Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 08, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | EAGLE BANCORP INC | ||
Entity Central Index Key | 1,050,441 | ||
Document Type | 10-K | ||
Trading Symbol | EGBN | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | Yes | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,940,000 | ||
Entity Common Stock, Shares Outstanding | 34,417,186 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 6,773 | $ 7,445 |
Federal funds sold | 11,934 | 15,767 |
Interest bearing deposits with banks and other short-term investments | 303,157 | 167,261 |
Investment securities available-for-sale, at fair value | 784,139 | 589,268 |
Federal Reserve and Federal Home Loan Bank stock | 23,506 | 36,324 |
Loans held for sale | 19,254 | 25,096 |
Loans | 6,991,447 | 6,411,528 |
Less allowance for credit losses | (69,944) | (64,758) |
Loans, net | 6,921,503 | 6,346,770 |
Premises and equipment, net | 16,851 | 20,991 |
Deferred income taxes | 33,027 | 28,770 |
Bank owned life insurance | 73,441 | 60,947 |
Intangible assets, net | 105,766 | 107,212 |
Other real estate owned | 1,394 | 1,394 |
Other assets | 88,392 | 71,784 |
Total Assets | 8,389,137 | 7,479,029 |
Deposits: | ||
Noninterest bearing demand | 2,104,220 | 1,982,912 |
Interest bearing transaction | 593,107 | 420,417 |
Savings and money market | 2,949,559 | 2,621,146 |
Time, $100,000 or more | 801,957 | 515,682 |
Other time | 525,442 | 313,827 |
Total deposits | 6,974,285 | 5,853,984 |
Customer repurchase agreements | 30,413 | 76,561 |
Other short-term borrowings | 325,000 | |
Long-term borrowings | 217,296 | 216,905 |
Other liabilities | 58,202 | 56,141 |
Total Liabilities | 7,280,196 | 6,528,591 |
Shareholders' Equity | ||
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 34,387,919 and 34,185,163, respectively | 342 | 340 |
Additional paid in capital | 528,380 | 520,304 |
Retained earnings | 584,494 | 431,544 |
Accumulated other comprehensive loss | (4,275) | (1,750) |
Total Shareholders' Equity | 1,108,941 | 950,438 |
Total Liabilities and Shareholders' Equity | $ 8,389,137 | $ 7,479,029 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 34,387,919 | 34,185,163 |
Common stock, outstanding | 34,387,919 | 34,185,163 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest Income | |||
Interest and fees on loans | $ 368,606 | $ 308,510 | $ 274,488 |
Interest and dividends on investment securities | 17,907 | 12,214 | 9,629 |
Interest on balances with other banks and short-term investments | 6,616 | 3,258 | 1,654 |
Interest on federal funds sold | 157 | 52 | 34 |
Total interest income | 393,286 | 324,034 | 285,805 |
Interest Expense | |||
Interest on deposits | 60,210 | 27,286 | 19,248 |
Interest on customer repurchase agreements | 225 | 197 | 167 |
Interest on short-term borrowings | 3,942 | 748 | 732 |
Interest on long-term borrowings | 11,916 | 11,916 | 7,493 |
Total interest expense | 76,293 | 40,147 | 27,640 |
Net Interest Income | 316,993 | 283,887 | 258,165 |
Provision for Credit Losses | 8,660 | 8,971 | 11,331 |
Net Interest Income After Provision For Credit Losses | 308,333 | 274,916 | 246,834 |
Noninterest Income | |||
Service charges on deposits | 7,014 | 6,364 | 5,821 |
Gain on sale of loans | 5,963 | 9,275 | 11,564 |
Gain on sale of investment securities | 97 | 542 | 1,194 |
Increase in the cash surrender value of bank owned life insurance | 1,507 | 1,711 | 1,554 |
Other income | 8,005 | 11,480 | 7,151 |
Total noninterest income | 22,586 | 29,372 | 27,284 |
Noninterest Expense | |||
Salaries and employee benefits | 67,734 | 67,129 | 67,010 |
Premises and equipment expenses | 15,660 | 15,632 | 15,118 |
Marketing and advertising | 4,566 | 4,095 | 3,495 |
Data processing | 9,714 | 8,220 | 7,747 |
Legal, accounting and professional fees | 9,742 | 5,053 | 3,673 |
FDIC insurance | 3,512 | 2,554 | 2,718 |
Other expenses | 15,783 | 15,869 | 15,255 |
Total noninterest expense | 126,711 | 118,552 | 115,016 |
Income Before Income Tax Expense | 204,208 | 185,736 | 159,102 |
Income Tax Expense | 51,932 | 85,504 | 61,395 |
Net Income | $ 152,276 | $ 100,232 | $ 97,707 |
Earnings Per Common Share | |||
Basic (in dollars per share) | $ 4.44 | $ 2.94 | $ 2.91 |
Diluted (in dollars per share) | $ 4.42 | $ 2.92 | $ 2.86 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 152,276 | $ 100,232 | $ 97,707 |
Other comprehensive income, net of tax: | |||
Unrealized loss on securities available for sale | (3,841) | (840) | (2,280) |
Reclassification adjustment for net gains included in net income | (72) | (336) | (716) |
Total unrealized loss on investment securities | (3,913) | (1,176) | (2,996) |
Unrealized gain (loss) on derivatives | 1,806 | 2,794 | (934) |
Reclassification adjustment for amounts included in net income | (418) | (987) | 1,358 |
Total unrealized gain on derivatives | 1,388 | 1,807 | 424 |
Other comprehensive (loss) income | (2,525) | 631 | (2,572) |
Comprehensive Income | $ 149,751 | $ 100,863 | $ 95,135 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock [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 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 97,707 | 97,707 | ||||
Other comprehensive gain (loss), net of tax | (2,572) | (2,572) | ||||
Stock-based compensation expense | 6,907 | 6,907 | ||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 954 | 955 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 74,215 | |||||
Excess tax benefits realized from stock compensation | 400 | 400 | ||||
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) | (18,490) | |||||
Time based stock awards granted (in shares) | 104,775 | |||||
Issuance of common stock related to employee stock purchase plan | 801 | 801 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 16,962 | |||||
Issuance of common stock in full redemption of warrants | $ 4 | $ (946) | 942 | |||
Issuance of common stock in full redemption of warrants (in shares) | 378,495 | |||||
Ending balance at Dec. 31, 2016 | $ 338 | 513,531 | 331,311 | (2,381) | 842,799 | |
Ending balance (in shares) at Dec. 31, 2016 | 34,023,850 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 100,232 | 100,232 | ||||
Other comprehensive gain (loss), net of tax | 631 | 631 | ||||
Stock-based compensation expense | 5,568 | 5,568 | ||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 371 | 372 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 69,040 | |||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 2 | (2) | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (17,801) | |||||
Time based stock awards granted (in shares) | 91,097 | |||||
Issuance of common stock related to employee stock purchase plan | $ (1) | 836 | 1 | 836 | ||
Issuance of common stock related to employee stock purchase plan (in shares) | 14,684 | |||||
Vesting of performance based stock awards, net of shares withheld for payroll taxes (in shares) | 4,293 | |||||
Ending balance at Dec. 31, 2017 | $ 340 | 520,304 | 431,544 | (1,750) | $ 950,438 | |
Ending balance (in shares) at Dec. 31, 2017 | 34,185,163 | 34,185,163 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 152,276 | $ 152,276 | ||||
Other comprehensive gain (loss), net of tax | (1,851) | (2,525) | ||||
Stock-based compensation expense | 6,494 | 6,494 | ||||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes | $ 1 | 775 | 776 | |||
Issuance of common stock related to options exercised, net of shares withheld for payroll taxes (in shares) | 108,201 | |||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes | $ 1 | (1) | ||||
Vesting of time based stock awards issued at date of grant, net of shares withheld for payroll taxes (in shares) | (14,162) | |||||
Time based stock awards granted (in shares) | 94,344 | |||||
Issuance of common stock related to employee stock purchase plan | 808 | 808 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 14,373 | |||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from AOCI (ASU 2018-02) | 674 | (674) | ||||
Ending balance at Dec. 31, 2018 | $ 342 | $ 528,380 | $ 584,494 | $ (4,275) | $ 1,108,941 | |
Ending balance (in shares) at Dec. 31, 2018 | 34,387,919 | 34,387,919 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 152,276 | $ 100,232 | $ 97,707 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 8,660 | 8,971 | 11,331 |
Depreciation and amortization | 6,969 | 6,883 | 6,226 |
Gains on sale of loans | (5,963) | (9,544) | (11,564) |
Gains on sale of GNMA loans | (342) | (2,450) | |
Securities premium amortization (discount accretion), net | 4,445 | 3,986 | 4,524 |
Origination of loans held for sale | (325,109) | (707,489) | (857,601) |
Proceeds from sale of loans held for sale | 337,256 | 746,016 | 865,028 |
Net increase in cash surrender value of BOLI | (1,507) | (1,466) | (1,554) |
(Increase) decrease in deferred income tax benefit | (3,497) | 18,974 | (5,628) |
Decrease in value of other real estate owned | 200 | ||
Net loss (gain) on sale of other real estate owned | 301 | (682) | |
Net gain on sale of investment securities | (97) | (542) | (1,194) |
Stock-based compensation expense | 6,494 | 5,568 | 6,907 |
Net tax benefits from stock compensation | 110 | 460 | |
Excess tax benefits realized from stock compensation | (400) | ||
Increase in other assets | (17,301) | (19,324) | (5,025) |
(Decrease) increase in other liabilities | 2,061 | 10,348 | 8,545 |
Net cash provided by operating activities | 164,455 | 160,924 | 116,820 |
Cash Flows From Investing Activities: | |||
Decrease in interest bearing deposits with other banks and short-term investments | 2,496 | ||
Purchases of available for sale investment securities | (331,884) | (202,974) | (236,991) |
Proceeds from maturities of available for sale securities | 93,848 | 75,922 | 84,259 |
Proceeds from sale/call of available for sale securities | 36,292 | 73,079 | 94,310 |
Purchases of Federal Reserve and Federal Home Loan Bank stock | (47,872) | (33,008) | (8,502) |
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock | 60,690 | 18,285 | 2,125 |
Net increase in loans | (583,393) | (738,067) | (687,362) |
Purchases of BOLI | (10,000) | ||
Proceeds from sale of other real estate owned | 2,144 | 6,139 | |
Bank premises and equipment acquired | (1,482) | (5,758) | (7,426) |
Net cash used in investing activities | (783,801) | (810,377) | (750,952) |
Cash Flows From Financing Activities: | |||
Increase in deposits | 1,120,301 | 137,870 | 557,670 |
(Decrease) increase in customer repurchase agreements | (46,148) | 7,685 | (3,480) |
(Decrease) increase in short-term borrowings | (325,000) | 325,000 | |
Increase (decrease) in long-term borrowings | 147,586 | ||
Proceeds from exercise of equity compensation plans | 776 | 372 | 955 |
Excess tax benefits realized from stock compensation | 400 | ||
Proceeds from employee stock purchase plan | 808 | 836 | 801 |
Net cash provided by financing activities | 750,737 | 471,763 | 703,932 |
Net Increase (Decrease) In Cash and Cash Equivalents | 131,391 | (177,690) | 69,800 |
Cash and Cash Equivalents at Beginning of Period | 190,473 | 368,163 | 298,363 |
Cash and Cash Equivalents at End of Period | 321,864 | 190,473 | 368,163 |
Supplemental Cash Flows Information: | |||
Interest paid | 73,806 | 39,772 | 24,031 |
Income taxes paid | $ 55,200 | 69,200 | 66,150 |
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 | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated. The investment in subsidiaries is recorded on the Company’s books (Parent Only) on the basis of its equity in the net assets of the subsidiary. The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America (“GAAP”) and to general practices in the banking industry. Certain reclassifications have been made to amounts previously reported to conform to the classification made in 2018. The following is a summary of the significant accounting policies. Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily FHA loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of December 31, 2018, the Bank offers its products and services through twenty 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, had provided subordinated financing for the acquisition, development and construction of real estate projects; these transactions involved 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. Business Combinations Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “ Business Combinations Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less. Loans Held for Sale The Company regularly engages in sales of residential mortgage loans held for sale and the guaranteed portion of SBA loans originated by the Bank. The Company has elected to carry loans held for sale at fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the Consolidated Statements of Operations. The Company’s current practice is to sell residential mortgage loans held for sale on a servicing released basis, and, therefore, it has no intangible asset recorded in the normal course of business for the value of such servicing as of December 31, 2018 and December 31, 2017. 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 the date of transfer. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an excess servicing asset, which is computed on a loan by loan basis with the unamortized amount being included in intangible assets in the Consolidated Balance Sheets. This excess servicing asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in other income in the Consolidated Statements of Operations. The Company originates multifamily FHA loans through the Department of Housing and Urban Development’s Multifamily Accelerated Program (“MAP”). The Company securitizes these loans through the Government National Mortgage Association (”Ginnie Mae”) MBS I program and sells the resulting securities in the open market to authorized dealers in the normal course of business and generally retains the MSRs for a period of time before the MSRs are packaged into a portfolio and sold. When servicing is retained on multifamily FHA loans securitized and sold, the Company computes an excess servicing asset on a loan by loan basis with the unamortized amount being included in Intangible assets in the Consolidated Balance Sheets. Unamortized multifamily FHA MSRs totaled $282 thousand as of December 31, 2018 and $596 thousand as of December 31, 2017. Noninterest Income includes gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of multifamily FHA loans underlying the Ginnie Mae securities. Revenue from servicing commercial multifamily FHA mortgages is recognized as earned based on the specific contractual terms of the underlying servicing agreements, along with amortization of and changes in impairment of mortgage servicing rights. Investment Securities The Company has no securities classified as trading, or as held-to-maturity. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations. Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include the: (1) duration and magnitude of the decline in value; (2) financial condition of the issuer or issuers; and (3) structure of the security. The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes. Loans Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan. Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures. Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (90 days or less) provided eventual collection of all amounts due is expected. The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral. In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis. 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 was carefully monitored. The loans were carried on the balance sheet at amounts outstanding. ECV recorded no additional interest on higher risk loan transactions during 2018, 2017, or 2016 (although normal interest income was recorded) and had no transactions outstanding as of December 31, 2018 compared to three higher risk loan transactions outstanding as of December 31, 2017, amounting to $7.7 million. 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 if collateral dependent otherwise discounted cash flows. 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 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. The review of the adequacy of the Allowance for Credit Losses includes an assessment of the fair value adjustment for acquired loans in accordance with generally accepted accounting principles. 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 and MSRs that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which must be conducted at least annually or upon the occurrence of a triggering event. The Company 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. Determining the fair value of a reporting unit under the goodwill impairment test is judgmental and often involves 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, 2018. 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. With the exception of forward commitment contracts discussed above under Loans Held for Sale, 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. 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 or stand-alone derivatives, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (a Consolidated Balance Sheet component of shareholders’ equity) 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 Statement of Cash Flows 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 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. Please refer to Note 9 to the Consolidated Financial Statements for further detail. 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 available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents. Stock-Based Compensation In accordance with ASC Topic 718, “Compensation,” Note 17 New Authoritative Accounting Guidance Accounting Standards Adopted in 2018 ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage servicing activities, as these activities are subject to other GAAP discussed elsewhere within our disclosures. Substantially all of the Company’s revenue is generated from contracts with customers. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of noninterest income are as follows: ● Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. ● Other Fees – generally, the Company receives compensation when a customer that it refers opens an account with certain third-parties. This category includes credit card, investment advisory, and interchange fees. The timing and amount of revenue recognition is not materially impacted by the new standard. ● Sale of OREO – ASU 2014-09 prescribes derecognition requirements for the sale of OREO that are less prescriptive than existing derecognition requirements. Previously, the Company was required to assess 1) the adequacy of a buyer’s initial and continuing investments and 2) the seller’s continuing involvement with the property. ASU 2014-09 requires an entity to assess whether it is “probable” that it will collect the consideration to which it will be entitled in exchange for transferring the asset to the customer. The new requirements could result in earlier revenue recognition; however, such sales are infrequent and the impact of this change is not considered material to our financial statements. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals based on fee schedules. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not have contract balances material to our financial statements. As of December 31, 2018 and 2017, the Company did not have any significant contract balances. In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. ASU 2016-01, “ Financial Instruments—(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Note 24 ASU 2016-15 “Statement of Cash Flows (Topic 230)” ASU 2017-04, “ Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2018-02, “ Income Statement - Reporting Comprehensive Income (Topic 220)- Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Accounting Standards Pending Adoption ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 has, among other things, required lessees to recognize a lease liability, which is a lessee’s obligation to make |
Cash and Due from Banks
Cash and Due from Banks | 12 Months Ended |
Dec. 31, 2018 | |
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 2018, 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 | 12 Months Ended |
Dec. 31, 2018 | |
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 December 31, 2018 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 260,150 $ 228 $ 4,033 $ 256,345 Residential mortgage backed securities 477,949 1,575 7,293 472,231 Municipal bonds 45,814 439 484 45,769 Corporate bonds 9,503 79 6 9,576 Other equity investments 218 — — 218 $ 793,634 $ 2,321 $ 11,816 $ 784,139 December 31, 2017 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 198,115 $ 283 $ 2,414 $ 195,984 Residential mortgage backed securities 322,067 187 4,418 317,836 Municipal bonds 60,976 1,295 214 62,057 Corporate bonds 13,010 163 — 13,173 Other equity investments 218 — — 218 $ 594,386 $ 1,928 $ 7,046 $ 589,268 In addition, at December 31, 2018 and December 31, 2017, the Company held $23.5 million and $36.3 million in equity securities, respectively, in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost. The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.6 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of December 31, 2018 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2018 and 2017 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2018 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 58 $ 72,679 $ 533 $ 144,636 $ 3,500 $ 217,315 $ 4,033 Residential mortgage backed securities 151 61,199 527 225,995 6,766 287,194 7,293 Municipal bonds 11 4,299 50 17,041 434 21,340 484 Corporate bonds 1 1,494 6 — — 1,494 6 221 $ 139,671 $ 1,116 $ 387,672 $ 10,700 $ 527,343 $ 11,816 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2017 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 38 $ 102,264 $ 1,073 $ 55,093 $ 1,341 $ 157,357 $ 2,414 Residential mortgage backed securities 137 152,350 1,306 147,953 3,112 300,303 4,418 Municipal bonds 8 17,446 214 — — 17,446 214 183 $ 272,060 $ 2,593 $ 203,046 $ 4,453 $ 475,106 $ 7,046 The amortized cost and estimated fair value of investments available-for-sale at December 31, 2018 and 2017 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. December 31, 2018 December 31, 2017 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 128,148 $ 125,545 $ 109,893 $ 108,198 After one year through five years 119,856 118,883 74,106 73,916 Five years through ten years 12,146 11,917 14,116 13,870 Residential mortgage backed securities 477,949 472,231 322,067 317,836 Municipal bonds maturing: One year or less 8,097 8,167 5,068 5,171 After one year through five years 15,025 15,081 19,405 19,879 Five years through ten years 21,626 21,385 35,432 35,846 After ten years 1,066 1,136 1,071 1,161 Corporate bonds maturing: After one year through five years 8,003 8,076 11,510 11,673 After ten years 1,500 1,500 1,500 1,500 Other equity investments 218 218 218 218 $ 793,634 $ 784,139 $ 594,386 $ 589,268 In 2018, gross realized gains on sales of investment securities were $391 thousand and gross realized losses on sales of investment securities were $294 thousand. In 2017, gross realized gains on sales of investment securities were $796 thousand and gross realized losses on sales of investment securities were $254 thousand. In 2016, gross realized gains on sales of investment securities were $1.4 million and gross realized losses on sales of investment securities were $188 thousand. Proceeds from sales and calls of investment securities for 2018, 2017 and 2016 were $36.3 million, $73.1 million, and $94.3 million, respectively. The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at December 31, 2018 was $528.2 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of December 31, 2018 and December 31, 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Loans and Allowance for Credit Losses | Note 4 - Loans and Allowance for Credit Losses The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets. Loans, net of unamortized net deferred fees, at December 31, 2018 and 2017 are summarized by type as follows: December 31, 2018 December 31, 2017 (dollars in thousands) Amount % Amount % Commercial $ 1,553,112 22 % $ 1,375,939 21 % Income producing - commercial real estate 3,256,900 46 % 3,047,094 48 % Owner occupied - commercial real estate 887,814 13 % 755,444 12 % Real estate mortgage - residential 106,418 2 % 104,357 2 % Construction - commercial and residential 1,039,815 15 % 973,141 15 % Construction - C&I (owner occupied) 57,797 1 % 58,691 1 % Home equity 86,603 1 % 93,264 1 % Other consumer 2,988 — 3,598 — Total loans 6,991,447 100 % 6,411,528 100 % Less: allowance for credit losses (69,944 ) (64,758 ) Net loans $ 6,921,503 $ 6,346,770 Unamortized net deferred fees amounted to $26.5 million and $23.9 million at December 31, 2018 and 2017, of which $60 thousand and $93 thousand at December 31, 2018 and 2017, respectively, represented net deferred costs on home equity loans. Loans acquired from Virginia Heritage Bank (“Virginia Heritage”) totaled $804 million at fair value, comprised of $801 million of loans that were not considered impaired at the acquisition date and $3.0 million of loans that were determined to be impaired at the time of acquisition. The impaired loans were accounted for in accordance with ASC Topic 310-30 “Accounting for Certain Loans or Debt Securities Acquired in a Transfer” As of December 31, 2018 and 2017, the Bank serviced $111.1 million and $195.3 million, respectively, of multifamily FHA loans, SBA loans and other loan participations, which are not reflected as loan balances on the Consolidated Balance Sheets. Loan Origination/Risk Management The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations. The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and income producing. At December 31, 2018, owner occupied commercial real estate and construction - C&I (owner occupied) represent approximately 14% of the loan portfolio while non-owner occupied commercial real estate and real estate construction represented approximately 61% of the loan portfolio. The combined owner occupied and commercial real estate loans represented approximately 75% of the loan portfolio. Real estate also serves as collateral for loans made for other purposes, resulting in 85% of all loans being secured by real estate. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank typically requires a maximum loan to value of 80% 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 22% of the loan portfolio at December 31, 2018 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. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA as well as internal loan size guidelines. Approximately 1% of the loan portfolio at December 31, 2018 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 22 months. These credits represent first liens on residential property loans originated by the Bank. While the Bank’s general practice is to originate and sell (servicing released) loans made by its Residential Lending department, from time to time certain loan characteristics do not meet the requirements of third party investors and these loans are instead maintained in the Bank’s portfolio until they are resold to another investor at a later date or mature. Loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required. Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects. Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and; 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination. Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months. Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition. Commercial permanent loans are generally secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels. Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 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 $1.62 billion at December 31, 2018. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 70% of the outstanding ADC loan portfolio at December 31, 2018. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. The following tables detail activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2018 and 2017. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total Year Ended December 31, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (3,491 ) (121 ) (132 ) — (1,160 ) — (81 ) (4,985 ) Recoveries of loans previously charged-off 340 2 3 6 1,009 133 18 1,511 Net loans (charged-off) recoveries (3,151 ) (119 ) (129 ) 6 (151 ) 133 (63 ) (3,474 ) Provision for credit losses 5,906 2,777 437 15 (166 ) (304 ) (5 ) 8,660 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 For the Year Ended December 31, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,803 $ 2,465 $ 600 $ — $ 1,050 $ — $ — $ 8,918 Collectively evaluated for impairment 11,054 25,569 5,642 965 17,125 599 72 61,026 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Year Ended December 31, 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 (747 ) (1,470 ) — — (2,158 ) (100 ) (100 ) (4,575 ) Recoveries of loans previously charged-off 681 80 3 6 492 5 21 1,288 Net loans (charged-off) recoveries (66 ) (1,390 ) 3 6 (1,666 ) (95 ) (79 ) (3,287 ) Provision for credit losses (1,532 ) 5,661 1,921 (346 ) 3,671 (463 ) 59 8,971 Ending balance $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 For the Year Ended December 31, 2017 Allowance for credit losses: Individually evaluated for impairment $ 3,259 $ 2,380 $ 1,382 $ — $ 500 $ — $ 80 $ 7,601 Collectively evaluated for impairment 9,843 22,996 4,552 944 17,992 770 60 57,157 Ending balance $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 The Company’s recorded investments in loans as of December 31, 2018 and December 31, 2017 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 - Commercial Owner Occupied - Commercial Real Estate Construction - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total December 31, 2018 Recorded investment in loans: Individually evaluated for impairment $ 8,738 $ 61,747 $ 5,307 $ 1,228 $ 7,012 $ 487 $ — $ 84,519 Collectively evaluated for impairment 1,544,374 3,195,153 882,507 105,190 1,090,600 86,116 2,988 6,906,928 Ending balance $ 1,553,112 $ 3,256,900 $ 887,814 $ 106,418 $ 1,097,612 $ 86,603 $ 2,988 $ 6,991,447 December 31, 2017 Recorded investment in loans: Individually evaluated for impairment $ 8,726 $ 10,192 $ 5,501 $ 478 $ 4,709 $ 494 $ 91 $ 30,191 Collectively evaluated for impairment 1,367,213 3,036,902 749,943 103,879 1,027,123 92,770 3,507 6,381,337 Ending balance $ 1,375,939 $ 3,047,094 $ 755,444 $ 104,357 $ 1,031,832 $ 93,264 $ 3,598 $ 6,411,528 At December 31, 2018, nonperforming loans acquired from Fidelity & Trust Financial Corporation (“Fidelity”) and Virginia Heritage have a carrying value of $282 thousand and $202 thousand, respectively, and an unpaid principal balance of $332 thousand and $995 thousand, 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 December 31, 2018 and 2017. Watch and Total (dollars in thousands) Pass Special Mention Substandard Doubtful Loans December 31, 2018 Commercial $ 1,505,477 $ 25,584 $ 22,051 $ — $ 1,553,112 Income producing - commercial real estate 3,182,903 1,536 82,885 — 3,256,900 Owner occupied - commercial real estate 844,286 38,221 5,307 — 887,814 Real estate mortgage 3 residential 104,543 647 1,228 — 106,418 Construction - commercial and residential 1,090,600 — 7,012 — 1,097,612 Home equity 85,434 682 487 — 86,603 Other consumer 2,988 — — — 2,988 Total $ 6,816,231 $ 66,670 $ 118,970 $ — $ 6,991,447 December 31, 2017 Commercial $ 1,333,050 $ 34,163 $ 8,726 $ — $ 1,375,939 Income producing - commercial real estate 3,033,046 3,856 10,192 — 3,047,094 Owner occupied - commercial real estate 696,754 53,189 5,501 — 755,444 Real estate mortgage - residential 103,220 659 478 — 104,357 Construction - commercial and residential 1,027,123 — 4,709 — 1,031,832 Home equity 92,084 686 494 — 93,264 Other consumer 3,505 2 91 — 3,598 Total $ 6,288,782 $ 92,555 $ 30,191 $ — $ 6,411,528 Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents, by class of loan, information related to nonaccrual loans as of December 31, 2018 and 2017. (dollars in thousands) December 31, 2018 December 31, 2017 Commercial $ 7,115 $ 3,493 Income producing - commercial real estate 1,766 832 Owner occupied - commercial real estate 2,368 5,501 Real estate mortgage - residential 1,510 775 Construction - commercial and residential 3,031 2,052 Home equity 487 494 Other consumer — 91 Total nonaccrual loans (1)(2) $ 16,277 $ 13,238 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $24.0 million at December 31, 2018, and $12.3 million at December 31, 2017. (2) Gross interest income of $1.0 million and $939 thousand would have been recorded in 2018 and 2017, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $265 thousand and $101 thousand at December 31, 2018 and 2017, respectively. 