — 1,843,157 — Interest bearing deposits 3,248,118 3,248,118 — 3,248,118 — Certificates of deposit 822,677 821,892 — 821,892 — Customer repurchase agreements 73,569 73,569 — 73,569 — Borrowings 416,807 448,768 — 448,768 — Mortgage banking derivatives 36 36 — — 36 Interest rate swap derivatives 24 24 — 24 — December 31, 2016 Assets Cash and due from banks $ 10,285 $ 10,285 $ — $ 10,285 $ — Federal funds sold 2,397 2,397 — 2,397 — Interest bearing deposits with other banks 355,481 355,481 — 355,481 — Investment securities 538,108 538,108 — 536,390 1,718 Federal Reserve and Federal Home Loan Bank stock 21,600 21,600 — 21,600 — Loans held for sale 51,629 51,629 — 51,629 — Loans, net 5,618,819 5,624,084 — — 5,624,084 Bank owned life insurance 60,130 60,130 — 60,130 — Annuity investment 11,929 11,929 — 11,929 — Mortgage banking derivatives 114 114 — — 114 Liabilities Noninterest bearing deposits 1,775,684 1,775,684 — 1,775,684 — Interest bearing deposits 3,191,682 3,191,682 — 3,191,682 — Certificates of deposit 748,748 745,985 — 745,985 — Customer repurchase agreements 68,876 68,876 — 68,876 — Borrowings 216,514 203,657 — 203,657 — Mortgage banking derivatives 55 55 — — 55 Interest rate swap derivatives 692 692 — 692 — |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details Narrative) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)Number | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Number$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)Number | |
Income tax expense (benefit) | $ | $ 17,409 | $ 15,484 | $ 50,109 | $ 44,966 | |
Risk Level, High [Member] | Eagle Commercial Ventures, LLC [Member] | |||||
Number of higher risk lending transactions outstanding | Number | 3 | 3 | 3 | ||
Loans receivable, net | $ | $ 9,500 | $ 9,500 | $ 9,300 | ||
Banking Services [Member] | |||||
Number of locations | Number | 21 | 21 | |||
Lending Services [Member] | |||||
Number of locations | Number | 5 | 5 | |||
Accounting Standards Update 2016-09 [Member] | |||||
Income tax expense (benefit) | $ | $ 460 | ||||
Earnings per share, basic and diluted (in dollars per share) | $ / shares | $ 0.01 | ||||
Minimum [Member] | |||||
Days from commitment to closing | 30 days | ||||
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | |||||
Property, plant and equipment, useful life | 3 years | ||||
Minimum [Member] | Building Improvements [Member] | |||||
Property, plant and equipment, useful life | 5 years | ||||
Minimum [Member] | Computer Software [Member] | |||||
Property, plant and equipment, useful life | 3 years | ||||
Maximum [Member] | |||||
Days from commitment to closing | 90 days | ||||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||||
Property, plant and equipment, useful life | 7 years | ||||
Maximum [Member] | Building Improvements [Member] | |||||
Property, plant and equipment, useful life | 20 years | ||||
Maximum [Member] | Computer Software [Member] | |||||
Property, plant and equipment, useful life | 5 years |
Investment Securities Availab32
Investment Securities Available-for-Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Amortized cost | $ 557,744 | $ 541,364 | |
Gross unrealized gains | 2,595 | 2,648 | |
Gross unrealized losses | 4,313 | 5,904 | |
Estimated fair value | 556,026 | 538,108 | $ 430,668 |
US Agency Securities [Member] | |||
Amortized cost | 179,100 | 107,425 | |
Gross unrealized gains | 342 | 519 | |
Gross unrealized losses | 1,524 | 1,802 | |
Estimated fair value | 177,918 | 106,142 | |
Residential Mortgage Backed Securities [Member] | |||
Amortized cost | 303,822 | 329,606 | |
Gross unrealized gains | 374 | 324 | |
Gross unrealized losses | 2,670 | 3,691 | |
Estimated fair value | 301,526 | 326,239 | |
Municipal Bonds [Member] | |||
Amortized cost | 61,593 | 94,607 | |
Gross unrealized gains | 1,673 | 1,723 | |
Gross unrealized losses | 119 | 400 | |
Estimated fair value | 63,147 | 95,930 | |
Corporate Bonds [Member] | |||
Amortized cost | 13,011 | 9,508 | |
Gross unrealized gains | 206 | 82 | |
Gross unrealized losses | 11 | ||
Estimated fair value | 13,217 | 9,579 | |
Other Equity Investments [Member] | |||
Amortized cost | 218 | 218 | |
Estimated fair value | $ 218 | $ 218 |
Investment Securities Availab33
Investment Securities Available-for-Sale (Details 1) $ in Thousands | Sep. 30, 2017USD ($)Number | Dec. 31, 2016USD ($)Number |
Available-for-sale securities in a continuous loss position, number of securities | Number | 150 | 157 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 309,803 | $ 361,079 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 2,743 | 5,285 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 84,219 | 23,170 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 1,570 | 619 |
Available-for-sale securities in a continuous loss position, estimated fair value | 394,022 | 384,249 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 4,313 | $ 5,904 |
US Agency Securities [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 32 | 27 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 97,832 | $ 88,991 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 1,101 | 1,764 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 28,299 | 3,768 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 423 | 38 |
Available-for-sale securities in a continuous loss position, estimated fair value | 126,131 | 92,759 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 1,524 | $ 1,802 |
Residential Mortgage Backed Securities [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 113 | 112 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 198,670 | $ 232,347 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 1,523 | 3,110 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 55,920 | 19,402 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 1,147 | 581 |
Available-for-sale securities in a continuous loss position, estimated fair value | 254,590 | 251,749 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 2,670 | $ 3,691 |
Municipal Bonds [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 5 | 16 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 13,301 | $ 34,743 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 119 | 400 |
Available-for-sale securities in a continuous loss position, estimated fair value | 13,301 | 34,743 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 119 | $ 400 |
Corporate Bonds [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 2 | |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 4,998 | |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 11 | |
Available-for-sale securities in a continuous loss position, estimated fair value | 4,998 | |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 11 |
Investment Securities Availab34
Investment Securities Available-for-Sale (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Amortized cost | $ 557,744 | $ 541,364 |
Estimated fair value | 556,026 | 538,108 |
US Agency Securities [Member] | ||
One year or less, amortized cost | 90,495 | 83,885 |
One year or less, estimated fair value | 89,503 | 82,548 |
After one year through five years, amortized cost | 74,481 | 20,736 |
After one year through five years, estimated fair value | 74,433 | 20,897 |
Five years through ten years, amortized cost | 14,124 | 2,804 |
Five years through ten years, estimated fair value | 13,982 | 2,697 |
Residential Mortgage Backed Securities [Member] | ||
Amortized cost, without maturity date | 303,822 | 329,606 |
Estimated fair value, without maturity date | 301,526 | 326,239 |
Municipal Bonds [Member] | ||
One year or less, amortized cost | 2,537 | 1,056 |
One year or less, estimated fair value | 2,586 | 1,070 |
After one year through five years, amortized cost | 21,116 | 45,808 |
After one year through five years, estimated fair value | 21,875 | 46,865 |
Five years through ten years, amortized cost | 36,868 | 46,668 |
Five years through ten years, estimated fair value | 37,493 | 46,839 |
After ten years, amortized cost | 1,072 | 1,075 |
After ten years, estimated fair value | 1,193 | 1,156 |
Corporate Bonds [Member] | ||
After one year through five years, amortized cost | 11,511 | 8,008 |
After one year through five years, estimated fair value | 11,717 | 8,079 |
After ten years, amortized cost | 1,500 | 1,500 |
After ten years, estimated fair value | 1,500 | 1,500 |
