Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 24, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CBTX, Inc. | |
Entity Central Index Key | 0001473844 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 25,999,297 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 54,110 | $ 54,450 |
Interest-bearing deposits at other financial institutions | 222,405 | 327,620 |
Total cash and cash equivalents | 276,515 | 382,070 |
Debt securities | 228,684 | 229,964 |
Equity investments | 15,065 | 13,026 |
Loans held for sale | 852 | |
Loans, net of allowance for loan loss of $24,643 and $23,693 at March 31, 2019 and December 31, 2018, respectively | 2,520,066 | 2,423,130 |
Premises and equipment, net of accumulated depreciation of $30,674 and $29,867 at March 31, 2019 and December 31, 2018, respectively | 51,453 | 51,622 |
Goodwill | 80,950 | 80,950 |
Other intangible assets, net of accumulated amortization of $15,147 and $14,915 at March 31, 2019 and December 31, 2018, respectively | 5,538 | 5,775 |
Bank-owned life insurance | 71,955 | 71,525 |
Operating lease right-to-use asset | 12,879 | |
Deferred tax asset, net | 5,942 | 7,201 |
Other assets | 13,563 | 13,833 |
Total assets | 3,283,462 | 3,279,096 |
Liabilities | ||
Noninterest-bearing deposits | 1,229,172 | 1,183,058 |
Interest-bearing deposits | 1,521,827 | 1,583,224 |
Total deposits | 2,750,999 | 2,766,282 |
Repurchase agreements | 1,600 | 2,498 |
Junior subordinated debt | 1,571 | |
Operating lease liabilities | 15,134 | |
Other liabilities | 17,076 | 21,120 |
Total liabilities | 2,784,809 | 2,791,471 |
Commitments and contingencies (Note 17) | ||
Shareholders’ equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued | ||
Common stock, $0.01 par value, 90,000,000 shares authorized, 25,777,904 and 25,777,693 shares issued at March 31, 2019 and December 31, 2018, 24,918,476 and 24,907,421 shares outstanding at March 31, 2019 and December 31, 2018, respectively | 258 | 258 |
Additional paid-in capital | 344,971 | 344,497 |
Retained earnings | 168,603 | 160,626 |
Treasury stock, at cost, 859,428 and 870,272 shares held at March 31, 2019 and December 31, 2018, respectively | (14,597) | (14,781) |
Accumulated other comprehensive loss, net of tax of $155 and $791 at March 31, 2019 and December 31, 2018, respectively | (582) | (2,975) |
Total shareholders’ equity | 498,653 | 487,625 |
Total liabilities and shareholders’ equity | $ 3,283,462 | $ 3,279,096 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Allowance of loan loss | $ 24,643 | $ 23,693 |
Premises and equipment, net of accumulated depreciation | 30,674 | 29,867 |
Accumulated amortization | $ 15,147 | $ 14,915 |
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 25,777,904 | 25,777,693 |
Common stock, shares outstanding | 24,918,476 | 24,907,421 |
Treasury stock, shares | 859,428 | 870,272 |
Accumulated other comprehensive loss, tax | $ 155 | $ 791 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest income | ||
Interest and fees on loans | $ 33,793 | $ 28,462 |
Debt securities | 1,557 | 1,436 |
Federal Funds and other interest-earning assets | 1,483 | 995 |
Equity investments | 152 | 192 |
Total interest income | 36,985 | 31,085 |
Interest expense | ||
Deposits | 3,584 | 1,948 |
Federal Home Loan Bank advances and repurchase agreements | 65 | 1 |
Note payable and junior subordinated debt | 8 | 97 |
Total interest expense | 3,657 | 2,046 |
Net interest income | 33,328 | 29,039 |
Provision for loan losses | 1,147 | 865 |
Net interest income after provision for loan losses | 32,181 | 28,174 |
Noninterest income | ||
Deposit account service charges | 1,629 | 1,478 |
Net gain on sale of assets | 88 | 130 |
Card interchange fees | 864 | 927 |
Earnings on bank-owned life insurance | 430 | 451 |
Other | 482 | 375 |
Total noninterest income | 3,493 | 3,361 |
Noninterest expense | ||
Salaries and employee benefits | 13,822 | 12,695 |
Net occupancy expense | 2,267 | 2,265 |
Regulatory fees | 464 | 545 |
Data processing | 714 | 683 |
Software | 440 | 365 |
Printing, stationery and office | 353 | 264 |
Amortization of intangibles | 232 | 255 |
Professional and director fees | 2,091 | 919 |
Correspondent bank and customer related transaction expenses | 65 | 67 |
Loan processing costs | 95 | 118 |
Advertising, marketing and business development | 440 | 506 |
Repossessed real estate and other asset expense | 57 | |
Security and protection expense | 323 | 302 |
Telephone and communications | 378 | 386 |
Other expenses | 901 | 857 |
Total noninterest expense | 22,585 | 20,284 |
Net income before income tax expense | 13,089 | 11,251 |
Income tax expense | 2,599 | 2,139 |
Net income | $ 10,490 | $ 9,112 |
Earnings per common share | ||
Basic | $ 0.42 | $ 0.37 |
Diluted | $ 0.42 | $ 0.37 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Net income | $ 10,490 | $ 9,112 |
Unrealized gains (losses) on debt securities available for sale arising during the period, net | 3,027 | (3,665) |
Reclassification adjustments for net realized gains included in net income | 3 | |
Change in related deferred income tax | (637) | 770 |
Other comprehensive income (loss), net of tax | 2,393 | (2,895) |
Total comprehensive income | $ 12,883 | $ 6,217 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2017 | $ 257 | $ 343,249 | $ 118,353 | $ (15,256) | $ (389) | $ 446,214 |
Beginning balance, shares at Dec. 31, 2017 | 25,731,504 | (898,272) | ||||
Net income | 9,112 | 9,112 | ||||
Dividends on common stock, $0.10 and $0.05 per share for the three months ended March 31, 2019 and 2018 respectively | (1,252) | (1,252) | ||||
Stock-based compensation expense | 392 | 392 | ||||
Other comprehensive income (loss), net of tax | (2,895) | (2,895) | ||||
Ending balance at Mar. 31, 2018 | $ 257 | 343,641 | 126,213 | $ (15,256) | (3,284) | 451,571 |
Ending balance, shares at Mar. 31, 2018 | 25,731,504 | (898,272) | ||||
Beginning balance at Dec. 31, 2018 | $ 258 | 344,497 | 160,626 | $ (14,781) | (2,975) | 487,625 |
Beginning balance, shares at Dec. 31, 2018 | 25,777,693 | (870,272) | ||||
Net income | 10,490 | 10,490 | ||||
Dividends on common stock, $0.10 and $0.05 per share for the three months ended March 31, 2019 and 2018 respectively | (2,513) | (2,513) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities | (2) | $ (2) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities (in shares) | 211 | 211 | ||||
Exercise of stock options | (69) | $ 184 | $ 115 | |||
Exercise of stock options (in shares) | 10,844 | |||||
Stock-based compensation expense | 545 | 545 | ||||
Other comprehensive income (loss), net of tax | 2,393 | 2,393 | ||||
Ending balance at Mar. 31, 2019 | $ 258 | $ 344,971 | $ 168,603 | $ (14,597) | $ (582) | $ 498,653 |
Ending balance, shares at Mar. 31, 2019 | 25,777,904 | (859,428) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) | ||
Dividends on Common Stock | $ 0.10 | $ 0.05 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 10,490,000 | $ 9,112,000 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Provision for loan losses | 1,147,000 | 865,000 |
Depreciation | 824,000 | 825,000 |
Amortization of intangibles | 232,000 | 255,000 |
Amortization of premiums on securities | 256,000 | 291,000 |
Amortization of lease right-to-use assets | 329,000 | |
Accretion of lease liabilities | 131,000 | |
Earnings on bank-owned life insurance | (430,000) | (451,000) |
Stock-based compensation expense | 545,000 | 392,000 |
Deferred income tax provision | 622,000 | 499,000 |
Net realized gains on sales of debt securities | (9,000) | (6,000) |
Net gains on sales of assets | (88,000) | (130,000) |
Change in operating assets and liabilities: | ||
Loans held for sale | (820,000) | 1,464,000 |
Other assets | 303,000 | 2,312,000 |
Operating lease liabilities | (448,000) | |
Other liabilities | (3,069,000) | (7,726,000) |
Total adjustments | (475,000) | (1,410,000) |
Net cash provided by operating activities | 10,015,000 | 7,702,000 |
Cash flows from investing activities: | ||
Purchases of debt securities | (153,962,000) | (85,675,000) |
Proceeds from sales, calls and maturities of debt securities | 153,056,000 | 78,890,000 |
Principal repayments of debt securities | 4,969,000 | 4,861,000 |
Net increase in loans | (97,639,000) | (45,514,000) |
Sales of loan participations | 7,500,000 | |
Purchases of loan participations | (1,256,000) | (7,000,000) |
Net contributions to equity investments | (2,039,000) | (449,000) |
Proceeds from sales of U.S. Small Business Administration loans | 818,000 | 237,000 |
Redemption (purchases) of bank-owned life insurance | (1,700,000) | |
Proceeds from sales of repossessed real estate and other assets | 20,000 | 393,000 |
Net sales (purchases) of premises and equipment | (653,000) | (354,000) |
Net cash used in investing activities | (96,686,000) | (48,811,000) |
Cash flows from financing activities: | ||
Net increase (decrease) in noninterest-bearing deposits | 46,114,000 | 10,732,000 |
Net increase (decrease) in interest-bearing deposits | (61,397,000) | (14,002,000) |
Net increase (decrease) in securities sold under agreements to repurchase | (898,000) | (664,000) |
Proceeds from exercise of stock options | 115,000 | |
Payments to tax authorities for stock-based compensation | (2,000) | |
Redemption of trust preferred securities | (1,571,000) | |
Dividends paid on common stock | (1,245,000) | (1,241,000) |
Net cash provided by financing activities | (18,884,000) | (5,175,000) |
Net decrease in cash, cash equivalents and restricted cash | (105,555,000) | (46,284,000) |
Cash, cash equivalents and restricted cash, beginning | 382,070,000 | 326,199,000 |