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 December 31, 2018 and 2017. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 December 31, 2017 Commercial $ 2,705 $ 748 $ 3,493 $ 6,946 $ 1,368,993 $ 1,375,939 Income producing - commercial real estate 4,398 6,930 832 12,160 3,034,934 3,047,094 Owner occupied - commercial real estate 522 3,906 5,501 9,929 745,515 755,444 Real estate mortgage – residential 6,993 1,244 775 9,012 95,345 104,357 Construction - commercial and residential — 5,268 2,052 7,320 1,024,512 1,031,832 Home equity 307 — 494 801 92,463 93,264 Other consumer 45 6 91 142 3,456 3,598 Total $ 14,970 $ 18,102 $ 13,238 $ 46,310 $ 6,365,218 $ 6,411,528 Impaired Loans Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. The following table presents, by class of loan, information related to impaired loans for the years ended December 31, 2018 and 2017. Unpaid Recorded Recorded 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 December 31, 2018 Commercial $ 8,613 $ 2,057 $ 6,084 $ 8,141 $ 4,803 $ 10,306 $ 8,359 $ (126 ) $ 190 Income producing - commercial real estate 21,402 1,720 19,682 21,402 2,465 15,331 12,309 189 550 Owner occupied - commercial real estate 5,731 4,361 1,370 5,731 600 5,746 6,011 47 196 Real estate mortgage – residential 1,510 1,510 — 1,510 — 1,516 1,688 — 2 Construction - commercial and residential 3,031 3,031 — 3,031 1,050 3,031 2,028 — 68 Home equity 487 487 — 487 — 487 491 — — Other consumer — — — — — 46 69 — — Total $ 40,774 $ 13,166 $ 27,136 $ 40,302 $ 8,918 $ 36,463 $ 27,836 $ 110 $ 1,006 December 31, 2017 Commercial $ 5,644 $ 1,777 $ 3,748 $ 5,525 $ 3,259 $ 5,764 $ 5,765 $ 48 $ 145 Income producing - commercial real estate 10,044 781 9,263 10,044 2,380 10,068 10,127 120 493 Owner occupied - commercial real estate 6,596 1,095 5,501 6,596 1,382 6,743 5,210 27 73 Real estate mortgage – residential 775 775 — 775 — 538 423 17 17 Construction - commercial and residential 2,052 1,534 518 2,052 500 3,491 3,731 (14 ) — Home equity 494 494 — 494 — 544 346 — 2 Other consumer 91 — 91 91 80 92 93 — — Total $ 25,696 $ 6,456 $ 19,121 $ 25,577 $ 7,601 $ 27,240 $ 25,695 $ 198 $ 730 Modifications A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. As of December 31, 2018, all performing TDRs were categorized as interest-only modifications. Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. The following table presents, by class, the recorded investment of loans modified in TDRs held by the Company during the years ended December 31, 2018 and 2017. For the Year Ended December 31, 2018 (dollars in thousands) Number of Commercial Income Producing - Commercial Real Estate Owner Occupied - Commercial Real Estate Construction - Commercial Real Estate Total Troubled debt restructurings Restructured accruing 9 $ 1,026 $ 19,636 $ 3,363 $ — $ 24,025 Restructured nonaccruing 3 544 — — — 544 Total 12 $ 1,570 $ 19,636 $ 3,363 $ — $ 24,569 Specific allowance $ — $ 3,000 $ — $ — $ 3,000 Restructured and subsequently defaulted $ 408 $ 937 $ — $ — $ 1,345 For the Year Ended December 31, 2017 (dollars in thousands) Number of Contracts Commercial Income Producing - Commercial Real Estate Owner Occupied - Commercial Real Estate Construction - Commercial Real Estate Total Troubled debt restructings Restructured accruing 9 $ 2,032 $ 9,212 $ 1,095 $ — $ 12,339 Restructured nonaccruing 5 867 121 — — 988 Total 14 $ 2,899 $ 9,333 $ 1,095 $ — $ 13,327 Specific allowance $ 595 $ 2,350 $ — $ — $ 2,945 Restructured and subsequently defaulted $ 237 $ — $ — $ — $ 237 The Company had twelve TDRs at December 31, 2018, totaling approximately $24.6 million, as compared to fourteen TDRs totaling approximately $13.3 million at December 31, 2017. At December 31, 2018, nine of these TDR loans, totaling approximately $24.0 million, are performing under their modified terms, as compared to the same period in 2017, there were nine performing TDR loans totaling approximately $12.3 million. During 2018, there were two performing TDRs totaling $460 thousand that defaulted on their modified terms which were reclassified to nonperforming loans, as compared to the same period in 2017, there were five performing TDR loans totaling approximately $988 thousand that defaulted on their modified terms and were reclassified to nonperforming loans. A default is considered to have occurred once the TDR is past due 90 days or more, or it has been placed on nonaccrual. During 2018 there were four defaulted loans totaling approximately $1.4 million that were charged off during the year, as compared to the same period in 2017, there was one defaulted loan totaling approximately $237 thousand that was charged off. There were two loan payoffs on performing loans in 2018 totaling approximately $3.9 million that were modified during the year. During 2018, there was a pay down of approximately $176 thousand on one nonperforming loan totaling approximately $183 thousand at December 31, 2017. During 2017, there was a pay down of approximately $4.8 million resulting from the sale of the underlying collateral on one nonperforming loan totaling approximately $4.9 million at December 31, 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 in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. During 2018, there were two loans modified in a TDR totaling approximately $12.8 million, as compared to the same period in 2017, there were four loans totaling approximately $5.3 million modified in a TDR. The criteria used to determine if a loan should be considered for charge off relates to its ultimate collectability includes the following: ● All or a portion of the loan is deemed uncollectible; ● Repayment is dependent upon secondary sources, such as liquidation of collateral, other assets, or judgment liens that may require an indefinite time period to collect. Loans may be identified for charge off in whole or in part based upon an impairment analysis consistent with ASC 310. If all or a portion of a loan is deemed uncollectible, such amount shall be charged off in the month in which the loan or portion thereof is determined to be uncollectible. Loans approved for non-accrual status, or charge off, are managed by the Chief Credit Officer or as dictated by the Directors Loan Committee and/or Credit Review Committee. The Chief Credit Officer is expected to position the loan in the best possible posture for recovery, including, among other actions, liquidating collateral, obtaining additional collateral, filing suit to obtain judgment or restructuring of repayment terms. A review of charged off loans is made on a monthly basis to assess the possibility of recovery from renewed collection efforts. All charged off loans that are deemed to have the possibility of recovery, whether partial or full, shall be actively pursued. Charged off loans that are deemed uncollectible will be placed in an inactive file with documentation supporting the suspension of further collection efforts. In the process of collecting problem loans the Bank may resort to the acquisition of collateral through foreclosure and repossession actions, or may accept the transfer of assets in partial or full satisfaction of the debt. These actions may in turn result in the necessity of carrying real property or chattels as an asset of the Company pending sale. For purchased loans acquired that are not deemed impaired at acquisition, credit marks representing the principal losses expected over the life of the loans are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit mark. The differences between the initial fair value and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans. The following table presents changes in the credit mark accretable yield, which includes income recognized from contractual interest cash flows, for the dates indicated. (dollars in thousands) 2018 2017 Balance at January 1, $ (2,459 ) $ (4,444 ) Net reclassifications from nonaccretable yield — — Accretion 964 1,985 Balance at December 31, $ (1,495 ) $ (2,459 ) Related Party Loans Certain directors and executive officers have had loan transactions with the Company. Such loans were made in the ordinary course of the Company’s lending business, we |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 5 - Premises and Equipment Premises and equipment include the following at December 31: (dollars in thousands) 2018 2017 Leasehold improvements $ 31,026 $ 31,451 Furniture and equipment 31,168 29,667 Less accumulated depreciation and amortization (45,343 ) (40,127 ) Total premises and equipment, net $ 16,851 $ 20,991 Total depreciation and amortization expense for the years ended December 31, 2018, 2017 and 2016, was $5.6 million, $5.4 million and $5.0 million, respectively. The Company leases banking and office space in 29 locations under non-cancelable lease arrangements accounted for as operating leases. The initial lease periods range from five to ten years and provide for one or more five year renewal options. The leases in some cases provide for scheduled annual rent escalations and require that the Bank (lessee) pay certain operating expenses applicable to the leased space. Rent expense applicable to operating leases amounted to $8.3 million for the year 2018, and $8.5 million for each year 2017, and 2016, as the company has completed some consolidation and “right-sizing” of its banking offices network. The Company subleased three leased premises during 2018, and four leased premises during 2017 and 2016. The Company recorded $574 thousand, $455 thousand, and $579 thousand of sublease income as a reduction of rent expense during 2018, 2017, and 2016, respectively. At December 31, 2018, future minimum lease payments under non-cancelable operating leases having an initial term in excess of one year are as follows: Years ending December 31: (dollars in thousands) Amount 2019 $ 8,435 2020 7,700 2021 7,611 2022 7,108 2023 6,750 Thereafter 29,138 Total minimum lease payments $ 66,742 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 – Intangible Assets Intangible assets are included in the Consolidated Balance Sheets as a separate line item, net of accumulated amortization and consist of the following items: Gross Net Intangible Accumulated FHA Intangible (dollars in thousands) Assets Additions Amortization MSR Sales Assets December 31, 2018 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (6,312 ) — 758 Excess servicing (3) 1,465 838 (1,053 ) (672 ) 578 Non-compete agreements (4) 345 0 (83 ) — 262 $ 113,048 $ 838 $ (7,448 ) $ (672 ) $ 105,766 December 31, 2017 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (5,355 ) — 1,715 Excess servicing (3) 472 993 (481 ) — 984 Non-compete agreements (4) — 345 — — 345 $ 111,710 $ 1,338 $ (5,836 ) $ — $ 107,212 The aggregate amortization expense was $1.6 million, $1.5 million, and $1.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. (1) The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately $360 thousand. Based on allowable adjustments through August 31, 2009, the unidentified intangible (goodwill) amounted to approximately $2.2 million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately $102 million. (2) In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price to core deposit intangibles which were $2.3 million and $4.6 million, respectively, based off of an independent evaluation and is included in intangible assets, net of accumulated amortization on the Consolidated Balance Sheets. The initial amount recorded for the Fidelity acquisition was $2.3 million. The amount of the core deposit intangible relating to the Fidelity acquisition was fully amortized at December 31, 2018, as a component of other noninterest expense. The initial amount recorded for the Virginia Heritage acquisition was $4.6 million. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at December 31, 2018 was $758 thousand, which is being amortized over its remaining economic life through 2020 as a component of other noninterest expense. (3) The Company recognizes a servicing asset for the computed value of servicing fees on the sale of multifamily FHA loans and the sale of the guaranteed portion of SBA loans. Assumptions related to loan terms and amortization is made to arrive at the initial recorded values, which are included in other assets. During 2018, the Company sold a portion of its FHA mortgage servicing rights totaling $672 thousand for a net loss of $71 thousand. (4) The Company entered into a non-compete agreement for three years with its former Vice Chairman of the Bank. The amount of the non-compete intangible was $262 thousand as of December 31, 2018, which is being amortized over its remaining term through 2020 as a component of professional fees. The future estimated annual amortization expense is presented below: Years ending December 31: (dollars in thousands) Amount 2019 1,051 2020 155 2021 71 2022 71 2023 71 Thereafter 179 Total annual amortization $ 1,598 |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2018 | |
Real Estate [Abstract] | |
Other Real Estate Owned | Note 7 – Other Real Estate Owned The activity within OREO for the years ended December 31, 2018 and 2017 is presented in the table below. There was one residential real estate loan totaling $487 thousand in the process of foreclosure as of December 31, 2018. For the year ended December 31, 2018, there were no sales of OREO, as compared to December 31, 2017, the proceeds on sales of OREO were $2.1 million resulting from the sale of three foreclosed properties, respectively. For the year ended December 31, 2018, there were no sales of OREO compared to a net loss on sales of OREO of $301 thousand for the year ended December 31, 2017. Year Ended December 31, (dollars in thousands) 2018 2017 Balance at January 1, $ 1,394 $ 2,694 Real estate acquired from borrowers — 1,145 Properties sold — (2,445 ) Ending balance $ 1,394 $ 1,394 |
Mortgage Banking Derivatives
Mortgage Banking Derivatives | 12 Months Ended |
Dec. 31, 2018 | |
Mortgage Banking Derivatives | |
Mortgage Banking Derivatives | Note 8 – Mortgage Banking Derivatives As part of its mortgage banking activities, the Bank enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Bank then locks in the loan and interest rate with an investor and commits to deliver the loan if settlement occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Certain loans under interest rate lock commitments are covered under forward sales contracts of mortgage backed securities (“MBS”). Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Bank determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded. Certain additional risks arise from these forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Bank does not expect any counterparty to any MBS to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Bank does not close the loans subject to interest rate risk lock commitments, it will still be obligated to deliver MBS to the counterparty under the forward sales agreement. Should this be required, the Bank could incur significant costs in acquiring replacement loans or MBS and such costs could have an adverse effect on mortgage banking operations. The fair value of the mortgage banking derivatives is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change. At December 31, 2018 the Bank had mortgage banking derivative financial instruments with a notional value of $49.6 million related to its forward contracts. The fair value of these mortgage banking derivative instruments at December 31, 2018 was $229 thousand included in other assets and $269 thousand included in other liabilities. At December 31, 2017 the Bank had mortgage banking derivative financial instruments with a notional value of $37.1 million related to its forward contracts. The fair value of these mortgage banking derivative instruments at December 31, 2017 was $43 thousand included in other assets and $10 thousand included in other liabilities. Included in gain on sale of loans for the year ended December 31, 2018 and 2017 was a net gain of $57 thousand and a net gain of $279 thousand, respectively, relating to mortgage banking derivative instruments. The amount included in gain on sale of loans for year ended December 31, 2018 and 2017 pertaining to its mortgage banking hedging activities was a net realized loss of $157 thousand and a net realized loss of $809 thousand, respectively. |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap Derivatives | Note 9 – 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 rate 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 December 31, 2018 and December 31, 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 $3.7 million at December 31, 2018 compared to a net unrealized gain before income tax of $2.3 million at December 31, 2017. The unrealized gain at year end 2018 is due to the expectation of short term rates remaining above the fixed strike rate of the swap for the remaining term of the interest rate swap. For derivatives designated as cash flow hedges, changes in the fair value of the derivative are initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. 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 year ended December 31, 2018, the Company reclassified income of $560 thousand 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 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 December 31, 2018, 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) that were in a net asset position totaled $3.7 million. The aggregate fair value of all derivative contracts with credit risk contingent features that were a net asset position totaled $2.3 million as of December 31, 2017. The Company has minimum collateral posting thresholds with certain of its derivative counterparties. As of December 31, 2018 and 2017, the Company was not required to post collateral with its derivative counterparties against its obligations under these agreements because these agreements were in a net asset position. If the Company had breached any provisions under the agreements at December 31, 2018 or December 31, 2017, it could have been required to settle its obligations under the agreements at the termination value. During the third quarter of 2018, the Company entered into credit risk participation agreements (“RPAs”) with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. These derivatives are not designated as hedges, are not speculative, and have a notional value of $27.5 million as of December 31. 2018. The changes in fair value for these contracts are recognized directly in earnings. The table below identifies the balance sheet category and fair values of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of December 31, 2018 and December 31, 2017. December 31, 2018 December 31, 2017 Swap Notional Balance Sheet Notional Balance Sheet Number Amount Fair Value Category Amount Fair Value Category Derivatives designated as hedging instruments (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ 845 Other Assets $ 75,000 $ 598 Other Assets Interest rate swap (2 ) 100,000 1,478 Other Assets 100,000 821 Other Assets Interest rate swap (3 ) 75,000 1,404 Other Assets 75,000 837 Other Assets Total $ 250,000 $ 3,727 $ 250,000 $ 2,256 Derivatives not designated as hedging instruments (dollars in thousands) Other Contracts (1 ) 27,500 59 Other Liabilities — — Other Liabilities Total $ 27,500 $ 59 $ — $ — The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the years ended December 31, 2018 and December 31, 2017. Year Ended December 31, 2018 Year Ended December 31, 2017 Amount of Reclassified from AOCI into Income Amount of Reclassified from AOCI into Income Swap Pre-tax gain Amount of Pre-tax (loss) Amount of Number Recognized in OCI Category Gain (Loss) Recognized in OCI Category (Loss) (dollars in thousands) Interest rate swap (1 ) $ 528 Interest Expense $ 240 $ 393 Interest Expense $ (400 ) Interest rate swap (2 ) 854 Interest Expense 198 702 Interest Expense (634 ) Interest rate swap (3 ) 688 Interest Expense 122 260 Interest Expense (560 ) Total $ 2,070 $ 560 $ 1,355 $ (1,594 ) The table below presents the pre-tax net gains (losses ) of the Company’s designated cash flow hedges for the years ended December 31, 2018 and 2017. Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships Year Ended December 31, 2018 Year Ended December 31, 2017 (dollars in thousands) Interest Income (Expense) Other Income (Expense) Interest Income (Expense) Other Income (Expense) Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 560 $ — $ (1,594 ) $ — The effects of cash flow hedging: Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 560 $ — $ (1,594 ) $ — Balance Sheet Offsetting The following table presents the liabilities subject to an enforceable master netting arrangement as of December 31, 2018 and December 31, 2017. As of December 31, 2018 Offsetting of Derivative Assets (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 2,948 $ — $ 2,948 $ — $ — $ 2,948 Counterparty 2 892 — $ 892 — — $ 892 Counterparty 3 (59 ) — $ (59 ) — — $ (59 ) $ 3,781 $ — $ 3,781 $ — $ — $ 3,781 As of December 31, 2017 Offsetting of Derivative Assets (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 1,619 $ — $ 1,619 $ — $ — $ 1,619 Counterparty 2 582 — 582 — — 582 $ 2,201 $ — $ 2,201 $ — $ — $ 2,201 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Deposits | Note 10 – Deposits The following table provides information regarding the Bank’s deposit composition at December 31, 2018, 2017, and 2016 as well as the average rate being paid on interest bearing deposits at December 31, 2018, 2017, and 2016. 2018 2017 2016 Average Average Average (dollars in thousands) Balance Rate Balance Rate Balance Rate Noninterest bearing demand $ 2,104,220 — $ 1,982,912 — $ 1,775,684 — Interest bearing transaction 593,107 0.81 % 420,417 0.46 % 289,122 0.16 % Savings and money market 2,949,559 1.68 % 2,621,146 0.70 % 2,902,560 0.54 % Time, $100,000 or more 801,957 2.25 % 515,682 1.20 % 464,842 0.95 % Other time 525,442 2.25 % 313,827 1.17 % 283,906 0.86 % Total $ 6,974,285 $ 5,853,984 $ 5,716,114 The remaining maturity of time deposits at December 31, 2018, 2017 and 2016 are as follows: (dollars in thousands) 2018 2017 2016 Three months or less $ 230,360 $ 180,459 $ 120,238 More than three months through six months 355,022 228,513 151,422 More than six months through twelve months 308,063 208,554 207,141 Over twelve months 433,954 211,983 269,947 Total $ 1,327,399 $ 829,509 $ 748,748 Interest expense on deposits for the years ended December 31, 2018, 2017 and 2016 is as follows: (dollars in thousands) 2018 2017 2016 Interest bearing transaction $ 3,348 $ 1,537 $ 646 Savings and money market 35,534 17,284 12,038 Time, $100,000 or more 17,138 7,294 6,487 Other time 4,190 1,171 77 Total $ 60,210 $ 27,286 $ 19,248 Related Party Deposits totaled $141.4 million and $179.1 million at December 31, 2018 and 2017, respectively. During 2018, we modified our analysis with respect to insider related parties and as a result included additional relationships such as those involving extended family members and trusts, resulting in an increase to the previously reported $84.3 million balance of related party deposits at December 31, 2017. As of December 31, 2018 and December 31, 2017, time deposit accounts in excess of $250 thousand totaled $445.8 million and $279.7 million, respectively. |
Affordable Housing Projects Tax
Affordable Housing Projects Tax Credit Partnerships | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Affordable Housing Projects Tax Credit Partnerships | Note 11 – Affordable Housing Projects Tax Credit Partnerships Included in Other Assets, the Company makes equity investments in various limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (“LIHTC”) pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of affordable housing products offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity. The Company is a limited partner in each LIHTC limited partnership. Each limited partnership is managed by an unrelated third party general partner who exercises significant control over the affairs of the limited partnership. The general partner has all the rights, powers and authority granted or permitted to be granted to a general partner of a limited partnership. Duties entrusted to the general partner of each limited partnership include, but are not limited to: investment in operating companies, company expenditures, investment of excess funds, borrowing funds, employment of agents, disposition of fund property, prepayment and refinancing of liabilities, votes and consents, contract authority, disbursement of funds, accounting methods, tax elections, bank accounts, insurance, litigation, cash reserve, and use of working capital reserve funds. Except for limited rights granted to the limited partner(s) relating to the approval of certain transactions, the limited partner(s) may not participate in the operation, management, or control of the limited partnership’s business, transact any business in the limited partnership’s name or have any power to sign documents for or otherwise bind the limited partnership. In addition, the general partner may only be removed by the limited partner(s) in the event the general partner fails to comply with the terms of the agreement or is negligent in performing its duties. The general partner of each limited partnership has both the power to direct the activities which most significantly affect the performance of each partnership and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. Therefore, the Company has determined that it is not the primary beneficiary of any LIHTC partnership. The Company accounts for its affordable housing tax credit investments using the proportional amortization method. The Company’s net affordable housing tax credit investments were $28.2 million and related unfunded commitments were $15.0 million and as of December 31, 2018 and are included in Other Assets and Other Liabilities in the Consolidated Statements of Condition. As of December 31, 2018, the expected payments for unfunded affordable housing commitments were as follows: Years ending December 31: (dollars in thousands) Amount 2019 $ 6,111 2020 4,473 2021 3,114 2022 155 2023 247 Thereafter 889 Total unfunded commitments $ 14,989 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 12 – Borrowings Information relating to short-term and long-term borrowings is as follows for the years ended December 31: 2018 2017 2016 (dollars in thousands) Amount Rate Amount Rate Amount Rate Short-term: At Year-End: Customer repurchase agreements and federal funds purchased $ 30,413 0.86 % $ 76,561 0.33 % $ 76,561 0.33 % Federal Home Loan Bank – current portion — — 325,000 1.48 % 325,000 1.48 % Total $ 30,413 $ 401,561 $ 401,561 Average Daily Balance: Customer repurchase agreements and federal funds purchased $ 44,333 0.51 % $ 73,237 0.27 % $ 73,237 0.27 % Federal Home Loan Bank – current portion 192,131 2.02 % 65,416 1.13 % 65,416 1.13 % Total $ 236,464 $ 138,653 $ 138,653 Maximum Month-end Balance: Customer repurchase agreements and federal funds purchased $ 72,141 0.32 % $ 85,614 0.29 % $ 85,614 0.29 % Federal Home Loan Bank – current portion 325,000 1.62 % 325,000 1.48 % 325,000 1.48 % Total $ 397,141 $ 410,614 $ 410,614 Long-term: At Year-End: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Average Daily Balance: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Total $ 220,000 $ 220,000 $ 220,000 Maximum Month-end Balance: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Total $ 220,000 $ 220,000 $ 220,000 The Company offers its business customers a repurchase agreement sweep account in which it collateralizes these funds with U.S. agency and mortgage backed securities segregated in its investment portfolio for this purpose. By entering into the agreement, the customer agrees to have the Bank repurchase the designated securities on the business day following the initial transaction in consideration of the payment of interest at the rate prevailing on the day of the transaction. The Bank can purchase up to $147.5 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding at December 31, 2018 and can borrow unsecured funds under one-way CDARS and ICS brokered deposits in the amount of $1.26 billion, against which there was $62.3 million outstanding at December 31, 2018. The Bank also has a commitment at December 31, 2018 from Promontory to place up to $700.0 million of brokered deposits from its IND program in amounts requested by the Bank, as compared to an actual balance of $544.5 million at December 31, 2018. At December 31, 2018, the Bank was also eligible to make advances from the FHLB up to $1.51 billion based on collateral at the FHLB, of which there was $55.0 million outstanding at December 31, 2018. The Bank may enter into repurchase agreements as well as obtain additional borrowing capabilities from the FHLB provided adequate collateral exists to secure these lending relationships. The Bank also has a back-up borrowing facility through the Discount Window at the Federal Reserve Bank of Richmond (“Federal Reserve Bank”). This facility, which amounts to approximately $662.0 million, is collateralized with specific loan assets identified to the Federal Reserve Bank. It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only. On August 5, 2014, the Company completed the sale of $70.0 million of its 5.75% subordinated notes, due September 1, 2024 (the “2024 Notes”). The Notes were offered to the public at par. The 2024 Notes qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $68.8 million, which includes $1.2 million in deferred financing costs which is being amortized over the life of the 2024 Notes. On July 26, 2016, the Company completed the sale of $150.0 million of its 5.00% Fixed-to-Floating Rate Subordinated Notes, due August 1, 2026 (the “2026 Notes”). The 2026 Notes were offered to the public at par and qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under the Basel III Rule capital requirements. The net proceeds were approximately $147.35 million, which includes $2.6 million in deferred financing costs which is being amortized over the life of the 2026 Notes. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants | |
Warrants | Note 13 – Warrants On December 27, 2016, 378,495 net shares of common stock were issued upon the exercise in full of the warrant for 423,977 shares originally issued in connection with the issuance of the Series B Preferred Stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 – Income Taxes The Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017 reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the Tax Act, we recorded a $14.6 million reduction in the value of our net deferred tax asset, which was recorded as additional income tax expense during 2017. We had net deferred tax assets (deferred tax assets in excess of deferred tax liabilities) of $33.0 million and $28.8 million at December 31, 2018 and 2017, respectively, which related primarily to our allowance for credit losses, and loan origination fees. Management believes it is more likely than not that all of the deferred tax assets will be realized. Federal and state income tax expense consists of the following for the years ended December 31: (dollars in thousands) 2018 2017 2016 Current federal income tax expense $ 39,498 $ 59,019 $ 53,290 Current state income tax expense 15,931 7,511 13,733 Total current tax expense 55,429 66,530 67,023 Deferred federal income tax expense (benefit) (2,634 ) 18,459 (5,523 ) Deferred state income tax expense (benefit) (863 ) 515 (105 ) Total deferred tax expense (benefit) (3,497 ) 18,974 (5,628 ) Total income tax expense $ 51,932 $ 85,504 $ 61,395 Temporary timing differences between the amounts reported in the financial statements and the tax bases of assets and liabilities result in deferred taxes. The table below summarizes significant components of our deferred tax assets and liabilities utilizing federal corporate income tax rates of 21% as of December 31, 2018 and 2017 and 35% as of December 31, 2016: (dollars in thousands) 2018 2017 2016 Deferred tax assets Allowance for credit losses $ 18,101 $ 16,568 $ 23,738 Deferred loan fees and costs 6,733 6,741 10,728 Deferred rent 1,026 1,009 1,483 Stock-based compensation 1,722 847 3,037 Net operating loss 2,003 2,032 2,695 Unrealized loss on securities available-for-sale 2,756 1,312 1,303 Unrealized loss on interest rate swap derivatives — — 284 SERP 1,497 1,373 2,088 Premises and equipment 795 33 3,838 Other 287 35 477 Total deferred tax assets 34,920 29,950 49,671 Unrealized gain on interest rate swap derivatives (965 ) (578 ) — Excess servicing (77 ) (99 ) (191 ) Intangible assets (223 ) (503 ) (1,260 ) Other liabilities (328 ) — — Total deferred tax liabilities (1,593 ) (1,180 ) (1,451 ) Net deferred income tax amount $ 33,327 $ 28,770 $ 48,220 A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31 follows: 2018 2017 2016 Statutory federal income tax rate 21.00 % 35.00 % 35.00 % Increase (decrease) due to State income taxes 5.83 3.41 5.57 Deferred tax adjustment related to Tax Act — 7.85 — Tax exempt interest and dividend income (1.13 ) (0.61 ) (0.98 ) Stock-based compensation expense 0.01 0.01 0.01 Other (0.28 ) 0.38 (1.01 ) Effective tax rates 25.43 % 46.04 % 38.59 % The Company is currently estimating that its effective tax rate for 2019 will be in the range of 25% to 26%. The net operating loss carry forward acquired in conjunction with the Fidelity acquisition is subject to annual limits under Section 382 of the Internal Revenue Code of $718 thousand and expires in 2027. The Company remains subject to examination for the years ending after December 31, 2014. |
Net Income per Common Share
Net Income per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Common Share | |
Net Income per Common Share | Note 15 – Net Income per Common Share The calculation of net income per common share for the years ended December 31 was as follows: (dollars and shares in thousands, except per share data) 2018 2017 2016 Basic: Net income $ 152,276 $ 100,232 $ 97,707 Average common shares outstanding 34,306 34,139 33,587 Basic net income per common share $ 4.44 $ 2.94 $ 2.91 Diluted: Net income $ 152,276 $ 100,232 $ 97,707 Average common shares outstanding 34,306 34,139 33,587 Adjustment for common share equivalents 137 182 594 Average common shares outstanding-diluted 34,443 34,321 34,181 Diluted net income per common share $ 4.42 $ 2.92 $ 2.86 Anti-dilutive shares — — 7 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 16– Related Party Transactions The Bank leases office space from a limited liability company in which a trust for the benefit of an executive officer’s children has a 51% interest. During the fourth quarter of 2015, the Company entered into an agreement to lease office space for a second location with limited liability companies in which an executive officer indirectly owns a majority interest. The Company leased additional space at this location starting with the third quarter of 2017. The Company paid $2.2 million, $2.1 million, and $1.9 million excluding certain pass-through expenses for the years ended December 31, 2018, 2017 and 2016, respectively. A director is a partner in the law firm which has provided, and continues to provide, legal services to the Company and its subsidiaries. During 2018, the Company and its subsidiaries paid aggregate fees of $750 thousand to that firm. Under the Director’s arrangement with his firm, he does not participate significantly in the profits or revenues resulting from the provision of legal services to the Company and its subsidiaries. The Company gives back to its community through the EagleBank Foundation, a 501c3 non-profit. The Company paid/donated to the EagleBank Foundation $150 thousand, $145 thousand, and $139 thousand for the years ended December 31, 2018, 2017 and 2016, respectively. Certain directors and executive officers have had loan transactions with the Company. Such loans were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with outsiders. Please see further detail regarding Related Party Loans in Note 4 to the Consolidated Financial Statements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 17 – Stock-Based Compensation The Company maintains the 2016 Stock Plan (“2016 Plan”), the 2006 Stock Plan (“2006 Plan”) and the 2011 Employee Stock Purchase Plan (“2011 ESPP”). In connection with the acquisition of Virginia Heritage, the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”). No additional options may be granted under the 2006 Plan or the Virginia Heritage Plans. The Company adopted the 2016 Plan upon approval by the shareholders at the 2016 Annual Meeting held on May 12, 2016. The 2016 Plan provides directors and selected employees of the Bank, the Company and their affiliates with the opportunity to acquire shares of stock, through awards of options, time vested restricted stock, performance-based restricted stock and stock appreciation rights. Under the 2016 Plan, 1,000,000 shares of common stock were initially reserved for issuance. For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model. For restricted stock awards granted under the 2006 plan, fair value is based on the average of the high and low stock price of the Company’s shares on the date of grant. For restricted stock awards granted under the 2016 plan, fair value is based on the Company’s closing price on the date of grant. For awards that are performance-based, compensation expense is recorded based on the probability of achievement of the goals underlying the grant. In February 2018, the Company awarded 94,344 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 2018, the Company awarded senior officers a targeted number of 42,533 performance vested restricted stock units (PRSUs). The vesting of PRSUs is 100% after three years with payouts based on threshold, target or maximum average performance targets over a three year period. There are two performance metrics: 1) average annual earnings per share growth; and 2) average annual return on average assets. Average annual return on average assets is measured against peer companies in the KBW Regional Banking Index. Average annual earnings per share growth is measured compared to the Company’s budget. The Company has unvested restricted stock awards and PRSU grants of 272,679 shares at December 31, 2018. Unrecognized stock based compensation expense related to restricted stock awards and PRSU grants totaled $8.5 million at December 31, 2018. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.74 years. The following tables summarize the unvested restricted stock awards at December 31, 2018 and 2017. 2018 2017 Perfomance Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 62,338 $ 50.45 33,226 $ 42.60 Issued 42,533 60.45 36,523 57.49 Forfeited (5,913 ) 50.28 (2,520 ) 41.93 Vested — — (4,891 ) 54.70 Unvested at end 98,958 $ 54.76 62,338 $ 50.45 Year Ended December 31, 2018 2017 Time Vested Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 164,043 $ 53.57 262,966 $ 33.60 Issued 94,344 60.45 91,097 62.70 Forfeited (7,132 ) 56.48 (2,360 ) 49.52 Vested (77,534 ) 49.67 (187,660 ) 30.07 Unvested at end 173,721 $ 58.93 164,043 $ 53.57 Below is a summary of stock option activity for the twelve months ended December 31, 2018 , Year Ended December 31, 2018 2017 2016 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Beginning balance 143,224 $ 9.13 216,859 $ 8.80 298,740 $ 9.97 Issued — — — — 3,000 49.49 Exercised (108,201 ) 7.17 (72,535 ) 8.19 (77,144 ) 14.48 Forfeited (900 ) 34.47 — — (1,100 ) 15.48 Expired — — (1,100 ) 5.76 (6,637 ) 12.87 Ending balance 34,123 $ 14.69 143,224 $ 9.13 216,859 $ 8.80 The following summarizes information about stock options outstanding at December 31, 2018. 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 22,024 $ 5.76 0.02 $10.73 $11.40 5,089 11.17 2.88 $11.41 $24.86 660 20.03 4.06 $24.87 $49.91 6,350 47.91 3.66 34,123 $ 14.69 1.20 Exercisable: Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $5.76 $10.72 4,675 $ 5.76 $10.73 $11.40 5,089 11.17 $11.41 $24.86 660 20.03 $24.87 $49.91 4,850 47.42 15,274 $ 21.41 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, 2018, 2017 and 2016. There were no grants of stock options during the year ended December 31, 2018. Years Ended December 31, 2018 2017 2016 Expected volatility n/a n/a 24.23 % Weighted-Average volatility n/a n/a 24.23 % Expected dividends — — — Expected term (in years) n/a n/a 7.0 Risk-free rate n/a n/a 1.37 % Weighted-average fair value (grant date) n/a n/a $ 14.27 The total intrinsic value of outstanding stock options was $1.2 million and $7.0 million, respectively, at December 31, 2018 and 2017. The total fair value of stock options vested was $80 thousand, $71 thousand and $66 thousand, for 2018, 2017 and 2016, respectively. Unrecognized stock-based compensation expense related to stock options totaled $17 thousand at December 31, 2018. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.54 years. Cash proceeds, tax benefits and intrinsic value related to total stock options exercised is as follows: Years Ended December 31, (dollars in thousands) 2018 2017 2016 Proceeds from stock options exercised $ 776 $ 372 $ 955 Tax benefits realized from stock compensation 5 99 400 Intrinsic value of stock options exercised 4,958 3,888 2,824 Approved by shareholders in May 2011, the 2011 ESPP reserved 550,000 shares of common stock (as adjusted for stock dividends) for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2011 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $6,250 per offering period or $25,000 annually (not to exceed more than 10% of compensation per pay period). At December 31, 2018, the 2011 ESPP had 387,805 shares reserved for issuance. Included in salaries and employee benefits in the accompanying Consolidated Statements of Operations, the Company recognized $6.5 million, $5.6 million and $6.9 million in stock-based compensation expense for 2018, 2017 and 2016, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 18 – Employee Benefit Plans The Company has a qualified 401(k) Plan which covers all employees who have reached the age of 21 and have completed at least one month of service as defined by the Plan. The Company makes contributions to the Plan based on a matching formula, which is reviewed annually. For the years 2018, 2017, and 2016, the Company recognized $894 thousand, $1.2 million, and $1.1 million in expense associated with this benefit, respectively. These amounts are included in salaries and employee benefits in the accompanying Consolidated Statements of Operations. |
Supplemental Executive Retireme
Supplemental Executive Retirement Plan | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Executive Retirement Plan | |
Supplemental Executive Retirement Plan | Note 19 – Supplemental Executive Retirement Plan The Bank has entered into Supplemental Executive Retirement and Death Benefit Agreements (the “SERP Agreements”) with certain of the Bank’s executive officers 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 carriers in 2013 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. The annuity contracts accrued $81 thousand and $47 thousand of income for the years ended December 31, 2018 and 2017, respectively, which were included in other noninterest income on the Consolidated Statement of Operations. The cash surrender value of the annuity contracts was $12.4 million at December 31, 2018 and was included in other assets on the Consolidated Balance Sheet. For the years ended December 31, 2018 and 2017, the Company recorded benefit expense accruals of $686 thousand and $410 thousand respectively for this post retirement benefit. Upon death of a named executive, the annuity contract related to such executive terminates. The Bank has purchased additional bank owned life insurance contracts, which would effectively finance payments (up to a 15 year certain amount) to the executives’ named beneficiaries. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments With Off-balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | Note 20 – Financial Instruments with Off-Balance Sheet Risk Various commitments to extend credit are made in the normal course of banking business. Letters of credit are also issued for the benefit of customers. These commitments are subject to loan underwriting standards and geographic boundaries consistent with the Company’s loans outstanding. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Loan commitments outstanding and lines and letters of credit at December 31, 2018 and 2017 are as follows: (dollars in thousands) 2018 2017 Unfunded loan commitments $ 2,228,689 $ 2,267,774 Unfunded lines of credit 90,283 96,477 Letters of credit 83,162 68,723 Total $ 2,402,134 $ 2,432,974 Because most of the Company’s business activity is with customers located in the Washington, D.C., metropolitan area, a geographic concentration of credit risk exists within the loan portfolio, the performance of which will be influenced by the economy of the region. The Bank maintains a reserve for the potential repurchase of residential mortgage loans, which amounted to $45 thousand at December 31, 2018 and $73 thousand at December 31, 2017. These amounts are included in other liabilities in the accompanying Consolidated Balance Sheets. Changes in the balance of the reserve are a component of other expenses in the accompanying Consolidated Statements of Operations. The reserve is available to absorb losses on the repurchase of loans sold related to document and other fraud, early payment default and early payoff. Through December 31, 2018, no reserve charges have occurred related to fraud. The Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The residential mortgage division either locks in the loan and rate with an investor and commits to deliver the loan if settlement occurs under best efforts or commits to deliver the locked loan in a binding mandatory delivery program with an investor. Certain loans under rate lock commitments are covered under forward sales contracts of mortgage backed securities as a hedge of any interest rate risk. Forward sales contracts of mortgage backed securities are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates while taking into consideration the probability that the rate lock commitments will close or will be funded. These transactions are further detailed in Note 8 to the Consolidated Financial Statements. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Note 21 – Commitments and Contingent Liabilities The Company has various financial obligations, including contractual obligations and commitments that may require future cash payments. Except for its loan commitments, as shown in Note 20 to the Consolidated Financial Statements, the following table shows details on these fixed and determinable obligations as of December 31, 2018 in the time period indicated. Within One One to Three to Over Five (dollars in thousands) Year Three Years Five Years Years Total Deposits without a stated maturity (1) $ 5,646,886 $ — $ — $ — $ 5,646,886 Time deposits (1) 893,445 396,942 37,012 — 1,327,399 Borrowed funds (2) 30,413 — — 220,000 250,413 Operating lease obligations 8,435 15,311 13,858 29,138 66,742 Outside data processing (3) 4,525 8,091 7,630 3,815 24,061 George Mason sponsorship (4) 650 1,325 1,350 8,475 11,800 D.C. United (5) 773 1,615 844 — 3,232 Non-Compete agreement (6) 21 — — — 21 LIHTC investments (7) 6,111 7,587 402 889 14,989 Total $ 6,591,259 $ 430,871 $ 61,096 $ 262,317 $ 7,345,543 (1) Excludes accrued interest payable at December 31, 2018. (2) Borrowed funds include customer repurchase agreements, and other short-term and long-term borrowings. (3) The Bank has outstanding obligations under its current core data processing contract that expire in March 2025 and two other vendor arrangements that relate to network infrastructure and data center services, one expires in July 2020 and the other expires in December 2019. (4) The Bank has the option of terminating the George Mason agreement at the end of contract years 10 and 15 (that is, effective June 30, 2025 or June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, contractual obligations would decrease $3.5 million and $3.6 million for the first option period (years 11-15) and the second option period (16-20), respectively. (5) Marketing sponsorship agreement with D.C. United (6) Non-compete agreement with a retired Director. (7) Low Income Housing Tax Credits (“LIHTC”) expected payments for unfunded affordable housing commitments. In the normal course of its business, the Company is involved in litigation arising from banking, financial, and other activities it conducts. Management, after consultation with legal counsel, does not anticipate that the ultimate liability, if any, arising out of these matters will have a material effect on the Company’s financial condition, operating results or liquidity. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Matters | |
Regulatory Matters | Note 22 – Regulatory Matters The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain amounts and ratios (set forth in the table below) of Total capital, Tier 1 capital and CET1 (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined), referred to as the Leverage Ratio. Management believes, as of December 31, 2018 and 2017, that the Company and Bank met all capital adequacy requirements to which they are subject. The actual capital amounts and ratios for the Company and Bank as of December 31, 2018 and 2017 are presented in the table below: Company Bank To Be Well Actual Actual Minimum Required For Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Capital Adequacy Purposes Regulations * As of December 31, 2018 CET1 capital (to risk weighted assets) $ 1,007,438 12.49 % $ 1,147,151 14.23 % 6.375 % 6.5 % Total capital (to risk weighted assets) 1,297,427 16.08 % 1,217,140 15.10 % 9.875 % 10.0 % Tier 1 capital (to risk weighted assets) 1,007,438 12.49 % 1,147,151 14.23 % 7.875 % 8.0 % Tier 1 capital (to average assets) 1,007,438 12.10 % 1,147,151 13.78 % 5.000 % 5.0 % As of December 31, 2017 CET1 capital (to risk weighted assets) $ 845,123 11.23 % $ 969,250 12.91 % 5.750 % 6.5 % Total capital (to risk weighted assets) 1,129,954 15.02 % 1,033,554 13.76 % 9.250 % 10.0 % Tier 1 capital (to risk weighted assets) 845,123 11.23 % 969,250 12.91 % 7.250 % 8.0 % Tier 1 capital (to average assets) 845,123 11.45 % 969,250 13.15 % 5.000 % 5.0 % * Bank and holding company regulations, as well as Maryland law, impose certain restrictions on dividend payments by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. At December 31, 2018, the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained required capital ratios. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2018 | |
Other Comprehensive Income | |
Other Comprehensive Income | Note 23 – Other Comprehensive Income The following table presents the components of other comprehensive income (loss) for the years ended December 31, 2018, 2017 and 2016. (dollars in thousands) Before Tax Tax Effect Net of Tax Year Ended December 31, 2018 Net unrealized loss on securities available-for-sale $ (4,279 ) $ (438 ) $ (3,841 ) Less: Reclassification adjustment for net gains included in net income (97 ) (25 ) (72 ) Total unrealized loss (4,376 ) (463 ) (3,913 ) Net unrealized gain on derivatives 2,033 227 1,806 Less: Reclassification adjustment for gain included in net income (560 ) (142 ) (418 ) Total unrealized gain 1,473 85 1,388 Other Comprehensive Loss $ (2,903 ) $ (378 ) $ (2,525 ) Year Ended December 31, 2017 Net unrealized loss on securities available-for-sale $ (1,319 ) $ (479 ) $ (840 ) Less: Reclassification adjustment for net gains included in net income (542 ) (206 ) (336 ) Total unrealized loss (1,861 ) (685 ) (1,176 ) Net unrealized gain on derivatives 4,559 1,765 2,794 Less: Reclassification adjustment for losses included in net income (1,592 ) (605 ) (987 ) Total unrealized gain 2,967 1,160 1,807 Other Comprehensive Income $ 1,106 $ 475 $ 631 Year Ended December 31, 2016 Net unrealized loss on securities available-for-sale $ (3,800 ) $ (1,520 ) $ (2,280 ) Less: Reclassification adjustment for net gains included in net income (1,194 ) (478 ) (716 ) Total unrealized loss (4,994 ) (1,998 ) (2,996 ) Net unrealized gain on derivatives (2,947 ) (2,018 ) (929 ) Less: Reclassification adjustment for losses included in net income 2,255 902 1,353 Total unrealized gain (692 ) (1,116 ) 424 Other Comprehensive Loss $ (5,686 ) $ (3,114 ) $ (2,572 ) The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018, 2017 and 2016. Securities Accumulated Other (dollars in thousands) Available For Sale Derivatives Comprehensive Income (Loss) Year Ended December 31, 2018 Balance at Beginning of Period $ (3,131 ) $ 1,381 $ (1,750 ) Other comprehensive income (loss) before reclassifications (3,841 ) 1,806 (2,035 ) Amounts reclassified from accumulated other comprehensive income (72 ) (418 ) (490 ) Net other comprehensive income during period (3,913 ) 1,388 (2,525 ) Balance at End of Period $ (7,044 ) $ 2,769 $ (4,275 ) Year Ended December 31, 2017 Balance at Beginning of Period $ (1,955 ) $ (426 ) $ (2,381 ) Other comprehensive income before reclassifications (840 ) 2,794 1,954 Amounts reclassified from accumulated other comprehensive income (336 ) (987 ) (1,323 ) Net other comprehensive income during period (1,176 ) 1,807 631 Balance at End of Period $ (3,131 ) $ 1,381 $ (1,750 ) Year Ended December 31, 2016 Balance at Beginning of Period $ 1,041 $ (850 ) $ 191 Other comprehensive income before reclassifications (2,280 ) (934 ) (3,214 ) Amounts reclassified from accumulated other comprehensive income (716 ) 1,358 642 Net other comprehensive income during period (2,996 ) 424 (2,572 ) Balance at End of Period $ (1,955 ) $ (426 ) $ (2,381 ) The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2018, 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 Year Ended December 31, 2018 2017 2016 Realized gain on sale of investment securities $ 97 $ 542 $ 1,194 Gain on sale of investment securities Interest income (expense) derivative deposits 560 (1,592 ) (1,695 ) Interest expense on deposits Interest expense derivative borrowings — — (569 ) Interest expense on short-term borrowings Income tax (expense) benefit (167 ) 399 428 Tax expense Total Reclassifications for the Period $ 490 $ (651 ) $ (642 ) Net Income |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 24 – Fair Value Measurements The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, “Fair Value Measurements and Disclosures,” Level 1 Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale. Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017: (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2018 Assets: Investment securities available for sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ 269 $ 269 December 31, 2017 Assets: Investment securities available for sale: U. S. agency securities $ — $ 195,984 $ — $ 195,984 Residential mortgage backed securities — 317,836 — 317,836 Municipal bonds — 62,057 — 62,057 Corporate bonds — 11,673 1,500 13,173 Other equity investments — — 218 218 Loans held for sale — 25,096 — 25,096 Mortgage banking derivatives — — 43 43 Interest rate swap derivatives — 2,256 — 2,256 Total assets measured at fair value on a recurring basis as of December 31, 2017 $ — $ 614,902 $ 1,761 $ 616,663 Liabilities: Mortgage banking derivatives $ — $ — $ 10 $ 10 Total liabilities measured at fair value on a recurring basis as of December 31, 2017 $ — $ — $ 10 $ 10 Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include U.S. agency debt securities, mortgage backed securities issued by Government Sponsored Entities (“GSE’s”) and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, the carrying amounts approximate the fair value. Loans held for sale The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of December 31, 2018 and December 31, 2017. December 31, 2018 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 19,254 $ 18,797 $ 457 FHA mortgage loans held for sale $ — $ — $ — December 31, 2017 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 25,096 $ 24,674 $ 422 FHA mortgage loans held for sale $ — $ — $ — No residential mortgage loans held for sale were 90 or more days past due or on nonaccrual status as of December 31, 2018 or December 31, 2017. Interest rate swap derivatives: Credit Risk Participation Agreements: The Company enters into credit risk participation agreements (“RPAs”) with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Accordingly, RPAs fall within Level 2. 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, 2018 $ 1,718 $ 43 $ 1,761 Realized gain included in earnings - net mortgage banking derivatives — 186 186 Reclass from level 2 8,076 — 8,076 Principal redemption — — — Ending balance at December 31, 2018 $ 9,794 $ 229 $ 10,023 Liabilities: Beginning balance at January 1, 2018 $ — $ 10 $ 10 Realized loss included in earnings - net mortgage banking derivatives — 259 259 Principal redemption — — — Ending balance at December 31, 2018 $ — $ 269 $ 269 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 — (71 ) (71 ) Purchases of available-for-sale securities — — — Principal redemption — — — Ending balance at December 31, 2017 $ 1,718 $ 43 $ 1,761 Liabilities: Beginning balance at January 1, 2017 $ — $ 55 $ 55 Realized loss included in earnings - net mortgage banking derivatives — (45 ) (45 ) Principal redemption — — — Ending balance at December 31, 2017 $ — $ 10 $ 10 Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value. The securities consist of $9.8 million in corporate bonds and equity investments in the form of common stock of two local banking companies which are not publicly traded, and for which the carrying amount approximates fair value. Mortgage banking derivatives: Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets. Impaired loans Other real estate owned (dollars in thousands) Quoted Prices Significant Other Observable Inputs Significant Other Total December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2017 Impaired loans: Commercial $ — $ — $ 2,266 $ 2,266 Income producing - commercial real estate — — 7,664 7,664 Owner occupied - commercial real estate — — 5,214 5,214 Real estate mortgage - residential — — 775 775 Construction - commercial and residential — — 1,552 1,552 Home equity — — 494 494 Other consumer — — 11 11 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2017 $ — $ — $ 19,370 $ 19,370 Loans The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is considered impaired and an allowance for loan loss is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, “Receivables.” Fair Value of Financial Instruments The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists. Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values and should not be considered an indication of the fair value of the Company taken as a whole. The following methods and assumptions were used to estimate the fair value of each category of financial instrument for which it is practicable to estimate value: Cash due from banks and federal funds sold: Interest bearing deposits with other banks: Investment securities: Federal Reserve and Federal Home Loan Bank stock: Loans held for sale: Loans: Bank owned life insurance: Annuity investment: Mortgage banking derivatives: Credit Risk Participation Agreements: Interest rate swap derivatives: Noninterest bearing deposits: Interest bearing deposits: Certificates of deposit: Customer repurchase agreements: Borrowings: Off-balance sheet items: The estimated fair values of the Company’s financial instruments at December 31, 2018 and 2017 are as follows: Fair Value Measurements Quoted Prices Significant Significant (dollars in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans (1) 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,399 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives 269 269 — — 269 December 31, 2017 Assets Cash and due from banks $ 7,445 $ 7,445 $ — $ 7,445 $ — Federal funds sold 15,767 15,767 — 15,767 — Interest bearing deposits with other banks 167,261 167,261 — 167,261 — Investment securities 589,268 589,268 — 587,550 1,718 Federal Reserve and Federal Home Loan Bank stock 36,324 36,324 — 36,324 — Loans held for sale 25,096 25,096 — 25,096 — Loans (2) 6,346,770 6,381,213 — — 6,381,213 Bank owned life insurance 60,947 60,947 — 60,947 — Annuity investment 11,632 11,632 — 11,632 — Mortgage banking derivatives 43 43 — — 43 Interest rate swap derivatives 2,256 2,256 — 2,256 — Liabilities Noninterest bearing deposits 1,982,912 1,982,912 — 1,982,912 — Interest bearing deposits 3,041,563 3,041,563 — 3,041,563 — Certificates of deposit 829,509 829,886 — 829,886 — Customer repurchase agreements 76,561 76,561 — 76,561 — Borrowings 541,905 533,162 — 533,162 — Mortgage banking derivatives 10 10 — — 10 (1) Carrying amount is net of unearned income and the allowance for credit losses. In accordance with the prospective adoption of ASU No. 2016-01, the fair value of loans was measured using an exit price notion. (2) Carrying amount is net of unearned income and the allowance for credit losses. The fair value of loans was measured using an entry price notion. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Quarterly Results of Operations (unaudited) | Note 25 – Quarterly Results of Operations (unaudited) The following table reports quarterly results of operations (unaudited) for 2018, 2017 and 2016: 2018 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 105,581 $ 102,360 $ 96,296 $ 89,049 Total interest expense 23,869 21,069 18,086 13,269 Net interest income 81,712 81,291 78,210 75,780 Provision for credit losses 2,600 2,441 1,650 1,969 Net interest income after provision for credit losses 79,112 78,850 76,560 73,811 Noninterest income 6,089 5,640 5,553 5,304 Noninterest expense 31,687 31,614 32,289 31,121 Income before income tax expense 53,514 52,876 49,824 47,994 Income tax expense 13,197 13,928 12,528 12,279 Net income 40,317 38,948 37,296 35,715 Net income available to common shareholders $ 40,317 $ 38,948 $ 37,296 $ 35,715 Earnings per common share Basic (1) $ 1.17 $ 1.14 $ 1.09 $ 1.04 Diluted (1) $ 1.17 $ 1.13 $ 1.08 $ 1.04 2017 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 86,526 $ 82,370 $ 79,344 $ 75,794 Total interest expense 11,167 10,434 9,646 8,900 Net interest income 75,359 71,936 69,698 66,894 Provision for credit losses 4,087 1,921 1,566 1,397 Net interest income after provision for credit losses 71,272 70,015 68,132 65,497 Noninterest income 9,496 6,784 7,023 6,070 Noninterest expense 29,803 29,516 30,001 29,232 Income before income tax expense 50,965 47,283 45,154 42,335 Income tax expense 35,396 17,409 17,382 15,318 Net income 15,569 29,874 27,772 27,017 Net income available to common shareholders $ 15,569 $ 29,874 $ 27,772 $ 27,017 Earnings per common share Basic (1) $ 0.46 $ 0.87 $ 0.81 $ 0.79 Diluted (1) $ 0.45 $ 0.87 $ 0.81 $ 0.79 2016 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 75,795 $ 72,431 $ 69,772 $ 67,807 Total interest expense 8,771 7,703 5,950 5,216 Net interest income 67,024 64,728 63,822 62,591 Provision for credit losses 2,112 2,288 3,888 3,043 Net interest income after provision for credit losses 64,912 62,440 59,934 59,548 Noninterest income 7,014 6,405 7,575 6,290 Noninterest expense 29,780 28,838 28,295 28,103 Income before income tax expense 42,146 40,007 39,214 37,735 Income tax expense 16,429 15,484 15,069 14,413 Net income 25,717 24,523 24,145 23,322 Net income available to common shareholders $ 25,717 $ 24,523 $ 24,145 $ 23,322 Earnings per common share Basic (1) $ 0.76 $ 0.73 $ 0.72 $ 0.70 Diluted (1) $ 0.75 $ 0.72 $ 0.71 $ 0.68 (1) Earnings per common share are calculated on a quarterly basis and may not be additive to the year to date amount. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Information | Note 26 – Parent Company Financial Information Condensed financial information for Eagle Bancorp, Inc. (Parent Company only) is as follows: (dollars in thousands) December 31, 2018 December 31, 2017 Assets Cash $ 72,783 $ 77,883 Investment securities available-for-sale, at fair value 100 100 Investment in subsidiaries 1,249,704 1,088,670 Other assets 8,214 5,315 Total Assets $ 1,330,801 $ 1,171,968 Liabilities Other liabilities $ 4,564 $ 4,625 Long-term borrowings 217,296 216,905 Total liabilities 221,860 221,530 Shareholders’ Equity Common stock 342 340 Additional paid in capital 528,380 520,304 Retained earnings 584,494 431,544 Accumulated other comprehensive loss (4,275 ) (1,750 ) Total Shareholders’ Equity 1,108,941 950,438 Total Liabilities and Shareholders’ Equity $ 1,330,801 $ 1,171,968 Years Ended December 31, (dollars in thousands) 2018 2017 2016 Income Other interest and dividends $ 678 $ 234 $ 280 Gain on sale of investment securities — — 43 Total Income $ 678 $ 234 $ 323 Expenses Interest expense 11,916 11,916 7,493 Legal and professional 870 118 131 Directors compensation 614 352 202 Other 1,287 1,246 1,083 Total Expenses $ 14,687 $ 13,632 $ 8,909 Loss Before Income Tax (Benefit) and Equity in Undistributed Income of Subsidiaries (14,009 ) (13,398 ) (8,586 ) Income Tax Benefit (2,892 ) (4,689 ) (2,919 ) Loss Before Equity in Undistributed Income of Subsidiaries (11,117 ) (8,709 ) (5,667 ) Equity in Undistributed Income of Subsidiaries 163,393 108,941 103,374 Net Income $ 152,276 $ 100,232 $ 97,707 Years Ended December 31, (dollars in thousands) 2018 2017 2016 Cash Flows From Operating Activities Net Income $ 152,276 $ 100,232 $ 97,707 Adjustments to reconcile net income to net cash used in operating activities: (163,393 ) (108,941 ) (103,374 ) Net tax benefits from stock compensation 110 460 — Excess tax benefit on stock-based compensation — — (400 ) Increase in other assets (2,508 ) (988 ) (1,491 ) (Decrease) increase in other liabilities (61 ) (189 ) 3,186 Net cash used in operating activities (13,576 ) (9,426 ) (4,372 ) Cash Flows From Investing Activities Proceeds from sale of available-for-sale securities — — 135 Investment in subsidiary (net) 6,892 (460 ) (124,636 ) Net cash provided by (used in) investing activities 6,892 (460 ) (124,501 ) Cash Flows From Financing Activities Issuance in long-term borrowings — — 147,586 Proceeds from exercise of stock options 776 372 955 Excess tax benefit on stock-based compensation — — 400 Proceeds from employee stock purchase plan 808 836 801 Net cash provided by financing activities 1,584 1,208 149,742 Net (Decrease) Increase in Cash (5,100 ) (8,678 ) 20,869 Cash and Cash Equivalents at Beginning of Year 77,883 86,561 65,692 Cash and Cash Equivalents at End of Year $ 72,783 $ 77,883 $ 86,561 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans, the origination of small business loans, and the origination, securitization and sale of multifamily FHA loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of December 31, 2018, the Bank offers its products and services through twenty 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, had provided subordinated financing for the acquisition, development and construction of real estate projects; these transactions involved 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. |
Business Combinations | Business Combinations Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “ Business Combinations |
Cash Flows | Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less. |
Loans Held for Sale | Loans Held for Sale The Company regularly engages in sales of residential mortgage loans held for sale and the guaranteed portion of SBA loans originated by the Bank. The Company has elected to carry loans held for sale at fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the Consolidated Statements of Operations. The Company’s current practice is to sell residential mortgage loans held for sale on a servicing released basis, and, therefore, it has no intangible asset recorded in the normal course of business for the value of such servicing as of December 31, 2018 and December 31, 2017. 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 the date of transfer. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an excess servicing asset, which is computed on a loan by loan basis with the unamortized amount being included in intangible assets in the Consolidated Balance Sheets. This excess servicing asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in other income in the Consolidated Statements of Operations. The Company originates multifamily FHA loans through the Department of Housing and Urban Development’s Multifamily Accelerated Program (“MAP”). The Company securitizes these loans through the Government National Mortgage Association (”Ginnie Mae”) MBS I program and sells the resulting securities in the open market to authorized dealers in the normal course of business and generally retains the MSRs for a period of time before the MSRs are packaged into a portfolio and sold. When servicing is retained on multifamily FHA loans securitized and sold, the Company computes an excess servicing asset on a loan by loan basis with the unamortized amount being included in Intangible assets in the Consolidated Balance Sheets. Unamortized multifamily FHA MSRs totaled $282 thousand as of December 31, 2018 and $596 thousand as of December 31, 2017. Noninterest Income includes gains from the sale of the Ginnie Mae securities and net revenues earned on the servicing of multifamily FHA loans underlying the Ginnie Mae securities. Revenue from servicing commercial multifamily FHA mortgages is recognized as earned based on the specific contractual terms of the underlying servicing agreements, along with amortization of and changes in impairment of mortgage servicing rights. |
Investment Securities | Investment Securities The Company has no securities classified as trading, or as held-to-maturity. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations. Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include the: (1) duration and magnitude of the decline in value; (2) financial condition of the issuer or issuers; and (3) structure of the security. The entire amount of an impairment loss is recognized in earnings only when: (1) the Company intends to sell the security; or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes. |
Loans | Loans Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan. Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures. Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (90 days or less) provided eventual collection of all amounts due is expected. The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral. In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis. |
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 was carefully monitored. The loans were carried on the balance sheet at amounts outstanding. ECV recorded no additional interest on higher risk loan transactions during 2018, 2017, or 2016 (although normal interest income was recorded) and had no transactions outstanding as of December 31, 2018 compared to three higher risk loan transactions outstanding as of December 31, 2017, amounting to $7.7 million. |
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 if collateral dependent otherwise discounted cash flows. 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 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. The review of the adequacy of the Allowance for Credit Losses includes an assessment of the fair value adjustment for acquired loans in accordance with generally accepted accounting principles. |
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 and MSRs that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which must be conducted at least annually or upon the occurrence of a triggering event. The Company 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. Determining the fair value of a reporting unit under the goodwill impairment test is judgmental and often involves 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, 2018. 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. With the exception of forward commitment contracts discussed above under Loans Held for Sale, 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. 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 or stand-alone derivatives, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (a Consolidated Balance Sheet component of shareholders’ equity) 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 Statement of Cash Flows 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 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. Please refer to Note 9 to the Consolidated Financial Statements for further detail. |
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 available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents. |
Stock-Based Compensation | Stock-Based Compensation In accordance with ASC Topic 718, “Compensation,” Note 17 |
New Authoritative Accounting Guidance | New Authoritative Accounting Guidance Accounting Standards Adopted in 2018 ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage servicing activities, as these activities are subject to other GAAP discussed elsewhere within our disclosures. Substantially all of the Company’s revenue is generated from contracts with customers. Descriptions of our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of noninterest income are as follows: ● Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. ● Other Fees – generally, the Company receives compensation when a customer that it refers opens an account with certain third-parties. This category includes credit card, investment advisory, and interchange fees. The timing and amount of revenue recognition is not materially impacted by the new standard. ● Sale of OREO – ASU 2014-09 prescribes derecognition requirements for the sale of OREO that are less prescriptive than existing derecognition requirements. Previously, the Company was required to assess 1) the adequacy of a buyer’s initial and continuing investments and 2) the seller’s continuing involvement with the property. ASU 2014-09 requires an entity to assess whether it is “probable” that it will collect the consideration to which it will be entitled in exchange for transferring the asset to the customer. The new requirements could result in earlier revenue recognition; however, such sales are infrequent and the impact of this change is not considered material to our financial statements. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals based on fee schedules. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not have contract balances material to our financial statements. As of December 31, 2018 and 2017, the Company did not have any significant contract balances. In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. ASU 2016-01, “ Financial Instruments—(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Note 24 ASU 2016-15 “Statement of Cash Flows (Topic 230)” ASU 2017-04, “ Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2018-02, “ Income Statement - Reporting Comprehensive Income (Topic 220)- Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Accounting Standards Pending Adoption ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 has, among other things, required lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 became effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) – Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we expect to recognize right-of-use assets between $36 million and $38 million and related lease liabilities between $36 million and $38 million. We expect to elect to apply certain practical expedients provided under ASU 2016-02 whereby we will not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We also do not expect to apply the recognition requirements of ASU 2016-02 to any short-term leases (as defined by related accounting guidance). We expect to account for lease and non-lease components separately because such amounts are readily determinable under our lease contracts and because we expect this election will result in a lower impact on our balance sheet. We expect to utilize the modified-retrospective transition approach prescribed by ASU 2018-11. ASU 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326).” |
Investment Securities Availab_2
Investment Securities Available-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and estimated fair value of securities available-for-sale | Amortized cost and estimated fair value of securities available-for-sale are summarized as follows: Gross Gross Estimated December 31, 2018 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 260,150 $ 228 $ 4,033 $ 256,345 Residential mortgage backed securities 477,949 1,575 7,293 472,231 Municipal bonds 45,814 439 484 45,769 Corporate bonds 9,503 79 6 9,576 Other equity investments 218 — — 218 $ 793,634 $ 2,321 $ 11,816 $ 784,139 December 31, 2017 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U. S. agency securities $ 198,115 $ 283 $ 2,414 $ 195,984 Residential mortgage backed securities 322,067 187 4,418 317,836 Municipal bonds 60,976 1,295 214 62,057 Corporate bonds 13,010 163 — 13,173 Other equity investments 218 — — 218 $ 594,386 $ 1,928 $ 7,046 $ 589,268 |
Schedule of gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position | Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2018 and 2017 are as follows: Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2018 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 58 $ 72,679 $ 533 $ 144,636 $ 3,500 $ 217,315 $ 4,033 Residential mortgage backed securities 151 61,199 527 225,995 6,766 287,194 7,293 Municipal bonds 11 4,299 50 17,041 434 21,340 484 Corporate bonds 1 1,494 6 — — 1,494 6 221 $ 139,671 $ 1,116 $ 387,672 $ 10,700 $ 527,343 $ 11,816 Less than 12 Months 12 Months or Greater Total Estimated Estimated Estimated December 31, 2017 Number of Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) Securities Value Losses Value Losses Value Losses U. S. agency securities 38 $ 102,264 $ 1,073 $ 55,093 $ 1,341 $ 157,357 $ 2,414 Residential mortgage backed securities 137 152,350 1,306 147,953 3,112 300,303 4,418 Municipal bonds 8 17,446 214 — — 17,446 214 183 $ 272,060 $ 2,593 $ 203,046 $ 4,453 $ 475,106 $ 7,046 |
Schedule of amortized cost and estimated fair value of investments available-for-sale by contractual maturity | The amortized cost and estimated fair value of investments available-for-sale at December 31, 2018 and 2017 by contractual maturity are shown in the table below. December 31, 2018 December 31, 2017 Amortized Estimated Amortized Estimated (dollars in thousands) Cost Fair Value Cost Fair Value U. S. agency securities maturing: One year or less $ 128,148 $ 125,545 $ 109,893 $ 108,198 After one year through five years 119,856 118,883 74,106 73,916 Five years through ten years 12,146 11,917 14,116 13,870 Residential mortgage backed securities 477,949 472,231 322,067 317,836 Municipal bonds maturing: One year or less 8,097 8,167 5,068 5,171 After one year through five years 15,025 15,081 19,405 19,879 Five years through ten years 21,626 21,385 35,432 35,846 After ten years 1,066 1,136 1,071 1,161 Corporate bonds maturing: After one year through five years 8,003 8,076 11,510 11,673 After ten years 1,500 1,500 1,500 1,500 Other equity investments 218 218 218 218 $ 793,634 $ 784,139 $ 594,386 $ 589,268 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of loans, net of unamortized net deferred fees | Loans, net of unamortized net deferred fees, at December 31, 2018 and 2017 are summarized by type as follows: December 31, 2018 December 31, 2017 (dollars in thousands) Amount % Amount % Commercial $ 1,553,112 22 % $ 1,375,939 21 % Income producing - commercial real estate 3,256,900 46 % 3,047,094 48 % Owner occupied - commercial real estate 887,814 13 % 755,444 12 % Real estate mortgage - residential 106,418 2 % 104,357 2 % Construction - commercial and residential 1,039,815 15 % 973,141 15 % Construction - C&I (owner occupied) 57,797 1 % 58,691 1 % Home equity 86,603 1 % 93,264 1 % Other consumer 2,988 — 3,598 — Total loans 6,991,447 100 % 6,411,528 100 % Less: allowance for credit losses (69,944 ) (64,758 ) Net loans $ 6,921,503 $ 6,346,770 |
Schedule of detail activity in the allowance for credit losses by portfolio segment | The following tables detail activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2018 and 2017. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Income Producing - Owner Occupied - Real Estate Construction - Commercial Commercial Mortgage Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total Year Ended December 31, 2018 Allowance for credit losses: Balance at beginning of period $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 Loans charged-off (3,491 ) (121 ) (132 ) — (1,160 ) — (81 ) (4,985 ) Recoveries of loans previously charged-off 340 2 3 6 1,009 133 18 1,511 Net loans (charged-off) recoveries (3,151 ) (119 ) (129 ) 6 (151 ) 133 (63 ) (3,474 ) Provision for credit losses 5,906 2,777 437 15 (166 ) (304 ) (5 ) 8,660 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 For the Year Ended December 31, 2018 Allowance for credit losses: Individually evaluated for impairment $ 4,803 $ 2,465 $ 600 $ — $ 1,050 $ — $ — $ 8,918 Collectively evaluated for impairment 11,054 25,569 5,642 965 17,125 599 72 61,026 Ending balance $ 15,857 $ 28,034 $ 6,242 $ 965 $ 18,175 $ 599 $ 72 $ 69,944 Year Ended December 31, 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 (747 ) (1,470 ) — — (2,158 ) (100 ) (100 ) (4,575 ) Recoveries of loans previously charged-off 681 80 3 6 492 5 21 1,288 Net loans (charged-off) recoveries (66 ) (1,390 ) 3 6 (1,666 ) (95 ) (79 ) (3,287 ) Provision for credit losses (1,532 ) 5,661 1,921 (346 ) 3,671 (463 ) 59 8,971 Ending balance $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 For the Year Ended December 31, 2017 Allowance for credit losses: Individually evaluated for impairment $ 3,259 $ 2,380 $ 1,382 $ — $ 500 $ — $ 80 $ 7,601 Collectively evaluated for impairment 9,843 22,996 4,552 944 17,992 770 60 57,157 Ending balance $ 13,102 $ 25,376 $ 5,934 $ 944 $ 18,492 $ 770 $ 140 $ 64,758 |
Schedule of recorded investments in loans related to each balance in the allowance for loan losses by portfolio segment | The Company’s recorded investments in loans as of December 31, 2018 and December 31, 2017 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 - Commercial Owner Occupied - Commercial Real Estate Construction - Commercial and Home Other (dollars in thousands) Commercial Real Estate Real Estate Residential Residential Equity Consumer Total December 31, 2018 Recorded investment in loans: Individually evaluated for impairment $ 8,738 $ 61,747 $ 5,307 $ 1,228 $ 7,012 $ 487 $ — $ 84,519 Collectively evaluated for impairment 1,544,374 3,195,153 882,507 105,190 1,090,600 86,116 2,988 6,906,928 Ending balance $ 1,553,112 $ 3,256,900 $ 887,814 $ 106,418 $ 1,097,612 $ 86,603 $ 2,988 $ 6,991,447 December 31, 2017 Recorded investment in loans: Individually evaluated for impairment $ 8,726 $ 10,192 $ 5,501 $ 478 $ 4,709 $ 494 $ 91 $ 30,191 Collectively evaluated for impairment 1,367,213 3,036,902 749,943 103,879 1,027,123 92,770 3,507 6,381,337 Ending balance $ 1,375,939 $ 3,047,094 $ 755,444 $ 104,357 $ 1,031,832 $ 93,264 $ 3,598 $ 6,411,528 |
Schedule of loans by class and credit quality indicators | The following table presents by class and by credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2018 and 2017. Watch and Total (dollars in thousands) Pass Special Mention Substandard Doubtful Loans December 31, 2018 Commercial $ 1,505,477 $ 25,584 $ 22,051 $ — $ 1,553,112 Income producing - commercial real estate 3,182,903 1,536 82,885 — 3,256,900 Owner occupied - commercial real estate 844,286 38,221 5,307 — 887,814 Real estate mortgage 3 residential 104,543 647 1,228 — 106,418 Construction - commercial and residential 1,090,600 — 7,012 — 1,097,612 Home equity 85,434 682 487 — 86,603 Other consumer 2,988 — — — 2,988 Total $ 6,816,231 $ 66,670 $ 118,970 $ — $ 6,991,447 December 31, 2017 Commercial $ 1,333,050 $ 34,163 $ 8,726 $ — $ 1,375,939 Income producing - commercial real estate 3,033,046 3,856 10,192 — 3,047,094 Owner occupied - commercial real estate 696,754 53,189 5,501 — 755,444 Real estate mortgage - residential 103,220 659 478 — 104,357 Construction - commercial and residential 1,027,123 — 4,709 — 1,031,832 Home equity 92,084 686 494 — 93,264 Other consumer 3,505 2 91 — 3,598 Total $ 6,288,782 $ 92,555 $ 30,191 $ — $ 6,411,528 |
Schedule of information related to nonaccrual loans by class | The following table presents, by class of loan, information related to nonaccrual loans as of December 31, 2018 and 2017. (dollars in thousands) December 31, 2018 December 31, 2017 Commercial $ 7,115 $ 3,493 Income producing - commercial real estate 1,766 832 Owner occupied - commercial real estate 2,368 5,501 Real estate mortgage - residential 1,510 775 Construction - commercial and residential 3,031 2,052 Home equity 487 494 Other consumer — 91 Total nonaccrual loans (1)(2) $ 16,277 $ 13,238 (1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $24.0 million at December 31, 2018, and $12.3 million at December 31, 2017. (2) Gross interest income of $1.0 million and $939 thousand would have been recorded in 2018 and 2017, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $265 thousand and $101 thousand at December 31, 2018 and 2017, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. |
Schedule by class of loan, an aging analysis and the recorded investments in loans past due | The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of December 31, 2018 and 2017. Loans Loans Loans Total Recorded 30-59 Days 60-89 Days 90 Days or Total Past Current Investment in (dollars in thousands) Past Due Past Due More Past Due Due Loans Loans Loans December 31, 2018 Commercial $ 4,535 $ 2,870 $ 7,115 $ 14,520 $ 1,538,592 $ 1,553,112 Income producing - commercial real estate 5,855 27,479 1,766 35,100 3,221,800 3,256,900 Owner occupied - commercial real estate 5,051 2,370 2,368 9,789 878,025 887,814 Real estate mortgage – residential 2,456 1,698 1,510 5,664 100,754 106,418 Construction - commercial and residential 4,392 — 3,031 7,423 1,090,189 1,097,612 Home equity 630 47 487 1,164 85,439 86,603 Other consumer — — — — 2,988 2,988 Total $ 22,919 $ 34,464 $ 16,277 $ 73,660 $ 6,917,787 $ 6,991,447 December 31, 2017 Commercial $ 2,705 $ 748 $ 3,493 $ 6,946 $ 1,368,993 $ 1,375,939 Income producing - commercial real estate 4,398 6,930 832 12,160 3,034,934 3,047,094 Owner occupied - commercial real estate 522 3,906 5,501 9,929 745,515 755,444 Real estate mortgage – residential 6,993 1,244 775 9,012 95,345 104,357 Construction - commercial and residential — 5,268 2,052 7,320 1,024,512 1,031,832 Home equity 307 — 494 801 92,463 93,264 Other consumer 45 6 91 142 3,456 3,598 Total $ 14,970 $ 18,102 $ 13,238 $ 46,310 $ 6,365,218 $ 6,411,528 |
Schedule of impaired loans, by class of loan | The following table presents, by class of loan, information related to impaired loans for the years ended December 31, 2018 and 2017. Unpaid Recorded Recorded 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 December 31, 2018 Commercial $ 8,613 $ 2,057 $ 6,084 $ 8,141 $ 4,803 $ 10,306 $ 8,359 $ (126 ) $ 190 Income producing - commercial real estate 21,402 1,720 19,682 21,402 2,465 15,331 12,309 189 550 Owner occupied - commercial real estate 5,731 4,361 1,370 5,731 600 5,746 6,011 47 196 Real estate mortgage – residential 1,510 1,510 — 1,510 — 1,516 1,688 — 2 Construction - commercial and residential 3,031 3,031 — 3,031 1,050 3,031 2,028 — 68 Home equity 487 487 — 487 — 487 491 — — Other consumer — — — — — 46 69 — — Total $ 40,774 $ 13,166 $ 27,136 $ 40,302 $ 8,918 $ 36,463 $ 27,836 $ 110 $ 1,006 December 31, 2017 Commercial $ 5,644 $ 1,777 $ 3,748 $ 5,525 $ 3,259 $ 5,764 $ 5,765 $ 48 $ 145 Income producing - commercial real estate 10,044 781 9,263 10,044 2,380 10,068 10,127 120 493 Owner occupied - commercial real estate 6,596 1,095 5,501 6,596 1,382 6,743 5,210 27 73 Real estate mortgage – residential 775 775 — 775 — 538 423 17 17 Construction - commercial and residential 2,052 1,534 518 2,052 500 3,491 3,731 (14 ) — Home equity 494 494 — 494 — 544 346 — 2 Other consumer 91 — 91 91 80 92 93 — — Total $ 25,696 $ 6,456 $ 19,121 $ 25,577 $ 7,601 $ 27,240 $ 25,695 $ 198 $ 730 |
Schedule of loans modified in troubled debt restructurings | The following table presents, by class, the recorded investment of loans modified in TDRs held by the Company during the years ended December 31, 2018 and 2017. For the Year Ended December 31, 2018 (dollars in thousands) Number of Commercial Income Producing - Commercial Real Estate Owner Occupied - Commercial Real Estate Construction - Commercial Real Estate Total Troubled debt restructurings Restructured accruing 9 $ 1,026 $ 19,636 $ 3,363 $ — $ 24,025 Restructured nonaccruing 3 544 — — — 544 Total 12 $ 1,570 $ 19,636 $ 3,363 $ — $ 24,569 Specific allowance $ — $ 3,000 $ — $ — $ 3,000 Restructured and subsequently defaulted $ 408 $ 937 $ — $ — $ 1,345 For the Year Ended December 31, 2017 (dollars in thousands) Number of Contracts Commercial Income Producing - Commercial Real Estate Owner Occupied - Commercial Real Estate Construction - Commercial Real Estate Total Troubled debt restructings Restructured accruing 9 $ 2,032 $ 9,212 $ 1,095 $ — $ 12,339 Restructured nonaccruing 5 867 121 — — 988 Total 14 $ 2,899 $ 9,333 $ 1,095 $ — $ 13,327 Specific allowance $ 595 $ 2,350 $ — $ — $ 2,945 Restructured and subsequently defaulted $ 237 $ — $ — $ — $ 237 |
Schedule of changes in the credit mark accretable yield | The following table presents changes in the credit mark accretable yield, which includes income recognized from contractual interest cash flows, for the dates indicated. (dollars in thousands) 2018 2017 Balance at January 1, $ (2,459 ) $ (4,444 ) Net reclassifications from nonaccretable yield — — Accretion 964 1,985 Balance at December 31, $ (1,495 ) $ (2,459 ) |
Schedule of activity in related party loans | The following table summarizes changes in amounts of loans outstanding, both direct and indirect, to those persons during 2018 and 2017. (dollars in thousands) 2018 2017 Balance at January 1, $ 238,236 $ 137,816 Additions 55,657 138,565 Repayments (126,009 ) (38,145 ) Balance at December 31, $ 167,884 $ 238,236 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | Premises and equipment include the following at December 31: (dollars in thousands) 2018 2017 Leasehold improvements $ 31,026 $ 31,451 Furniture and equipment 31,168 29,667 Less accumulated depreciation and amortization (45,343 ) (40,127 ) Total premises and equipment, net $ 16,851 $ 20,991 |
Schedule of future minimum lease payments under non-cancelable operating leases | At December 31, 2018, future minimum lease payments under non-cancelable operating leases having an initial term in excess of one year are as follows: Years ending December 31: (dollars in thousands) Amount 2019 $ 8,435 2020 7,700 2021 7,611 2022 7,108 2023 6,750 Thereafter 29,138 Total minimum lease payments $ 66,742 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets are included in the Consolidated Balance Sheets as a separate line item, net of accumulated amortization and consist of the following items: Gross Net Intangible Accumulated FHA Intangible (dollars in thousands) Assets Additions Amortization MSR Sales Assets December 31, 2018 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (6,312 ) — 758 Excess servicing (3) 1,465 838 (1,053 ) (672 ) 578 Non-compete agreements (4) 345 0 (83 ) — 262 $ 113,048 $ 838 $ (7,448 ) $ (672 ) $ 105,766 December 31, 2017 Goodwill (1) $ 104,168 $ — $ — $ — $ 104,168 Core deposit (2) 7,070 — (5,355 ) — 1,715 Excess servicing (3) 472 993 (481 ) — 984 Non-compete agreements (4) — 345 — — 345 $ 111,710 $ 1,338 $ (5,836 ) $ — $ 107,212 (1) The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately $360 thousand. Based on allowable adjustments through August 31, 2009, the unidentified intangible (goodwill) amounted to approximately $2.2 million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately $102 million. (2) In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price to core deposit intangibles which were $2.3 million and $4.6 million, respectively, based off of an independent evaluation and is included in intangible assets, net of accumulated amortization on the Consolidated Balance Sheets. The initial amount recorded for the Fidelity acquisition was $2.3 million. The amount of the core deposit intangible relating to the Fidelity acquisition was fully amortized at December 31, 2018, as a component of other noninterest expense. The initial amount recorded for the Virginia Heritage acquisition was $4.6 million. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at December 31, 2018 was $758 thousand, which is being amortized over its remaining economic life through 2020 as a component of other noninterest expense. (3) The Company recognizes a servicing asset for the computed value of servicing fees on the sale of multifamily FHA loans and the sale of the guaranteed portion of SBA loans. Assumptions related to loan terms and amortization is made to arrive at the initial recorded values, which are included in other assets. During 2018, the Company sold a portion of its FHA mortgage servicing rights totaling $672 thousand for a net loss of $71 thousand. (4) The Company entered into a non-compete agreement for three years with its former Vice Chairman of the Bank. The amount of the non-compete intangible was $262 thousand as of December 31, 2018, which is being amortized over its remaining term through 2020 as a component of professional fees. |