Other Equity Investments [Member] | ||
Amortized cost, without maturity date | 218 | 218 |
Estimated fair value, without maturity date | $ 218 | $ 218 |
Investment Securities Availab35
Investment Securities Available-for-Sale (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Federal home loan bank stock and federal reserve bank stock | $ 30,980 | $ 19,920 | $ 21,600 |
Debt securities percentage | 99.90% | ||
Debt securities weighted average duration | 3 years 6 months | ||
Available-for-sale securities, gross realized gains | $ 795 | 1,300 | |
Available-for-sale securities, gross realized losses | 254 | 202 | |
Proceeds from sale of available-for-sale securities | 70,100 | $ 94,200 | |
Available-for-sale securities pledged as collateral | $ 459,900 |
Mortgage Banking Derivative (De
Mortgage Banking Derivative (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Derivative, notional amount | $ 250,000 | $ 250,000 | $ 250,000 | ||
Designated as Hedging Instrument [Member] | |||||
Noninterest income (loss), other | (14) | $ 151 | (912) | $ (156) | |
Mortgage Banking Derivative [Member] | |||||
Derivative, notional amount | 59,600 | 81,700 | 59,600 | 81,700 | |
Noninterest income (loss), other | 71 | (46) | 335 | 274 | |
Mortgage Banking Derivative [Member] | Other Assets [Member] | |||||
Derivative asset | 63 | 217 | 63 | 217 | |
Mortgage Banking Derivative [Member] | Other Liabilities [Member] | |||||
Derivative liability | $ 36 | $ 222 | $ 36 | $ 222 |
Loans and Allowance for Credi37
Loans and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Loans | $ 6,084,204 | $ 5,677,893 | $ 5,481,975 | |
Loans, percent | 100.00% | 100.00% | 100.00% | |
Less: allowance for credit losses | $ (62,967) | $ (59,074) | $ (56,864) | |
Net loans | 6,021,237 | 5,618,819 | 5,425,111 | |
Commercial Portfolio Segment [Member] | ||||
Loans | $ 1,244,184 | $ 1,200,728 | $ 1,130,042 | |
Loans, percent | 20.00% | 21.00% | 21.00% | |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||||
Loans | $ 2,898,948 | $ 2,509,517 | $ 2,551,186 | |
Loans, percent | 48.00% | 44.00% | 46.00% | |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||||
Loans | $ 749,580 | $ 640,870 | $ 590,427 | |
Loans, percent | 12.00% | 12.00% | 11.00% | |
Real Estate Mortgage - Residential Portfolio Segment [Member] | ||||
Loans | $ 109,460 | $ 152,748 | $ 154,439 | |
Loans, percent | 2.00% | 3.00% | 3.00% | |
Construction Portfolio Segment [Member] | ||||
Loans | $ 971,321 | $ 1,058,569 | $ 942,813 | |
Construction Portfolio Segment [Member] | Commercial and Residential Loan [Member] | ||||
Loans | [1] | $ 915,493 | $ 932,531 | $ 838,137 |
Loans, percent | [1] | 15.00% | 16.00% | 15.00% |
Construction Portfolio Segment [Member] | Commercial and Industrial (Owner Occupied) Loan [Member] | ||||
Loans | $ 55,828 | $ 126,038 | $ 104,676 | |
Loans, percent | 1.00% | 2.00% | 2.00% | |
Home Equity Portfolio Segment [Member] | ||||
Loans | $ 101,898 | $ 105,096 | $ 106,856 | |
Loans, percent | 2.00% | 2.00% | 2.00% | |
Other Consumer Portfolio Segment [Member] | ||||
Loans | $ 8,813 | $ 10,365 | $ 6,212 | |
[1] | Includes land loans. |
Loans and Allowance for Credi38
Loans and Allowance for Credit Losses (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Allowance for Credit Losses, beginning balance | $ 61,047 | $ 56,536 | $ 59,074 | $ 52,687 | ||
Loans charged-off | (593) | (1,993) | (2,266) | (5,398) | ||
Recoveries of loans previously charged-off | 592 | 33 | 1,275 | 356 | ||
Net loans (charged-off) recoveries | (1) | (1,960) | (991) | (5,042) | ||
Provision for credit losses | 1,921 | 2,288 | 4,884 | 9,219 | ||
Allowance for Credit Losses, ending balance | 62,967 | 56,864 | 62,967 | 56,864 | ||
Individually evaluated for impairment | $ 8,700 | $ 4,471 | ||||
Collectively evaluated for impairment | 54,267 | 52,393 | ||||
Balance | 62,967 | 56,536 | 62,967 | 56,864 | 62,967 | 56,864 |
Commercial Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 14,225 | 13,386 | 14,700 | 11,563 | ||
Loans charged-off | (522) | (109) | (659) | (2,802) | ||
Recoveries of loans previously charged-off | 407 | 7 | 675 | 93 | ||
Net loans (charged-off) recoveries | (115) | (102) | 16 | (2,709) | ||
Provision for credit losses | (2,266) | (523) | (2,872) | 3,907 | ||
Allowance for Credit Losses, ending balance | 11,844 | 12,761 | 11,844 | 12,761 | ||
Individually evaluated for impairment | 3,246 | 1,997 | ||||
Collectively evaluated for impairment | 8,598 | 10,764 | ||||
Balance | 11,844 | 12,761 | 11,844 | 12,761 | 11,844 | 12,761 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 23,308 | 19,072 | 21,105 | 14,122 | ||
Loans charged-off | (1,751) | (1,470) | (2,342) | |||
Recoveries of loans previously charged-off | 30 | 10 | 80 | 14 | ||
Net loans (charged-off) recoveries | 30 | (1,741) | (1,390) | (2,328) | ||
Provision for credit losses | (963) | 3,178 | 2,660 | 8,715 | ||
Allowance for Credit Losses, ending balance | 22,375 | 20,509 | 22,375 | 20,509 | ||
Individually evaluated for impairment | 1,378 | 1,714 | ||||
Collectively evaluated for impairment | 20,997 | 18,795 | ||||
Balance | 22,375 | 20,509 | 22,375 | 20,509 | 22,375 | 20,509 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 4,189 | 4,202 | 4,010 | 3,279 | ||
Recoveries of loans previously charged-off | 2 | 2 | ||||
Net loans (charged-off) recoveries | 2 | 2 | ||||
Provision for credit losses | 1,273 | 59 | 1,450 | 980 | ||
Allowance for Credit Losses, ending balance | 5,462 | 4,261 | 5,462 | 4,261 | ||
Individually evaluated for impairment | 1,005 | 360 | ||||
Collectively evaluated for impairment | 4,457 | 3,901 | ||||
Balance | 5,462 | 4,261 | 5,462 | 4,261 | 5,462 | 4,261 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 1,081 | 1,061 | 1,284 | 1,268 | ||
Recoveries of loans previously charged-off | 2 | 2 | 5 | 5 | ||
Net loans (charged-off) recoveries | 2 | 2 | 5 | 5 | ||
Provision for credit losses | (126) | 47 | (332) | (163) | ||
Allowance for Credit Losses, ending balance | 957 | 1,110 | 957 | 1,110 | ||
Collectively evaluated for impairment | 957 | 1,110 | ||||
Balance | 957 | 1,110 | 957 | 1,110 | 957 | 1,110 |
Construction Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 16,727 | 17,024 | 16,487 | 21,088 | ||
Loans charged-off | (39) | (39) | ||||
Recoveries of loans previously charged-off | 146 | 3 | 491 | 207 | ||
Net loans (charged-off) recoveries | 107 | 3 | 452 | 207 | ||
Provision for credit losses | 4,052 | (513) | 3,947 | (4,781) | ||
Allowance for Credit Losses, ending balance | 20,886 | 16,514 | 20,886 | 16,514 | ||
Individually evaluated for impairment | 2,900 | 300 | ||||
Collectively evaluated for impairment | 17,986 | 16,214 | ||||
Balance | 20,886 | 16,514 | 16,487 | 21,088 | 20,886 | 16,514 |
Home Equity Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 1,216 | 1,556 | 1,328 | 1,292 | ||
Loans charged-off | (121) | (217) | ||||
Recoveries of loans previously charged-off | 1 | 3 | 4 | 11 | ||
Net loans (charged-off) recoveries | 1 | (118) | 4 | (206) | ||
Provision for credit losses | (120) | (69) | (235) | 283 | ||
Allowance for Credit Losses, ending balance | 1,097 | 1,369 | 1,097 | 1,369 | ||
Individually evaluated for impairment | 90 | |||||
Collectively evaluated for impairment | 1,007 | 1,369 | ||||
Balance | 1,097 | 1,369 | 1,097 | 1,369 | 1,097 | 1,369 |
Other Consumer Portfolio Segment [Member] | ||||||
Allowance for Credit Losses, beginning balance | 301 | 235 | 160 | 75 | ||
Loans charged-off | (32) | (12) | (98) | (37) | ||
Recoveries of loans previously charged-off | 6 | 8 | 18 | 24 | ||
Net loans (charged-off) recoveries | (26) | (4) | (80) | (13) | ||
Provision for credit losses | 71 | 109 | 266 | 278 | ||
Allowance for Credit Losses, ending balance | 346 | 340 | 346 | 340 | ||
Individually evaluated for impairment | 81 | 100 | ||||
Collectively evaluated for impairment | 265 | 240 | ||||
Balance | $ 346 | $ 340 | $ 346 | $ 340 | $ 346 | $ 340 |
Loans and Allowance for Credi39
Loans and Allowance for Credit Losses (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Recorded investment in loans: | |||
Loans individually evaluated for impairment | $ 33,534 | $ 34,471 | $ 34,848 |
Loans collectively evaluated for impairment | 6,050,670 | 5,643,422 | 5,447,127 |
Net loans | 6,084,204 | 5,677,893 | 5,481,975 |