Cash, cash equivalents and restricted cash, ending | $ 276,515,000 | $ 279,915,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations CBTX, Inc., or the Company, or CBTX, operates 35 branches, 19 in the Houston market area, 15 in the Beaumont/East Texas market area and one in Dallas, through its wholly-owned subsidiary, CommunityBank of Texas, N.A., or the Bank. The Bank provides relationship-driven commercial banking products and services primarily to small and mid-sized businesses and professionals with operations within the Bank’s markets. The Bank operates under a national charter and therefore is subject to regulation by the Office of the Comptroller of the Currency, or OCC, and the Federal Deposit Insurance Corporation, or FDIC. The Company is subject to regulation by the Board of Governors of the Federal Reserve. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2019 and December 31, 2018, consolidated results of operations for the three months ended March 31, 2019 and 2018, consolidated shareholders’ equity for the three months ended March 31, 2019 and 2018 and consolidated cash flows for the three months ended March 31, 2019 and 2018. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included within our Annual Report on Form 10-K. Reclassification— Within interest income, equity investment income for 2018 has been reclassified from federal funds and other interest-earning assets to a separate line and within interest expense, repurchase agreements and FHLB advance expense have been combined and notes payable and junior subordinated debt have also been combined. These reclassifications were made to conform to the 2019 financial statement presentation in the consolidated statements of income. Accounting Standards Recently Adopted The Company adopted Accounting Standards Update, or ASU 2016-02, Leases (Topic 842) on January 1, 2019, using the effective date as the date of initial adoption. The Company elected to apply certain practical expedients for transition, and under those expedients the Company did not reassess prior accounting decisions regarding the identification, classification and initial direct costs for leases existing at the effective date. The Company also elected to use hindsight in determining lease term when considering options to extend the lease and excluded short-term leases (defined as lease terms of 12 months or less). The Company elected to separate non-lease components from lease components in its application of ASU 2016-02. At adoption, the Company recorded right-of-use assets totaling $13.2 million, which represented the Company’s right to use, or control the use of, a specified assets for their lease terms and the Company recorded lease liabilities totaling $15.5 million, which represented the Company’s liability to make lease payments under these leases. Accrued lease obligations and lease incentive liabilities totaling $2.3 million that were in other liabilities at December 31, 2018 were reversed as part of the adoption. The ASU 2016-02 standard applied to all leases existing at the date of initial adoption. The Company’s financial statements and related footnotes were not updated for ASU 2016-02 for dates and periods before the date of adoption. See Note 16. Accounting Standards Not Yet Adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is in the process of developing its process and methodology for implementing ASU 2016-13, with the assistance of an outside consultant. Existing technology is being adapted to conform to the requirements of ASU 2016-13. The adoption of ASU 2016-13 will require changes to the Company’s accounting policies and disclosures for credit losses on financial instruments. The Company is continuing to evaluate the impact of this pronouncement on the allowance for credit losses and related future provisions. Cash Flow Reporting Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $16.2 million and $18.5 million at March 31, 2019 and December 31, 2018, respectively. Additionally, as of March 31, 2019 and December 31, 2018, the Company had $1.6 million in cash collateral used in our interest rate swap transactions. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2019 2018 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 3,536 1,960 Cash paid for interest on junior subordinated debt 63 87 Supplemental disclosures of non-cash flow information: Dividends accrued 1,268 10 Operating lease right-to-use asset obtained in exchange for lease liabilities 13,208 — Repossessed real estate and other assets 41 — |
DEBT SECURITIES
DEBT SECURITIES | 3 Months Ended |
Mar. 31, 2019 | |
DEBT SECURITIES. | |
DEBT SECURITIES | NOTE 2: DEBT SECURITIES The amortized cost and fair values of investments in debt securities as of the dates shown below were as follows: Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2019 Debt securities available for sale: State and municipal securities $ 54,854 $ 811 $ (194) $ 55,471 U.S. agency securities: Debt securities 17,315 — (255) 17,060 Collateralized mortgage obligations 66,230 158 (603) 65,785 Mortgage-backed securities 89,856 490 (1,116) 89,230 Other securities 1,135 — (27) 1,108 Total $ 229,390 $ 1,459 $ (2,195) $ 228,654 Debt securities held to maturity: Mortgage-backed securities $ 30 $ 2 $ — $ 32 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2018 Debt securities available for sale: State and municipal securities $ 57,972 $ 345 $ (626) $ 57,691 U.S. agency securities: Debt securities 17,315 — (434) 16,881 Collateralized mortgage obligations 66,438 98 (1,122) 65,414 Mortgage-backed securities 90,845 230 (2,216) 88,859 Other securities 1,129 — (41) 1,088 Total $ 233,699 $ 673 $ (4,439) $ 229,933 Debt securities held to maturity: Mortgage-backed securities $ 31 $ 1 $ — $ 32 The amortized cost and estimated fair value of debt securities, by contractual maturities, as of the dates shown below were as follows: Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value March 31, 2019 Amounts maturing in: 1 year or less $ 3,338 $ 3,326 $ — $ — 1 year through 5 years 20,086 19,846 — — 5 years through 10 years 13,958 14,061 — — After 10 years 192,008 191,421 30 32 $ 229,390 $ 228,654 $ 30 $ 32 December 31, 2018 Amounts maturing in: 1 year or less $ 3,224 $ 3,188 $ — $ — 1 year through 5 years 22,784 22,370 — — 5 years through 10 years 13,127 13,062 — — After 10 years 194,564 191,313 31 32 $ 233,699 $ 229,933 $ 31 $ 32 Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Debt securities with a carrying amount of $358,000 were sold in the three months ended March 31, 2019. There were no securities sold in the three months ended March 31, 2018. At March 31, 2019 and December 31, 2018, debt securities with a carrying amount of approximately $57.5 million and $49.9 million, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law. The Company held 187 debt securities at March 31, 2019 and 167 debt securities at December 31, 2018, respectively, that were in a gross unrealized loss position for 12 months or more as illustrated in the table below. The unrealized losses are attributable primarily to changes in market interest rates relative to those available when the debt securities were acquired. The fair value of these debt securities is expected to recover as the debt securities reach their maturity or re‑pricing date, or if changes in market rates for such investments decline. Management does not believe that any of the debt securities are impaired due to reasons of credit quality. Accordingly, as of March 31, 2019 and December 31, 2018, management believes the unrealized losses detailed in the table below are temporary and no impairment loss has been recorded in the Company’s condensed consolidated statements of income for the three months ended March 31, 2019 and 2018. Debt securities with unrealized losses as of the dates shown below, aggregated by category and the length of time were as follows: Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2019 Debt securities available for sale: State and municipal securities $ 674 $ (3) $ 11,792 $ (191) U.S. agency securities: Debt securities — — 17,060 (255) Collateralized mortgage obligations — — 50,194 (603) Mortgage-backed securities 196 — 56,261 (1,116) Other securities — — 1,108 (27) $ 870 $ (3) $ 136,415 $ (2,192) December 31, 2018 Debt securities available for sale: State and municipal securities $ 20,892 $ (324) $ 6,584 $ (302) U.S. agency securities: Debt securities — — 16,882 (434) Collateralized mortgage obligations 8,854 (81) 46,157 (1,041) Mortgage-backed securities 21,745 (368) 46,183 (1,848) Other securities — — 1,088 (41) $ 51,491 $ (773) $ 116,894 $ (3,666) |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 3 Months Ended |
Mar. 31, 2019 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | NOTE 3: EQUITY INVESTMENTS The Company’s unconsolidated investments that are considered equity securities as they represent ownership interests such as common or preferred stock were as follows for the dates indicated below. (Dollars in thousands) March 31, 2019 December 31, 2018 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 3,289 1,250 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 2,364 2,364 $ 15,065 $ 13,026 Banks that are members of the Federal Home Loan Bank System, or FHLB, are required to maintain a stock investment in the FHLB calculated as a percentage of aggregate outstanding mortgages, outstanding FHLB advances and other financial instruments. Banks that are members of the Federal Reserve System are required to annually subscribe to Federal Reserve Bank stock in specific ratios to the Bank’s equity. Although FHLB and Federal Reserve Bank Stock are considered equity securities, they do not have readily determinable fair values because ownership is restricted and they lack a market. These investments can be sold back only at their par value of $100 per share and can only be sold to the Federal Home Loan Banks or Federal Reserve Banks or to another member institution. In addition, the equity ownership rights are more limited than would be the case for a public company, because of the oversight role exercised by regulators in the process of budgeting and approving dividends. As a result, these investments are carried at cost and evaluated for impairment. The Company also holds an investment in the stock of The Independent Bankers Financial Corporation, or TIB. This investment has limited marketability. As a result, these investments are carried at cost and evaluated for impairment. The Company has investments in two private investment funds and a limited partnership. These investments are qualified Community Reinvestment Act, or CRA, investments under the Small Business Investment Company program of the Small Business Administration, or SBA. There are limited to no observable price changes in orderly transactions for identical investments or similar investments from the same issuers that are actively traded and as a result, these investments are stated at cost. At March 31, 2019 and December 31, 2018, the Company had $3.0 million and $3.0 million, respectively, in outstanding unfunded commitments to these funds, which are subject to call. The Company’s equity investments are evaluated for impairment based on an assessment of qualitative indicators. Impairment indicators to be considered include, but are not limited to (i) a significant deterioration in the earnings, performance, credit rating, asset quality or business prospects of the investee, (ii) a significant adverse change in the regulatory, economic or technological environment of the investee, (iii) a significant adverse change in the general market conditions of either the geographical area or the industry in which the investee operates, (iv) a bona fide offer to purchase, an offer by the investee to sell, or completed auction process for the same or similar investment for an amount less than the carrying amount of that investment. There were no such qualitative indicators as of March 31, 2019. |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2019 | |
LOANS | |