Schedule of future estimated amortization expense | The future estimated annual amortization expense is presented below: Years ending December 31: (dollars in thousands) Amount 2019 1,051 2020 155 2021 71 2022 71 2023 71 Thereafter 179 Total annual amortization $ 1,598 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of activity of other real estate owned | For the year ended December 31, 2018, there were no sales of OREO compared to a net loss on sales of OREO of $301 thousand for the year ended December 31, 2017. Year Ended December 31, (dollars in thousands) 2018 2017 Balance at January 1, $ 1,394 $ 2,694 Real estate acquired from borrowers — 1,145 Properties sold — (2,445 ) Ending balance $ 1,394 $ 1,394 |
Interest Rate Swap Derivatives
Interest Rate Swap Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of balance sheet category and fair values of the derivative instruments | The table below identifies the balance sheet category and fair values of the Company’s designated cash flow hedge derivative instruments and non-designated hedges as of December 31, 2018 and December 31, 2017. December 31, 2018 December 31, 2017 Swap Notional Balance Sheet Notional Balance Sheet Number Amount Fair Value Category Amount Fair Value Category Derivatives designated as hedging instruments (dollars in thousands) Interest rate swap (1 ) $ 75,000 $ 845 Other Assets $ 75,000 $ 598 Other Assets Interest rate swap (2 ) 100,000 1,478 Other Assets 100,000 821 Other Assets Interest rate swap (3 ) 75,000 1,404 Other Assets 75,000 837 Other Assets Total $ 250,000 $ 3,727 $ 250,000 $ 2,256 Derivatives not designated as hedging instruments (dollars in thousands) Other Contracts (1 ) 27,500 59 Other Liabilities — — Other Liabilities Total $ 27,500 $ 59 $ — $ — |
Schedule of pretax net gains (losses) of dsignated cash flow hedges | The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the years ended December 31, 2018 and December 31, 2017. Year Ended December 31, 2018 Year Ended December 31, 2017 Amount of Reclassified from AOCI into Income Amount of Reclassified from AOCI into Income Swap Pre-tax gain Amount of Pre-tax (loss) Amount of Number Recognized in OCI Category Gain (Loss) Recognized in OCI Category (Loss) (dollars in thousands) Interest rate swap (1 ) $ 528 Interest Expense $ 240 $ 393 Interest Expense $ (400 ) Interest rate swap (2 ) 854 Interest Expense 198 702 Interest Expense (634 ) Interest rate swap (3 ) 688 Interest Expense 122 260 Interest Expense (560 ) Total $ 2,070 $ 560 $ 1,355 $ (1,594 ) |
Schedule of the effect of derivative financial instruments on the Consolidated Statements of Operations | The table below presents the pre-tax net gains (losses ) of the Company’s designated cash flow hedges for the years ended December 31, 2018 and 2017. Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships Year Ended December 31, 2018 Year Ended December 31, 2017 (dollars in thousands) Interest Income (Expense) Other Income (Expense) Interest Income (Expense) Other Income (Expense) Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 560 $ — $ (1,594 ) $ — The effects of cash flow hedging: Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 560 $ — $ (1,594 ) $ — |
Schedule of offsetting liabilities of derivatives | The following table presents the liabilities subject to an enforceable master netting arrangement as of December 31, 2018 and December 31, 2017. As of December 31, 2018 Offsetting of Derivative Assets (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 2,948 $ — $ 2,948 $ — $ — $ 2,948 Counterparty 2 892 — $ 892 — — $ 892 Counterparty 3 (59 ) — $ (59 ) — — $ (59 ) $ 3,781 $ — $ 3,781 $ — $ — $ 3,781 As of December 31, 2017 Offsetting of Derivative Assets (dollars in thousands) Gross Amounts Not Offset in the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Financial Instruments Cash Collateral Posted Net Amount Counterparty 1 $ 1,619 $ — $ 1,619 $ — $ — $ 1,619 Counterparty 2 582 — 582 — — 582 $ 2,201 $ — $ 2,201 $ — $ — $ 2,201 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of deposit composition and average interest rates | The following table provides information regarding the Bank’s deposit composition at December 31, 2018, 2017, and 2016 as well as the average rate being paid on interest bearing deposits at December 31, 2018, 2017, and 2016. 2018 2017 2016 Average Average Average (dollars in thousands) Balance Rate Balance Rate Balance Rate Noninterest bearing demand $ 2,104,220 — $ 1,982,912 — $ 1,775,684 — Interest bearing transaction 593,107 0.81 % 420,417 0.46 % 289,122 0.16 % Savings and money market 2,949,559 1.68 % 2,621,146 0.70 % 2,902,560 0.54 % Time, $100,000 or more 801,957 2.25 % 515,682 1.20 % 464,842 0.95 % Other time 525,442 2.25 % 313,827 1.17 % 283,906 0.86 % Total $ 6,974,285 $ 5,853,984 $ 5,716,114 |
Schedule of maturity of time deposits | The remaining maturity of time deposits at December 31, 2018, 2017 and 2016 are as follows: (dollars in thousands) 2018 2017 2016 Three months or less $ 230,360 $ 180,459 $ 120,238 More than three months through six months 355,022 228,513 151,422 More than six months through twelve months 308,063 208,554 207,141 Over twelve months 433,954 211,983 269,947 Total $ 1,327,399 $ 829,509 $ 748,748 |
Schedule of interest expense on deposits | Interest expense on deposits for the years ended December 31, 2018, 2017 and 2016 is as follows: (dollars in thousands) 2018 2017 2016 Interest bearing transaction $ 3,348 $ 1,537 $ 646 Savings and money market 35,534 17,284 12,038 Time, $100,000 or more 17,138 7,294 6,487 Other time 4,190 1,171 77 Total $ 60,210 $ 27,286 $ 19,248 |
Affordable Housing Projects T_2
Affordable Housing Projects Tax Credit Partnerships (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of expected payments for unfunded affordable housing commitments | As of December 31, 2018, the expected payments for unfunded affordable housing commitments were as follows: Years ending December 31: (dollars in thousands) Amount 2019 $ 6,111 2020 4,473 2021 3,114 2022 155 2023 247 Thereafter 889 Total unfunded commitments $ 14,989 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of short-term and long-term borrowings | Information relating to short-term and long-term borrowings is as follows for the years ended December 31: 2018 2017 2016 (dollars in thousands) Amount Rate Amount Rate Amount Rate Short-term: At Year-End: Customer repurchase agreements and federal funds purchased $ 30,413 0.86 % $ 76,561 0.33 % $ 76,561 0.33 % Federal Home Loan Bank – current portion — — 325,000 1.48 % 325,000 1.48 % Total $ 30,413 $ 401,561 $ 401,561 Average Daily Balance: Customer repurchase agreements and federal funds purchased $ 44,333 0.51 % $ 73,237 0.27 % $ 73,237 0.27 % Federal Home Loan Bank – current portion 192,131 2.02 % 65,416 1.13 % 65,416 1.13 % Total $ 236,464 $ 138,653 $ 138,653 Maximum Month-end Balance: Customer repurchase agreements and federal funds purchased $ 72,141 0.32 % $ 85,614 0.29 % $ 85,614 0.29 % Federal Home Loan Bank – current portion 325,000 1.62 % 325,000 1.48 % 325,000 1.48 % Total $ 397,141 $ 410,614 $ 410,614 Long-term: At Year-End: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Average Daily Balance: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Total $ 220,000 $ 220,000 $ 220,000 Maximum Month-end Balance: Subordinated Notes 220,000 5.42 % 220,000 5.42 % 220,000 5.42 % Total $ 220,000 $ 220,000 $ 220,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of federal and state income tax expense | Federal and state income tax expense consists of the following for the years ended December 31: (dollars in thousands) 2018 2017 2016 Current federal income tax expense $ 39,498 $ 59,019 $ 53,290 Current state income tax expense 15,931 7,511 13,733 Total current tax expense 55,429 66,530 67,023 Deferred federal income tax expense (benefit) (2,634 ) 18,459 (5,523 ) Deferred state income tax expense (benefit) (863 ) 515 (105 ) Total deferred tax expense (benefit) (3,497 ) 18,974 (5,628 ) Total income tax expense $ 51,932 $ 85,504 $ 61,395 |
Schedule of significant components of deferred tax assets and liabilities | The table below summarizes significant components of our deferred tax assets and liabilities utilizing federal corporate income tax rates of 21% as of December 31, 2018 and 2017 and 35% as of December 31, 2016: (dollars in thousands) 2018 2017 2016 Deferred tax assets Allowance for credit losses $ 18,101 $ 16,568 $ 23,738 Deferred loan fees and costs 6,733 6,741 10,728 Deferred rent 1,026 1,009 1,483 Stock-based compensation 1,722 847 3,037 Net operating loss 2,003 2,032 2,695 Unrealized loss on securities available-for-sale 2,756 1,312 1,303 Unrealized loss on interest rate swap derivatives — — 284 SERP 1,497 1,373 2,088 Premises and equipment 795 33 3,838 Other 287 35 477 Total deferred tax assets 34,920 29,950 49,671 Unrealized gain on interest rate swap derivatives (965 ) (578 ) — Excess servicing (77 ) (99 ) (191 ) Intangible assets (223 ) (503 ) (1,260 ) Other liabilities (328 ) — — Total deferred tax liabilities (1,593 ) (1,180 ) (1,451 ) Net deferred income tax amount $ 33,327 $ 28,770 $ 48,220 |
Schedule of reconciliation of the statutory federal income tax rate to effective income tax rate | A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31 follows: 2018 2017 2016 Statutory federal income tax rate 21.00 % 35.00 % 35.00 % Increase (decrease) due to State income taxes 5.83 3.41 5.57 Deferred tax adjustment related to Tax Act — 7.85 — Tax exempt interest and dividend income (1.13 ) (0.61 ) (0.98 ) Stock-based compensation expense 0.01 0.01 0.01 Other (0.28 ) 0.38 (1.01 ) Effective tax rates 25.43 % 46.04 % 38.59 % |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Common Share | |
Schedule of calculation of net income per common share | The calculation of net income per common share for the years ended December 31 was as follows: (dollars and shares in thousands, except per share data) 2018 2017 2016 Basic: Net income $ 152,276 $ 100,232 $ 97,707 Average common shares outstanding 34,306 34,139 33,587 Basic net income per common share $ 4.44 $ 2.94 $ 2.91 Diluted: Net income $ 152,276 $ 100,232 $ 97,707 Average common shares outstanding 34,306 34,139 33,587 Adjustment for common share equivalents 137 182 594 Average common shares outstanding-diluted 34,443 34,321 34,181 Diluted net income per common share $ 4.42 $ 2.92 $ 2.86 Anti-dilutive shares — — 7 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 December 31, 2018 and 2017. 2018 2017 Perfomance Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 62,338 $ 50.45 33,226 $ 42.60 Issued 42,533 60.45 36,523 57.49 Forfeited (5,913 ) 50.28 (2,520 ) 41.93 Vested — — (4,891 ) 54.70 Unvested at end 98,958 $ 54.76 62,338 $ 50.45 Year Ended December 31, 2018 2017 Time Vested Awards Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Unvested at beginning 164,043 $ 53.57 262,966 $ 33.60 Issued 94,344 60.45 91,097 62.70 Forfeited (7,132 ) 56.48 (2,360 ) 49.52 Vested (77,534 ) 49.67 (187,660 ) 30.07 Unvested at end 173,721 $ 58.93 164,043 $ 53.57 |
Schedule of activity of stock options | Below is a summary of stock option activity for the twelve months ended December 31, 2018 , Year Ended December 31, 2018 2017 2016 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Beginning balance 143,224 $ 9.13 216,859 $ 8.80 298,740 $ 9.97 Issued — — — — 3,000 49.49 Exercised (108,201 ) 7.17 (72,535 ) 8.19 (77,144 ) 14.48 Forfeited (900 ) 34.47 — — (1,100 ) 15.48 Expired — — (1,100 ) 5.76 (6,637 ) 12.87 Ending balance 34,123 $ 14.69 143,224 $ 9.13 216,859 $ 8.80 |
Schedule of stock option by exercise price range | The following summarizes information about stock options outstanding at December 31, 2018. 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 22,024 $ 5.76 0.02 $10.73 $11.40 5,089 11.17 2.88 $11.41 $24.86 660 20.03 4.06 $24.87 $49.91 6,350 47.91 3.66 34,123 $ 14.69 1.20 Exercisable: Stock Options Weighted-Average Range of Exercise Prices Exercisable Exercise Price $5.76 $10.72 4,675 $ 5.76 $10.73 $11.40 5,089 11.17 $11.41 $24.86 660 20.03 $24.87 $49.91 4,850 47.42 15,274 $ 21.41 |
Schedule of valuation assumptions used for stock options | 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, 2018, 2017 and 2016. Years Ended December 31, 2018 2017 2016 Expected volatility n/a n/a 24.23 % Weighted-Average volatility n/a n/a 24.23 % Expected dividends — — — Expected term (in years) n/a n/a 7.0 Risk-free rate n/a n/a 1.37 % Weighted-average fair value (grant date) n/a n/a $ 14.27 |
Schedule of cash proceeds, tax benefits and intrinsic value related to total stock options exercised | Cash proceeds, tax benefits and intrinsic value related to total stock options exercised is as follows: Years Ended December 31, (dollars in thousands) 2018 2017 2016 Proceeds from stock options exercised $ 776 $ 372 $ 955 Tax benefits realized from stock compensation 5 99 400 Intrinsic value of stock options exercised 4,958 3,888 2,824 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments With Offbalance Sheet Risk Tables Abstract | |
Schedule of loan commitments outstanding and lines and letters of credit | Loan commitments outstanding and lines and letters of credit at December 31, 2018 and 2017 are as follows: (dollars in thousands) 2018 2017 Unfunded loan commitments $ 2,228,689 $ 2,267,774 Unfunded lines of credit 90,283 96,477 Letters of credit 83,162 68,723 Total $ 2,402,134 $ 2,432,974 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of details on these fixed and determinable obligations | Except for its loan commitments, as shown in Note 20 to the Consolidated Financial Statements, the following table shows details on these fixed and determinable obligations as of December 31, 2018 in the time period indicated. Within One One to Three to Over Five (dollars in thousands) Year Three Years Five Years Years Total Deposits without a stated maturity (1) $ 5,646,886 $ — $ — $ — $ 5,646,886 Time deposits (1) 893,445 396,942 37,012 — 1,327,399 Borrowed funds (2) 30,413 — — 220,000 250,413 Operating lease obligations 8,435 15,311 13,858 29,138 66,742 Outside data processing (3) 4,525 8,091 7,630 3,815 24,061 George Mason sponsorship (4) 650 1,325 1,350 8,475 11,800 D.C. United (5) 773 1,615 844 — 3,232 Non-Compete agreement (6) 21 — — — 21 LIHTC investments (7) 6,111 7,587 402 889 14,989 Total $ 6,591,259 $ 430,871 $ 61,096 $ 262,317 $ 7,345,543 (1) Excludes accrued interest payable at December 31, 2018. (2) Borrowed funds include customer repurchase agreements, and other short-term and long-term borrowings. (3) The Bank has outstanding obligations under its current core data processing contract that expire in March 2025 and two other vendor arrangements that relate to network infrastructure and data center services, one expires in July 2020 and the other expires in December 2019. (4) The Bank has the option of terminating the George Mason agreement at the end of contract years 10 and 15 (that is, effective June 30, 2025 or June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, contractual obligations would decrease $3.5 million and $3.6 million for the first option period (years 11-15) and the second option period (16-20), respectively. (5) Marketing sponsorship agreement with D.C. United (6) Non-compete agreement with a retired Director. (7) Low Income Housing Tax Credits (“LIHTC”) expected payments for unfunded affordable housing commitments. |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Matters Tables Abstract | |
Schedule of regulatory capital requirements under banking regulations | The actual capital amounts and ratios for the Company and Bank as of December 31, 2018 and 2017 are presented in the table below: Company Bank To Be Well Actual Actual Minimum Required For Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Capital Adequacy Purposes Regulations * As of December 31, 2018 CET1 capital (to risk weighted assets) $ 1,007,438 12.49 % $ 1,147,151 14.23 % 6.375 % 6.5 % Total capital (to risk weighted assets) 1,297,427 16.08 % 1,217,140 15.10 % 9.875 % 10.0 % Tier 1 capital (to risk weighted assets) 1,007,438 12.49 % 1,147,151 14.23 % 7.875 % 8.0 % Tier 1 capital (to average assets) 1,007,438 12.10 % 1,147,151 13.78 % 5.000 % 5.0 % As of December 31, 2017 CET1 capital (to risk weighted assets) $ 845,123 11.23 % $ 969,250 12.91 % 5.750 % 6.5 % Total capital (to risk weighted assets) 1,129,954 15.02 % 1,033,554 13.76 % 9.250 % 10.0 % Tier 1 capital (to risk weighted assets) 845,123 11.23 % 969,250 12.91 % 7.250 % 8.0 % Tier 1 capital (to average assets) 845,123 11.45 % 969,250 13.15 % 5.000 % 5.0 % * |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Comprehensive Income Tables Abstract | |
Schedule of components of other comprehensive income (loss) | The following table presents the components of other comprehensive income (loss) for the years ended December 31, 2018, 2017 and 2016. (dollars in thousands) Before Tax Tax Effect Net of Tax Year Ended December 31, 2018 Net unrealized loss on securities available-for-sale $ (4,279 ) $ (438 ) $ (3,841 ) Less: Reclassification adjustment for net gains included in net income (97 ) (25 ) (72 ) Total unrealized loss (4,376 ) (463 ) (3,913 ) Net unrealized gain on derivatives 2,033 227 1,806 Less: Reclassification adjustment for gain included in net income (560 ) (142 ) (418 ) Total unrealized gain 1,473 85 1,388 Other Comprehensive Loss $ (2,903 ) $ (378 ) $ (2,525 ) Year Ended December 31, 2017 Net unrealized loss on securities available-for-sale $ (1,319 ) $ (479 ) $ (840 ) Less: Reclassification adjustment for net gains included in net income (542 ) (206 ) (336 ) Total unrealized loss (1,861 ) (685 ) (1,176 ) Net unrealized gain on derivatives 4,559 1,765 2,794 Less: Reclassification adjustment for losses included in net income (1,592 ) (605 ) (987 ) Total unrealized gain 2,967 1,160 1,807 Other Comprehensive Income $ 1,106 $ 475 $ 631 Year Ended December 31, 2016 Net unrealized loss on securities available-for-sale $ (3,800 ) $ (1,520 ) $ (2,280 ) Less: Reclassification adjustment for net gains included in net income (1,194 ) (478 ) (716 ) Total unrealized loss (4,994 ) (1,998 ) (2,996 ) Net unrealized gain on derivatives (2,947 ) (2,018 ) (929 ) Less: Reclassification adjustment for losses included in net income 2,255 902 1,353 Total unrealized gain (692 ) (1,116 ) 424 Other Comprehensive Loss $ (5,686 ) $ (3,114 ) $ (2,572 ) |
Schedule of changes in each component of accumulated other comprehensive income (loss), net of tax | The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018, 2017 and 2016. Securities Accumulated Other (dollars in thousands) Available For Sale Derivatives Comprehensive Income (Loss) Year Ended December 31, 2018 Balance at Beginning of Period $ (3,131 ) $ 1,381 $ (1,750 ) Other comprehensive income (loss) before reclassifications (3,841 ) 1,806 (2,035 ) Amounts reclassified from accumulated other comprehensive income (72 ) (418 ) (490 ) Net other comprehensive income during period (3,913 ) 1,388 (2,525 ) Balance at End of Period $ (7,044 ) $ 2,769 $ (4,275 ) Year Ended December 31, 2017 Balance at Beginning of Period $ (1,955 ) $ (426 ) $ (2,381 ) Other comprehensive income before reclassifications (840 ) 2,794 1,954 Amounts reclassified from accumulated other comprehensive income (336 ) (987 ) (1,323 ) Net other comprehensive income during period (1,176 ) 1,807 631 Balance at End of Period $ (3,131 ) $ 1,381 $ (1,750 ) Year Ended December 31, 2016 Balance at Beginning of Period $ 1,041 $ (850 ) $ 191 Other comprehensive income before reclassifications (2,280 ) (934 ) (3,214 ) Amounts reclassified from accumulated other comprehensive income (716 ) 1,358 642 Net other comprehensive income during period (2,996 ) 424 (2,572 ) Balance at End of Period $ (1,955 ) $ (426 ) $ (2,381 ) |
Schedule of amounts reclassified out of accumulated other comprehensive (loss) income | The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2018, 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 Year Ended December 31, 2018 2017 2016 Realized gain on sale of investment securities $ 97 $ 542 $ 1,194 Gain on sale of investment securities Interest income (expense) derivative deposits 560 (1,592 ) (1,695 ) Interest expense on deposits Interest expense derivative borrowings — — (569 ) Interest expense on short-term borrowings Income tax (expense) benefit (167 ) 399 428 Tax expense Total Reclassifications for the Period $ 490 $ (651 ) $ (642 ) Net Income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of recorded amount of assets and liabilities measured at fair value on a recurring basis | The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017: (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2018 Assets: Investment securities available for sale: U. S. agency securities $ — $ 256,345 $ — $ 256,345 Residential mortgage backed securities — 472,231 — 472,231 Municipal bonds — 45,769 — 45,769 Corporate bonds — — 9,576 9,576 Other equity investments — — 218 218 Loans held for sale — 19,254 — 19,254 Mortgage banking derivatives — — 229 229 Interest rate swap derivatives — 3,727 — 3,727 Total assets measured at fair value on a recurring basis as of December 31, 2018 $ — $ 797,326 $ 10,023 $ 807,349 Liabilities: Mortgage banking derivatives $ — $ — $ 269 $ 269 Total liabilities measured at fair value on a recurring basis as of December 31, 2018 $ — $ — $ 269 $ 269 December 31, 2017 Assets: Investment securities available for sale: U. S. agency securities $ — $ 195,984 $ — $ 195,984 Residential mortgage backed securities — 317,836 — 317,836 Municipal bonds — 62,057 — 62,057 Corporate bonds — 11,673 1,500 13,173 Other equity investments — — 218 218 Loans held for sale — 25,096 — 25,096 Mortgage banking derivatives — — 43 43 Interest rate swap derivatives — 2,256 — 2,256 Total assets measured at fair value on a recurring basis as of December 31, 2017 $ — $ 614,902 $ 1,761 $ 616,663 Liabilities: Mortgage banking derivatives $ — $ — $ 10 $ 10 Total liabilities measured at fair value on a recurring basis as of December 31, 2017 $ — $ — $ 10 $ 10 |
Schedule of aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value | The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of December 31, 2018 and December 31, 2017. December 31, 2018 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 19,254 $ 18,797 $ 457 FHA mortgage loans held for sale $ — $ — $ — December 31, 2017 Aggregate Unpaid (dollars in thousands) Fair Value Principal Balance Difference Residential mortgage loans held for sale $ 25,096 $ 24,674 $ 422 FHA mortgage loans held for sale $ — $ — $ — |
Schedule of the reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3) | The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3): Investment Mortgage Banking (dollars in thousands) Securities Derivatives Total Assets: Beginning balance at January 1, 2018 $ 1,718 $ 43 $ 1,761 Realized gain included in earnings - net mortgage banking derivatives — 186 186 Reclass from level 2 8,076 — 8,076 Principal redemption — — — Ending balance at December 31, 2018 $ 9,794 $ 229 $ 10,023 Liabilities: Beginning balance at January 1, 2018 $ — $ 10 $ 10 Realized loss included in earnings - net mortgage banking derivatives — 259 259 Principal redemption — — — Ending balance at December 31, 2018 $ — $ 269 $ 269 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 — (71 ) (71 ) Purchases of available-for-sale securities — — — Principal redemption — — — Ending balance at December 31, 2017 $ 1,718 $ 43 $ 1,761 Liabilities: Beginning balance at January 1, 2017 $ — $ 55 $ 55 Realized loss included in earnings - net mortgage banking derivatives — (45 ) (45 ) Principal redemption — — — Ending balance at December 31, 2017 $ — $ 10 $ 10 |
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 Observable Inputs Significant Other Total December 31, 2018 Impaired loans: Commercial $ — $ — $ 3,338 $ 3,338 Income producing - commercial real estate — — 18,937 18,937 Owner occupied - commercial real estate — — 5,131 5,131 Real estate mortgage - residential — — 1,510 1,510 Construction - commercial and residential 1,981 1,981 Home equity — — 487 487 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2018 $ — $ — $ 32,778 $ 32,778 (dollars in thousands) Quoted Prices Significant Other Significant Other Total December 31, 2017 Impaired loans: Commercial $ — $ — $ 2,266 $ 2,266 Income producing - commercial real estate — — 7,664 7,664 Owner occupied - commercial real estate — — 5,214 5,214 Real estate mortgage - residential — — 775 775 Construction - commercial and residential — — 1,552 1,552 Home equity — — 494 494 Other consumer — — 11 11 Other real estate owned — — 1,394 1,394 Total assets measured at fair value on a nonrecurring basis as of December 31, 2017 $ — $ — $ 19,370 $ 19,370 |
Schedule of estimated fair values of financial instruments | The estimated fair values of the Company’s financial instruments at December 31, 2018 and 2017 are as follows: Fair Value Measurements Quoted Prices Significant Other Observable Inputs Significant Unobservable Inputs (dollars in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) December 31, 2018 Assets Cash and due from banks $ 6,773 $ 6,773 $ — $ 6,773 $ — Federal funds sold 11,934 11,934 — 11,934 — Interest bearing deposits with other banks 303,157 303,157 — 303,157 — Investment securities 784,139 784,139 — 774,345 9,794 Federal Reserve and Federal Home Loan Bank stock 23,506 23,506 — 23,506 — Loans held for sale 19,254 19,254 — 19,254 — Loans (1) 6,921,503 6,921,048 — — 6,921,048 Bank owned life insurance 73,441 73,441 — 73,441 — Annuity investment 12,417 12,417 — 12,417 — Mortgage banking derivatives 229 229 — — 229 Interest rate swap derivatives 3,727 3,727 — 3,727 — Liabilities Noninterest bearing deposits 2,104,220 2,104,220 — 2,104,220 — Interest bearing deposits 3,542,666 3,542,666 — 3,542,666 — Certificates of deposit 1,327,399 1,325,209 — 1,325,209 — Customer repurchase agreements 30,413 30,413 — 30,413 — Borrowings 217,196 218,006 — 218,006 — Mortgage banking derivatives 269 269 — — 269 December 31, 2017 Assets Cash and due from banks $ 7,445 $ 7,445 $ — $ 7,445 $ — Federal funds sold 15,767 15,767 — 15,767 — Interest bearing deposits with other banks 167,261 167,261 — 167,261 — Investment securities 589,268 589,268 — 587,550 1,718 Federal Reserve and Federal Home Loan Bank stock 36,324 36,324 — 36,324 — Loans held for sale 25,096 25,096 — 25,096 — Loans (2) 6,346,770 6,381,213 — — 6,381,213 Bank owned life insurance 60,947 60,947 — 60,947 — Annuity investment 11,632 11,632 — 11,632 — Mortgage banking derivatives 43 43 — — 43 Interest rate swap derivatives 2,256 2,256 — 2,256 — Liabilities Noninterest bearing deposits 1,982,912 1,982,912 — 1,982,912 — Interest bearing deposits 3,041,563 3,041,563 — 3,041,563 — Certificates of deposit 829,509 829,886 — 829,886 — Customer repurchase agreements 76,561 76,561 — 76,561 — Borrowings 541,905 533,162 — 533,162 — Mortgage banking derivatives 10 10 — — 10 (1) Carrying amount is net of unearned income and the allowance for credit losses. In accordance with the prospective adoption of ASU No. 2016-01, the fair value of loans was measured using an exit price notion. (2) Carrying amount is net of unearned income and the allowance for credit losses. The fair value of loans was measured using an entry price notion. |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Schedule of quarterly results of operations (unaudited) | The following table reports quarterly results of operations (unaudited) for 2018, 2017 and 2016: 2018 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 105,581 $ 102,360 $ 96,296 $ 89,049 Total interest expense 23,869 21,069 18,086 13,269 Net interest income 81,712 81,291 78,210 75,780 Provision for credit losses 2,600 2,441 1,650 1,969 Net interest income after provision for credit losses 79,112 78,850 76,560 73,811 Noninterest income 6,089 5,640 5,553 5,304 Noninterest expense 31,687 31,614 32,289 31,121 Income before income tax expense 53,514 52,876 49,824 47,994 Income tax expense 13,197 13,928 12,528 12,279 Net income 40,317 38,948 37,296 35,715 Net income available to common shareholders $ 40,317 $ 38,948 $ 37,296 $ 35,715 Earnings per common share Basic (1) $ 1.17 $ 1.14 $ 1.09 $ 1.04 Diluted (1) $ 1.17 $ 1.13 $ 1.08 $ 1.04 2017 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 86,526 $ 82,370 $ 79,344 $ 75,794 Total interest expense 11,167 10,434 9,646 8,900 Net interest income 75,359 71,936 69,698 66,894 Provision for credit losses 4,087 1,921 1,566 1,397 Net interest income after provision for credit losses 71,272 70,015 68,132 65,497 Noninterest income 9,496 6,784 7,023 6,070 Noninterest expense 29,803 29,516 30,001 29,232 Income before income tax expense 50,965 47,283 45,154 42,335 Income tax expense 35,396 17,409 17,382 15,318 Net income 15,569 29,874 27,772 27,017 Net income available to common shareholders $ 15,569 $ 29,874 $ 27,772 $ 27,017 Earnings per common share Basic (1) $ 0.46 $ 0.87 $ 0.81 $ 0.79 Diluted (1) $ 0.45 $ 0.87 $ 0.81 $ 0.79 2016 (dollars in thousands except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Total interest income $ 75,795 $ 72,431 $ 69,772 $ 67,807 Total interest expense 8,771 7,703 5,950 5,216 Net interest income 67,024 64,728 63,822 62,591 Provision for credit losses 2,112 2,288 3,888 3,043 Net interest income after provision for credit losses 64,912 62,440 59,934 59,548 Noninterest income 7,014 6,405 7,575 6,290 Noninterest expense 29,780 28,838 28,295 28,103 Income before income tax expense 42,146 40,007 39,214 37,735 Income tax expense 16,429 15,484 15,069 14,413 Net income 25,717 24,523 24,145 23,322 Net income available to common shareholders $ 25,717 $ 24,523 $ 24,145 $ 23,322 Earnings per common share Basic (1) $ 0.76 $ 0.73 $ 0.72 $ 0.70 Diluted (1) $ 0.75 $ 0.72 $ 0.71 $ 0.68 (1) Earnings per common share are calculated on a quarterly basis and may not be additive to the year to date amount. |
Parent Company Financial Info_2
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Balance Sheet for Parent Company only | Condensed financial information for Eagle Bancorp, Inc. (Parent Company only) is as follows: (dollars in thousands) December 31, 2018 December 31, 2017 Assets Cash $ 72,783 $ 77,883 Investment securities available-for-sale, at fair value 100 100 Investment in subsidiaries 1,249,704 1,088,670 Other assets 8,214 5,315 Total Assets $ 1,330,801 $ 1,171,968 Liabilities Other liabilities $ 4,564 $ 4,625 Long-term borrowings 217,296 216,905 Total liabilities 221,860 221,530 Shareholders’ Equity Common stock 342 340 Additional paid in capital 528,380 520,304 Retained earnings 584,494 431,544 Accumulated other comprehensive loss (4,275 ) (1,750 ) Total Shareholders’ Equity 1,108,941 950,438 Total Liabilities and Shareholders’ Equity $ 1,330,801 $ 1,171,968 |