Commercial Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 8,309 | 10,437 | 12,448 |
Loans collectively evaluated for impairment | 1,235,875 | 1,190,291 | 1,117,594 |
Net loans | 1,244,184 | 1,200,728 | 1,130,042 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 10,241 | 15,057 | 14,648 |
Loans collectively evaluated for impairment | 2,888,707 | 2,494,460 | 2,536,538 |
Net loans | 2,898,948 | 2,509,517 | 2,551,186 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 6,570 | 2,093 | 2,517 |
Loans collectively evaluated for impairment | 743,010 | 638,777 | 587,910 |
Net loans | 749,580 | 640,870 | 590,427 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 241 | 244 | |
Loans collectively evaluated for impairment | 109,460 | 152,507 | 154,195 |
Net loans | 109,460 | 152,748 | 154,439 |
Construction Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 7,728 | 6,517 | 4,878 |
Loans collectively evaluated for impairment | 963,593 | 1,052,052 | 937,935 |
Net loans | 971,321 | 1,058,569 | 942,813 |
Home Equity Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 594 | 113 | |
Loans collectively evaluated for impairment | 101,304 | 105,096 | 106,743 |
Net loans | 101,898 | 105,096 | 106,856 |
Other Consumer Portfolio Segment [Member] | |||
Recorded investment in loans: | |||
Loans individually evaluated for impairment | 92 | 126 | |
Loans collectively evaluated for impairment | 8,721 | 10,239 | 6,212 |
Net loans | $ 8,813 | $ 10,365 | $ 6,212 |
Loans and Allowance for Credi40
Loans and Allowance for Credit Losses (Details 3) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Loans and leases receivable, net of deferred income | $ 6,084,204 | $ 5,677,893 | $ 5,481,975 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 109,460 | 152,748 | 154,439 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 749,580 | 640,870 | 590,427 |
Other Consumer Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 8,813 | 10,365 | 6,212 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 2,898,948 | 2,509,517 | 2,551,186 |
Home Equity Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 101,898 | 105,096 | 106,856 |
Construction Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 971,321 | 1,058,569 | 942,813 |
Commercial Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 1,244,184 | 1,200,728 | 1,130,042 |
Pass [Member] | |||
Loans and leases receivable, net of deferred income | 5,968,616 | 5,597,416 | 5,407,185 |
Pass [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 108,797 | 151,831 | 153,515 |
Pass [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 720,693 | 630,827 | 577,925 |
Pass [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 8,719 | 10,237 | 6,209 |
Pass [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 2,861,346 | 2,489,407 | 2,527,318 |
Pass [Member] | Home Equity Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 100,618 | 103,484 | 105,126 |
Pass [Member] | Construction Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 963,593 | 1,051,445 | 937,198 |
Pass [Member] | Commercial Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 1,204,850 | 1,160,185 | 1,099,894 |
Watch and Special Mention [Member] | |||
Loans and leases receivable, net of deferred income | 82,054 | 46,006 | 41,255 |
Watch and Special Mention [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 663 | 676 | 680 |
Watch and Special Mention [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 22,317 | 7,950 | 10,399 |
Watch and Special Mention [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 2 | 2 | 3 |
Watch and Special Mention [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 27,361 | 5,053 | 9,220 |
Watch and Special Mention [Member] | Home Equity Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 686 | 1,612 | 1,617 |
Watch and Special Mention [Member] | Construction Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 607 | 737 | |
Watch and Special Mention [Member] | Commercial Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 31,025 | 30,106 | 18,599 |
Substandard [Member] | |||
Loans and leases receivable, net of deferred income | 33,534 | 34,471 | 33,535 |
Substandard [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 241 | 244 | |
Substandard [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 6,570 | 2,093 | 2,103 |
Substandard [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 92 | 126 | |
Substandard [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 10,241 | 15,057 | 14,648 |
Substandard [Member] | Home Equity Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 594 | 113 | |
Substandard [Member] | Construction Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | 7,728 | 6,517 | 4,878 |
Substandard [Member] | Commercial Portfolio Segment [Member] | |||
Loans and leases receivable, net of deferred income | $ 8,309 | $ 10,437 | $ 11,549 |
Loans and Allowance for Credi41
Loans and Allowance for Credit Losses (Details 4) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Nonaccrual loan, recorded investment | [1],[2] | $ 16,609 | $ 17,875 | $ 22,274 |
Commercial Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 3,242 | 2,490 | 2,986 | |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 880 | 10,539 | 10,098 | |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 6,570 | 2,093 | 2,103 | |
Real Estate Mortgage - Residential Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 301 | 555 | 562 | |
Construction Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 4,930 | 2,072 | 6,412 | |
Home Equity Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | 594 | $ 113 | ||
Other Consumer Portfolio Segment [Member] | ||||
Nonaccrual loan, recorded investment | $ 92 | $ 126 | ||
[1] | Excludes troubled debt restructurings ("TDRs") that were performing under their restructured terms totaling $12.3 million at September 30, 2017, as compared to $7.9 million at December 31, 2016 and $2.9 million at September 30, 2016. | |||
[2] | Gross interest income of $176 thousand and $802 thousand would have been recorded for the three and nine months ended September 30, 2017, if nonaccrual loans shown above had been current and in accordance with their original terms while interest actually recorded on such loans was $31 thousand and $56 thousand for the three and nine months ended September 30, 2017. See Note 1 to the Consolidated Financial Statements for a description of the Company's policy for placing loans on nonaccrual status. |
Loans and Allowance for Credi42
Loans and Allowance for Credit Losses (Details 5) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Loans past due | $ 30,249 | $ 31,082 | $ 28,650 |
Current loans | 6,053,955 | 5,646,811 | 5,453,325 |
Total recorded investment in loans | 6,084,204 | 5,677,893 | 5,481,975 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans past due | 3,904 | 1,733 | 726 |
Current loans | 105,556 | 151,015 | 153,713 |
Total recorded investment in loans | 109,460 | 152,748 | 154,439 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans past due | 10,655 | 9,408 | 5,441 |
Current loans | 738,925 | 631,462 | 584,986 |
Total recorded investment in loans | 749,580 | 640,870 | 590,427 |
Other Consumer Portfolio Segment [Member] | |||
Loans past due | 117 | 236 | 24 |
Current loans | 8,696 | 10,129 | 6,188 |
Total recorded investment in loans | 8,813 | 10,365 | 6,212 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans past due | 4,810 | 11,050 | 10,098 |
Current loans | 2,894,138 | 2,498,467 | 2,541,088 |
Total recorded investment in loans | 2,898,948 | 2,509,517 | 2,551,186 |
Home Equity Portfolio Segment [Member] | |||
Loans past due | 1,331 | 1,295 | |
Current loans | 100,567 | 105,096 | 105,561 |
Total recorded investment in loans | 101,898 | 105,096 | 106,856 |
Construction Portfolio Segment [Member] | |||
Loans past due | 5,127 | 3,774 | 6,412 |
Current loans | 966,194 | 1,054,795 | 936,401 |
Total recorded investment in loans | 971,321 | 1,058,569 | 942,813 |
Commercial Portfolio Segment [Member] | |||
Loans past due | 4,305 | 4,881 | 4,654 |
Current loans | 1,239,879 | 1,195,847 | 1,125,388 |
Total recorded investment in loans | 1,244,184 | 1,200,728 | 1,130,042 |
Financing Receivables, 30 to 59 Days Past Due [Member] | |||