LOANS | NOTE 4: LOANS Loans by loan class as of the dates shown below were as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Commercial and industrial $ 559,882 $ 519,779 Real estate: Commercial real estate 811,742 795,733 Construction and development 572,861 515,533 1-4 family residential 281,502 282,011 Multi-family residential 213,582 221,194 Consumer 39,072 39,421 Agriculture 8,915 11,076 Other 64,215 68,382 Total gross loans 2,551,771 2,453,129 Less deferred loan fees and unearned discounts (6,210) (6,306) Less allowance for loan loss (24,643) (23,693) Less loans held for sale (852) — Loans, net $ 2,520,066 $ 2,423,130 Accrued interest receivable for loans is $7.9 million and $6.8 million at March 31, 2019 and December 31, 2018, respectively, and is included in other assets in the condensed consolidated balance sheets. From time to time, the Company will acquire and dispose of interests in loans under participation agreements with other financial institutions. Loan participations purchased and sold during the three months ending March 31, 2019 and 2018, by loan class, were as follows: Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2019 Commercial real estate $ 1,256 $ — March 31, 2018 Commercial and industrial $ 7,000 $ — Commercial real estate — 7,500 $ 7,000 $ 7,500 The Company participates in the SBA loan program. When advantageous, the Company will sell the guaranteed portions of these loans with servicing retained. SBA loans that were sold with servicing retained during the three months ended March 31, 2019 and 2018 totaled $818,000 and $237,000, respectively. |
LOAN PERFORMANCE
LOAN PERFORMANCE | 3 Months Ended |
Mar. 31, 2019 | |
LOAN PERFORMANCE | |
LOAN PERFORMANCE | NOTE 5: LOAN PERFORMANCE Nonaccrual loans, segregated by loan class, as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 1,390 $ 1,317 Real estate: Commercial real estate 862 1,517 1-4 family residential 635 656 Other 47 — Total $ 2,934 $ 3,490 Interest income that would have been earned under the original terms of the nonaccrual loans was $48,000 and $99,000 for the three months ended March 31, 2019 and 2018, respectively. The following is an aging analysis of the Company’s past due loans, segregated by loan class, as of the dates shown below: 90 days or 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2019 Commercial and industrial $ 468 $ 25 $ 1,011 $ 1,504 $ 558,378 $ 559,882 $ — Real estate: Commercial real estate — — 692 692 811,050 811,742 — Construction and development 1,613 — — 1,613 571,248 572,861 — 1-4 family residential 193 124 147 464 281,038 281,502 — Multi-family residential 1,570 — — 1,570 212,012 213,582 — Consumer — 7 — 7 39,065 39,072 — Agriculture — — — — 8,915 8,915 — Other — — — — 64,215 64,215 — Total loans $ 3,844 $ 156 $ 1,850 $ 5,850 $ 2,545,921 $ 2,551,771 $ — December 31, 2018 Commercial and industrial $ 178 $ 881 $ 154 $ 1,213 $ 518,566 $ 519,779 $ — Real estate: Commercial real estate 68 1,089 605 1,762 793,971 795,733 — Construction and development 359 4,204 — 4,563 510,970 515,533 — 1-4 family residential 395 111 36 542 281,469 282,011 — Multi-family residential — — — — 221,194 221,194 — Consumer 28 — — 28 39,393 39,421 — Agriculture — — — — 11,076 11,076 — Other — — — — 68,382 68,382 — Total loans $ 1,028 $ 6,285 $ 795 $ 8,108 $ 2,445,021 $ 2,453,129 $ — There were no loans restructured due to the borrower’s financial difficulties during the three months ended March 31, 2019. Loans restructured due to the borrower’s financial difficulties during the three months ended March 31, 2018, which remained outstanding at the end of that period were as follows: Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate March 31, 2018 Commercial and industrial 3 $ 983 $ 983 $ — $ — $ — Commercial real estate 4 2,434 2,434 — — — Total 7 $ 3,417 $ 3,417 $ — $ — $ — The recorded investment in troubled debt restructurings was $11.0 million and $11.4 million as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019 and December 31, 2018, $1.6 million and $1.8 million of restructured loans were nonaccrual loans and $9.4 million and $9.6 million of restructured loans were accruing interest as of those periods. At March 31, 2019, the Company had an outstanding commitment to potentially fund $1.5 million on a line of credit restructured prior to 2018. At December 31, 2018, the Company had an outstanding commitment to potentially fund $2.1 million on a line of credit restructured prior to 2018. There were no loans modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. For purposes of this disclosure, a default is a loan modified as a troubled debt restructuring where the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral. |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2019 | |
ALLOWANCE FOR LOAN LOSSES | |
ALLOWANCE FOR LOAN LOSSES | NOTE 6: ALLOWANCE FOR LOAN LOSSES Activity in the allowance for loan losses segregated by loan class for the periods indicated in the tables below was as follows: Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision (recapture) for loan loss 903 52 402 (33) (54) (36) (12) (75) 1,147 Charge-offs (280) — (4) — — (284) Recoveries 74 2 1 10 — — 87 Net (charge-offs) recoveries (206) 2 — 1 — 6 — — (197) Ending balance $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Period-end amount allocated to: Specific reserve $ 582 $ 33 $ — $ 77 $ — $ — $ — $ 96 $ 788 General reserve 7,834 6,751 4,700 2,172 1,457 357 50 534 23,855 Total $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss 479 364 (126) 5 101 (51) (15) 108 865 Charge-offs (469) — — (3) — — — — (472) Recoveries 172 3 — 1 — 2 — — 178 Net (charge-offs) recoveries (297) 3 — (2) — 2 — — (294) Ending balance $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Period-end amount allocated to: Specific reserve $ 845 $ 55 $ — $ 107 $ — $ — $ — $ — $ 1,007 General reserve 6,594 10,687 3,356 1,222 1,520 517 53 393 24,342 Total $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 The allowance for loan losses by loan category as of the periods indicated was as follows: March 31, 2019 December 31, 2018 (Dollars in thousands) Amount Percent Amount Percent Commercial and industrial $ 8,416 34.1 % $ 7,719 32.6 % Real estate: Commercial real estate 6,784 27.5 % 6,730 28.4 % Construction and development 4,700 19.1 % 4,298 18.1 % 1-4 family residential 2,249 9.1 % 2,281 9.6 % Multi-family residential 1,457 5.9 % 1,511 6.4 % Consumer 357 1.5 % 387 1.6 % Agricultural 50 0.2 % 62 0.3 % Other 630 2.6 % 705 3.0 % Total allowance for loan losses $ 24,643 100.0 % $ 23,693 100 % Allocation of a portion of the allowance to one category of loans above does not preclude its availability to absorb losses in other categories. In addition to the amounts indicated in the tables above, the Company has an accumulated reserve for loan losses on unfunded commitments of $378,000 and $378,000 recorded in other liabilities as of March 31, 2019 and December 31, 2018, respectively. Risk Grading As part of the on‑going monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for loan losses, management assigns and tracks loan grades as described below are used as credit quality indicators. Pass — Credits in this category contain an acceptable amount of risk. Special Mention —Credits in this category contain more than the normal amount of risk and are referred to as “special mention” in accordance with regulatory guidelines. These credits possess clearly identifiable temporary weaknesses or trends that, if not corrected or revised, may result in a condition that exposes the Company to higher level of risk of loss. Substandard —Credits in this category are “substandard” in accordance with regulatory guidelines and of unsatisfactory credit quality with well‑defined weaknesses or weaknesses that jeopardize the liquidation of the debt. Credits in this category are inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. Often, the assets in this category will have a valuation allowance representative of management’s estimated loss that is probable to be incurred. Loans deemed substandard and on nonaccrual status are considered impaired and are evaluated for impairment. Doubtful —Credits in this category are considered “doubtful” in accordance with regulatory guidelines, are placed on nonaccrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near‑term event which lacks certainty. Generally, these credits will have a valuation allowance based upon management’s best estimate of the losses probable to occur in the liquidation of the debt. Loss —Credits in this category are considered “loss” in accordance with regulatory guidelines and are considered uncollectible and of such little value as to question their continued existence as assets on the Company’s financial statements. Such credits are to be charged off or charged down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. This category does not intend to imply that the debt or some portion of it will never be paid, nor does it in any way imply that the debt will be forgiven. The Company had no loans graded “loss” or “doubtful” at March 31, 2019 and December 31, 2018. Loans by risk grades and loan class as of the dates shown below were as follows: Special (Dollars in thousands) Pass Mention Substandard Total Loans March 31, 2019 Commercial and industrial $ 544,799 5,816 9,267 $ 559,882 Real estate: Commercial real estate 801,078 8,058 2,606 811,742 Construction and development 571,301 1,560 — 572,861 1-4 family residential 276,203 — 5,299 281,502 Multi-family residential 213,582 — — 213,582 Consumer 38,816 242 14 39,072 Agriculture 8,888 — 27 8,915 Other 56,833 — 7,382 64,215 Total loans $ 2,511,500 $ 15,676 $ 24,595 $ 2,551,771 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2018 Commercial and industrial $ 504,425 5,768 9,586 $ 519,779 Real estate: Commercial real estate 781,035 10,370 4,328 795,733 Construction and development 511,329 4,204 — 515,533 1-4 family residential 274,781 2,175 5,055 282,011 Multi-family residential 221,194 — — 221,194 Consumer 39,140 246 35 39,421 Agriculture 11,048 — 28 11,076 Other 61,569 — 6,813 68,382 Total loans $ 2,404,521 $ 22,763 $ 25,845 $ 2,453,129 Loan Impairment Assessment The Company’s recorded investment in impaired loans, as of the dates shown below by loan class and disaggregated based on the Company’s impairment methodology was as follows: Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2019 Commercial and industrial $ 4,333 $ 3,517 $ 700 $ 4,217 $ 582 $ 4,288 Real estate: Commercial real estate 2,677 1,942 585 2,527 33 2,984 1-4 family residential 4,232 2,297 1,812 4,109 77 4,219 Other 7,382 6,093 1,288 7,381 96 7,492 Total loans $ 18,624 $ 13,849 $ 4,385 $ 18,234 $ 788 $ 18,983 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2018 Commercial and industrial $ 4,378 $ 3,642 $ 635 $ 4,277 $ 525 $ 5,771 Real estate: Commercial real estate 4,128 3,374 596 3,970 44 6,135 Construction and development — — — — — 139 1-4 family residential 4,551 2,612 1,824 4,436 89 4,597 Consumer — — — — — 7 Other 6,814 5,572 1,241 6,813 100 7,841 Total loans $ 19,871 $ 15,200 $ 4,296 $ 19,496 $ 758 $ 24,490 Interest income recognized on impaired loans was $215,000 and $254,000 for the three months ended March 31, 2019 and 2018, respectively. The Company’s recorded investment in loans as of the dates shown below by loan class and based on the Company’s impairment methodology was as follows: March 31, 2019 December 31, 2018 Individually Collectively Individually Collectively Evaluated for Evaluated for Total Evaluated for Evaluated for Total (Dollars in thousands) Impairment Impairment Loans Impairment Impairment Loans Commercial and industrial $ 4,217 $ 555,665 $ 559,882 $ 4,277 $ 515,502 $ 519,779 Real estate: Commercial real estate 2,527 809,215 811,742 3,970 791,763 795,733 Construction and development — 572,861 572,861 — 515,533 515,533 1-4 family residential 4,109 277,393 281,502 4,436 277,575 282,011 Multi-family residential — 213,582 213,582 — 221,194 221,194 Consumer — 39,072 39,072 — 39,421 39,421 Agriculture — 8,915 8,915 — 11,076 11,076 Other 7,381 56,834 64,215 6,813 61,569 68,382 Total $ 18,234 $ 2,533,537 $ 2,551,771 $ 19,496 $ 2,433,633 $ 2,453,129 At March 31, 2019 and December 31, 2018, the allowance allocated to specific reserves for loans individually evaluated for impairment was $788,000 and $758,000, respectively. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2019 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 7: PREMISES AND EQUIPMENT Premises and equipment are summarized as follows as of the dates shown below: March 31, December 31, (Dollars in thousands) 2019 2018 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 52,740 52,188 Furniture and equipment 15,685 15,426 Vehicles 236 232 Construction in progress — 177 82,127 81,489 Less accumulated depreciation (30,674) (29,867) Premises and equipment, net $ 51,453 $ 51,622 Depreciation expense was $824,000 and $825,000 for the three months ended March 31, 2019 and 2018, respectively, which is included in net occupancy expense on the Company’s condensed consolidated statements of income. Net gains and losses on dispositions of premises and equipment of $1,700 and $63,000 for the three months ended March 31, 2019 and 2018, were recognized and are included in net gain on sale of assets in the condensed consolidated statements of income. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $81.0 million at March 31, 2019 and December 31, 2018 and there have been no changes in goodwill during the three months ended March 31, 2019 or the year ended December 31, 2018. Based on the results of the Company’s assessment, management does not believe any impairment of goodwill or other intangible assets existed at March 31, 2019 or December 31, 2018. Other intangibles, net of accumulated amortization, were as follows as of the dates shown below: Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets March 31, 2019 Other intangible assets, net Core deposits 5.0 years $ $ (12,674) $ 1,076 Customer relationships 9.8 years 6,629 (2,320) 4,309 Servicing assets 12.3 years 306 (153) 153 Total other intangible assets, net $ 20,685 $ (15,147) $ 5,538 December 31, 2018 Other intangible assets, net Core deposits 5.2 years $ $ (12,561) $ 1,189 Customer relationships 10.0 years 6,629 (2,209) 4,420 Servicing assets 14.4 years 311 (145) 166 Total other intangible assets, net $ 20,690 $ (14,915) $ 5,775 Servicing Assets Changes in the related servicing assets as of the dates indicated below were as follows: Three Months Ended March 31, (Dollars in thousands) 2019 2018 Balance at beginning of year $ 166 $ 209 Increase from loan sales 14 6 Decrease from serviced loans paid off or foreclosed (19) — Amortization (8) (8) Balance at end of period $ 153 $ 207 |
BANK OWNED LIFE INSURANCE
BANK OWNED LIFE INSURANCE | 3 Months Ended |
Mar. 31, 2019 | |
BANK OWNED LIFE INSURANCE | |
BANK OWNED LIFE INSURANCE | NOTE 9: BANK OWNED LIFE INSURANCE The Company has purchased life insurance policies on covered individuals, which are recorded at their cash surrender value. Changes in the cash surrender value of the policies are recorded in noninterest income. Gains or losses and proceeds from maturities are recognized upon the death of a covered employee, on receipt of a death notice or other verified evidence. Bank-owned life insurance policies and the net change in cash surrender value during the periods shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Balance at beginning of period $ 71,525 $ 68,010 Purchases — 1,700 Redemptions — — Earnings, net 430 1,815 Balance at end of period $ 71,955 $ 71,525 |
DEPOSITS
DEPOSITS | 3 Months Ended |
Mar. 31, 2019 | |
DEPOSITS | |
DEPOSITS | NOTE 10: DEPOSITS Deposits as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Interest-bearing demand accounts $ 352,623 $ 387,457 Money market accounts 695,968 737,770 Saving accounts 96,251 96,962 Certificates and other time deposits, $100,000 or greater 181,507 189,007 Certificates and other time deposits, less than $100,000 195,478 172,028 Total interest-bearing deposits 1,521,827 1,583,224 Noninterest-bearing deposits 1,229,172 1,183,058 Total deposits $ 2,750,999 $ 2,766,282 At March 31, 2019 and December 31, 2018, the Company had $46.7 million and $51.5 million in deposits from public entities and brokered deposits of $129.2 million and $104.5 million, respectively. The Company had no major concentrations of deposits at March 31, 2019 or December 31, 2018 from any single or related groups of depositors. |
LINES OF CREDIT
LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2019 | |
LINES OF CREDIT | |
LINES OF CREDIT | NOTE 11: LINES OF CREDIT Frost Line of Credit The Company has entered into a loan agreement, or the Loan Agreement, with Frost Bank, which provides for a $30.0 million revolving line of credit, or Line of Credit. The Loan Agreement was amended and restated on December 13, 2018 and, as amended, is referred to as the Amended Agreement. The Company can make draws on the Line of Credit for a period of 12 months which began on December 13, 2018, after which the Company will not be permitted to make further draws and the outstanding balance will amortize over a period of 60 months. Interest accrues on outstanding borrowings at a rate equal to the maximum “Latest” U.S. prime rate of interest per annum and payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months. The entire outstanding balance and unpaid interest is payable in full on December 13, 2024. The Company may prepay the principal amount of any loan under the Amended Agreement without premium or penalty. The obligations of the Company under the Amended Agreement are secured by a valid and perfected first priority lien on all of the issued and outstanding shares of capital stock of the Bank. Covenants made under the Amended Agreement include, among other things, the Company maintaining tangible net worth of not less than $300 million, the Company maintaining free cash flow coverage ratio of not less than 1.25 to 1.00, the Bank’s Texas Ratio (as defined under the Amended Agreement) not to exceed 15%, the Bank’s Total Capital Ratio (as defined under the Amended Loan Agreement) of not less than 12% and restrictions on the ability of the Company and its subsidiaries to incur certain additional debt. The Company was in compliance with these covenants at March 31, 2019. As of March 31, 2019, there were no outstanding borrowings on this line and the Company has not drawn on this line since the Company entered the agreement. Additional Lines of Credit The FHLB allows us to borrow on a blanket floating lien status collateralized by certain loans. As of March 31, 2019 and December 31, 2018, total borrowing capacity of $935.9 million and $919.9 million, respectively, was available under this arrangement. During the first quarter of 2019 and the second and third quarter of 2018, the Company borrowed under this agreement on a short-term basis and as of March 31, 2019 and December 31, 2018, there were no outstanding FHLB advances. As of March 31, 2019 and December 31, 2018, we maintained four federal funds lines of credit with commercial banks that provide for the availability to borrow up to an aggregate of $75.0 million, in federal funds. There were no funds under these lines of credit outstanding as of March 31, 2019 or December 31, 2018. |
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT | 3 Months Ended |
Mar. 31, 2019 | |
JUNIOR SUBORDINATED DEBT | |
JUNIOR SUBORDINATED DEBT | NOTE 12: JUNIOR SUBORDINATED DEBT Prior to being acquired in 2007 by the Company, County Bancshares, Inc. received proceeds of junior subordinated debt held by a trust funded by common securities, all of which were purchased by County Bancshares, Inc. and trust preferred securities in the amount of $5.5 million that were held by other investors. Funds raised by the trust totaling $5.7 million were loaned to County Bancshares, Inc. in the form of junior subordinated debt. This debt was transferred to the Company at the date of acquisition. In 2015, the Company purchased approximately $4.1 million of the outstanding preferred securities, reducing the outstanding preferred securities to $1.6 million. In November 2018, the County Bancshares Trust I, or County Trust, agreed to redeem all of the County Trust’s issued and outstanding trust preferred securities upon concurrent redemption made by the Company of its junior subordinated debt securities held by the County Trust on January 7, 2019. The Company paid $5.7 million to pay its obligation for the junior subordinated debt, including accrued and unpaid interest. The Company received $4.1 million from the redemption of the preferred securities . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13: RELATED PARTY TRANSACTIONS In the ordinary course of business, the Company, through the Bank, has and expects to continue to conduct routine banking business with related parties, including its executive officers and directors. Related parties also include stockholders, and their affiliates in which they directly or indirectly have 5% or more beneficial ownership in the Company. Loans —In the opinion of management, loans to related parties were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable transactions with other persons and did not involve more than a normal risk of collectability or present any other unfavorable features to the Company. The Company had approximately $172.8 million and $169.0 million in loans to related parties at March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019 and December 31, 2018, there were no loans made to related parties deemed nonaccrual, past due, restructured or classified as potential problem loans. Unfunded Commitments —At March 31, 2019 and December 31, 2018, the Company had approximately $51.0 million and $55.7 million in unfunded loan commitments to related parties, respectively. Deposits —The Company held related party deposits of approximately $250.2 million and $311.2 million at March 31, 2019 and December 31, 2018, respectively. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE DISCLOSURES | |