Schedule of Condensed Income Statement for Parent Company only | Condensed financial information for Eagle Bancorp, Inc. (Parent Company only) is as follows: Years Ended December 31, (dollars in thousands) 2018 2017 2016 Income Other interest and dividends $ 678 $ 234 $ 280 Gain on sale of investment securities — — 43 Total Income $ 678 $ 234 $ 323 Expenses Interest expense 11,916 11,916 7,493 Legal and professional 870 118 131 Directors compensation 614 352 202 Other 1,287 1,246 1,083 Total Expenses $ 14,687 $ 13,632 $ 8,909 Loss Before Income Tax (Benefit) and Equity in Undistributed Income of Subsidiaries (14,009 ) (13,398 ) (8,586 ) Income Tax Benefit (2,892 ) (4,689 ) (2,919 ) Loss Before Equity in Undistributed Income of Subsidiaries (11,117 ) (8,709 ) (5,667 ) Equity in Undistributed Income of Subsidiaries 163,393 108,941 103,374 Net Income $ 152,276 $ 100,232 $ 97,707 |
Schedule of Condensed Cash Flow Statement for Parent Company only | Condensed financial information for Eagle Bancorp, Inc. (Parent Company only) is as follows: Years Ended December 31, (dollars in thousands) 2018 2017 2016 Cash Flows From Operating Activities Net Income $ 152,276 $ 100,232 $ 97,707 Adjustments to reconcile net income to net cash used in operating activities: (163,393 ) (108,941 ) (103,374 ) Net tax benefits from stock compensation 110 460 — Excess tax benefit on stock-based compensation — — (400 ) Increase in other assets (2,508 ) (988 ) (1,491 ) (Decrease) increase in other liabilities (61 ) (189 ) 3,186 Net cash used in operating activities (13,576 ) (9,426 ) (4,372 ) Cash Flows From Investing Activities Proceeds from sale of available-for-sale securities — — 135 Investment in subsidiary (net) 6,892 (460 ) (124,636 ) Net cash provided by (used in) investing activities 6,892 (460 ) (124,501 ) Cash Flows From Financing Activities Issuance in long-term borrowings — — 147,586 Proceeds from exercise of stock options 776 372 955 Excess tax benefit on stock-based compensation — — 400 Proceeds from employee stock purchase plan 808 836 801 Net cash provided by financing activities 1,584 1,208 149,742 Net (Decrease) Increase in Cash (5,100 ) (8,678 ) 20,869 Cash and Cash Equivalents at Beginning of Year 77,883 86,561 65,692 Cash and Cash Equivalents at End of Year $ 72,783 $ 77,883 $ 86,561 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018Number | Dec. 31, 2017USD ($) | |
Banking Services [Member] | ||
Number of locations | 20 | |
Lending Services [Member] | ||
Number of locations | 5 | |
Minimum [Member] | ||
Days from commitment to closing | 30 days | |
Maximum [Member] | ||
Days from commitment to closing | 90 days | |
Furniture Fixtures and Equipment [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Furniture Fixtures and Equipment [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 7 years | |
Computer Software and Hardware [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Computer Software and Hardware [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 5 years | |
Building Improvements [Member] | Minimum [Member] | ||
Property, plant and equipment, useful life | 5 years | |
Building Improvements [Member] | Maximum [Member] | ||
Property, plant and equipment, useful life | 20 years | |
Risk Level, High [Member] | Eagle Commercial Ventures, LLC [Member] | ||
Loans receivable, net | $ | $ 7,700 |
Investment Securities Availab_3
Investment Securities Available-for-Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized cost | $ 793,634 | $ 594,386 |
Gross unrealized gains | 2,321 | 1,928 |
Gross unrealized losses | 11,816 | 7,046 |
Estimated fair value | 784,139 | 589,268 |
US Agency Securities [Member] | ||
Amortized cost | 260,150 | 198,115 |
Gross unrealized gains | 228 | 283 |
Gross unrealized losses | 4,033 | 2,414 |
Estimated fair value | 256,345 | 195,984 |
Residential Mortgage Backed Securities [Member] | ||
Amortized cost | 477,949 | 322,067 |
Gross unrealized gains | 1,575 | 187 |
Gross unrealized losses | 7,293 | 4,418 |
Estimated fair value | 472,231 | 317,836 |
Municipal Bonds [Member] | ||
Amortized cost | 45,814 | 60,976 |
Gross unrealized gains | 439 | 1,295 |
Gross unrealized losses | 484 | 214 |
Estimated fair value | 45,769 | 62,057 |
Corporate Bonds [Member] | ||
Amortized cost | 9,503 | 13,010 |
Gross unrealized gains | 79 | 163 |
Gross unrealized losses | 6 | |
Estimated fair value | 9,576 | 13,173 |
Investment Securities [Member] | ||
Amortized cost | 218 | 218 |
Estimated fair value | $ 218 | $ 218 |
Investment Securities Availab_4
Investment Securities Available-for-Sale (Details 1) $ in Thousands | Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number |
Available-for-sale securities in a continuous loss position, number of securities | Number | 221 | 183 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 139,671 | $ 272,060 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 1,116 | 2,593 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 387,672 | 203,046 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 10,700 | 4,453 |
Available-for-sale securities in a continuous loss position, estimated fair value | 527,343 | 475,106 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 11,816 | $ 7,046 |
US Agency Securities [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 58 | 38 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 72,679 | $ 102,264 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 533 | 1,073 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 144,636 | 55,093 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 3,500 | 1,341 |
Available-for-sale securities in a continuous loss position, estimated fair value | 217,315 | 157,357 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 4,033 | $ 2,414 |
Residential Mortgage Backed Securities [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 151 | 137 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 61,199 | $ 152,350 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 527 | 1,306 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 225,995 | 147,953 |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 6,766 | 3,112 |
Available-for-sale securities in a continuous loss position, estimated fair value | 287,194 | 300,303 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 7,293 | $ 4,418 |
Municipal Bonds [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 11 | 8 |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 4,299 | $ 17,446 |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 50 | 214 |
Available-for-sale securities in a continuous loss position, 12 months or greater, estimated fair value | 17,041 | |
Available-for-sale securities in a continuous loss position, 12 months or greater, unrealized losses | 434 | |
Available-for-sale securities in a continuous loss position, estimated fair value | 21,340 | 17,446 |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 484 | $ 214 |
Corporate Bonds [Member] | ||
Available-for-sale securities in a continuous loss position, number of securities | Number | 1 | |
Available-for-sale securities in a continuous loss position, less than 12 months, estimated fair value | $ 1,494 | |
Available-for-sale securities in a continuous loss position, less than 12 months, unrealized losses | 6 | |
Available-for-sale securities in a continuous loss position, estimated fair value | 1,494 | |
Available-for-sale securities in a continuous loss position, unrealized losses | $ 6 |
Investment Securities Availab_5
Investment Securities Available-for-Sale (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized cost | $ 793,634 | $ 594,386 |
Estimated fair value | 784,139 | 589,268 |
US Agency Securities [Member] | ||
One year or less, amortized cost | 128,148 | 109,893 |
After one year through five years, amortized cost | 119,856 | 74,106 |
Five years through ten years, amortized cost | 12,146 | 14,116 |
One year or less, estimated fair value | 125,545 | 108,198 |
After one year through five years, estimated fair value | 118,883 | 73,916 |
Five years through ten years, estimated fair value | 11,917 | 13,870 |
Residential Mortgage Backed Securities [Member] | ||
Amortized cost, without maturity date | 477,949 | 322,067 |
Estimated fair value, without maturity date | 472,231 | 317,836 |
Municipal Bonds [Member] | ||
One year or less, amortized cost | 8,097 | 5,068 |
After one year through five years, amortized cost | 15,025 | 19,405 |
Five years through ten years, amortized cost | 21,626 | 35,432 |
After ten years, amortized cost | 1,066 | 1,071 |
One year or less, estimated fair value | 8,167 | 5,171 |
After one year through five years, estimated fair value | 15,081 | 19,879 |
Five years through ten years, estimated fair value | 21,385 | 35,846 |
After ten years, estimated fair value | 1,136 | 1,161 |
Corporate Bonds [Member] | ||
After one year through five years, amortized cost | 8,003 | 11,510 |
After ten years, amortized cost | 1,500 | 1,500 |
After one year through five years, estimated fair value | 8,076 | 11,673 |
After ten years, estimated fair value | 1,500 | 1,500 |
Investment Securities [Member] | ||
Amortized cost, without maturity date | 218 | 218 |
Estimated fair value, without maturity date | $ 218 | $ 218 |
Investment Securities Availab_6
Investment Securities Available-for-Sale (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Federal home loan bank stock and federal reserve bank stock | $ 23,506 | $ 36,324 | |
Debt securities as percentage of total investment securities | 99.90% | ||
Debt securities weighted average duration | 3 years 7 months 6 days | ||
Available-for-sale securities, gross realized gains | $ 391 | 796 | $ 1,400 |
Available-for-sale securities, gross realized losses | 294 | 254 | 188 |
Proceeds from sale of available-for-sale securities | 36,300 | $ 73,100 | $ 94,300 |
Collateral Pledged [Member] | |||
Available-for-sale securities pledged as collateral | $ 528,200 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans | $ 6,991,447 | $ 6,411,528 |
Loans, percent | 100.00% | 100.00% |
Less: allowance for credit losses | $ (69,944) | $ (64,758) |
Loans, net | 6,921,503 | 6,346,770 |
Commercial [Member] | ||
Loans | $ 1,553,112 | $ 1,375,939 |
Loans, percent | 22.00% | 21.00% |
Income Producing - Commercial Real Estate [Member] | ||
Loans | $ 3,256,900 | $ 3,047,094 |
Loans, percent | 46.00% | 48.00% |
Owner Occupied - Commercial Real Estate - [Member] | ||
Loans | $ 887,814 | $ 755,444 |
Loans, percent | 13.00% | 12.00% |
Real Estate Mortgage Residential [Member] | ||
Loans | $ 106,418 | $ 104,357 |
Loans, percent | 2.00% | 2.00% |
Construction - Commercial and Residential [Member] | ||
Loans | $ 1,097,612 | $ 1,031,832 |
Construction - Commercial and Residential [Member] | Commercial And Residential [Member] | ||
Loans | $ 1,039,815 | $ 973,141 |
Loans, percent | 15.00% | 15.00% |
Construction - Commercial and Residential [Member] | C & I Owner Occupied [Member] | ||
Loans | $ 57,797 | $ 58,691 |
Loans, percent | 1.00% | 1.00% |
Home Equity [Member] | ||
Loans | $ 86,603 | $ 93,264 |
Loans, percent | 1.00% | 1.00% |
Other Consumer [Member] | ||
Loans | $ 2,988 | $ 3,598 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Credit Losses, beginning balance | $ 64,758 | $ 59,074 |
Loans charged-off | (4,985) | (4,575) |
Recoveries of loans previously charged-off | 1,511 | 1,288 |
Net loans charged-off | (3,474) | (3,287) |
Provision for credit losses | 8,660 | 8,971 |
Allowance for Credit Losses, ending balance | 69,944 | 64,758 |
Individually evaluated for impairment | 8,918 | 7,601 |
Collectively evaluated for impairment | 61,026 | 57,157 |
Commercial [Member] | ||
Allowance for Credit Losses, beginning balance | 13,102 | 14,700 |
Loans charged-off | (3,491) | (747) |
Recoveries of loans previously charged-off | 340 | 681 |
Net loans charged-off | (3,151) | (66) |
Provision for credit losses | 5,906 | (1,532) |
Allowance for Credit Losses, ending balance | 15,857 | 13,102 |
Individually evaluated for impairment | 4,803 | 3,259 |
Collectively evaluated for impairment | 11,054 | 9,843 |
Income Producing - Commercial Real Estate [Member] | ||
Allowance for Credit Losses, beginning balance | 25,376 | 21,105 |
Loans charged-off | (121) | (1,470) |
Recoveries of loans previously charged-off | 2 | 80 |
Net loans charged-off | (119) | (1,390) |
Provision for credit losses | 2,777 | 5,661 |
Allowance for Credit Losses, ending balance | 28,034 | 25,376 |
Individually evaluated for impairment | 2,465 | 2,380 |
Collectively evaluated for impairment | 25,569 | 22,996 |
Owner Occupied - Commercial Real Estate - [Member] | ||
Allowance for Credit Losses, beginning balance | 5,934 | 4,010 |
Loans charged-off | (132) | |
Recoveries of loans previously charged-off | 3 | 3 |
Net loans charged-off | (129) | 3 |
Provision for credit losses | 437 | 1,921 |
Allowance for Credit Losses, ending balance | 6,242 | 5,934 |
Individually evaluated for impairment | 600 | 1,382 |
Collectively evaluated for impairment | 5,642 | 4,552 |
Real Estate Mortgage Residential [Member] | ||
Allowance for Credit Losses, beginning balance | 944 | 1,284 |
Recoveries of loans previously charged-off | 6 | 6 |
Net loans charged-off | 6 | 6 |
Provision for credit losses | 15 | (346) |
Allowance for Credit Losses, ending balance | 965 | 944 |
Collectively evaluated for impairment | 965 | 944 |
Construction - Commercial and Residential [Member] | ||
Allowance for Credit Losses, beginning balance | 18,492 | 16,487 |
Loans charged-off | (1,160) | (2,158) |
Recoveries of loans previously charged-off | 1,009 | 492 |
Net loans charged-off | (151) | (1,666) |
Provision for credit losses | (166) | 3,671 |
Allowance for Credit Losses, ending balance | 18,175 | 18,492 |
Individually evaluated for impairment | 1,050 | 500 |
Collectively evaluated for impairment | 17,125 | 17,992 |
Home Equity [Member] | ||
Allowance for Credit Losses, beginning balance | 770 | 1,328 |
Loans charged-off | (100) | |
Recoveries of loans previously charged-off | 133 | 5 |
Net loans charged-off | 133 | (95) |
Provision for credit losses | (304) | (463) |
Allowance for Credit Losses, ending balance | 599 | 770 |
Collectively evaluated for impairment | 599 | 770 |
Other Consumer [Member] | ||
Allowance for Credit Losses, beginning balance | 140 | 160 |
Loans charged-off | (81) | (100) |
Recoveries of loans previously charged-off | 18 | 21 |
Net loans charged-off | (63) | (79) |
Provision for credit losses | (5) | 59 |
Allowance for Credit Losses, ending balance | 72 | 140 |
Individually evaluated for impairment | 80 | |
Collectively evaluated for impairment | $ 72 | $ 60 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Recorded investment in loans: | ||
Loans individually evaluated for impairment | $ 84,519 | $ 30,191 |
Loans collectively evaluated for impairment | 6,906,928 | 6,381,337 |
Net loans | 6,991,447 | 6,411,528 |
Commercial [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 8,738 | 8,726 |
Loans collectively evaluated for impairment | 1,544,374 | 1,367,213 |
Net loans | 1,553,112 | 1,375,939 |
Income Producing - Commercial Real Estate [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 61,747 | 10,192 |
Loans collectively evaluated for impairment | 3,195,153 | 3,036,902 |
Net loans | 3,256,900 | 3,047,094 |
Owner Occupied - Commercial Real Estate - [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 5,307 | 5,501 |
Loans collectively evaluated for impairment | 882,507 | 749,943 |
Net loans | 887,814 | 755,444 |
Real Estate Mortgage Residential [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 1,228 | 478 |
Loans collectively evaluated for impairment | 105,190 | 103,879 |
Net loans | 106,418 | 104,357 |
Construction - Commercial and Residential [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 7,012 | 4,709 |
Loans collectively evaluated for impairment | 1,090,600 | 1,027,123 |
Net loans | 1,097,612 | 1,031,832 |
Home Equity [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 487 | 494 |
Loans collectively evaluated for impairment | 86,116 | 92,770 |
Net loans | 86,603 | 93,264 |
Other Consumer [Member] | ||
Recorded investment in loans: | ||
Loans individually evaluated for impairment | 91 | |
Loans collectively evaluated for impairment | 2,988 | 3,507 |
Net loans | $ 2,988 | $ 3,598 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans and leases receivable, net of deferred income | $ 6,991,447 | $ 6,411,528 |
Pass [Member] | ||
Loans and leases receivable, net of deferred income | 6,816,231 | 6,288,782 |
Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 66,670 | 92,555 |
Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 118,970 | 30,191 |
Commercial [Member] | ||
Loans and leases receivable, net of deferred income | 1,553,112 | 1,375,939 |
Commercial [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 1,505,477 | 1,333,050 |
Commercial [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 25,584 | 34,163 |
Commercial [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 22,051 | 8,726 |
Income Producing - Commercial Real Estate [Member] | ||
Loans and leases receivable, net of deferred income | 3,256,900 | 3,047,094 |
Income Producing - Commercial Real Estate [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 3,182,903 | 3,033,046 |
Income Producing - Commercial Real Estate [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 1,536 | 3,856 |
Income Producing - Commercial Real Estate [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 82,885 | 10,192 |
Owner Occupied - Commercial Real Estate - [Member] | ||
Loans and leases receivable, net of deferred income | 887,814 | 755,444 |
Owner Occupied - Commercial Real Estate - [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 844,286 | 696,754 |
Owner Occupied - Commercial Real Estate - [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 38,221 | 53,189 |
Owner Occupied - Commercial Real Estate - [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 5,307 | 5,501 |
Real Estate Mortgage Residential [Member] | ||
Loans and leases receivable, net of deferred income | 106,418 | 104,357 |
Real Estate Mortgage Residential [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 104,543 | 103,220 |
Real Estate Mortgage Residential [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 647 | 659 |
Real Estate Mortgage Residential [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 1,228 | 478 |
Construction - Commercial and Residential [Member] | ||
Loans and leases receivable, net of deferred income | 1,097,612 | 1,031,832 |
Construction - Commercial and Residential [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 1,090,600 | 1,027,123 |
Construction - Commercial and Residential [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 7,012 | 4,709 |
Home Equity [Member] | ||
Loans and leases receivable, net of deferred income | 86,603 | 93,264 |
Home Equity [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | 85,434 | 92,084 |
Home Equity [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 682 | 686 |
Home Equity [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | 487 | 494 |
Other Consumer [Member] | ||
Loans and leases receivable, net of deferred income | 2,988 | 3,598 |
Other Consumer [Member] | Pass [Member] | ||
Loans and leases receivable, net of deferred income | $ 2,988 | 3,505 |
Other Consumer [Member] | Watch and Special Mention [Member] | ||
Loans and leases receivable, net of deferred income | 2 | |
Other Consumer [Member] | Substandard [Member] | ||
Loans and leases receivable, net of deferred income | $ 91 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses (Details 4) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Nonaccrual loan, recorded investment | [1],[2] | $ 16,277 | $ 13,238 |
Commercial [Member] | |||
Nonaccrual loan, recorded investment | 7,115 | 3,493 | |
Income Producing - Commercial Real Estate [Member] | |||
Nonaccrual loan, recorded investment | 1,766 | 832 | |
Owner Occupied - Commercial Real Estate - [Member] | |||
Nonaccrual loan, recorded investment | 2,368 | 5,501 | |
Real Estate Mortgage Residential [Member] | |||
Nonaccrual loan, recorded investment | 1,510 | 775 | |
Construction - Commercial and Residential [Member] | |||
Nonaccrual loan, recorded investment | 3,031 | 2,052 | |
Home Equity [Member] | |||
Nonaccrual loan, recorded investment | $ 487 | 494 | |
Other Consumer [Member] | |||
Nonaccrual loan, recorded investment | $ 91 | ||
[1] | Excludes troubled debt restructurings ("TDRs") that were performing under their restructured terms totaling $24.0 million at December 31, 2018, and $12.3 million at December 31, 2017. | ||
[2] | Gross interest income of $1.0 million and $939 thousand would have been recorded in 2018 and 2017, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $265 thousand and $101 thousand at December 31, 2018 and 2017, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company's policy for placing loans on nonaccrual status. |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses (Details 5) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans past due | $ 73,660 | $ 46,310 |
Current loans | 6,917,787 | 6,365,218 |
Total recorded investment in loans | 6,991,447 | 6,411,528 |
Real Estate Mortgage Residential [Member] | ||
Loans past due | 5,664 | 9,012 |
Current loans | 100,754 | 95,345 |
Total recorded investment in loans | 106,418 | 104,357 |
Owner Occupied - Commercial Real Estate - [Member] | ||
Loans past due | 9,789 | 9,929 |
Current loans | 878,025 | 745,515 |
Total recorded investment in loans | 887,814 | 755,444 |
Other Consumer [Member] | ||
Loans past due | 142 | |
Current loans | 2,988 | 3,456 |
Total recorded investment in loans | 2,988 | 3,598 |
Income Producing - Commercial Real Estate [Member] | ||
Loans past due | 35,100 | 12,160 |
Current loans | 3,221,800 | 3,034,934 |
Total recorded investment in loans | 3,256,900 | 3,047,094 |
Home Equity [Member] | ||
Loans past due | 1,164 | 801 |
Current loans | 85,439 | 92,463 |
Total recorded investment in loans | 86,603 | 93,264 |
Construction - Commercial and Residential [Member] | ||
Loans past due | 7,423 | 7,320 |
Current loans | 1,090,189 | 1,024,512 |
Total recorded investment in loans | 1,097,612 | 1,031,832 |
Commercial [Member] | ||
Loans past due | 14,520 | 6,946 |
Current loans | 1,538,592 | 1,368,993 |
Total recorded investment in loans | 1,553,112 | 1,375,939 |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Loans past due | 22,919 | 14,970 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Real Estate Mortgage Residential [Member] | ||
Loans past due | 2,456 | 6,993 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Owner Occupied - Commercial Real Estate - [Member] | ||
Loans past due | 5,051 | 522 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Other Consumer [Member] | ||
Loans past due | 45 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Income Producing - Commercial Real Estate [Member] | ||
Loans past due | 5,855 | 4,398 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Home Equity [Member] | ||
Loans past due | 630 | 307 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Construction - Commercial and Residential [Member] | ||
Loans past due | 4,392 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial [Member] | ||
Loans past due | 4,535 | 2,705 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Loans past due | 34,464 | 18,102 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Real Estate Mortgage Residential [Member] | ||
Loans past due | 1,698 | 1,244 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Owner Occupied - Commercial Real Estate - [Member] | ||
Loans past due | 2,370 | 3,906 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Other Consumer [Member] | ||
Loans past due | 6 | |
Financing Receivables, 60 to 89 Days Past Due [Member] | Income Producing - Commercial Real Estate [Member] | ||
Loans past due | 27,479 | 6,930 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Home Equity [Member] | ||
Loans past due | 47 | |
Financing Receivables, 60 to 89 Days Past Due [Member] | Construction - Commercial and Residential [Member] | ||
Loans past due | 5,268 | |
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial [Member] | ||
Loans past due | 2,870 | 748 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Loans past due | 16,277 | 13,238 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Real Estate Mortgage Residential [Member] | ||
Loans past due | 1,510 | 775 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Owner Occupied - Commercial Real Estate - [Member] | ||
Loans past due | 2,368 | 5,501 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Other Consumer [Member] | ||
Loans past due | 91 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Income Producing - Commercial Real Estate [Member] | ||
Loans past due | 1,766 | 832 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Home Equity [Member] | ||
Loans past due | 487 | 494 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Construction - Commercial and Residential [Member] | ||
Loans past due | 3,031 | 2,052 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial [Member] | ||
Loans past due | $ 7,115 | $ 3,493 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses (Details 6) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unpaid Contractual Principal Balance | $ 40,774 | $ 25,696 | $ 40,774 | $ 25,696 |
Recorded Investment With No Allowance | 13,166 | 6,456 | 13,166 | 6,456 |
Recorded Investment With Allowance | 27,136 | 19,121 | 27,136 | 19,121 |
Total Recorded Investment | 40,302 | 25,577 | 40,302 | 25,577 |
Related Allowance | 8,918 | 7,601 | 8,918 | 7,601 |
Average Recorded Investment | 36,463 | 27,240 | 27,836 | 25,695 |
Interest Income Recognized | 110 | 198 | 1,006 | 730 |
Commercial [Member] | ||||
Unpaid Contractual Principal Balance | 8,613 | 5,644 | 8,613 | 5,644 |
Recorded Investment With No Allowance | 2,057 | 1,777 | 2,057 | 1,777 |
Recorded Investment With Allowance | 6,084 | 3,748 | 6,084 | 3,748 |
Total Recorded Investment | 8,141 | 5,525 | 8,141 | 5,525 |
Related Allowance | 4,803 | 3,259 | 4,803 | 3,259 |
Average Recorded Investment | 10,306 | 5,764 | 8,359 | 5,765 |
Interest Income Recognized | (126) | 48 | 190 | 145 |
Income Producing - Commercial Real Estate [Member] | ||||
Unpaid Contractual Principal Balance | 21,402 | 10,044 | 21,402 | 10,044 |
Recorded Investment With No Allowance | 1,720 | 781 | 1,720 | 781 |
Recorded Investment With Allowance | 19,682 | 9,263 | 19,682 | 9,263 |
Total Recorded Investment | 21,402 | 10,044 | 21,402 | 10,044 |
Related Allowance | 2,465 | 2,380 | 2,465 | 2,380 |
Average Recorded Investment | 15,331 | 10,068 | 12,309 | 10,127 |
Interest Income Recognized | 189 | 120 | 550 | 493 |
Owner Occupied - Commercial Real Estate - [Member] | ||||
Unpaid Contractual Principal Balance | 5,731 | 6,596 | 5,731 | 6,596 |
Recorded Investment With No Allowance | 4,361 | 1,095 | 4,361 | 1,095 |
Recorded Investment With Allowance | 1,370 | 5,501 | 1,370 | 5,501 |
Total Recorded Investment | 5,731 | 6,596 | 5,731 | 6,596 |
Related Allowance | 600 | 1,382 | 600 | 1,382 |
Average Recorded Investment | 5,746 | 6,743 | 6,011 | 5,210 |
Interest Income Recognized | 47 | 27 | 196 | 73 |
Real Estate Mortgage Residential [Member] | ||||
Unpaid Contractual Principal Balance | 1,510 | 775 | 1,510 | 775 |
Recorded Investment With No Allowance | 1,510 | 775 | 1,510 | 775 |
Total Recorded Investment | 1,510 | 775 | 1,510 | 775 |
Average Recorded Investment | 1,516 | 538 | 1,688 | 423 |
Interest Income Recognized | 17 | 2 | 17 | |
Construction - Commercial and Residential [Member] | ||||
Unpaid Contractual Principal Balance | 3,031 | 2,052 | 3,031 | 2,052 |
Recorded Investment With No Allowance | 3,031 | 1,534 | 3,031 | 1,534 |
Recorded Investment With Allowance | 518 | 518 | ||
Total Recorded Investment | 3,031 | 2,052 | 3,031 | 2,052 |
Related Allowance | 1,050 | 500 | 1,050 | 500 |
Average Recorded Investment | 3,031 | 3,491 | 2,028 | 3,731 |
Interest Income Recognized | (14) | 68 | ||
Home Equity [Member] | ||||
Unpaid Contractual Principal Balance | 487 | 494 | 487 | 494 |
Recorded Investment With No Allowance | 487 | 494 | 487 | 494 |
Total Recorded Investment | 487 | 494 | 487 | 494 |
Average Recorded Investment | 487 | 544 | 491 | 346 |
Interest Income Recognized | 2 | |||
Other Consumer [Member] | ||||
Unpaid Contractual Principal Balance | 91 | 91 | ||
Recorded Investment With Allowance | 91 | 91 | ||
Total Recorded Investment | 91 | 91 | ||
Related Allowance | 80 | 80 | ||
Average Recorded Investment | $ 46 | $ 92 | $ 69 | $ 93 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses (Details 7) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number | |
Number of loans - restructured accruing | Number | 9 | 9 |
Number of loans - restructured nonaccruing | Number | 3 | 5 |
Number of loans | Number | 12 | 14 |
Restructured accruing | $ 24,025 | $ 12,339 |
Restructured nonaccruing | 544 | 988 |
Troubled Debt Restructured | 24,569 | 13,327 |
Specific allowance | 3,000 | 2,945 |
Restructured and subsequently defaulted | 1,345 | 237 |
Commercial [Member] | ||
Restructured accruing | 1,026 | 2,032 |
Restructured nonaccruing | 544 | 867 |
Troubled Debt Restructured | 1,570 | 2,899 |
Specific allowance | 595 | |
Restructured and subsequently defaulted | 408 | 237 |
Income Producing - Commercial Real Estate [Member] | ||
Restructured accruing | 19,636 | 9,212 |
Restructured nonaccruing | 121 | |
Troubled Debt Restructured | 19,636 | 9,333 |
Specific allowance | 3,000 | 2,350 |
Restructured and subsequently defaulted | 937 | |
Owner Occupied - Commercial Real Estate - [Member] | ||
Restructured accruing | 3,363 | 1,095 |
Troubled Debt Restructured | $ 3,363 | $ 1,095 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses (Details 8) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Balance at January 1, | $ (2,459) | $ (4,444) |
Accretion | 964 | 1,985 |
Balance at December 31, | $ (1,495) | $ (2,459) |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses (Details 9) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Loans receivable-related parties, beginning | $ 238,236 | $ 137,816 |
Additions | 55,657 | 138,565 |
Repayments | (126,009) | (38,145) |
Loans receivable-related parties, ending | $ 167,884 | $ 238,236 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loans and leases receivable, deferred fees | $ 26,500 | $ 23,900 | |
Servicing asset at fair value, amount | $ 111,100 | 195,300 | |
Stress test assumption increase interest rates | 2.00% | ||
Financing receivable, net | $ 6,991,447 | 6,411,528 | |
Financing receivable, modifications, recorded investment | 24,600 | 13,300 | |
Nonaccrual loans, gross interest income if in compliance | 1,000 | 939 | |
Nonaccrual loans, recorded interest income | $ 265 | 101 | |
Loans secured by real estate (percent) | 85.00% | ||
Loans receivable-related parties | $ 167,884 | 238,236 | $ 137,816 |
ADC Loans [Member] | |||
Percent of ADC loan portfolio using interest reserves | 70.00% | ||
Financing receivable, net | $ 1,620,000 | ||
Virginia Heritage Bank [Member] | |||