Loans past due | 6,713 | 7,608 | 1,743 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans past due | 1,480 | 1,015 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans past due | 817 | 3,987 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans past due | 21 | 101 | 8 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans past due | 3,160 | 511 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Home Equity Portfolio Segment [Member] | |||
Loans past due | 637 | 562 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Construction Portfolio Segment [Member] | |||
Loans past due | 197 | 360 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial Portfolio Segment [Member] | |||
Loans past due | 401 | 1,634 | 1,173 |
Financing Receivables, 60 to 89 Days Past Due [Member] | |||
Loans past due | 6,927 | 5,599 | 4,633 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans past due | 2,123 | 163 | 164 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans past due | 3,268 | 3,328 | 3,338 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans past due | 4 | 9 | 16 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans past due | 770 | ||
Financing Receivables, 60 to 89 Days Past Due [Member] | Home Equity Portfolio Segment [Member] | |||
Loans past due | 100 | 620 | |
Financing Receivables, 60 to 89 Days Past Due [Member] | Construction Portfolio Segment [Member] | |||
Loans past due | 1,342 | ||
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial Portfolio Segment [Member] | |||
Loans past due | 662 | 757 | 495 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | |||
Loans past due | 16,609 | 17,875 | 22,274 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Loans past due | 301 | 555 | 562 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Loans past due | 6,570 | 2,093 | 2,103 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Other Consumer Portfolio Segment [Member] | |||
Loans past due | 92 | 126 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Loans past due | 880 | 10,539 | 10,098 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Home Equity Portfolio Segment [Member] | |||
Loans past due | 594 | 113 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Construction Portfolio Segment [Member] | |||
Loans past due | 4,930 | 2,072 | 6,412 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial Portfolio Segment [Member] | |||
Loans past due | $ 3,242 | $ 2,490 | $ 2,986 |
Loans and Allowance for Credi43
Loans and Allowance for Credit Losses (Details 6) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Unpaid Contractual Principal Balance | $ 28,946 | $ 37,917 | $ 28,468 |
Recorded Investment With No Allowance | 7,132 | 6,954 | 11,361 |
Recorded Investment With Allowance | 21,770 | 27,894 | 14,438 |
Total Recorded Investment | 28,902 | 34,848 | 25,799 |
Related Allowance | 8,700 | 4,471 | 5,599 |
Quarter to Date [Member] | |||
Average Recorded Investment | 27,473 | 38,042 | 37,052 |
Interest Income Recognized | 178 | 97 | 135 |
Year to Date [Member] | |||
Average Recorded Investment | 25,750 | 37,048 | 37,938 |
Interest Income Recognized | 532 | 271 | 406 |
Home Equity Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 594 | 113 | |
Recorded Investment With No Allowance | 494 | ||
Recorded Investment With Allowance | 100 | 113 | |
Total Recorded Investment | 594 | 113 | |
Related Allowance | 90 | 100 | |
Home Equity Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 446 | 117 | 78 |
Interest Income Recognized | 2 | ||
Home Equity Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 223 | 129 | 89 |
Interest Income Recognized | 2 | 2 | |
Commercial Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 6,047 | 15,517 | 8,296 |
Recorded Investment With No Allowance | 2,363 | 2,370 | 2,532 |
Recorded Investment With Allowance | 3,640 | 10,078 | 3,095 |
Total Recorded Investment | 6,003 | 12,448 | 5,627 |
Related Allowance | 3,246 | 1,997 | 2,671 |
Commercial Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 5,977 | 12,838 | 12,620 |
Interest Income Recognized | 31 | 54 | 79 |
Commercial Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 5,790 | 12,879 | 12,755 |
Interest Income Recognized | 97 | 112 | 191 |
Construction Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 4,930 | 4,878 | 2,072 |
Recorded Investment With No Allowance | 1,534 | 4,340 | 1,535 |
Recorded Investment With Allowance | 3,396 | 538 | 537 |
Total Recorded Investment | 4,930 | 4,878 | 2,072 |
Related Allowance | 2,900 | 300 | 522 |
Construction Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 4,808 | 5,146 | 5,091 |
Construction Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 3,736 | 6,542 | 5,174 |
Interest Income Recognized | 14 | ||
Commercial Real Estate - Income Producing Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 10,092 | 14,648 | 14,936 |
Recorded Investment With No Allowance | 828 | 5,048 | |
Recorded Investment With Allowance | 9,264 | 14,648 | 9,888 |
Total Recorded Investment | 10,092 | 14,648 | 14,936 |
Related Allowance | 1,378 | 1,714 | 1,943 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 10,222 | 17,584 | 16,742 |
Interest Income Recognized | 121 | 28 | 54 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 11,350 | 15,298 | 17,533 |
Interest Income Recognized | 373 | 144 | 198 |
Other Consumer Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 92 | 126 | |
Recorded Investment With Allowance | 92 | 126 | |
Total Recorded Investment | 92 | 126 | |
Related Allowance | 81 | 113 | |
Other Consumer Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 93 | 42 | |
Interest Income Recognized | 2 | ||
Other Consumer Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 101 | 6 | 32 |
Interest Income Recognized | 4 | ||
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 6,890 | 2,517 | 2,483 |
Recorded Investment With No Allowance | 1,612 | 1,691 | |
Recorded Investment With Allowance | 5,278 | 2,517 | 792 |
Total Recorded Investment | 6,890 | 2,517 | 2,483 |
Related Allowance | 1,005 | 360 | 350 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 5,623 | 2,108 | 2,233 |
Interest Income Recognized | 26 | 13 | |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | 4,182 | 1,923 | 2,106 |
Interest Income Recognized | 46 | 13 | 13 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | |||
Unpaid Contractual Principal Balance | 301 | 244 | 555 |
Recorded Investment With No Allowance | 301 | 244 | 555 |
Total Recorded Investment | 301 | 244 | 555 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | Quarter to Date [Member] | |||
Average Recorded Investment | 304 | 249 | 246 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | Year to Date [Member] | |||
Average Recorded Investment | $ 368 | $ 271 | $ 249 |
Loans and Allowance for Credi44
Loans and Allowance for Credit Losses (Details 7) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017USD ($)Number | Sep. 30, 2016USD ($)Number | |
Number of loans | Number | 2 | 1 |
Restructed accruing | $ (379) | $ 801 |
Restructed nonaccruing | 26 | |
Troubled debt restructings | (353) | 801 |
Specific allowance | (744) | 363 |
Commercial Portfolio Segment [Member] | ||
Restructed accruing | (356) | 801 |
Restructed nonaccruing | 586 | |
Troubled debt restructings | 230 | 801 |
Specific allowance | (185) | $ 363 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||
Restructed accruing | ||
Restructed nonaccruing | (560) | |
Troubled debt restructings | (560) | |
Specific allowance | (559) | |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||
Restructed accruing | (23) | |
Troubled debt restructings | $ (23) |
Loans and Allowance for Credi45
Loans and Allowance for Credit Losses (Details 8) $ in Thousands | Sep. 30, 2017USD ($)Number | Sep. 30, 2016USD ($)Number |
Number of loans - restructured accruing | Number | 9 | 7 |
Number of loans - restructured nonaccruing | Number | 4 | 2 |
Number of loans | Number | 13 | 9 |
Restructed accruing | $ 12,293 | $ 2,881 |
Restructed nonaccruing | 912 | 5,147 |
Troubled debt restructings | 13,205 | 8,028 |
Specific allowance | 2,026 | 456 |
Restructured and subsequently defaulted | 237 | 4,948 |
Commercial Portfolio Segment [Member] | ||
Restructed accruing | 2,761 | 1,725 |
Restructed nonaccruing | 776 | 199 |
Troubled debt restructings | 3,537 | 1,924 |
Specific allowance | 685 | 456 |
Restructured and subsequently defaulted | 237 | |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||