FAIR VALUE DISCLOSURES | NOTE 14: FAIR VALUE DISCLOSURES The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction occurring in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In estimating fair value, we use 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 refer to the assumptions used in pricing the asset or liability. Valuation inputs are categorized in a three-level hierarchy, that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs —Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs —Other inputs observable inputs that may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable for the asset or liability such as interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates or inputs that are observable or can be corroborated by observable market data. Level 3 Inputs —Unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. During the three months ended March 31, 2019 and the year ended December 31, 2018, there were no transfers of assets or liabilities within the levels of the fair value hierarchy. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon models that primarily use observable market-based parameters as inputs. Valuation adjustments may be made to ensure that assets and liabilities are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value could result in different estimate of fair value. Fair value estimates are based on judgements regarding current economic conditions, risk characteristics of the various instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. Financial Instruments Measured at Fair Value on a Recurring Basis The Company’s assets and liabilities measured at fair value on a recurring basis include the following: Debt Securities Available for Sale: Debt securities classified as available for sale are recorded at fair value. For those debt securities classified as Level 2, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies for reasonableness. The other securities in the table below are mutual funds and the fair value is determined by using unadjusted quoted market prices which are considered Level 1 inputs. Interest Rate Swaps: The Company obtains fair value measurements for its interest rate swaps from an independent pricing service which uses the income approach. The income approach calls for the utilization of valuation techniques to convert future cash flows as due to be exchanged per the terms of the financial instrument, into a single present value amount. Measurement is based on the value indicated by the market expectations about those future amounts as of the measurement date. The proprietary curves of the independent pricing service utilize pricing models derived from industry standard analytic tools, considering both Level 1 and Level 2 inputs. Financial assets and financial liabilities measured at fair value on a recurring basis as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Fair value of financial assets: Level 1 inputs: Debt securities available for sale - other securities $ 1,108 $ 1,088 Level 2 inputs: Debt securities available for sale State and municipal securities 55,471 57,691 U.S. Agency Securities: Debt securities 17,060 16,881 Collateralized mortgage obligations 65,785 65,414 Mortgage-backed securities 89,230 88,859 Interest rate swaps 768 962 Total fair value of financial assets $ 229,422 $ 230,895 Fair value of financial liabilities: Level 2 inputs: Interest rate swaps $ 768 $ 962 Total fair value of financial liabilities $ 768 $ 962 Financial Instruments Measured at Fair Value on a Non-recurring Basis A portion of financial instruments are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances. The Company’s financial assets measured at fair value on a non-recurring basis are certain impaired loans and as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Level 3 inputs Impaired loans: Commercial and industrial $ 118 $ 110 Commercial real estate 552 552 1-4 family residential 1,735 1,735 Other 1,192 1,141 Total impaired loans $ 3,597 $ 3,538 Non-Financial Assets and Non-Financial Liabilities Measured on a Non-recurring Basis The fair value portion of non-financial assets or non-financial liabilities is measured on a non-recurring basis in certain circumstances, such as when there is evidence of impairment and may be subject to impairment adjustments. The Company’s non-financial assets whose fair value may be measured on a non-recurring basis include repossessed real estate, other foreclosed assets, goodwill and intangible assets, among other assets. There were no write-downs of foreclosed assets for fair value remeasurement subsequent to initial foreclosure during the three months ended March 31, 2019 and during 2018. The fair value of repossessed real estate and other foreclosed assets is estimated using Level 2 inputs and, as of the dates shown below, were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ 41 $ 13 Charge-offs recognized in the allowance for loan losses — (1) Fair value $ 41 $ 12 Financial Instruments Reported at Amortized Cost Fair market values and carrying amounts of financial instruments that are reported at cost as of the dates shown below were as follows: March 31, 2019 December 31, 2018 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 54,110 $ 54,110 $ 54,450 $ 54,450 Interest bearing deposits in banks 222,405 222,405 327,620 327,620 Level 2 inputs: Debt securities held to maturity 32 30 32 31 Bank-owned life insurance 71,955 71,955 71,525 71,525 Accrued interest receivable 8,845 8,845 8,227 8,227 Servicing asset 153 153 166 166 Level 3 inputs: Loans, including held for sale, net 2,582,037 2,520,918 2,432,753 2,423,130 Equity investments 15,065 15,065 13,026 13,026 Total financial assets $ 2,954,602 $ 2,893,481 $ 2,907,799 $ 2,898,175 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,229,172 $ 1,229,172 $ 1,183,058 $ 1,183,058 Level 2 inputs: Interest-bearing deposits 1,478,396 1,521,827 1,522,366 1,583,224 Repurchase agreements 1,600 1,600 2,498 2,498 Junior subordinated debt — — 1,571 1,571 Accrued interest payable 708 708 653 653 Total financial liabilities $ 2,709,876 $ 2,753,307 $ 2,710,146 $ 2,771,004 The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value and as such the fair values shown above are not necessarily indicative of the amounts the Company will realize. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 15: DERIVATIVE FINANCIAL INSTRUMENTS The Company has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments for mitigating interest rate risk of the Bank. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap transaction, the Bank agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Bank agrees to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. Because the Bank acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact the Company’s operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties. At March 31, 2019 and December 31, 2018, no such deterioration was determined by management. At both March 31, 2019 and December 31, 2018, the Company had 13 interest rate swap agreements outstanding with borrowers and financial institutions. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Fair value amounts are included in other assets and other liabilities. Interest rates on the Company’s swap agreements are based on the London Interbank Offered Rate of the U.S. Dollar deposits in Europe, or Libor. Derivative instruments outstanding as of the dates shown below were as follows: Weighted Notional Fair Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity March 31, 2019 Interest rate swaps with customers Other Assets $ 26,013 $ 422 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.39 years Interest rate swaps with financial institution Other Assets 15,365 346 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 6.92 years Interest rate swaps with customers Other Liabilities 15,365 (346) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 6.92 years Interest rate swaps with financial institution Other Liabilities 26,013 (422) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.39 years Total derivatives not designated as hedging instruments $ 82,756 $ — Weighted Notional Fair Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2018 Interest rate swaps with customers Other Assets $ 8,901 $ 169 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 years Interest rate swaps with financial institution Other Assets 32,923 793 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 years Interest rate swaps with customers Other Liabilities 32,923 (793) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 years Interest rate swaps with financial institution Other Liabilities 8,901 (169) 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 years Total derivatives not designated as hedging instruments $ 83,648 $ — |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2019 | |
OPERATING LEASES | |
OPERATING LEASES | NOTE 16: OPERATING LEASES The Company adopted Accounting Standards Update, or ASU 2016-02, Leases (Topic 842) on January 1, 2019 and the Company’s leases within scope were operating leases of office space, stand-alone buildings and land. The Company’s leases have no variable costs. Right-of-use assets represent the Company’s right to use, or control the use of, leased assets for their lease term and at March 31, 2019, totaled $12.9 million. Lease liabilities represent the Company’s liability to make lease payments under these leases, on a discounted basis and at March 31, 2019, totaled $15.1 million. The weighted-average discount rate for the three months ended March 31, 2019 was 3.58%. The weighted-average remaining lease term for operating leases outstanding at March 31, 2019 was 11.8 years. Cash paid for amounts included in the measurement of operating lease liabilities for the three months ended March 31, 2019 was $448,000. Lease costs for the period shown below were as follows: For the Three Months Ended (Dollars in thousands) March 31, Operating lease cost $ 461 Short-term lease cost 19 Sublease income (6) Total lease cost $ 474 A maturity analysis of operating lease liabilities as of the date shown below was as follows: (Dollars in thousands) March 31, 2019 2020 $ 1,940 2021 2,070 2022 2,165 2023 2,207 2024 2,124 Thereafter 10,347 Total undiscounted lease liability 20,853 Discount (5,719) Total lease liability $ 15,134 |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | 3 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | NOTE 17: COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF‑BALANCE‑SHEET RISK Financial Instruments with Off-Balance-Sheet Risk In the normal course of business, the Company enters into various transactions, which in accordance with GAAP are not included in its consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These financial instruments include commitments to extend credit for loans in process and standby letters of credit. The Company uses the same credit policies in making these commitments and conditional obligations as it does for on-balance-sheet instruments . Commitments to extend credit and standby letters of credit as of the dates shown below were as follows: March 31, December 31, (Dollars in thousands) 2019 2018 Commitments to extend credit, variable interest rate $ 702,152 $ 726,277 Commitments to extend credit, fixed interest rate 117,747 105,359 $ 819,899 $ 831,636 Standby letters of credit $ 28,072 $ 31,729 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 many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers. Litigation The Company is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Company, it is the opinion of management that the disposition or ultimate determination of such claims and lawsuits will not have a material adverse effect on the financial position or results of operations of the Company. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2019 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 18: REVENUE RECOGNITION ASU 606 requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. A majority of the Company’s revenue is derived from interest income on financial assets, which is not within the scope of ASC 606. Income from changes in the cash surrender value of bank-owned life is also not within the scope of ASC 606. The Company’s revenue-generating activities that are within the scope of ASC 606 are included in its consolidated income statements in noninterest income. See table below. The Company’s revenue recognition for revenue streams within the scope of ASC 606 did not materially change from previous practice. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed and charged at a point in time based on activity. Three Months Ended March 31, (Dollars in thousands) 2019 2018 Deposit account service charges $ 1,629 $ 1,478 Net gain on sale of assets 88 130 Card interchange fees 864 927 Other noninterest income 482 375 Deposit account service charges are fees from the Company’s customers for deposit related services, such as monthly account maintenance and activity or transaction-based fees. Revenue is recognized when the Company’s performance obligation is completed, which is generally monthly for account maintenance services or when a transaction is completed for activity or transaction-based fees. Payment for such performance obligations are received at the time the performance obligation is satisfied. Net gain on sale of assets includes gains on sales of fixed assets, gains on sales of loans and gains on sales of other real estate owned, or OREO. Gains on sales of loans are excluded from ASC 606. The performance obligation in the sale of OREO or fixed assets is delivery of control over the property to the buyer. The Company does not typically provide financing and the transaction price is identified in the purchase and sale agreement. If the Company provides financing, the Company must determine a transaction price depending on if the sales contract is at market terms and taking into account the credit risk inherent in the sale agreement. Card interchange fees are fees generated from debit card transactions. Revenue is recognized when the Company’s performance obligation is completed, which is generally when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. Other noninterest income includes a variety of items including wire transfer fee income, ATM fee income, letters of credit fee income and swap fee income. Revenue is recognized when the Company’s performance obligation is completed, which is generally when a transaction is completed. Payment for such performance obligations are generally received at the time the performance obligation is satisfied. |
EMPLOYEE BENEFIT PLANS AND DEFE
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2019 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | NOTE 19: EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS Employee Benefit Plans The Company maintains a 401(k) employee benefit plan and substantially all employees that complete three months of service may participate. The Company, at its discretion, may match a portion of each employee’s contribution and may make additional contributions. For the three months ended March 31, 2019 and 2018, the Company contributed $683,000 and $659,000 to the plan, respectively. Executive Deferred Compensation Arrangements The Company established an executive incentive compensation arrangement with several officers of the Bank, in which these officers are eligible for performance-based incentive bonus compensation. As part of this compensation arrangement, the Company contributes one‑fourth of the incentive bonus amount into a deferred compensation account. The deferred amounts accrue at a market rate of interest and are payable to the employees upon separation from the Bank provided vesting arrangements have been met. At March 31, 2019 and December 31, 2018, the amount payable, including interest, for this deferred plan was approximately $2.5 million and $2.5 million, respectively, which is included in other liabilities in the condensed consolidated balance sheets. Salary Continuation Agreements The Company entered into a salary continuation arrangement in 2008 with the Company’s then President and CEO that calls for payments of $100,000 per year for a period of 10 years commencing at age 65. Payments under the plan began during 2014. The Company’s liability was $399,000 and $421,000 at March 31, 2019 and December 31, 2018, respectively, which is included in other liabilities in the condensed consolidated balance sheets and equals the present value of the benefits expected to be provided. In October 2017, the Company entered into a salary continuation arrangement with the Company’s President and CEO that calls for payments of $200,000 per year payable for a period of 10 years commencing at age 70. Payments under the plan will begin in 2024. The Company’s liability was $274,000 and $219,000 at March 31, 2019 and December 31, 2018, respectively, which is included in other liabilities in the condensed consolidated balance sheets. The liability will continue to accrue over the remaining period until payments commence such that the accrued amount at the eligibility date will equal the present value of all the future benefits expected to be paid. Change of Control Agreements In 2017, the Company entered into employment agreements with certain executive officers. These agreements provide for severance benefits if the Company terminates the executive without cause or the executive resigns with good reason, as defined in the agreements. In addition, upon a change of control, as that term is defined in the agreements, these employees will be entitled to an aggregate amount estimated to be $4.4 million at March 31, 2019, in accordance to the terms of their respective agreements. No compensation has been recorded to date as a change of control condition is not deemed probable. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 20: STOCK-BASED COMPENSATION The Company acquired a stock option plan which originated under VB Texas, Inc. as a part of a merger of the two companies. The options granted to employees must be exercised within 10 years from the date of grant and vesting schedules are determined on an individual basis. At the merger date, all outstanding options became fully vested and were converted to options of the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. No options were granted under this plan after October 24, 2016. In May 2014, the Company adopted the 2014 Stock Option Plan, or the 2014 Plan. The 2014 Plan was approved by the Company’s shareholders and limits the number of shares that may be optioned to 1,127,200. The 2014 Plan provides that no options may be granted after May 20, 2024. Options granted under the 2014 Plan expire 10 years from the date of grant and become exercisable in installments over a period of one to five years, beginning on the first anniversary of the date of grant. At March 31, 2019, 959,200 shares were available for future grant under the 2014 Plan. In September 2017, the Company adopted the 2017 Omnibus Incentive Plan, or the 2017 Plan. The 2017 Plan authorizes the Company to grant options and performance-based and non-performance based restricted stock awards as well as various other types of stock-based and other awards that are not stock-based to eligible employees, consultants and non‑employee directors up to an aggregate of 600,000 shares of common stock. At March 31, 2019, 328,940 shares were available for future grant under the 2017 Plan. Stock option activity for the periods shown below was as follows: Three Months Ended March 31, 2019 2018 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise Options Price Options Price Outstanding at beginning of period 232,322 $ 16.66 260,322 $ 16.00 Granted — — — — Exercised (10,844) 10.68 — — Forfeited — — — — Outstanding at end of period 221,478 16.96 260,322 16.00 A summary of stock options as of the dates shown below was as follows: March 31, 2019 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 136,279 85,199 221,478 Weighted-average exercise price per share $ 15.06 $ 19.99 $ 16.96 Aggregate intrinsic value (in thousands) $ 2,373 $ 1,063 $ 3,436 Weighted-average remaining contractual term (years) 5.3 7.7 6.2 The fair value of the Company’s restricted stock awards is estimated based on the market value of the Company’s common stock at the date of grant. Restricted stock shares are considered fully issued at the time of the grant and the grantee becomes the record owner of the restricted stock and has voting, dividend and other shareholder rights. The shares of restricted stock are non-transferable and subject to forfeiture until the restricted stock vests and any dividends with respect to the restricted stock are subject to the same restrictions, including the risk of forfeiture. Non-performance based restricted stock grants vest over the service period in equal increments over a period of two to five years, beginning on the first anniversary of the date of grant. The number of shares earned under the Company’s performance-based restricted stock award agreements is based on the achievement of certain branch production goals. Compensation expense for performance-based restricted stock is recognized for the probable award level over the period estimated to achieve the performance conditions and other goals, on a straight-line basis. If the probable award level and/or the period estimated to be achieved change, compensation expense will be adjusted via a cumulative catch-up adjustment to reflect these changes. The performance conditions goals must be achieved within five years or the awards expire. The number of performance-based shares granted presented in the table below is based upon the attainment of the maximum number of shares possible to be earned. Restricted stock activity for the periods shown below was as follows: Non-performance Based Performance-based Weighted Weighted Average Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Outstanding at 12/31/2017 212,580 $ 26.71 — $ — Granted 1,500 29.27 — — Vested — — — — Forfeited — — — — Outstanding at 3/31/2018 214,080 $ 27.29 — $ — Outstanding at 12/31/2018 181,773 27.05 24,000 34.46 Granted 19,187 32.25 — — Vested (300) 29.27 — — Forfeited — — — — Outstanding at 3/31/2019 200,660 $ 27.54 24,000 $ 34.46 The Company’s stock compensation plans allow the employee to elect to have shares withheld to satisfy their tax liability related to restricted stock vesting or stock option exercises. The number of shares issued and withheld during the three months ended March 31, 2019 was as follows: Shares Shares Total Issued Withheld Vested 211 89 300 A summary of restricted stock as of the dates shown below was as follows: March 31, 2019 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 200,660 24,000 Weighted-average grant date fair value per share $ 27.54 $ 34.46 Aggregate fair value (in thousands) $ 6,515 $ 779 Weighted-average remaining vesting period (years) 3.4 2.9 For the three months ended March 31, 2019 and 2018, stock compensation expense was $545,000 and $392,000, respectively. As of March 31, 2019, there was approximately $6.0 million of total unrecognized compensation expense related to the stock‑based compensation arrangements, which is expected to be recognized in the Company’s consolidated statements of income over a weighted-average period of 3.3 years. |