Loans fair value at acquisition | 840,000 | ||
Certain loans acquired in transfer accounted for as debt securities acquisition at fair value | 3,000 | ||
Home Equity [Member] | |||
Loans and leases receivable, deferred fees | 60 | 93 | |
Financing receivable, net | $ 86,603 | 93,264 | |
Owner Occupied Commercial Real Estate and Construction [Member] | |||
Percent of loan portfolio | 14.00% | ||
Income Producing Commercial Real Estate and Real Estate Construction [Member] | |||
Percent of loan portfolio | 61.00% | ||
Minimum cash flow debt service coverage ratio | 1.15 | ||
Maximum loan to value (percent) | 80.00% | ||
Commercial Real Estate and Real Estate Construction Loans [Member] | |||
Percent of loan portfolio | 75.00% | ||
Commercial [Member] | |||
Percent of loan portfolio | 22.00% | ||
Financing receivable, net | $ 1,553,112 | 1,375,939 | |
Commercial [Member] | Maximum [Member] | |||
Loan period | 10 years | ||
Amortization term | 25 years | ||
Commercial [Member] | Maximum [Member] | Preferred Term [Member] | |||
Loan period | 7 years | ||
Commercial [Member] | Minimum [Member] | Preferred Term [Member] | |||
Loan period | 5 years | ||
Commercial [Member] | SBA Loans [Member] | |||
Percent of loan portfolio | 2.00% | ||
Consumer Portfolio Segment [Member] | |||
Percent of loan portfolio | 1.00% | ||
Consumer Portfolio Segment [Member] | Land Acquisition Development and Construction Loans [Member] | Maximum [Member] | |||
Loan period | 2 years | ||
Real Estate Mortgage Residential [Member] | |||
Financing receivable, net | $ 106,418 | 104,357 | |
Real Estate Mortgage Residential [Member] | Real Estate Loan [Member] | |||
Percent of loan portfolio | 2.00% | ||
Real Estate Mortgage Residential [Member] | Land Acquisition Development and Construction Loans [Member] | Maximum [Member] | |||
Loan period | 3 years | ||
Performing Loans [Member] | |||
Financing receivable, modifications, recorded investment | $ 24,000 | 12,300 | |
Non-Performing Loans [Member] | |||
Financing receivable, modifications, recorded investment | 460 | 988 | |
Non-Performing Loans [Member] | Virginia Heritage Bank [Member] | |||
Certain loans acquired in transfer not accounted for as debt securities, carrying amount, net | 202 | ||
Certain loans acquired in transfer not accounted for as debt securities, outstanding balance | 995 | ||
Non-Performing Loans [Member] | Fidelity [Member] | |||
Certain loans acquired in transfer not accounted for as debt securities, carrying amount, net | 282 | ||
Certain loans acquired in transfer not accounted for as debt securities, outstanding balance | 332 | ||
Non-Impaired Loans [Member] | Virginia Heritage Bank [Member] | |||
Loans fair value at acquisition | $ 801,000 | ||
Previously Reported [Member] | |||
Loans receivable-related parties | $ 60,900 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses (Details Narrative 1) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($) | |
Financing receivable, modifications, recorded investment | $ 24,600 | $ 13,300 | |
Nonaccrual loans, gross interest income if in compliance | 1,000 | 939 | |
Nonaccrual loans, recorded interest income | $ 265 | $ 101 | |
Number of loans - restructured accruing | Number | 9 | 9 | |
Number of loans - restructured nonaccruing | Number | 3 | 5 | |
Number of loans | Number | 12 | 14 | |
Number of defaulted loans charged-off | Number | 4 | 1 | |
Recorded investment - defaulted charged-off | $ 1,400 | $ 237 | |
Recorded investment - loans modified in TDR | $ 12,800 | $ 5,300 | |
Number of loans modified in TDR | Number | 2 | 4 | |
Performing Loans [Member] | |||
Financing receivable, modifications, recorded investment | $ 24,000 | $ 12,300 | |
Number of loans | Number | 9 | 9 | |
Number of loans pay-off | Number | 2 | ||
Recorded investment - pay-offs | $ 3,900 | ||
Non-Performing Loans [Member] | |||
Financing receivable, modifications, recorded investment | $ 460 | $ 988 | |
Number of loans subsequent defaults reclassified to non-performing | Number | 2 | 5 | |
Recorded investment - subsequent defaults reclassified to non-performing | $ 460 | $ 988 | |
Number of loans paydowns | Number | 1 | ||
Recorded investment - paydowns | 183 | $ 4,900 | |
Paydown of nonperforming loan | $ 176 | $ 4,800 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 31,026 | $ 31,451 |
Furniture and equipment | 31,168 | 29,667 |
Less accumulated depreciation and amortization | (45,343) | (40,127) |
Total premises and equipment, net | $ 16,851 | $ 20,991 |
Premises and Equipment (Detai_2
Premises and Equipment (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Property, Plant and Equipment [Abstract] | |
2,019 | $ 8,435 |
2,020 | 7,700 |
2,021 | 7,611 |
2,022 | 7,108 |
2,023 | 6,750 |
Thereafter | 29,138 |
Total minimum lease payments | $ 66,742 |
Premises and Equipment (Detai_3
Premises and Equipment (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($)Number | |
Depreciation | $ 5,600 | $ 5,400 | $ 5,000 |
Operating Leases, Rent Expense, Net | $ 8,300 | $ 8,500 | $ 8,500 |
Number of Subleased Premises | Number | 3 | 4 | 4 |
Reduction Of Rent Expense | $ 574 | $ 455 | $ 579 |
Minimum [Member] | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 5 years | ||
Maximum [Member] | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 10 years | ||
Banking Services [Member] | |||
Number of Stores | Number | 29 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Goodwill, gross | [1] | $ 104,168 | $ 104,168 |
Goodwill, net | [1] | 104,168 | 104,168 |
Intangible assets and goodwill, gross | 113,048 | 111,710 | |
Intangible assets, additions | 838 | 1,338 | |
Intangible assets, accumulated amortization | (7,448) | (5,836) | |
FHA MSR Sales | (672) | ||
Intangible assets, net | 105,766 | 107,212 | |
Core Deposits [Member] | |||
Intangible assets and goodwill, gross | [2] | 7,070 | 7,070 |
Intangible assets, additions | [2] | ||
Intangible assets, accumulated amortization | [2] | (6,312) | (5,355) |
Finite-Lived Intangible Assets, Net | [2] | 758 | 1,715 |
Excess Servicing [Member] | |||
Intangible assets and goodwill, gross | [3] | 1,465 | 472 |
Intangible assets, additions | [3] | 838 | 993 |
Intangible assets, accumulated amortization | [3] | (1,053) | (481) |
FHA MSR Sales | [3] | (672) | |
Finite-Lived Intangible Assets, Net | [3] | 578 | 984 |
Non-compete Agreements [Member] | |||
Intangible assets and goodwill, gross | [4] | 345 | 0 |
Intangible assets, additions | [4] | 0 | 345 |
Intangible assets, accumulated amortization | [4] | (83) | |
Finite-Lived Intangible Assets, Net | [4] | $ 262 | $ 345 |
[1] | The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately $360 thousand. Based on allowable adjustments through August 31, 2009, the unidentified intangible (goodwill) amounted to approximately $2.2 million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately $102 million. | ||
[2] | In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price to core deposit intangibles which were $2.3 million and $4.6 million, respectively, based off of an independent evaluation and is included in intangible assets, net of accumulated amortization on the Consolidated Balance Sheets. The initial amount recorded for the Fidelity acquisition was $2.3 million. The amount of the core deposit intangible relating to the Fidelity acquisition was fully amortized at December 31, 2018, as a component of other noninterest expense. The initial amount recorded for the Virginia Heritage acquisition was $4.6 million. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at December 31, 2018 was $758 thousand, which is being amortized over its remaining economic life through 2020 as a component of other noninterest expense. | ||
[3] | The Company recognizes a servicing asset for the computed value of servicing fees on the sale of multifamily FHA loans and the sale of the guaranteed portion of SBA loans. Assumptions related to loan terms and amortization is made to arrive at the initial recorded values, which are included in other assets. During 2018, the Company sold a portion of its FHA mortgage servicing rights totaling $672 thousand for a net loss of $71 thousand. | ||
[4] | The Company entered into a non-compete agreement for three years with its former Vice Chairman of the Bank. The amount of the non-compete intangible was $262 thousand, which is being amortized over its remaining term through 2020 as a component of professional fees. |
Intangible Assets (Details 1)
Intangible Assets (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 1,051 |
2,020 | 155 |
2,021 | 71 |
2,022 | 71 |
2,023 | 71 |
Thereafter | 179 |
Total annual amortization | $ 1,598 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2014 | Aug. 31, 2009 | Aug. 31, 2008 | ||||
Amortization of Intangible Assets | $ 1,500 | $ 1,500 | $ 1,700 | ||||||
Goodwill | 104,168 | [1] | 104,168 | [1] | $ 104,168 | ||||
Loss on Sale of Intangible Assets | 71 | ||||||||
Virginia Heritage Bank [Member] | |||||||||
Goodwill | $ 102,000 | ||||||||
Fidelity [Member] | |||||||||
Goodwill | $ 2,200 | $ 360 | |||||||
Non-compete Agreements [Member] | |||||||||
Finite-Lived Intangible Assets, Net | [2] | 262 | $ 345 | ||||||
Agreement term | 3 years | ||||||||
Core Deposits [Member] | |||||||||
Finite-Lived Intangible Assets, Net | [3] | $ 758 | $ 1,715 | ||||||
Core Deposits [Member] | Virginia Heritage Bank [Member] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 4,600 | $ 4,600 | |||||||
Core Deposits [Member] | Fidelity [Member] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 758 | $ 2,300 | |||||||
[1] | The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately $360 thousand. Based on allowable adjustments through August 31, 2009, the unidentified intangible (goodwill) amounted to approximately $2.2 million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately $102 million. | ||||||||
[2] | The Company entered into a non-compete agreement for three years with its former Vice Chairman of the Bank. The amount of the non-compete intangible was $262 thousand, which is being amortized over its remaining term through 2020 as a component of professional fees. | ||||||||
[3] | In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price to core deposit intangibles which were $2.3 million and $4.6 million, respectively, based off of an independent evaluation and is included in intangible assets, net of accumulated amortization on the Consolidated Balance Sheets. The initial amount recorded for the Fidelity acquisition was $2.3 million. The amount of the core deposit intangible relating to the Fidelity acquisition was fully amortized at December 31, 2018, as a component of other noninterest expense. The initial amount recorded for the Virginia Heritage acquisition was $4.6 million. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at December 31, 2018 was $758 thousand, which is being amortized over its remaining economic life through 2020 as a component of other noninterest expense. |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Real Estate [Roll Forward] | ||
Balance beginning of period | $ 1,394 | $ 2,694 |
Real estate acquired from borrowers | 1,145 | |
Properties sold | (2,445) | |
Balance end of period | $ 1,394 | $ 1,394 |
Other Real Estate Owned (Deta_2
Other Real Estate Owned (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Real Estate [Abstract] | |||
Proceeds from sale of other real estate | $ 2,144 | $ 6,139 | |
Gains (losses) on sales of other real estate | (301) | 682 | |
Other real estate owned | $ 1,394 | $ 2,694 | $ 1,394 |
Foreclosure of loan | $ 487 |
Mortgage Banking Derivatives (D
Mortgage Banking Derivatives (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Designated as Hedging Instrument [Member] | ||
Noninterest income (loss), other | $ 157 | $ 809 |
Mortgage Banking Derivative [Member] | ||
Derivative, notional amount | 49,600 | 37,100 |
Noninterest income (loss), other | 57 | 279 |
Mortgage Banking Derivative [Member] | Other Assets [Member] | ||
Derivative asset | 229 | 43 |
Mortgage Banking Derivative [Member] | Other Liabilities [Member] | ||
Derivative liability | $ 269 | $ 10 |
Interest Rate Swap Derivative_2
Interest Rate Swap Derivatives (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Notional Amount | $ 250,000 | $ 250,000 |
Fair value | 3,727 | 2,256 |
Other Assets [Member] | Interest Rate Swap 1 [Member] | ||
Notional Amount | 75,000 | 75,000 |
Fair value | 845 | 598 |
Other Assets [Member] | Interest Rate Swap 2 [Member] | ||
Notional Amount | 100,000 | 100,000 |
Fair value | 1,478 | 821 |
Other Assets [Member] | Interest Rate Swap 3 [Member] | ||
Notional Amount | 75,000 | 75,000 |
Fair value | 1,404 | $ 837 |
Other Liabilities [Member] | ||
Notional Amount | 27,500 | |
Fair value | 59 | |
Other Liabilities [Member] | Other Contracts Swap 1 [Member] | ||
Notional Amount | 27,500 | |
Fair value | $ 59 |
Interest Rate Swap Derivative_3
Interest Rate Swap Derivatives (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amount of pre-tax gain (loss) recognized in OCI | $ 2,033 | $ 4,559 | $ (2,947) |
Interest Rate Swap 1 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 528 | 393 | |
Effective portion reclassified from AOCI into income | 240 | (400) | |
Interest Rate Swap 2 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 854 | 702 | |
Effective portion reclassified from AOCI into income | 198 | (634) | |
Interest Rate Swap 3 [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 688 | 260 | |
Effective portion reclassified from AOCI into income | 122 | (560) | |
Interest Rate Swap [Member] | |||
Amount of pre-tax gain (loss) recognized in OCI | 2,070 | 1,355 | |
Effective portion reclassified from AOCI into income | $ 560 | $ 1,600 |
Interest Rate Swap Derivative_4
Interest Rate Swap Derivatives (Details 2) - Interest Income (Expense) [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | $ 560 | $ (1,594) |
Cash Flow Hedge [Member] | ||
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | $ 560 | $ (1,594) |
Interest Rate Swap Derivative_5
Interest Rate Swap Derivatives (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Gross Amount of Recognized Assets | $ 3,727 | $ 2,256 |
Interest Rate Swap [Member] | ||
Gross Amount of Recognized Assets | 3,781 | 2,201 |
Net amounts of assets presented in the balance sheet | 3,781 | 2,201 |
Gross amounts not offset in the balance sheet net amount | 3,781 | 2,201 |
Counter Party 1 [Member] | Interest Rate Swap [Member] | ||
Gross Amount of Recognized Assets | 2,948 | 1,619 |
Net amounts of assets presented in the balance sheet | 2,948 | 1,619 |
Gross amounts not offset in the balance sheet net amount | 2,948 | 1,619 |
Counter Party 2 [Member] | Interest Rate Swap [Member] | ||
Gross Amount of Recognized Assets | 892 | 582 |
Net amounts of assets presented in the balance sheet | 892 | 582 |
Gross amounts not offset in the balance sheet net amount | 892 | $ 582 |
Counter Party 3 [Member] | Interest Rate Swap [Member] | ||
Gross Amount of Recognized Assets | (59) | |
Net amounts of assets presented in the balance sheet | (59) | |
Gross amounts not offset in the balance sheet net amount | $ (59) |
Interest Rate Swap Derivative_6
Interest Rate Swap Derivatives (Details Narrative) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018USD ($)Number | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Notional amount | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||||||||
Designated cash flow hedge derivatives reclassified from accumulated oci into interest | $ 23,869 | $ 21,069 | $ 18,086 | $ 13,269 | 11,167 | $ 10,434 | $ 9,646 | $ 8,900 | $ 8,771 | $ 7,703 | $ 5,950 | $ 5,216 | $ 76,293 | 40,147 | $ 27,640 |
Interest Rate Swap [Member] | |||||||||||||||
Derivative, number of instruments held | Number | 3 | 3 | |||||||||||||
Notional amount | $ 250,000 | $ 250,000 | $ 250,000 | 250,000 | |||||||||||
Unrealized gain (loss) on derivatives | 3,700 | 2,300 | |||||||||||||
Derivative instruments, gain (loss) reclassified from accumulated oci into income, effective portion, net | 560 | 1,600 | |||||||||||||
Designated cash flow hedge derivatives reclassified from accumulated oci into interest | $ 27,500 | 3,700 | $ 2,300 | ||||||||||||
Estimated amount to be reclassified to interest expense (based on existing interest rates) for cash flow hedges | $ 2,000 | ||||||||||||||
Estimate of time to transfer from AOCI to interest income/expense for designated cash flow hedge derivatives | 12 months |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Banking and Thrift [Abstract] | |||
Noninterest bearing demand, balance | $ 2,104,220 | $ 1,982,912 | $ 1,775,684 |
Interest bearing transaction, balance | 593,107 | 420,417 | 289,122 |
Savings and money market, balance | 2,949,559 | 2,621,146 | 2,902,560 |
Time, $100,000 or more, balance | 801,957 | 515,682 | 464,842 |
Other time, balance | 525,442 | 313,827 | 283,906 |
Total deposits | $ 6,974,285 | $ 5,853,984 | $ 5,716,114 |
Interest bearing transaction, average rate | 0.81% | 0.46% | 0.16% |
Savings and money market, average rate | 1.68% | 0.70% | 0.54% |
Time, $100,000 or more, average rate | 2.25% | 1.20% | 0.95% |
Other time, average rate | 2.25% | 1.17% | 0.86% |
Deposits (Details 1)
Deposits (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Banking and Thrift [Abstract] | |||
Three months or less | $ 230,360 | $ 180,459 | $ 120,238 |
More than three months through six months | 355,022 | 228,513 | 151,422 |
More than six months through twelve months | 308,063 | 208,554 | 207,141 |
Over twelve months | 433,954 | 211,983 | 269,947 |
Total | $ 1,327,399 | $ 829,509 | $ 748,748 |
Deposits (Details 2)
Deposits (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |||
Interest bearing transaction | $ 3,348 | $ 1,537 | $ 646 |
Savings and money market | 35,534 | 17,284 | 12,038 |
Time, $100,000 or more | 17,138 | 7,294 | 6,487 |
Other time | 4,190 | 1,171 | 77 |
Total | $ 60,210 | $ 27,286 | $ 19,248 |
Deposits (Details Narrative)
Deposits (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Deposit Liabilities | $ 141,400 | $ 179,100 |
Time Deposists, $250,000 or More | $ 445,800 | 279,700 |
Previously Reported [Member] | ||
Related Party Deposit Liabilities | $ 84,300 |
Affordable Housing Projects T_3
Affordable Housing Projects Tax Credit Partnerships (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Years ending December 31: | |
2,019 | $ 6,111 |
2,020 | 4,473 |
2,021 | 3,114 |
2,022 | 155 |
2,023 | 247 |
Thereafter | 889 |
Total unfunded commitments | $ 14,989 |
Affordable Housing Projects T_4
Affordable Housing Projects Tax Credit Partnerships (Details Narrative) $ in Thousands | Dec. 31, 2018USD ($) |
Affordable Housing Projects Tax Credit - Unfunded Commitments | $ 14,989 |
Other Liabilities [Member] | |
Affordable Housing Projects Tax Credit - Unfunded Commitments | 14,989 |
Affordable Housing Projects Tax Credit Partnership [Member] | Other Assets [Member] | |
Investments | $ 28,200 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 26, 2016 | Aug. 05, 2014 | |
Total short-term borrowings | $ 30,413 | $ 401,561 | $ 401,561 | ||
Average daily balance short-term borrowings | 236,464 | 138,653 | 138,653 | ||
Maximum month-end balance short-term borrowings | 397,141 | 410,614 | 410,614 | ||
Total long-term borrowings | 217,296 | 216,905 | |||
Average daily balance long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Maximum month-end balance long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Subordinated Debt [Member] | |||||
Total long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Average daily balance long-term borrowings | 220,000 | 220,000 | 220,000 | ||
Maximum month-end balance long-term borrowings | $ 220,000 | $ 220,000 | $ 220,000 | ||
Debt instrument, interest rate, stated percentage | 5.42% | 5.42% | 5.42% | 5.00% | 5.75% |
Average interest rate | 5.42% | 5.42% | 5.42% | ||
Month-end interest rate | 5.42% | 5.42% | 5.42% | ||
Customer Repos and Federal Funds Purchased [Member] | |||||
Total short-term borrowings | $ 30,413 | $ 76,561 | $ 76,561 | ||
Average daily balance short-term borrowings | 44,333 | 73,237 | 73,237 | ||
Maximum month-end balance short-term borrowings | $ 72,141 | $ 85,614 | $ 85,614 | ||
Debt instrument, interest rate, stated percentage | 0.86% | 0.33% | 0.33% | ||
Average interest rate | 0.51% | 0.27% | 0.27% | ||
Month-end interest rate | 0.32% | 0.29% | 0.29% | ||
Federal Home Loan Bank [Member] | |||||
Total short-term borrowings | $ 325,000 | $ 325,000 | |||
Average daily balance short-term borrowings | $ 192,131 | 65,416 | 65,416 | ||
Maximum month-end balance short-term borrowings | $ 325,000 | $ 325,000 | $ 325,000 | ||
Debt instrument, interest rate, stated percentage | 1.48% | 1.48% | |||
Average interest rate | 2.02% | 1.13% | 1.13% | ||
Month-end interest rate | 1.62% | 1.48% | 1.48% |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - USD ($) $ in Thousands | Jul. 26, 2016 | Aug. 05, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term Line of Credit | $ 90,283 | $ 96,477 | |||
Proceeds from Issuance of Subordinated Long-term Debt | $ 147,350 | $ 68,800 | |||
Subordinated Debt [Member] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.75% | 5.42% | 5.42% | 5.42% |
Debt Instrument, Face Amount | $ 150,000 | $ 70,000 | |||
Payments of Debt Issuance Costs | $ 2,600 | $ 1,200 | |||
Maximum [Member] | |||||
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances | $ 1,510,000 | ||||
C D A R S [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,260,000 | ||||
Long-term Line of Credit | 62,300 | ||||
I N D [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 700,000 | ||||
Long-term Line of Credit | 544,500 | ||||
Loan Agreement and Related Stock Security Agreement [Member] | |||||
Long-term Line of Credit | 55,000 | ||||
Federal Reserve Bank of Richmond [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 662,000 | ||||
Federal Funds [Member] | |||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 147,500 |
Warrants (Details Narrative)
Warrants (Details Narrative) | Dec. 27, 2016shares |
Warrants Details Narrative Abstract | |
Stock Issued During Period, Shares, Redemption of Warrants | 378,495 |
Number of Securities Called by Warrants | 423,977 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||||||
Current federal income tax expense | $ 39,498 | $ 59,019 | $ 53,290 | ||||||||||||
Current state income tax expense | 15,931 | 7,511 | 13,733 | ||||||||||||
Total current tax expense | 55,429 | 66,530 | 67,023 | ||||||||||||
Deferred federal income tax expense (benefit) | (2,634) | 18,459 | (5,523) | ||||||||||||
Deferred state income tax expense (benefit) | (863) | 515 | (105) | ||||||||||||
Total deferred expense (benefit) | (3,497) | 18,974 | (5,628) | ||||||||||||
Total income tax expense | $ 13,197 | $ 13,928 | $ 12,528 | $ 12,279 | $ 35,396 | $ 17,409 | $ 17,382 | $ 15,318 | $ 16,429 | $ 15,484 | $ 15,069 | $ 14,413 | $ 51,932 | $ 85,504 | $ 61,395 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | |||
Allowance for credit losses | $ 18,101 | $ 16,568 | $ 23,738 |
Deferred loan fees and costs | 6,733 | 6,741 | 10,728 |
Deferred rent | 1,026 | 1,009 | 1,483 |
Stock-based compensation | 1,722 | 847 | 3,037 |
Net operating loss | 2,003 | 2,032 | 2,695 |
Unrealized loss on securities available-for-sale | 2,756 | 1,312 | 1,303 |
Unrealized loss on interest rate swap derivatives | 284 | ||
SERP | 1,497 | 1,373 | 2,088 |
Premises and equipment | 795 | 33 | 3,838 |
Other | 287 | 35 | 477 |
Total deferred tax assets | 34,920 | 29,950 | 49,671 |
Deferred tax liabilities | |||
Unrealized gain on interest rate swap derivatives | (965) | (578) | |
Excess servicing | (77) | (99) | (191) |
Intangible assets | (223) | (503) | (1,260) |
Other liabilities | (328) | ||
Total deferred tax liabilities | (1,593) | (1,180) | (1,451) |
Net deferred income tax amount | $ 33,327 | $ 28,770 | $ 48,220 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
Increase (decrease) due to | |||
State income taxes | 5.83% | 3.41% | 5.57% |
Deferred tax adjustment related to Tax Act | 7.85% | ||
Tax exempt interest and dividend income | (1.13%) | (0.61%) | (0.98%) |
Stock-based compensation expense | 0.01% | 0.01% | 0.01% |
Other | (0.28%) | 0.38% | (1.01%) |
Effective tax rates | 25.43% | 46.04% | 38.59% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Federal income tax rate | 21.00% | 35.00% | 35.00% | |
Effective tax rates | 25.43% | 46.04% | 38.59% | |
Reduction in deferred tax asset | $ 14,600 | |||
Net deferred tax assets | 33,000 | $ 28,800 | ||
Operating Loss Carryforward | $ 718 | |||
Operating Loss Carryforward date | Dec. 31, 2027 | |||
Subsequent Fiscal Year [Member] | Minimum [Member] | ||||
Effective tax rates | 25.00% | |||
Subsequent Fiscal Year [Member] | Maximum [Member] | ||||
Effective tax rates | 26.00% |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2018 | [1] | Sep. 30, 2018 | [1] | Jun. 30, 2018 | [1] | Mar. 31, 2018 | [1] | Dec. 31, 2017 | [1] | Sep. 30, 2017 | [1] | Jun. 30, 2017 | [1] | Mar. 31, 2017 | [1] | Dec. 31, 2016 | [1] | Sep. 30, 2016 | [1] | Jun. 30, 2016 | [1] | Mar. 31, 2016 | [1] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic: | |||||||||||||||||||||||||||
Net income | $ 152,276 | $ 100,232 | $ 97,707 | ||||||||||||||||||||||||
Average common shares outstanding (in shares) | 34,306 | 34,139 | 33,587 | ||||||||||||||||||||||||
Basic net income per common share (in dollars per share) | $ 1.17 | $ 1.14 | $ 1.09 | $ 1.04 | $ 0.46 | $ 0.87 | $ 0.81 | $ 0.79 | $ 0.76 | $ 0.73 | $ 0.72 | $ 0.7 | $ 4.44 | $ 2.94 | $ 2.91 | ||||||||||||
Diluted: | |||||||||||||||||||||||||||
Net income | $ 152,276 | $ 100,232 | $ 97,707 | ||||||||||||||||||||||||
Average common shares outstanding (in shares) | 34,306 | 34,139 | 33,587 | ||||||||||||||||||||||||
Adjustment for common share equivalents (in shares) | 137 | 182 | 594 | ||||||||||||||||||||||||
Average common shares outstanding-diluted (in shares) | 34,443 | 34,321 | 34,181 | ||||||||||||||||||||||||
Diluted net income per common share (in dollars per share) | $ 1.17 | $ 1.13 | $ 1.08 | $ 1.04 | $ 0.45 | $ 0.87 | $ 0.81 | $ 0.79 | $ 0.75 | $ 0.72 | $ 0.71 | $ 0.68 | $ 4.42 | $ 2.92 | $ 2.86 | ||||||||||||
Anti-dilutive shares (in shares) | 7 | ||||||||||||||||||||||||||
[1] | Earnings per common share are calculated on a quarterly basis and may not be additive to the year to date amount. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 2,200 | $ 2,100 | $ 1,900 |
Related Party Transaction, Amounts of Transaction | 750 | ||
Donation paid | $ 150 | $ 145 | $ 139 |
Limited Liability Company A [Member] | |||
Ownership Interest In Trust | 51.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance Shares [Member] | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 62,338 | 33,226 | |
Issued | 42,533 | 42,533 | 36,523 |
Forfeited | (5,913) | (2,520) | |
Vested | (4,891) | ||
Unvested at end | 98,958 | 62,338 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 50.45 | $ 42.60 | |
Issued | 60.45 | 57.49 | |
Forfeited | 50.28 | 41.93 | |
Vested | 54.70 | ||
Unvested at end | $ 54.76 | $ 50.45 | |
Time Vested Awards [Member] | |||
Common stock Nonvested, Number of Shares: | |||
Unvested at beginning | 164,043 | 262,966 | |
Issued | 94,344 | 91,097 | |
Forfeited | (7,132) | (2,360) | |
Vested | (77,534) | (187,600) | |
Unvested at end | 173,721 | 164,043 | |
Common stock Nonvested, Weighted Average Grant Date Fair Value: | |||
Unvested at beginning | $ 53.57 | $ 33.60 | |
Issued | 60.45 | 62.70 | |
Forfeited | 56.48 | 49.52 | |
Vested | 49.67 | 30.07 | |
Unvested at end | $ 58.93 | $ 53.57 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options, Outstanding: | |||
Beginning balance | 143,224 | 216,859 | 298,740 |
Issued | 3,000 | ||
Exercised | (108,201) | (72,535) | (77,144) |
Forfeited | (900) | (1,100) | |
Expired | (1,100) | (6,637) | |
Ending balance | 34,123 | 143,224 | 216,859 |
Options, Outstanding, Weighted Average Exercise Price: | |||
Beginning balance | $ 9.13 | $ 8.80 | $ 9.97 |
Issued | 49.49 | ||
Exercised | 7.17 | 8.19 | 14.48 |
Forfeited | 34.47 | 15.48 | |
Expired | 5.76 | 12.87 | |
Ending balance | $ 14.69 | $ 9.13 | $ 8.80 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options outstanding (in shares) | 34,123 | 143,224 | 216,859 | 298,740 |
Outstanding options, weighted-average exercise price (in dollars per share) | $ 14.69 | $ 9.13 | $ 8.80 | $ 9.97 |
Outstanding options, weighted-average remaining contractual life (Year) | 1 year 2 months 12 days | |||
Stock options exercisable (in shares) | 15,274 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 21.41 | |||
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) | 22,024 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 5.76 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 7 days | |||
Stock options exercisable (in shares) | 4,675 | |||
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) | 5,089 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 11.17 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 2 years 10 months 17 days | |||
Stock options exercisable (in shares) | 5,089 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 11.17 | |||
Range 3 [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) | 660 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 20.03 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 4 years 22 days | |||
Stock options exercisable (in shares) | 660 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 20.03 | |||
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) | 6,350 | |||
Outstanding options, weighted-average exercise price (in dollars per share) | $ 47.91 | |||
Outstanding options, weighted-average remaining contractual life (Year) | 3 years 7 months 28 days | |||
Stock options exercisable (in shares) | 4,850 | |||
Exercisable options, weighted-average exercise price (in dollars per share) | $ 47.42 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details 3) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected volatility | 24.23% |
Weighted-Average volatility | 24.23% |
Expected term (in years) | 7 years |
Risk-free rate | 1.37% |
Weighted-average fair value (grant date) (in dollars per share) | $ 14.27 |
Stock-based Compensation (Det_5
Stock-based Compensation (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Proceeds from stock options exercised | $ 776 | $ 372 | $ 955 |
Tax benefits realized from stock compensation | 5 | 99 | 400 |
Intrinsic value of stock options exercised | $ 4,958 | $ 3,888 | $ 2,824 |
Stock-Based Compensation (Det_6
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | May 31, 2011 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 12, 2016 | |
Award vesting period | 2 years | |||||
Options, outstanding, intrinsic value | $ 1,200 | $ 7,000 | ||||
Options, vested in period, fair value | 80 | 71 | $ 66 | |||
Stock options compensation not yet recognized, | $ 17 | |||||
Compensation cost not yet recognized period for recognition | 1 year 6 months 14 days | |||||
Salaries and Employee Benefits [Member] | ||||||
Allocated share-based compensation expense | $ 6,500 | $ 5,600 | $ 6,900 | |||
Restricted Stock [Member] | ||||||
Common stock, grants in period | 94,344 | |||||
Performance Shares [Member] | ||||||
Common stock, grants in period | 42,533 | 42,533 | 36,523 | |||
Award vesting period | 3 years | |||||
Award vesting rights, percentage | 100.00% | |||||