Restructed accruing | 9,212 | 742 |
Restructed nonaccruing | 136 | |
Troubled debt restructings | 9,348 | 742 |
Specific allowance | 1,341 | |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||
Restructed accruing | 320 | 414 |
Troubled debt restructings | $ 320 | 414 |
Construction Portfolio Segment [Member] | Commercial Real Estate [Member] | ||
Restructed nonaccruing | 4,948 | |
Troubled debt restructings | 4,948 | |
Restructured and subsequently defaulted | $ 4,948 |
Loans and Allowance for Credi46
Loans and Allowance for Credit Losses (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)Number | Sep. 30, 2016USD ($)Number | Sep. 30, 2017USD ($)Number | Dec. 31, 2016USD ($) | |
Loans and leases receivable, deferred fees | $ 23,300 | $ 20,900 | $ 23,300 | $ 22,300 |
Servicing asset at fair value, amount | $ 176,500 | $ 176,500 | 128,800 | |
Minimum debt service coverage | 1.15 | 1.15 | ||
Stress test assumption increase interest rates | 2.00% | 2.00% | ||
Financing receivable, net | $ 6,084,204 | 5,481,975 | $ 6,084,204 | 5,677,893 |
Financing receivable, modifications, recorded investment | 13,205 | $ 8,028 | 13,205 | |
Loans and leases receivable, impaired, interest lost on nonaccrual loans | 176 | 802 | ||
Impaired financing receivable, interest income, accrual method | $ 31 | $ 56 | ||
Financing receivable modifications number of contracts outstanding | Number | 13 | 9 | 13 | |
Financing receivable, modifications, number of contracts | Number | 2 | 1 | ||
Financing receivable modification, amount | $ 251 | $ 801 | ||
Nonperforming Financial Instruments [Member] | ||||
Financing receivable, modifications, recorded investment | 2,900 | $ 2,900 | ||
Nonperforming Financial Instruments [Member] | Fidelity [Member] | ||||
Certain loans acquired in transfer not accounted for as debt securities, carrying amount, net | 476 | 476 | ||
Certain loans acquired in transfer not accounted for as debt securities, outstanding balance | 533 | 533 | ||
Nonperforming Financial Instruments [Member] | Virginia Heritage Bank [Member] | ||||
Certain loans acquired in transfer not accounted for as debt securities, carrying amount, net | 507 | 507 | ||
Certain loans acquired in transfer not accounted for as debt securities, outstanding balance | 1,500 | 1,500 | ||
Performing Financial Instruments [Member] | ||||
Financing receivable, modifications, recorded investment | $ 12,300 | 2,900 | $ 12,300 | 7,900 |
Owner Occupied Commercial Real Estate and Construction [Member] | ||||
Percent of loan portfolio | 13.00% | 13.00% | ||
Income Producing Commercial Real Estate and Real Estate Construction [Member] | ||||
Percent of loan portfolio | 63.00% | 63.00% | ||
Commercial Real Estateand Real Estate Construction Loans [Member] | ||||
Percent of loan portfolio | 76.00% | 76.00% | ||
Commercial Portfolio Segment [Member] | ||||
Percent of loan portfolio | 20.00% | 20.00% | ||
Financing receivable, net | $ 1,244,184 | 1,130,042 | $ 1,244,184 | 1,200,728 |
Financing receivable, modifications, recorded investment | $ 3,537 | 1,924 | $ 3,537 | |
Commercial Portfolio Segment [Member] | SBA Loans [Member] | ||||
Percent of loan portfolio | 2.00% | 2.00% | ||
Commercial Portfolio Segment [Member] | ADC Loans [Member] | ||||
Percent of loan portfolio | 79.00% | 79.00% | ||
Financing receivable, net | $ 1,440,000 | $ 1,440,000 | ||
Consumer Portfolio Segment [Member] | ||||
Percent of loan portfolio | 2.00% | 2.00% | ||
Real Estate Mortgage - Residential Portfolio Segment [Member] | ||||
Financing receivable, net | $ 109,460 | $ 154,439 | $ 109,460 | $ 152,748 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | Real Estate Loan [Member] | ||||
Percent of loan portfolio | 2.00% | 2.00% | ||
Maximum [Member] | ||||
Loan to value ratio | 80.00% | 80.00% | ||
Maximum [Member] | Commercial Portfolio Segment [Member] | ||||
Loan period | 10 years | |||
Amortization term | 25 years | |||
Maximum [Member] | Commercial Portfolio Segment [Member] | Preferred Term [Member] | ||||
Loan period | 7 years | |||
Minimum [Member] | ||||
Interest rate adjustment frequency | 5 years | |||
Minimum [Member] | Commercial Portfolio Segment [Member] | Preferred Term [Member] | ||||
Loan period | 5 years |
Interest Rate Swap Derivative47
Interest Rate Swap Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Notional Amount | $ 250,000 | $ 250,000 |
Fair value | 167 | (692) |
Other Assets [Member] | Interest Rate Swap 1 [Member] | ||
Notional Amount | 75,000 | |
Fair value | $ 116 | |
Pay Rate | 1.71% | |
Maturity | Mar. 31, 2020 | |
Receive rate basis | 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points | |
Other Assets [Member] | Interest Rate Swap 1 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Spread on basis | 0.10% | |
Other Assets [Member] | Interest Rate Swap 3 [Member] | ||
Notional Amount | $ 75,000 | 75,000 |
Fair value | $ 75 | $ 19 |
Pay Rate | 1.92% | 1.92% |
Maturity | Mar. 31, 2022 | Mar. 31, 2022 |
Receive rate basis | 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points | 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points |
Other Assets [Member] | Interest Rate Swap 3 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Spread on basis | 0.10% | 0.10% |
Other Liabilities [Member] | Interest Rate Swap 1 [Member] | ||
Notional Amount | $ 75,000 | |
Fair value | $ (197) | |
Pay Rate | 1.71% | |
Maturity | Mar. 31, 2020 | |
Receive rate basis | 1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points | |
Other Liabilities [Member] | Interest Rate Swap 1 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Spread on basis | 0.10% | |
Other Liabilities [Member] | Interest Rate Swap 2 [Member] | ||
Notional Amount | $ 100,000 | $ 100,000 |
Fair value | $ (24) | $ (514) |
Pay Rate | 1.74% | 1.74% |
Maturity | Apr. 15, 2021 | Apr. 15, 2021 |
Receive rate basis | Federal Funds Effective Rate +10 basis points | Federal Funds Effective Rate +10 basis points |
Other Liabilities [Member] | Interest Rate Swap 2 [Member] | Federal Funds Effective Swap Rate [Member] | ||
Spread on basis | 0.10% | 0.10% |
Interest Rate Swap Derivative48
Interest Rate Swap Derivatives (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Interest Rate Swap 1 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | $ 116 | $ (197) | |
Effective portion reclassified from AOCI into income | (338) | (628) | |
Interest Rate Swap 2 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | (24) | (514) | |
Effective portion reclassified from AOCI into income | (525) | (880) | |
Interest Rate Swap 3 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 75 | 19 | |
Effective portion reclassified from AOCI into income | (458) | (747) | |
Ineffective portion recognized in income on Derivatives | (1) | 1 | |
Interest Rate Swap [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 167 | (692) | |
Effective portion reclassified from AOCI into income | $ 307 | (1,321) | (2,255) |
Ineffective portion recognized in income on Derivatives | $ (1) | $ 1 |
Interest Rate Swap Derivative49
Interest Rate Swap Derivatives (Details 2) - Interest Rate Swap [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Gross amounts of recognized liabilities | $ (92) | $ 711 |
Gross amounts offset in the balance sheet | (75) | (19) |
Net amounts of liabilities presented in the balance sheet | (167) | 692 |
Gross amounts not offset in the balance sheet cash collateral posted | (890) | (550) |
Gross amounts not offset in the balance sheet net amount | (1,057) | 142 |
Counter Party 1 [Member] | ||
Gross amounts of recognized liabilities | 24 | 514 |
Gross amounts offset in the balance sheet | (75) | (19) |
Net amounts of liabilities presented in the balance sheet | (51) | 495 |
Gross amounts not offset in the balance sheet cash collateral posted | (560) | (380) |
Gross amounts not offset in the balance sheet net amount | (611) | 115 |
Counter Party 2 [Member] | ||
Gross amounts of recognized liabilities | (116) | 197 |
Net amounts of liabilities presented in the balance sheet | (116) | 197 |
Gross amounts not offset in the balance sheet cash collateral posted | (330) | (170) |
Gross amounts not offset in the balance sheet net amount | $ (446) | $ 27 |
Interest Rate Swap Derivative50
Interest Rate Swap Derivatives (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Number | Sep. 30, 2017USD ($)Number | Dec. 31, 2016USD ($) | |