REGULATORY MATTERS
REGULATORY MATTERS | 3 Months Ended |
Mar. 31, 2019 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE 21: REGULATORY MATTERS Regulatory Capital Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off‑balance‑sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. The Company and the Bank’s Common Equity Tier 1 capital includes common stock and related capital surplus, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, the Company and the Bank elected to opt‑out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1. Common Equity Tier 1 for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities, and subject to transition provisions. The Basel III Capital Rules require the Company and the Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk‑weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk‑weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four‑year period (increasing by that amount on each subsequent January 1, until it reached 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company and the Bank. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk‑weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk‑weighted assets below the effective minimum (4.5% plus the capital conservation buffer and, if applicable, the countercyclical capital buffer) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The Company and the Bank are subject to the regulatory capital requirements administered by the Federal Reserve and, for the Bank, the OCC. Regulatory authorities can initiate certain mandatory actions if the Company or the Bank fail to meet the minimum capital requirements, which could have a direct material effect on the Company’s financial statements. Management believes, as of March 31, 2019 and December 31, 2018, that the Company and the Bank met all capital adequacy requirements to which they were subject. Dividend Restrictions In the ordinary course of business, the Company may be dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. As of March 31, 2019 and December 31, 2018, the Company and the Bank, were “well capitalized” based on the ratios presented below. Actual and required capital ratios for the Company and the Bank were as follows for the dates presented: Minimum Minimum Capital Required Capital Required Required to be for Capital Adequacy Basel III Considered Well Actual Purposes Fully Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio March 31, 2019 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 413,851 $ 128,186 $ 199,401 N/A N/A Bank Only $ 372,226 $ 128,176 $ 199,385 $ 185,143 Tier I Capital to Risk-Weighted Assets: Consolidated $ 413,851 $ 170,915 $ 242,129 N/A N/A Bank Only $ 372,226 $ 170,901 $ 242,110 $ 227,869 Total Capital to Risk-Weighted Assets: Consolidated $ 438,872 $ 227,886 $ 299,101 N/A N/A Bank Only $ 397,246 $ 227,869 $ 299,077 $ 284,836 Tier 1 Leverage Capital to Average Assets: Consolidated $ 413,851 $ 127,051 $ 127,051 N/A N/A Bank Only $ 372,224 $ 127,051 $ 127,051 $ 158,814 December 31, 2018 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 405,012 $ 123,885 $ 192,710 N/A N/A Bank Only $ 363,140 $ 123,877 $ 192,697 $ 178,933 Tier I Capital to Risk-Weighted Assets: Consolidated $ 406,257 $ 165,180 $ 234,005 N/A N/A Bank Only $ 363,140 $ 165,169 $ 233,989 $ 220,225 Total Capital to Risk-Weighted Assets: Consolidated $ 430,238 $ 220,240 $ 289,065 N/A N/A Bank Only $ 387,211 $ 220,225 $ 289,046 $ 275,282 Tier 1 Leverage Capital to Average Assets: Consolidated $ 406,257 $ 127,350 $ 127,350 N/A N/A Bank Only $ 363,140 $ 127,350 $ 127,350 $ 159,188 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 22: INCOME TAXES The provision for income tax expense and effective tax rates for the periods shown below were as follows: Three Months Ended March 31, (Dollars in thousands) 2019 2018 Provision for income tax expense $ 2,599 $ 2,139 Effective tax rate The differences between the federal statutory rate of 21% and the effective tax rates presented in the table above were largely attributable to permanent differences primarily related to tax exempt interest and bank‑owned life insurance. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 23: EARNINGS PER SHARE The computation of basic and diluted earnings per share for the periods shown was as follows: Three Months Ended March 31, (Dollars in thousands, except per share data) 2019 2018 Net income for common shareholders $ 10,490 $ 9,112 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,910 24,833 Dilutive effect of outstanding stock options and unvested restricted stock awards 144 121 Diluted weighted-average shares outstanding 25,054 24,954 Earnings per share: Basic $ 0.42 $ 0.37 Diluted $ 0.42 $ 0.37 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENT. | |
SUBSEQUENT EVENT | NOTE 24: SUBSEQUENT EVENT On April 29, 2019, the Company received proceeds in the amount of $1.6 million as the owner and beneficiary under a bank-owned life insurance policy as the result of the death of a former employee. The Company recorded a gain of $1.2 million over the recorded value in April 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2019 and December 31, 2018, consolidated results of operations for the three months ended March 31, 2019 and 2018, consolidated shareholders’ equity for the three months ended March 31, 2019 and 2018 and consolidated cash flows for the three months ended March 31, 2019 and 2018. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included within our Annual Report on Form 10-K. Reclassification— Within interest income, equity investment income for 2018 has been reclassified from federal funds and other interest-earning assets to a separate line and within interest expense, repurchase agreements and FHLB advance expense have been combined and notes payable and junior subordinated debt have also been combined. These reclassifications were made to conform to the 2019 financial statement presentation in the consolidated statements of income. |
Accounting Standards Recently Adopted | Accounting Standards Recently Adopted The Company adopted Accounting Standards Update, or ASU 2016-02, Leases (Topic 842) on January 1, 2019, using the effective date as the date of initial adoption. The Company elected to apply certain practical expedients for transition, and under those expedients the Company did not reassess prior accounting decisions regarding the identification, classification and initial direct costs for leases existing at the effective date. The Company also elected to use hindsight in determining lease term when considering options to extend the lease and excluded short-term leases (defined as lease terms of 12 months or less). The Company elected to separate non-lease components from lease components in its application of ASU 2016-02. At adoption, the Company recorded right-of-use assets totaling $13.2 million, which represented the Company’s right to use, or control the use of, a specified assets for their lease terms and the Company recorded lease liabilities totaling $15.5 million, which represented the Company’s liability to make lease payments under these leases. Accrued lease obligations and lease incentive liabilities totaling $2.3 million that were in other liabilities at December 31, 2018 were reversed as part of the adoption. The ASU 2016-02 standard applied to all leases existing at the date of initial adoption. The Company’s financial statements and related footnotes were not updated for ASU 2016-02 for dates and periods before the date of adoption. See Note 16. |
Accounting Standards Not Yet Adopted | Accounting Standards Not Yet Adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is in the process of developing its process and methodology for implementing ASU 2016-13, with the assistance of an outside consultant. Existing technology is being adapted to conform to the requirements of ASU 2016-13. The adoption of ASU 2016-13 will require changes to the Company’s accounting policies and disclosures for credit losses on financial instruments. The Company is continuing to evaluate the impact of this pronouncement on the allowance for credit losses and related future provisions. |
Cash Flow Reporting | Cash Flow Reporting Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $16.2 million and $18.5 million at March 31, 2019 and December 31, 2018, respectively. Additionally, as of March 31, 2019 and December 31, 2018, the Company had $1.6 million in cash collateral used in our interest rate swap transactions. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2019 2018 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 3,536 1,960 Cash paid for interest on junior subordinated debt 63 87 Supplemental disclosures of non-cash flow information: Dividends accrued 1,268 10 Operating lease right-to-use asset obtained in exchange for lease liabilities 13,208 — Repossessed real estate and other assets 41 — |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Supplemental disclosures of cash flow information | Three Months Ended March 31, (Dollars in thousands) 2019 2018 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest on deposits and repurchase agreements 3,536 1,960 Cash paid for interest on junior subordinated debt 63 87 Supplemental disclosures of non-cash flow information: Dividends accrued 1,268 10 Operating lease right-to-use asset obtained in exchange for lease liabilities 13,208 — Repossessed real estate and other assets 41 — |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DEBT SECURITIES. | |