Nonvested awards, number of shares outstanding | 98,958 | 62,338 | 33,226 | |||
The 2016 Plan [Member] | ||||||
Common stock, capital shares reserved for future issuance | 1,000,000 | |||||
Stock Plan 2006 [Member] | Restricted Stock and PRSU [Member] | ||||||
Compensation cost not yet recognized period for recognition | 1 year 8 months 26 days | |||||
Nonvested awards, number of shares outstanding | 272,679 | |||||
Common stock awards, compensation not yet recognized | $ 8,500 | |||||
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 | 387,805 | |||||
The 2011 ESPP [Member] | Maximum [Member] | ||||||
Maximum employee subscription rate ESPP (percent) | 10.00% | |||||
The 2011 ESPP [Member] | Maximum [Member] | Annually [Member] | ||||||
Amount contributed to ESPP for participants | $ 25 | |||||
The 2011 ESPP [Member] | Maximum [Member] | Offering Period [Member] | ||||||
Amount contributed to ESPP for participants | 6,250 | |||||
The 2011 ESPP [Member] | Minimum [Member] | Pay Period [Member] | ||||||
Amount contributed to ESPP for participants | $ 10 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Deferred Compensation Arrangement With Individual Minimum Age | 21 years | ||
Deferred Compensation Arrangement with Individual, Requisite Service Period | 30 days | ||
Defined Contribution Plan, Cost Recognized | $ 894 | $ 1,200 | $ 1,100 |
Supplemental Executive Retire_2
Supplemental Executive Retirement Plan (Details Narrative) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | Dec. 31, 2013USD ($) | |
Share-based compensation arrangement by share-based payment award, award vesting period | 2 years | |||
Defined benefit plan, net periodic benefit cost | $ 686 | $ 410 | ||
Supplemental Executive Retirement and Death Benefit Agreements [Member] | ||||
Time period for calculating base salary under SERP agreements | 5 years | |||
Retirement age | Number | 67 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 6 years | |||
Retirement plan monthly instalments | Number | 180 | |||
Purchased Fixed Annuity for Financing Retirement Benefits [Member] | Supplemental Executive Retirement and Death Benefit Agreements [Member] | ||||
Other investments | $ 11,400 | |||
Annuity contracts accrued income | $ 81 | $ 47 | ||
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 | $ 12,400 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Instruments With Offbalance Sheet Risk Details Abstract | ||
Unfunded loan commitments | $ 2,228,689 | $ 2,267,774 |
Unfunded lines of credit | 90,283 | 96,477 |
Letters of credit | 83,162 | 68,723 |
Total | $ 2,402,134 | $ 2,432,974 |
Financial Instruments with Of_4
Financial Instruments with Off-Balance Sheet Risk (Details Narratives) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Instruments With Offbalance Sheet Risk Details Narratives Abstract | ||
Mortgage Loans on Real Estate, Write-down or Reserve, Amount | $ 45 | $ 73 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities (Details) $ in Thousands | Dec. 31, 2018USD ($) | |
Within one year | $ 6,591,259 | |
One to three years | 430,871 | |
Three to five years | 61,096 | |
Over five years | 262,317 | |
Total | 7,345,543 | |
Deposits Without a Stated Maturity [Member] | ||
Within one year | 5,646,886 | [1] |
Total | 5,646,886 | [1] |
Time Deposits [Member] | ||
Within one year | 893,445 | [1] |
One to three years | 396,942 | [1] |
Three to five years | 37,012 | [1] |
Total | 1,327,399 | [1] |
Borrowed Funds [Member] | ||
Within one year | 30,413 | [2] |
Over five years | 220,000 | [2] |
Total | 250,413 | [2] |
Operating Lease Obligations [Member] | ||
Within one year | 8,435 | |
One to three years | 15,311 | |
Three to five years | 13,858 | |
Over five years | 29,138 | |
Total | 66,742 | |
Outside Data Processing [Member] | ||
Within one year | 4,525 | [3] |
One to three years | 8,091 | [3] |
Three to five years | 7,630 | [3] |
Over five years | 3,815 | [3] |
Total | 24,061 | [3] |
George Mason Sponsorship [Member] | ||
Within one year | 650 | [4] |
One to three years | 1,325 | [4] |
Three to five years | 1,350 | [4] |
Over five years | 8,475 | [4] |
Total | 11,800 | [4] |
D.C. United [Member] | ||
Within one year | 773 | [5] |
One to three years | 1,615 | [5] |
Three to five years | 844 | [5] |
Total | 3,232 | [5] |
Non-compete Agreement [Member] | ||
Within one year | 21 | [6] |
Total | 21 | [6] |
LIHTC Investments [Member] | ||
Within one year | 6,111 | [7] |
One to three years | 7,587 | [7] |
Three to five years | 402 | [7] |
Over five years | 889 | [7] |
Total | $ 14,989 | [7] |
[1] | Excludes accrued interest payable at December 31, 2018. | |
[2] | Borrowed funds include customer repurchase agreements, and other short-term and long-term borrowings. | |
[3] | The Bank has outstanding obligations under its current core data processing contract that expire in March 2025 and two other vendor arrangements that relate to network infrastructure and data center services, one expires in July 2020 and the other expires in December 2019. | |
[4] | The Bank has the option of terminating the George Mason agreement at the end of contract years 10 and 15 (that is, effective June 30, 2025 or June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, contractual obligations would decrease $3.5 million and $3.6 million for the first option period (years 11-15) and the second option period (16-20), respectively. | |
[5] | Marketing sponsorship agreement with D.C. United | |
[6] | Non-compete agreement with a retired Director. | |
[7] | Low Income Housing Tax Credits ("LIHTC") expected payments for unfunded affordable housing commitments. |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities (Details Narrative) - George Mason Sponsorship [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Termination Option One [Member] | |
Increase (Decrease) in Contractual Obligation, Termination Option | $ (3,500) |
Termination Option One [Member] | Minimum [Member] | |
Contractual Obligation, Option Period | 11 years |
Termination Option One [Member] | Maximum [Member] | |
Contractual Obligation, Option Period | 15 years |
Termination Option Two [Member] | |
Increase (Decrease) in Contractual Obligation, Termination Option | $ (3,600) |
Termination Option Two [Member] | Minimum [Member] | |
Contractual Obligation, Option Period | 16 years |
Termination Option Two [Member] | Maximum [Member] | |
Contractual Obligation, Option Period | 20 years |
Effective June 30, 2025 [Member] | |
Option to Terminate | 10 years |
Effective June 30, 2030 [Member] | |
Option to Terminate | 15 years |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
CET1 capital (to risk weighted aseets) minimum required for capital adequacy purposes | 6.375% | 5.75% | |
CET1 capital (to risk weighted aseets) to be well capitalized under prompt corrective action regulations | [1] | 6.50% | 6.50% |
Total capital (to risk weighted assets) minimum required for capital adequacy purposes | 9.875% | 9.25% | |
Total capital (to risk weighted assets) to be well capitalized under prompt corrective action regulations | [1] | 10.00% | 10.00% |
Tier 1 capital (to risk weighted assets) minimum required for capital adequacy purposes | 7.875% | 7.25% | |
Tier 1 capital (to risk weighted assets) to be well capitalized under prompt corrective action regulations | [1] | 8.00% | 8.00% |
Tier 1 capital (to average assets) minimum required for capital adequacy purposes | 5.00% | 5.00% | |
Tier 1 capital (to average assets) to be well capitalized under prompt corrective action regulations | [1] | 5.00% | 5.00% |
Bank [Member] | |||
CET1 capital (to risk weighted aseets) actual amount | $ 1,147,151 | $ 969,250 | |
CET1 capital (to risk weighted aseets) actual ratio | 14.23% | 12.91% | |
Total capital (to risk weighted assets) actual amount | $ 1,217,140 | $ 1,033,554 | |
Total capital (to risk weighted assets) actual ratio | 15.10% | 13.76% | |
Tier 1 capital (to risk weighted assets) actual amount | $ 1,147,151 | $ 969,250 | |
Tier 1 capital (to risk weighted assets) actual ratio | 14.23% | 12.91% | |
Tier 1 capital (to average assets) actual amount | $ 1,147,151 | $ 969,250 | |
Tier 1 capital (to average assets) actual ratio | 13.78% | 13.15% | |
Parent Company [Member] | |||
CET1 capital (to risk weighted aseets) actual amount | $ 1,007,438 | $ 845,123 | |
CET1 capital (to risk weighted aseets) actual ratio | 12.49% | 11.23% | |
Total capital (to risk weighted assets) actual amount | $ 1,297,427 | $ 1,129,954 | |
Total capital (to risk weighted assets) actual ratio | 16.08% | 15.02% | |
Tier 1 capital (to risk weighted assets) actual amount | $ 1,007,438 | $ 845,123 | |
Tier 1 capital (to risk weighted assets) actual ratio | 12.49% | 11.23% | |
Tier 1 capital (to average assets) actual amount | $ 1,007,438 | $ 845,123 | |
Tier 1 capital (to average assets) actual ratio | 12.10% | 11.45% | |
[1] | Applies to Bank only |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Comprehensive Income | |||
Net unrealized gain (loss) on securities available-for-sale, before tax | $ (4,279) | $ (1,319) | $ (3,800) |
Less: Reclassification adjustment for net gains/loss included in net income, before tax | (97) | (542) | (1,194) |
Total unrealized gain (loss), before tax | (4,376) | (1,861) | (4,994) |
Net unrealized gain (loss) on derivatives, before tax | 2,033 | 4,559 | (2,947) |
Less: Reclassification adjustment for gains/losses included in net income, before tax | (560) | (1,592) | 2,255 |
Total unrealized gain (loss) on derivatives, before tax | 1,473 | 2,967 | (692) |
Other Comprehensive Income (Loss), before tax | (2,903) | 1,106 | (5,686) |
Net unrealized gain (loss) on securities available-for-sale, tax effect | (438) | (479) | (1,520) |
Less: Reclassification adjustment for net gains/loss included in net income, tax | (25) | (206) | (478) |
Total unrealized gain (loss), tax effect | (463) | (685) | (1,998) |
Net unrealized gain (loss) on derivatives, tax effect | 227 | 1,765 | (2,018) |
Less: Reclassification adjustment for gains/losses included in net income, tax effect | (142) | (605) | 902 |
Total unrealized gain (loss) on derivatives, tax effect | 85 | 1,160 | (1,116) |
Other Comprehensive Income (Loss), tax effect | (378) | 475 | (3,114) |
Net unrealized gain (loss) on securities available-for-sale, net of tax | (3,841) | (840) | (2,280) |
Less: Reclassification adjustment for net gains/loss included in net income, net of tax | (72) | (336) | (716) |
Total unrealized gain (loss) on investment securities, net of tax | (3,913) | (1,176) | (2,996) |
Net unrealized gain (loss) on derivatives, net of tax | 1,806 | 2,794 | (934) |
Less: Reclassification adjustment for gains/losses included in net income, net of tax | (418) | (987) | 1,358 |
Total unrealized gain (loss) on derivatives, net of tax | 1,388 | 1,807 | 424 |
Other comprehensive income (loss), net of tax | $ (2,525) | $ 631 | $ (2,572) |
Other Comprehensive Income (D_2
Other Comprehensive Income (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Securities Available for Sale | |||
Beginning balance | $ (3,131) | $ (1,955) | $ 1,041 |
Other comprehensive income (loss) before reclassifications | (3,841) | (840) | (2,280) |
Amounts reclassified from accumulated other comprehensive income (loss) | (72) | (336) | (716) |
Net other comprehensive income during the period | (3,913) | (1,176) | (2,996) |
Ending balance | (7,044) | (3,131) | (1,955) |
Derivatives | |||
Beginning balance | 1,381 | (426) | (850) |
Other comprehensive income (loss) before reclassifications | 1,806 | 2,794 | (934) |
Amounts reclassified from accumulated other comprehensive income (loss) | (418) | (987) | 1,358 |
Net other comprehensive income during the period | 1,388 | 1,807 | 424 |
Ending balance | 2,769 | 1,381 | (426) |
Accumulated Other Comprehensive Income (Loss) | |||
Beginning balance | (1,750) | (2,381) | 191 |
Other comprehensive income (loss) before reclassifications | (2,035) | 1,954 | (3,214) |
Amounts reclassified from accumulated other comprehensive income (loss) | (490) | (1,323) | 642 |
Net other comprehensive income during the period | (2,525) | 631 | (2,572) |
Ending balance | $ (4,275) | $ (1,750) | $ (2,381) |
Other Comprehensive Income (D_3
Other Comprehensive Income (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Realized gain on sale of investment securities | $ 97 | $ 542 | $ 1,194 | ||||||||||||
Interest income (expense) derivative deposits | (60,210) | (27,286) | (19,248) | ||||||||||||
Income tax (expense) benefit | $ (13,197) | $ (13,928) | $ (12,528) | $ (12,279) | $ (35,396) | $ (17,409) | $ (17,382) | $ (15,318) | $ (16,429) | $ (15,484) | $ (15,069) | $ (14,413) | (51,932) | (85,504) | (61,395) |
Amounts reclassified from accumulated other comprehensive income (loss) | (490) | (1,323) | 642 | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||||||
Realized gain on sale of investment securities | 97 | 542 | 1,194 | ||||||||||||
Interest income (expense) derivative deposits | 560 | (1,592) | (1,695) | ||||||||||||
Interest expense derivative borrowings | (569) | ||||||||||||||
Income tax (expense) benefit | (167) | 399 | 428 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | $ 490 | $ (651) | $ (642) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment securities | $ 784,139 | $ 589,268 |
Loans held for sale | 19,254 | 25,096 |
Other equity investments | 218 | 218 |
Assets measured at a fair value | 807,349 | 616,663 |
Liabilities measured at a fair value | 269 | 10 |
Interest Rate Swap [Member] | ||
Derivative asset | 3,781 | 2,201 |
Interest Rate Swap [Member] | Derivative Financial Instruments, Assets [Member] | ||
Derivative asset | 3,727 | 2,256 |
US Agency Securities [Member] | ||
Investment securities | 256,345 | 195,984 |
Residential Mortgage Backed Securities [Member] | ||
Investment securities | 472,231 | 317,836 |
Loans held for sale | 19,254 | 25,096 |
Municipal Bonds [Member] | ||
Investment securities | 45,769 | 62,057 |
Corporate Bonds [Member] | ||
Investment securities | 9,576 | 13,173 |
Mortgage Banking Derivative [Member] | ||
Derivative asset | 229 | 43 |
Derivative liability | 269 | 10 |
Fair Value, Inputs, Level 2 [Member] | ||
Investment securities | 774,345 | 587,550 |
Loans held for sale | 19,254 | 25,096 |
Fair Value, Inputs, Level 2 [Member] | Recurring [Member] | ||
Assets measured at a fair value | 797,326 | 614,902 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||
Derivative asset | 3,727 | 2,256 |
Fair Value, Inputs, Level 2 [Member] | US Agency Securities [Member] | ||
Investment securities | 256,345 | 195,984 |
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member] | ||
Investment securities | 472,231 | 317,836 |
Fair Value, Inputs, Level 2 [Member] | Municipal Bonds [Member] | ||
Investment securities | 45,769 | 62,057 |
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds [Member] | ||
Investment securities | 11,673 | |
Fair Value, Inputs, Level 3 [Member] | ||
Investment securities | 9,794 | 1,718 |
Other equity investments | 218 | 218 |
Fair Value, Inputs, Level 3 [Member] | Recurring [Member] | ||
Assets measured at a fair value | 10,023 | 1,761 |
Liabilities measured at a fair value | 269 | 10 |
Fair Value, Inputs, Level 3 [Member] | Corporate Bonds [Member] | ||
Investment securities | 9,576 | 1,500 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative [Member] | ||
Derivative asset | $ 229 | $ 43 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans held for sale | $ 19,254 | $ 25,096 |
Residential Mortgage Backed Securities [Member] | ||
Loans held for sale | 19,254 | 25,096 |
Aggregate Unpaid Principal Balance | 19,254 | 24,674 |
Difference | $ 457 | $ 422 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets - Beginning balance | $ 1,761 | $ 1,832 |
Realized gain (loss) included in earnings - net mortgage banking derivatives | 186 | (71) |
Reclass from level 2 | 8,076 | |
Assets - Ending balance | 10,023 | 1,761 |
Liabilities - Beginning balance | 10 | 55 |
Realized gain (loss) included in earnings - net mortgage banking derivatives | 259 | (45) |
Liabilities - Ending balance | 259 | 10 |
Investment Securities [Member] | ||
Assets - Beginning balance | 1,718 | 1,718 |
Reclass from level 2 | 8,076 | |
Assets - Ending balance | 9,794 | 1,718 |
Mortgage Banking Derivatives [Member] | ||
Assets - Beginning balance | 43 | 114 |
Realized gain (loss) included in earnings - net mortgage banking derivatives | 186 | (71) |
Assets - Ending balance | 229 | 43 |
Liabilities - Beginning balance | 10 | 55 |
Realized gain (loss) included in earnings - net mortgage banking derivatives | 259 | (45) |
Liabilities - Ending balance | $ 259 | $ 10 |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other real estate owned | $ 1,394 | $ 1,394 |
Assets measured at a fair value | 807,349 | 616,663 |
Non Recurring [Member] | ||
Assets measured at a fair value | 32,778 | 19,370 |
Fair Value, Inputs, Level 3 [Member] | ||
Other real estate owned | 1,394 | 1,394 |
Fair Value, Inputs, Level 3 [Member] | Non Recurring [Member] | ||
Assets measured at a fair value | 32,778 | 19,370 |
Commercial [Member] | ||
Impaired loans | 3,338 | 2,266 |
Commercial [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 3,338 | 2,266 |
Income Producing - Commercial Real Estate [Member] | ||
Impaired loans | 18,937 | 7,664 |
Income Producing - Commercial Real Estate [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 18,937 | 7,664 |
Owner Occupied - Commercial Real Estate - [Member] | ||
Impaired loans | 5,131 | 5,214 |
Owner Occupied - Commercial Real Estate - [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 5,131 | 5,214 |
Real Estate Mortgage Residential [Member] | ||
Impaired loans | 1,510 | 775 |
Real Estate Mortgage Residential [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 1,510 | 775 |
Construction - Commercial and Residential [Member] | ||
Impaired loans | 1,981 | 1,552 |
Construction - Commercial and Residential [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | 1,981 | 1,552 |
Home Equity [Member] | ||
Impaired loans | 487 | 494 |
Home Equity [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | $ 487 | 494 |
Other Consumer [Member] | ||
Impaired loans | 11 | |
Other Consumer [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans | $ 11 |
Fair Value Measurements (Deta_5
Fair Value Measurements (Details 4) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Federal funds sold | $ 11,934 | $ 15,767 | |||
Interest bearing deposits with other banks | 303,157 | 167,261 | |||
Investment securities | 784,139 | 589,268 | |||
Loans held for sale | 19,254 | 25,096 | |||
Bank owned life insurance | 73,441 | 60,947 | |||
Interest bearing deposits | 593,107 | 420,417 | $ 289,122 | ||
Interest Rate Swap [Member] | |||||
Derivative asset | 3,781 | 2,201 | |||
Fair Value, Inputs, Level 2 [Member] | |||||
Cash and due from banks | 6,773 | 7,445 | |||
Federal funds sold | 11,934 | 15,767 | |||
Interest bearing deposits with other banks | 303,157 | 167,261 | |||
Investment securities | 774,345 | 587,550 | |||
Federal Reserve and Federal Home Loan Bank stock | 23,506 | 36,324 | |||
Loans held for sale | 19,254 | 25,096 | |||
Bank owned life insurance | 73,441 | 60,947 | |||
Annuity investment | 12,417 | 11,632 | |||
Noninterest bearing deposits | 2,104,220 | 1,982,912 | |||
Interest bearing deposits | 3,542,666 | 3,041,563 | |||
Certificates of deposit | 1,325,209 | 829,886 | |||
Customer repurchase agreements | 30,413 | 76,561 | |||
Borrowings | 218,006 | 533,162 | |||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | |||||
Derivative asset | 3,727 | 2,256 | |||
Fair Value, Inputs, Level 3 [Member] | |||||
Investment securities | 9,794 | 1,718 | |||
Loans, net | 6,921,048 | [1] | 6,381,213 | [2] | |
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative [Member] | |||||
Derivative asset | 229 | 43 | |||
Derivative liability | 269 | 10 | |||
Carrying Value [Member] | |||||
Cash and due from banks | 6,773 | 7,445 | |||
Federal funds sold | 11,934 | 15,767 | |||
Interest bearing deposits with other banks | 303,157 | 167,261 | |||
Investment securities | 784,139 | 589,268 | |||
Federal Reserve and Federal Home Loan Bank stock | 23,506 | 36,324 | |||
Loans held for sale | 19,254 | 25,096 | |||
Loans, net | 6,921,503 | [1] | 6,346,770 | [2] | |
Bank owned life insurance | 73,441 | 60,947 | |||
Annuity investment | 12,417 | 11,632 | |||
Noninterest bearing deposits | 2,104,220 | 1,982,912 | |||
Interest bearing deposits | 3,542,666 | 3,041,563 | |||
Certificates of deposit | 1,327,399 | 829,509 | |||
Customer repurchase agreements | 30,413 | 76,561 | |||
Borrowings | 217,196 | 541,905 | |||
Carrying Value [Member] | Interest Rate Swap [Member] | |||||
Derivative asset | 3,727 | 2,256 | |||
Carrying Value [Member] | Mortgage Banking Derivative [Member] | |||||
Derivative asset | 229 | 43 | |||
Derivative liability | 269 | 10 | |||
Fair Value [Member] | |||||
Cash and due from banks | 6,773 | 7,445 | |||
Federal funds sold | 11,934 | 15,767 | |||
Interest bearing deposits with other banks | 303,157 | 167,261 | |||
Investment securities | 784,139 | 589,268 | |||
Federal Reserve and Federal Home Loan Bank stock | 23,506 | 36,324 | |||
Loans held for sale | 19,254 | 25,096 | |||
Loans, net | 6,921,048 | [1] | 6,381,213 | [2] | |
Bank owned life insurance | 73,441 | 60,947 | |||
Annuity investment | 12,417 | 11,632 | |||
Noninterest bearing deposits | 2,104,220 | 1,982,912 | |||
Interest bearing deposits | 3,542,666 | 3,041,563 | |||
Certificates of deposit | 1,325,209 | 829,886 | |||
Customer repurchase agreements | 30,413 | 76,561 | |||
Borrowings | 218,006 | 533,162 | |||
Fair Value [Member] | Interest Rate Swap [Member] | |||||
Derivative asset | 3,727 | 2,256 | |||
Fair Value [Member] | Mortgage Banking Derivative [Member] | |||||
Derivative asset | 229 | 43 | |||
Derivative liability | $ 269 | $ 10 | |||
[1] | Carrying amount is net of unearned income and the allowance for credit losses. In accordance with the prospective adoption of ASU No. 2016-01, the fair value of loans was measured using an exit price notion. | ||||
[2] | Carrying amount is net of unearned income and the allowance for credit losses. The fair value of loans was measured using an entry price notion. |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||
Quarterly Results Of Operations Unaudited | |||||||||||||||||||||||||||
Total interest income | $ 105,581 | $ 102,360 | $ 96,296 | $ 89,049 | $ 86,526 | $ 82,370 | $ 79,344 | $ 75,794 | $ 75,795 | $ 72,431 | $ 69,772 | $ 67,807 | $ 393,286 | $ 324,034 | $ 285,805 | ||||||||||||
Total interest expense | 23,869 | 21,069 | 18,086 | 13,269 | 11,167 | 10,434 | 9,646 | 8,900 | 8,771 | 7,703 | 5,950 | 5,216 | 76,293 | 40,147 | 27,640 | ||||||||||||
Net interest income | 81,712 | 81,291 | 78,210 | 75,780 | 75,359 | 71,936 | 69,698 | 66,894 | 67,024 | 64,728 | 63,822 | 62,591 | 316,993 | 283,887 | 258,165 | ||||||||||||
Provision for credit losses | 2,600 | 2,441 | 1,650 | 1,969 | 4,087 | 1,921 | 1,566 | 1,397 | 2,112 | 2,288 | 3,888 | 3,043 | |||||||||||||||
Net interest income after provision for credit losses | 79,112 | 78,850 | 76,560 | 73,811 | 71,272 | 70,015 | 68,132 | 65,497 | 64,912 | 62,440 | 59,934 | 59,548 | 308,333 | 274,916 | 246,834 | ||||||||||||
Noninterest income | 6,089 | 5,640 | 5,553 | 5,304 | 9,496 | 6,784 | 7,023 | 6,070 | 7,014 | 6,405 | 7,575 | 6,290 | 22,586 | 29,372 | 27,284 | ||||||||||||
Noninterest expense | 31,687 | 31,614 | 32,289 | 31,121 | 29,803 | 29,516 | 30,001 | 29,232 | 29,780 | 28,838 | 28,295 | 28,103 | 126,711 | 118,552 | 115,016 | ||||||||||||
Income before income tax expense | 53,514 | 52,876 | 49,824 | 47,994 | 50,965 | 47,283 | 45,154 | 42,335 | 42,146 | 40,007 | 39,214 | 37,735 | 204,208 | 185,736 | 159,102 | ||||||||||||
Income Tax Expense | 13,197 | 13,928 | 12,528 | 12,279 | 35,396 | 17,409 | 17,382 | 15,318 | 16,429 | 15,484 | 15,069 | 14,413 | 51,932 | 85,504 | 61,395 | ||||||||||||
Net Income | 40,317 | 38,948 | 37,296 | 35,715 | 15,569 | 29,874 | 27,772 | 27,017 | 25,717 | 24,523 | 24,145 | 23,322 | 152,276 | 100,232 | 97,707 | ||||||||||||
Preferred Stock Dividends | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 25,717 | $ 24,523 | $ 24,145 | $ 23,322 | |||||||||||||||
Net income available to common shareholders | $ 152,276 | $ 100,232 | $ 97,707 | ||||||||||||||||||||||||
Earnings Per Common Share | |||||||||||||||||||||||||||
Basic (in dollars per share) | $ 1.17 | [1] | $ 1.14 | [1] | $ 1.09 | [1] | $ 1.04 | [1] | $ 0.46 | [1] | $ 0.87 | [1] | $ 0.81 | [1] | $ 0.79 | [1] | $ 0.76 | [1] | $ 0.73 | [1] | $ 0.72 | [1] | $ 0.7 | [1] | $ 4.44 | $ 2.94 | $ 2.91 |
Diluted (in dollars per share) | $ 1.17 | [1] | $ 1.13 | [1] | $ 1.08 | [1] | $ 1.04 | [1] | $ 0.45 | [1] | $ 0.87 | [1] | $ 0.81 | [1] | $ 0.79 | [1] | $ 0.75 | [1] | $ 0.72 | [1] | $ 0.71 | [1] | $ 0.68 | [1] | $ 4.42 | $ 2.92 | $ 2.86 |
[1] | Earnings per common share are calculated on a quarterly basis and may not be additive to the year to date amount. |
Parent Company Financial Info_3
Parent Company Financial Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Investment securities available-for-sale, at fair value | $ 784,139 | $ 589,268 | ||
Other assets | 88,392 | 71,784 | ||
Total Assets | 8,389,137 | 7,479,029 | ||
Liabilities | ||||
Other liabilities | 58,202 | 56,141 | ||
Long-term borrowings | 217,296 | 216,905 | ||
Total Liabilities | 7,280,196 | 6,528,591 | ||
Shareholders' Equity | ||||
Common stock | 342 | 340 | ||
Additional paid in capital | 528,380 | 520,304 | ||
Retained earnings | 584,494 | 431,544 | ||
Accumulated other comprehensive loss | (4,275) | (1,750) | $ (2,381) | $ 191 |
Total Shareholders' Equity | 1,108,941 | 950,438 | $ 842,799 | $ 738,601 |
Total Liabilities and Shareholders' Equity | 8,389,137 | 7,479,029 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash | 72,783 | 77,883 | ||
Investment securities available-for-sale, at fair value | 100 | 100 | ||
Investment in subsidiaries | 1,249,704 | 1,088,670 | ||
Other assets | 8,214 | 5,315 | ||
Total Assets | 1,330,801 | 1,171,968 | ||
Liabilities | ||||
Other liabilities | 4,564 | 4,625 | ||
Long-term borrowings | 217,296 | 216,905 | ||
Total Liabilities | 221,860 | 221,530 | ||
Shareholders' Equity | ||||
Common stock | 342 | 340 | ||
Additional paid in capital | 528,380 | 520,304 | ||
Retained earnings | 584,494 | 431,544 | ||
Accumulated other comprehensive loss | (4,275) | (1,750) | ||
Total Shareholders' Equity | 1,108,941 | 950,438 | ||
Total Liabilities and Shareholders' Equity | $ 1,330,801 | $ 1,171,968 |
Parent Company Financial Info_4
Parent Company Financial Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gain on sale of investment securities | $ 97 | $ 542 | $ 1,194 | ||||||||||||
Interest expense | $ 23,869 | $ 21,069 | $ 18,086 | $ 13,269 | $ 11,167 | $ 10,434 | $ 9,646 | $ 8,900 | $ 8,771 | $ 7,703 | $ 5,950 | $ 5,216 | 76,293 | 40,147 | 27,640 |
Legal and professional | 9,742 | 5,053 | 3,673 | ||||||||||||
Other | 15,783 | 15,869 | 15,255 | ||||||||||||
Income Tax Expense | 13,197 | 13,928 | 12,528 | 12,279 | 35,396 | 17,409 | 17,382 | 15,318 | 16,429 | 15,484 | 15,069 | 14,413 | 51,932 | 85,504 | 61,395 |
Net Income | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 25,717 | $ 24,523 | $ 24,145 | $ 23,322 | 152,276 | 100,232 | 97,707 |
Parent Company [Member] | |||||||||||||||
Other interest and dividends | 678 | 234 | 280 | ||||||||||||
Gain on sale of investment securities | 43 | ||||||||||||||
Total Income | 678 | 234 | 323 | ||||||||||||
Interest expense | 11,916 | 11,916 | 7,493 | ||||||||||||
Legal and professional | 870 | 118 | 131 | ||||||||||||
Directors compensation | 614 | 352 | 202 | ||||||||||||
Other | 1,287 | 1,246 | 1,083 | ||||||||||||
Total Expenses | 14,687 | 13,632 | 8,909 | ||||||||||||
Income Before Income Tax Expense | (14,009) | (13,398) | (8,586) | ||||||||||||
Income Tax Expense | (2,892) | (4,689) | (2,919) | ||||||||||||
Loss Before Equity in Undistributed Income of Subsidiaries | (11,117) | (8,709) | (5,667) | ||||||||||||
Equity in Undistributed Income of Subsidiaries | 163,393 | 108,941 | 103,374 | ||||||||||||
Net Income | $ 152,276 | $ 100,232 | $ 97,707 |
Parent Company Financial Info_5
Parent Company Financial Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities: | |||||||||||||||
Net Income | $ 40,317 | $ 38,948 | $ 37,296 | $ 35,715 | $ 15,569 | $ 29,874 | $ 27,772 | $ 27,017 | $ 25,717 | $ 24,523 | $ 24,145 | $ 23,322 | $ 152,276 | $ 100,232 | $ 97,707 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Net tax benefits from stock compensation | 110 | 460 | |||||||||||||
Excess tax benefit on stock-based compensation | (400) | ||||||||||||||
Increase in other assets | (17,301) | (19,324) | (5,025) | ||||||||||||
(Decrease) increase in other liabilities | 2,061 | 10,348 | 8,545 | ||||||||||||
Net cash provided by operating activities | 164,455 | 160,924 | 116,820 | ||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Proceeds from sale of available-for-sale securities | 36,300 | 73,100 | 94,300 | ||||||||||||
Net cash provided by (used in) investing activities | (783,801) | (810,377) | (750,952) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||
Proceeds from exercise of equity compensation plans | 776 | 372 | 955 | ||||||||||||
Excess tax benefit on stock-based compensation | 400 | ||||||||||||||
Proceeds from employee stock purchase plan | 808 | 836 | 801 | ||||||||||||
Net cash provided by financing activities | 750,737 | 471,763 | 703,932 | ||||||||||||
Net (Decrease) Increase in Cash | 131,391 | (177,690) | 69,800 | ||||||||||||
Cash and Cash Equivalents at Beginning of Period | 190,473 | 368,163 | 298,363 | 190,473 | 368,163 | 298,363 | |||||||||
Cash and Cash Equivalents at End of Period | 321,864 | 190,473 | 368,163 | 321,864 | 190,473 | 368,163 | |||||||||
Parent Company [Member] | |||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||
Net Income | 152,276 | 100,232 | 97,707 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Equity in undistributed income of subsidiary | (163,393) | (108,941) | (103,374) | ||||||||||||
Net tax benefits from stock compensation | 110 | 460 | |||||||||||||
Excess tax benefit on stock-based compensation | (400) | ||||||||||||||
Increase in other assets | (2,508) | (988) | (1,491) | ||||||||||||
(Decrease) increase in other liabilities | (61) | (189) | 3,186 | ||||||||||||
Net cash provided by operating activities | (13,576) | (9,426) | (4,372) | ||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Proceeds from sale of available-for-sale securities | 135 | ||||||||||||||
Investment in subsidiary (net) | 6,892 | (460) | (124,636) | ||||||||||||
Net cash provided by (used in) investing activities | 6,892 | (460) | (124,501) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||
Issuance in long-term borrowings | 147,586 | ||||||||||||||
Proceeds from exercise of equity compensation plans | 776 | 372 | 955 | ||||||||||||
Excess tax benefit on stock-based compensation | 400 | ||||||||||||||
Proceeds from employee stock purchase plan | 808 | 836 | 801 | ||||||||||||
Net cash provided by financing activities | 1,584 | 1,208 | 149,742 | ||||||||||||
Net (Decrease) Increase in Cash | (5,100) | (8,678) | 20,869 | ||||||||||||
Cash and Cash Equivalents at Beginning of Period | $ 77,883 | $ 86,561 | $ 65,692 | 77,883 | 86,561 | 65,692 | |||||||||
Cash and Cash Equivalents at End of Period | $ 72,783 | $ 77,883 | $ 86,561 | $ 72,783 | $ 77,883 | $ 86,561 |