Notional amount | $ 250,000 | $ 250,000 | $ 250,000 |
Interest Rate Swap [Member] | |||
Derivative, number of instruments held | Number | 3 | 3 | |
Notional amount | $ 250,000 | $ 250,000 | |
Unrealized gain (loss) on derivatives | 167 | (692) | |
Derivative instruments, gain (loss) reclassified from accumulated oci into income, effective portion, net | $ 307 | (1,321) | (2,255) |
Derivative instruments, gain (loss) reclassification from accumulated oci to income, estimate of time to transfer | 1 year | ||
Derivative instruments, gain (loss) reclassification from accumulated oci to income, estimated net amount to be transferred | $ 657 | ||
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net | 167 | (692) | |
Derivative liability | (167) | (167) | $ 692 |
Derivative liability, fair value of collateral | $ 890 | $ 890 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Real Estate [Roll Forward] | ||||
Balance beginning of period | $ 1,394 | $ 3,152 | $ 2,694 | $ 5,852 |
Real estate acquired from borrowers | 1,145 | 2,500 | 1,145 | 2,500 |
Valuation allowance | (200) | |||
Properties sold | (1,145) | (458) | (2,445) | (2,958) |
Balance end of period | $ 1,394 | $ 5,194 | $ 1,394 | $ 5,194 |
Other Real Estate Owned (Deta52
Other Real Estate Owned (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017USD ($)Number | Sep. 30, 2017USD ($)Number | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Real Estate [Abstract] | |||||||
Proceeds from sale of other real estate | $ 1,200 | $ 2,144 | $ 3,614 | ||||
Number of other real estate owned sold | Number | 2 | 3 | |||||
Other real estate owned | $ 1,394 | $ 1,394 | 5,194 | $ 1,394 | $ 2,694 | $ 3,152 | $ 5,852 |
Gains (losses) on sales of other real estate | $ 60 | $ (301) | $ 657 |
Long-Term Borrowings (Details)
Long-Term Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Less: debt issurance costs | $ (3,193) | $ (3,486) | $ (3,581) |
Long-term borrowings | 216,807 | 216,514 | 216,419 |
Subordinated Notes, 5.75% [Member] | |||
Subordinated notes | 70,000 | 70,000 | 70,000 |
Subordinated Notes, 5.0% [Member] | |||
Subordinated notes | $ 150,000 | $ 150,000 | $ 150,000 |
Long-Term Borrowings (Details N
Long-Term Borrowings (Details Narrative) - USD ($) $ in Thousands | Jul. 26, 2016 | Aug. 05, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Proceeds from issuance of subordinated long-term debt | $ 147,350 | $ 68,800 | |||
Subordinated Debt [Member] | |||||
Face amount | $ 150,000 | $ 70,000 | |||
Debt instrument, interest rate, stated percentage | 5.00% | 5.75% | |||
Payments of debt issuance costs | $ 2,600 | $ 1,200 | |||
Subordinated Notes, 5.0% [Member] | |||||
Debt instrument, interest rate, stated percentage | 5.00% | 5.00% | 5.00% | ||
Subordinated Notes, 5.75% [Member] | |||||
Debt instrument, interest rate, stated percentage | 5.75% | 5.75% | 5.75% |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic: | ||||
Net income | $ 29,874 | $ 24,523 | $ 84,663 | $ 71,990 |
Average common shares outstanding (in shares) | 34,174 | 33,590 | 34,124 | 33,566 |
Basic net income per common share (in dollars per share) | $ 0.87 | $ 0.73 | $ 2.48 | $ 2.14 |
Diluted: | ||||
Adjustment for common share equivalents (in shares) | 164 | 597 | 192 | 596 |
Average common shares outstanding-diluted (in shares) | 34,338 | 34,187 | 34,316 | 34,162 |
Diluted net income per common share (in dollars per share) | $ 0.87 | $ 0.72 | $ 2.47 | $ 2.11 |
Anti-dilutive shares (in shares) | 8 | 8 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 1 Months Ended | 9 Months Ended | |
Feb. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Performance Shares [Member] | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 33,226 | ||
Issued | 36,523 | 36,523 | 34,957 |
Forfeited | (3,097) | (1,731) | |
Vested | (4,314) | ||
Unvested at end | 62,338 | 33,226 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 42.60 | ||
Issued | 57.49 | $ 42.60 | |
Forfeited | 42.60 | 42.60 | |
Vested | 54.92 | ||
Unvested at end | $ 50.45 | $ 42.60 | |
Time Vested Awards [Member] | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 262,966 | 369,093 | |
Issued | 91,097 | 104,775 | |
Forfeited | (1,477) | (7,815) | |
Vested | (187,600) | (195,738) | |
Unvested at end | 164,986 | 270,315 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 33.60 | $ 24.43 | |
Issued | 62.70 | 46.39 | |
Forfeited | 47.69 | 40.17 | |
Vested | 30.07 | 22.53 | |
Unvested at end | $ 53.56 | $ 33.87 |
Stock-Based Compensation (Det57
Stock-Based Compensation (Details 1) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Options, Outstanding: | ||
Beginning balance | 216,859 | 298,740 |
Issued | 3,000 | |
Exercised | (64,420) | (24,458) |
Forfeited | (1,100) | |
Expired | (6,637) | |
Ending balance | 152,439 | 269,545 |
Options, Outstanding, Weighted Average Exercise Price: | ||
Beginning balance | $ 8.80 | $ 9.97 |
Issued | 49.49 | |
Exercised | 7.46 | 13.10 |
Forfeited | 15.48 | |
Expired | 12.87 | |
Ending balance | $ 9.36 | $ 10.03 |
Stock-Based Compensation (Det58
Stock-Based Compensation (Details 2) - $ / shares | 9 Months Ended | |||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Stock options outstanding (in shares) | 152,439 | 216,859 | 269,545 | 298,740 |
Outstanding options, weighted-average exercise price (in dollars per share) | $ 9.36 | $ 8.80 | $ 10.03 | $ 9.97 |
Outstanding options, weighted-average remaining contractual life (Year) | 1 year 6 months 14 days | |||
Stock options exercisable (in shares) | 110,581 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 8.28 | |||
Range 1 [Member] | ||||
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 | |||
Stock options outstanding (in shares) | 101,075 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 5.76 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 1 year 3 months 4 days | |||
Stock options exercisable (in shares) | 66,377 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 5.76 | |||
Range 2 [Member] | ||||
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) | 41,389 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 10.84 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 9 months 7 days | |||
Stock options exercisable (in shares) | 41,389 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 10.84 | |||
Range 3 [Member] | ||||
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 | |||
Stock options outstanding (in shares) | 3,225 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 22.79 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 6 years 7 days | |||
Stock options exercisable (in shares) | 2,065 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 23.18 | |||
Range 4 [Member] | ||||
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) | 6,750 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 47.83 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 8 years 4 months 13 days | |||
Stock options exercisable (in shares) | 750 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 49.49 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected volatility | 24.23% | 31.21% |
Weighted-Average volatility | 24.23% | 31.21% |
Expected term (in years) | 7 years | 7 years |
Risk-free rate | 1.37% | 1.64% |
Weighted-average fair value (grant date) (in dollars per share) | $ 14.27 | $ 16.73 |
Stock-Based Compensation (Det60
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Feb. 28, 2017 | May 31, 2011 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | May 12, 2016 | |
Award vesting period | 3 years | |||||
Options, outstanding, intrinsic value | $ 8,800,000 | |||||
Options, exercises in period, intrinsic value | 3,500,000 | $ 855,000 | ||||
Options, vested in period, fair value | 50,000 | 45,000 | ||||
Stock options compensation not yet recognized, | $ 90,000 | |||||
Compensation cost not yet recognized period for recognition | 2 years 1 month 2 days | |||||
Salaries and Employee Benefits [Member] | ||||||
Allocated share-based compensation expense | $ 4,200,000 | $ 5,200,000 | ||||
The 2016 Plan [Member] | ||||||
Common stock, capital shares reserved for future issuance | 1,000,000 | |||||
The 2011 ESPP [Member] | ||||||
Number of additional shares authorized | 550,000 | |||||
ESPP percentage of market value of offering period | 85.00% | |||||
Number of shares available for grant | 406,081 | |||||
The 2011 ESPP [Member] | Maximum [Member] | ||||||
Maximum employee subscription rate ESPP (percent) | 10.00% | |||||
The 2011 ESPP [Member] | Annually [Member] | Maximum [Member] | ||||||
Amount contributed to ESPP for participants | $ 25,000 | |||||
The 2011 ESPP [Member] | Pay Period [Member] | Minimum [Member] | ||||||
Amount contributed to ESPP for participants | 10 | |||||
The 2011 ESPP [Member] | Offering Period [Member] | Maximum [Member] | ||||||
Amount contributed to ESPP for participants | $ 6,250 | |||||
Restricted Stock [Member] | ||||||
Common stock, grants in period | 91,097 | |||||
Performance Shares [Member] | ||||||
Common stock, grants in period | 36,523 | 36,523 | 34,957 | |||
Award vesting period | 3 years | |||||
Award vesting rights, percentage | 100.00% | |||||
Nonvested awards, number of shares outstanding | 62,338 | 33,226 | 33,226 | |||
Restricted Stock and PRSU [Member] | Stock Plan 2006 [Member] | ||||||
Compensation cost not yet recognized period for recognition | 2 years 1 month 16 days | |||||
Nonvested awards, number of shares outstanding | 227,324 | |||||
Common stock awards, compensation not yet recognized | $ 9,300,000 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Comprehensive Income Details 1 | ||||
Net unrealized gain on securities available-for-sale, before tax | $ 25 | $ (1,512) | $ 2,080 | $ 6,850 |
Less: Reclassification adjustment for net gains included in net income, before tax | (11) | 1 | (542) | (1,123) |
Total unrealized gain, before tax | 14 | (1,511) | 1,538 | 5,727 |
Net unrealized gain (loss) on derivatives, before tax | 557 | 2,927 | 2,186 | (9,132) |
Less: Reclassification adjustment for gains/losses included in net income, before tax | (289) | (777) | (1,308) | 1,519 |
Total unrealized gain (loss) on derivatives, before tax | 268 | 2,150 | 878 | (7,613) |
Other Comprehensive Income (Loss), before tax | 282 | 639 | 2,416 | (1,886) |
Net unrealized gain on securities available-for-sale, tax effect | 10 | (605) | 837 | 2,740 |
Less: Reclassification adjustment for net gains included in net income, tax | (4) | (202) | (449) | |
Total unrealized gain, tax effect | 6 | (605) | 635 | 2,291 |
Net unrealized gain (loss) on derivatives, tax effect | 210 | 1,171 | 836 | (3,654) |
Less: Reclassification adjustment for gains/losses included in net income, tax effect | (106) | (311) | (487) | 608 |
Total unrealized gain (loss) on derivatives, tax effect | 104 | 860 | 349 | (3,046) |
Other Comprehensive Income (Loss), tax effect | 110 | 255 | 984 | (755) |
Net unrealized gain on securities available-for-sale, net of tax | 15 | (907) | 1,243 | 4,110 |
Less: Reclassification adjustment for net gains included in net income, net of tax | (7) | 1 | (340) | (674) |
Total unrealized gain (loss) on investment securities | 8 | (906) | 903 | 3,436 |
Net unrealized gain (loss) on derivatives, net of tax | 347 | 1,756 | 1,350 | (5,478) |
Less: Reclassification adjustment for gains/losses included in net income, net of tax | (183) | (466) | (821) | 911 |
Total unrealized gain (loss) on derivatives | 164 | 1,290 | 529 | (4,567) |
Other comprehensive income (loss) | $ 172 | $ 384 | $ 1,432 | $ (1,131) |
Other Comprehensive Income (D62
Other Comprehensive Income (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Securities Available for Sale | ||||
Beginning balance | $ (1,060) | $ 5,383 | $ (1,955) | $ 1,041 |
Unrealized gain on securities available for sale | 15 | (907) | 1,243 | 4,110 |
Reclassification adjustment for net gains included in net income | (7) | 1 | (340) | (674) |
Total unrealized gain (loss) on investment securities | 8 | (906) | 903 | 3,436 |
Ending balance | (1,052) | 4,477 | (1,052) | 4,477 |
Derivatives | ||||
Beginning balance | (61) | (6,707) | (426) | (850) |
Unrealized gain (loss) on derivatives | 347 | 1,756 | 1,350 | (5,478) |
Reclassification adjustment for amounts included in net income | (183) | (466) | (821) | 911 |
Total unrealized gain (loss) on derivatives | 164 | 1,290 | 529 | (4,567) |
Ending balance | 103 | (5,417) | 103 | (5,417) |
Accumulated Other Comprehensive (Loss) Income | ||||
Beginning balance | (1,121) | (1,324) | (2,381) | 191 |
Other comprehensive income (loss) before reclassifications | 362 | 849 | 2,593 | (1,368) |
Amounts reclassified from accumulated other comprehensive income | (190) | (465) | (1,161) | 237 |
Other comprehensive income (loss) | 172 | 384 | 1,432 | (1,131) |
Ending balance | $ (949) | $ (940) | $ (949) | $ (940) |
Other Comprehensive Income (D63
Other Comprehensive Income (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Realized gain on sale of investment securities | $ 11 | $ 1 | $ 542 | $ 1,123 |
Interest expense derivative deposits | (7,233) | (4,840) | (19,466) | (13,513) |
Income tax benefit (expense) | (17,409) | (15,484) | (50,109) | (44,966) |
Amounts reclassified from accumulated other comprehensive income | (190) | (465) | (1,161) | 237 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Realized gain on sale of investment securities | (11) | (1) | (542) | (1,123) |
Interest expense derivative deposits | (289) | (470) | (1,308) | (952) |
Interest expense derivative borrowings | (306) | (567) | ||
Income tax benefit (expense) | 110 | 311 | 689 | 2,405 |
Amounts reclassified from accumulated other comprehensive income | $ (190) | $ (466) | $ (1,161) | $ (237) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Investment securities | $ 556,026 | $ 538,108 | $ 430,668 |
Loans held for sale | 25,980 | 51,629 | |
Assets measured at a fair value on a recurring basis | 582,260 | 589,851 | |
Liabilities measured at a fair value on a recurring basis | 60 | 747 | |
Interest Rate Swap [Member] | Derivative Financial Instruments, Assets [Member] | |||
Derivative asset | 191 | ||
Derivative Financial Instruments, Liabilities [Member] | Interest Rate Swap [Member] | |||
Derivative liability | 24 | 692 | |
Derivative Financial Instruments, Liabilities [Member] | Mortgage Banking Derivative [Member] | |||
Derivative liability | 36 | 55 | |
US Agency Securities [Member] | |||
Investment securities | 177,918 | 106,142 | |
Residential Mortgage Backed Securities [Member] | |||
Investment securities | 301,526 | 326,239 | |
Loans held for sale | 25,980 | 51,629 | |
Municipal Bonds [Member] | |||
Investment securities | 63,147 | 95,930 | |
Corporate Bonds [Member] | |||
Investment securities | 13,217 | 9,579 | |
Equity Securities [Member] | |||
Investment securities | 218 | 218 | |
Mortgage Banking Derivative [Member] | Derivative Financial Instruments, Assets [Member] | |||
Derivative asset | 63 | ||
Assets measured at a fair value on a recurring basis | 114 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Loans held for sale | 25,980 | 51,629 | |
Assets measured at a fair value on a recurring basis | 580,479 | 588,019 | |
Liabilities measured at a fair value on a recurring basis | 24 | 692 | |
Fair Value, Inputs, Level 2 [Member] | Derivative Financial Instruments, Assets [Member] | |||
Derivative asset | 191 | ||
Fair Value, Inputs, Level 2 [Member] | Derivative Financial Instruments, Liabilities [Member] | Interest Rate Swap [Member] | |||
Derivative liability | 24 | 692 | |
Fair Value, Inputs, Level 2 [Member] | US Agency Securities [Member] | |||
Investment securities | 177,918 | 106,142 | |
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member] | |||
Investment securities | 301,526 | 326,239 | |
Loans held for sale | 25,980 | ||
Fair Value, Inputs, Level 2 [Member] | Municipal Bonds [Member] | |||
Investment securities | 63,147 | 95,930 | |
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds [Member] | |||
Investment securities | 11,717 | 8,079 | |
Fair Value, Inputs, Level 3 [Member] | |||
Assets measured at a fair value on a recurring basis | 1,781 | 1,832 | |
Liabilities measured at a fair value on a recurring basis | 36 | 55 | |
Fair Value, Inputs, Level 3 [Member] | Derivative Financial Instruments, Assets [Member] | |||
Derivative asset | 63 | ||
Fair Value, Inputs, Level 3 [Member] | Derivative Financial Instruments, Liabilities [Member] | Mortgage Banking Derivative [Member] | |||
Derivative liability | 36 | 55 | |
Fair Value, Inputs, Level 3 [Member] | Corporate Bonds [Member] | |||
Investment securities | 1,500 | 1,500 | |
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | |||
Investment securities | $ 218 | 218 | |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative [Member] | Derivative Financial Instruments, Assets [Member] | |||
Derivative asset | $ 114 |
Fair Value Measurements (Deta65
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loans held for sale | $ 25,980 | $ 51,629 |
Residential Mortgage Backed Securities [Member] | ||
Loans held for sale | 25,980 | 51,629 |
Aggregate Unpaid Principal Balance | 25,473 | 51,021 |
Difference | $ 507 | $ 608 |
Fair Value Measurements (Deta66
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Assets - Beginning balance | $ 1,832 | $ 243 |
Realized loss included in earnings - net mortgage banking derivatives | (51) | 90 |
Purchases of available-for-sale securities | 1,500 | |
Principal redemption | (1) | |
Assets - Ending balance | 1,781 | 1,832 |
Liabilities - Beginning balance | 55 | 30 |
Realized loss included in earnings - net mortgage banking derivatives | (19) | 25 |
Liabilities - Ending balance | 36 | 55 |
Other Equity Investments [Member] | ||
Assets - Beginning balance | 1,718 | 219 |
Purchases of available-for-sale securities | 1,500 | |
Principal redemption | (1) | |
Assets - Ending balance | 1,718 | 1,718 |
Mortgage Banking Derivatives [Member] | ||
Assets - Beginning balance | 114 | 24 |
Realized loss included in earnings - net mortgage banking derivatives | (51) | 90 |
Assets - Ending balance | 63 | 114 |
Liabilities - Beginning balance | 55 | 30 |
Realized loss included in earnings - net mortgage banking derivatives | (19) | 25 |
Liabilities - Ending balance | $ 36 | $ 55 |
Fair Value Measurements (Deta67
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other real estate owned | $ 1,394 | $ 2,694 |
Total assets measured at fair value on a nonrecurring basis | 21,596 | 22,894 |
Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||
Impaired loans | 5,885 | 2,133 |
Real Estate Mortgage - Residential Portfolio Segment [Member] | ||
Impaired loans | 301 | 555 |
Home Equity Portfolio Segment [Member] | ||
Impaired loans | 504 | |
Other Consumer Portfolio Segment [Member] | ||
Impaired loans | 11 | 13 |
Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||
Impaired loans | 8,714 | 12,993 |
Construction Portfolio Segment [Member] | ||
Impaired loans | 2,030 | 1,550 |
Commercial Portfolio Segment [Member] | ||
Impaired loans | 2,757 | 2,956 |
Fair Value, Inputs, Level 3 [Member] | ||
Other real estate owned | 1,394 | 2,694 |
Total assets measured at fair value on a nonrecurring basis | 21,596 | 22,894 |
Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate - Owner Occupied Portfolio Segment [Member] | ||
Impaired loans | 5,885 | 2,133 |
Fair Value, Inputs, Level 3 [Member] | Real Estate Mortgage - Residential Portfolio Segment [Member] | ||
Impaired loans | 301 | 555 |
Fair Value, Inputs, Level 3 [Member] | Home Equity Portfolio Segment [Member] | ||
Impaired loans | 504 | |
Fair Value, Inputs, Level 3 [Member] | Other Consumer Portfolio Segment [Member] | ||
Impaired loans | 11 | 13 |
Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate - Income Producing Portfolio Segment [Member] | ||
Impaired loans | 8,714 | 12,993 |
Fair Value, Inputs, Level 3 [Member] | Construction Portfolio Segment [Member] | ||
Impaired loans | 2,030 | 1,550 |
Fair Value, Inputs, Level 3 [Member] | Commercial Portfolio Segment [Member] | ||
Impaired loans | $ 2,757 | $ 2,956 |
Fair Value Measurements (Deta68
Fair Value Measurements (Details 4) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Federal funds sold | $ 8,548 | $ 2,397 | $ 5,262 |
Interest bearing deposits with other banks | 432,156 | 355,481 | 505,087 |
Investment securities | 556,026 | 538,108 | 430,668 |
Loans held for sale | 25,980 | 51,629 | |
Bank owned life insurance | 61,238 | 60,130 | 59,747 |
Interest bearing deposits | 429,247 | 289,122 | $ 297,973 |
Reported Value Measurement [Member] | |||
Cash and due from banks | 8,246 | 10,285 | |
Federal funds sold | 8,548 | 2,397 | |
Interest bearing deposits with other banks | 432,156 | 355,481 | |
Investment securities | 556,026 | 538,108 | |
Federal Reserve and Federal Home Loan Bank stock | 30,980 | 21,600 | |
Loans held for sale | 25,980 | 51,629 | |
Loans, net | 6,021,237 | 5,618,819 | |
Bank owned life insurance | 61,238 | 60,130 | |
Annuity investment | 11,591 | 11,929 | |
Noninterest bearing deposits | 1,843,157 | 1,775,684 | |
Interest bearing deposits | 3,248,118 | 3,191,682 | |
Certificates of deposit | 822,677 | 748,748 | |
Customer repurchase agreements | 73,569 | 68,876 | |
Borrowings | 416,807 | 216,514 | |
Estimate of Fair Value Measurement [Member] | |||
Cash and due from banks | 8,246 | 10,285 | |
Federal funds sold | 8,548 | 2,397 | |
Interest bearing deposits with other banks | 432,156 | 355,481 | |
Investment securities | 556,026 | 538,108 | |
Federal Reserve and Federal Home Loan Bank stock | 30,980 | 21,600 | |
Loans held for sale | 25,980 | 51,629 | |
Loans, net | 6,075,997 | 5,624,084 | |
Bank owned life insurance | 61,238 | 60,130 | |
Annuity investment | 11,591 | 11,929 | |
Noninterest bearing deposits | 1,843,157 | 1,775,684 | |
Interest bearing deposits | 3,248,118 | 3,191,682 | |
Certificates of deposit | 821,892 | 745,985 | |
Customer repurchase agreements | 73,569 | 68,876 | |
Borrowings | 448,768 | 203,657 | |
Fair Value, Inputs, Level 2 [Member] | |||
Loans held for sale | 25,980 | 51,629 | |
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Cash and due from banks | 8,246 | 10,285 | |
Federal funds sold | 8,548 | 2,397 | |
Interest bearing deposits with other banks | 432,156 | 355,481 | |
Investment securities | 554,308 | 536,390 | |
Federal Reserve and Federal Home Loan Bank stock | 30,980 | 21,600 | |
Loans held for sale | 25,980 | 51,629 | |
Bank owned life insurance | 61,238 | 60,130 | |
Annuity investment | 11,591 | 11,929 | |
Noninterest bearing deposits | 1,843,157 | 1,775,684 | |
Interest bearing deposits | 3,248,118 | 3,191,682 | |
Certificates of deposit | 821,892 | 745,985 | |
Customer repurchase agreements | 73,569 | 68,876 | |
Borrowings | 448,768 | 203,657 | |
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | |||
Investment securities | 1,718 | 1,718 | |
Loans, net | 6,021,237 | 5,624,084 | |
Mortgage Banking Derivative [Member] | Reported Value Measurement [Member] | |||
Derivative asset | 63 | 114 | |
Derivative liability | 36 | 55 | |
Mortgage Banking Derivative [Member] | Estimate of Fair Value Measurement [Member] | |||
Derivative asset | 63 | 114 | |
Derivative liability | 36 | 55 | |
Mortgage Banking Derivative [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | |||
Derivative asset | 63 | 114 | |
Derivative liability | 36 | 55 | |
Interest Rate Swap [Member] | |||
Derivative liability | (167) | 692 | |
Interest Rate Swap [Member] | Reported Value Measurement [Member] | |||
Derivative asset | 191 | ||
Derivative liability | 24 | 692 | |
Interest Rate Swap [Member] | Estimate of Fair Value Measurement [Member] | |||
Derivative asset | 191 | ||
Derivative liability | 24 | 692 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Derivative asset | 191 | ||
Derivative liability | $ 24 | $ 692 |
Supplemental Executive Retire69
Supplemental Executive Retirement Plan (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2017 | Sep. 30, 2017USD ($)Number | Sep. 30, 2017USD ($)Number | Dec. 31, 2013USD ($) | |
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Supplemental Executive Retirement and Death Benefit Agreements [Member] | ||||
Time period for calculating base salary under SERP agreements | 5 years | |||
Retirement age | Number | 67 | 67 | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 6 years | |||
Retirement plan monthly instalments | Number | 180 | 180 | ||
Defined benefit plan, net periodic benefit cost (credit) | $ 103 | $ 308 | ||
Purchased Fixed Annuity for Financing Retirement Benefits [Member] | Supplemental Executive Retirement and Death Benefit Agreements [Member] | ||||
Other investments | $ 11,400 | |||
Noninterest income, other | 54 | |||
Purchased Fixed Annuity for Financing Retirement Benefits [Member] | Supplemental Executive Retirement and Death Benefit Agreements [Member] | Other Assets [Member] | ||||
Cash surrender value of life insurance | $ 11,600 | $ 11,600 |