The amortized cost and estimated fair values of investments in securities | Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2019 Debt securities available for sale: State and municipal securities $ 54,854 $ 811 $ (194) $ 55,471 U.S. agency securities: Debt securities 17,315 — (255) 17,060 Collateralized mortgage obligations 66,230 158 (603) 65,785 Mortgage-backed securities 89,856 490 (1,116) 89,230 Other securities 1,135 — (27) 1,108 Total $ 229,390 $ 1,459 $ (2,195) $ 228,654 Debt securities held to maturity: Mortgage-backed securities $ 30 $ 2 $ — $ 32 Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2018 Debt securities available for sale: State and municipal securities $ 57,972 $ 345 $ (626) $ 57,691 U.S. agency securities: Debt securities 17,315 — (434) 16,881 Collateralized mortgage obligations 66,438 98 (1,122) 65,414 Mortgage-backed securities 90,845 230 (2,216) 88,859 Other securities 1,129 — (41) 1,088 Total $ 233,699 $ 673 $ (4,439) $ 229,933 Debt securities held to maturity: Mortgage-backed securities $ 31 $ 1 $ — $ 32 |
Schedule of amortized cost and estimated fair value of securities by contractual maturities | Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value March 31, 2019 Amounts maturing in: 1 year or less $ 3,338 $ 3,326 $ — $ — 1 year through 5 years 20,086 19,846 — — 5 years through 10 years 13,958 14,061 — — After 10 years 192,008 191,421 30 32 $ 229,390 $ 228,654 $ 30 $ 32 December 31, 2018 Amounts maturing in: 1 year or less $ 3,224 $ 3,188 $ — $ — 1 year through 5 years 22,784 22,370 — — 5 years through 10 years 13,127 13,062 — — After 10 years 194,564 191,313 31 32 $ 233,699 $ 229,933 $ 31 $ 32 |
Information pertaining to securities with gross unrealized losses | Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2019 Debt securities available for sale: State and municipal securities $ 674 $ (3) $ 11,792 $ (191) U.S. agency securities: Debt securities — — 17,060 (255) Collateralized mortgage obligations — — 50,194 (603) Mortgage-backed securities 196 — 56,261 (1,116) Other securities — — 1,108 (27) $ 870 $ (3) $ 136,415 $ (2,192) December 31, 2018 Debt securities available for sale: State and municipal securities $ 20,892 $ (324) $ 6,584 $ (302) U.S. agency securities: Debt securities — — 16,882 (434) Collateralized mortgage obligations 8,854 (81) 46,157 (1,041) Mortgage-backed securities 21,745 (368) 46,183 (1,848) Other securities — — 1,088 (41) $ 51,491 $ (773) $ 116,894 $ (3,666) |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
EQUITY INVESTMENTS | |
Schedule of equity investments that do not have readily determinable fair values | (Dollars in thousands) March 31, 2019 December 31, 2018 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 3,289 1,250 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 2,364 2,364 $ 15,065 $ 13,026 |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
LOANS | |
Loans, by portfolio segment | (Dollars in thousands) March 31, 2019 December 31, 2018 Commercial and industrial $ 559,882 $ 519,779 Real estate: Commercial real estate 811,742 795,733 Construction and development 572,861 515,533 1-4 family residential 281,502 282,011 Multi-family residential 213,582 221,194 Consumer 39,072 39,421 Agriculture 8,915 11,076 Other 64,215 68,382 Total gross loans 2,551,771 2,453,129 Less deferred loan fees and unearned discounts (6,210) (6,306) Less allowance for loan loss (24,643) (23,693) Less loans held for sale (852) — Loans, net $ 2,520,066 $ 2,423,130 |
Loan participations purchased and sold | Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2019 Commercial real estate $ 1,256 $ — March 31, 2018 Commercial and industrial $ 7,000 $ — Commercial real estate — 7,500 $ 7,000 $ 7,500 |
LOAN PERFORMANCE (Tables)
LOAN PERFORMANCE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
LOAN PERFORMANCE | |
Nonaccrual loans, segregated by loan class | March 31, December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 1,390 $ 1,317 Real estate: Commercial real estate 862 1,517 1-4 family residential 635 656 Other 47 — Total $ 2,934 $ 3,490 |
Aging analysis of loans past due segregated by loan class | 90 days or 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2019 Commercial and industrial $ 468 $ 25 $ 1,011 $ 1,504 $ 558,378 $ 559,882 $ — Real estate: Commercial real estate — — 692 692 811,050 811,742 — Construction and development 1,613 — — 1,613 571,248 572,861 — 1-4 family residential 193 124 147 464 281,038 281,502 — Multi-family residential 1,570 — — 1,570 212,012 213,582 — Consumer — 7 — 7 39,065 39,072 — Agriculture — — — — 8,915 8,915 — Other — — — — 64,215 64,215 — Total loans $ 3,844 $ 156 $ 1,850 $ 5,850 $ 2,545,921 $ 2,551,771 $ — December 31, 2018 Commercial and industrial $ 178 $ 881 $ 154 $ 1,213 $ 518,566 $ 519,779 $ — Real estate: Commercial real estate 68 1,089 605 1,762 793,971 795,733 — Construction and development 359 4,204 — 4,563 510,970 515,533 — 1-4 family residential 395 111 36 542 281,469 282,011 — Multi-family residential — — — — 221,194 221,194 — Consumer 28 — — 28 39,393 39,421 — Agriculture — — — — 11,076 11,076 — Other — — — — 68,382 68,382 — Total loans $ 1,028 $ 6,285 $ 795 $ 8,108 $ 2,445,021 $ 2,453,129 $ — |
Loans segregated by loan class, which were restructured due to the borrower’s financial difficulties | Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments and Number Recorded Restructured Extended Restructured Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate March 31, 2018 Commercial and industrial 3 $ 983 $ 983 $ — $ — $ — Commercial real estate 4 2,434 2,434 — — — Total 7 $ 3,417 $ 3,417 $ — $ — $ — |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ALLOWANCE FOR LOAN LOSSES | |
Activity in the allowance for loan losses segregated by loan class | Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision (recapture) for loan loss 903 52 402 (33) (54) (36) (12) (75) 1,147 Charge-offs (280) — (4) — — (284) Recoveries 74 2 1 10 — — 87 Net (charge-offs) recoveries (206) 2 — 1 — 6 — — (197) Ending balance $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Period-end amount allocated to: Specific reserve $ 582 $ 33 $ — $ 77 $ — $ — $ — $ 96 $ 788 General reserve 7,834 6,751 4,700 2,172 1,457 357 50 534 23,855 Total $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss 479 364 (126) 5 101 (51) (15) 108 865 Charge-offs (469) — — (3) — — — — (472) Recoveries 172 3 — 1 — 2 — — 178 Net (charge-offs) recoveries (297) 3 — (2) — 2 — — (294) Ending balance $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 Period-end amount allocated to: Specific reserve $ 845 $ 55 $ — $ 107 $ — $ — $ — $ — $ 1,007 General reserve 6,594 10,687 3,356 1,222 1,520 517 53 393 24,342 Total $ 7,439 $ 10,742 $ 3,356 $ 1,329 $ 1,520 $ 517 $ 53 $ 393 $ 25,349 |
Allowance for loan losses by loan category | March 31, 2019 December 31, 2018 (Dollars in thousands) Amount Percent Amount Percent Commercial and industrial $ 8,416 34.1 % $ 7,719 32.6 % Real estate: Commercial real estate 6,784 27.5 % 6,730 28.4 % Construction and development 4,700 19.1 % 4,298 18.1 % 1-4 family residential 2,249 9.1 % 2,281 9.6 % Multi-family residential 1,457 5.9 % 1,511 6.4 % Consumer 357 1.5 % 387 1.6 % Agricultural 50 0.2 % 62 0.3 % Other 630 2.6 % 705 3.0 % Total allowance for loan losses $ 24,643 100.0 % $ 23,693 100 % |
Loans by risk grades and loan class | Special (Dollars in thousands) Pass Mention Substandard Total Loans March 31, 2019 Commercial and industrial $ 544,799 5,816 9,267 $ 559,882 Real estate: Commercial real estate 801,078 8,058 2,606 811,742 Construction and development 571,301 1,560 — 572,861 1-4 family residential 276,203 — 5,299 281,502 Multi-family residential 213,582 — — 213,582 Consumer 38,816 242 14 39,072 Agriculture 8,888 — 27 8,915 Other 56,833 — 7,382 64,215 Total loans $ 2,511,500 $ 15,676 $ 24,595 $ 2,551,771 Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2018 Commercial and industrial $ 504,425 5,768 9,586 $ 519,779 Real estate: Commercial real estate 781,035 10,370 4,328 795,733 Construction and development 511,329 4,204 — 515,533 1-4 family residential 274,781 2,175 5,055 282,011 Multi-family residential 221,194 — — 221,194 Consumer 39,140 246 35 39,421 Agriculture 11,048 — 28 11,076 Other 61,569 — 6,813 68,382 Total loans $ 2,404,521 $ 22,763 $ 25,845 $ 2,453,129 |
Loan Impairment Assessment | Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date March 31, 2019 Commercial and industrial $ 4,333 $ 3,517 $ 700 $ 4,217 $ 582 $ 4,288 Real estate: Commercial real estate 2,677 1,942 585 2,527 33 2,984 1-4 family residential 4,232 2,297 1,812 4,109 77 4,219 Other 7,382 6,093 1,288 7,381 96 7,492 Total loans $ 18,624 $ 13,849 $ 4,385 $ 18,234 $ 788 $ 18,983 Unpaid Recorded Average contractual investment Recorded Total recorded principal with no investment recorded Related investment (Dollars in thousands) balance allowance with allowance investment allowance year-to-date December 31, 2018 Commercial and industrial $ 4,378 $ 3,642 $ 635 $ 4,277 $ 525 $ 5,771 Real estate: Commercial real estate 4,128 3,374 596 3,970 44 6,135 Construction and development — — — — — 139 1-4 family residential 4,551 2,612 1,824 4,436 89 4,597 Consumer — — — — — 7 Other 6,814 5,572 1,241 6,813 100 7,841 Total loans $ 19,871 $ 15,200 $ 4,296 $ 19,496 $ 758 $ 24,490 |
Allowance for loan losses on the basis of the Company’s impairment methodology | March 31, 2019 December 31, 2018 Individually Collectively Individually Collectively Evaluated for Evaluated for Total Evaluated for Evaluated for Total (Dollars in thousands) Impairment Impairment Loans Impairment Impairment Loans Commercial and industrial $ 4,217 $ 555,665 $ 559,882 $ 4,277 $ 515,502 $ 519,779 Real estate: Commercial real estate 2,527 809,215 811,742 3,970 791,763 795,733 Construction and development — 572,861 572,861 — 515,533 515,533 1-4 family residential 4,109 277,393 281,502 4,436 277,575 282,011 Multi-family residential — 213,582 213,582 — 221,194 221,194 Consumer — 39,072 39,072 — 39,421 39,421 Agriculture — 8,915 8,915 — 11,076 11,076 Other 7,381 56,834 64,215 6,813 61,569 68,382 Total $ 18,234 $ 2,533,537 $ 2,551,771 $ 19,496 $ 2,433,633 $ 2,453,129 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
PREMISES AND EQUIPMENT | |
Schedule of premises and equipment | March 31, December 31, (Dollars in thousands) 2019 2018 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 52,740 52,188 Furniture and equipment 15,685 15,426 Vehicles 236 232 Construction in progress — 177 82,127 81,489 Less accumulated depreciation (30,674) (29,867) Premises and equipment, net $ 51,453 $ 51,622 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of intangible assets | Weighted Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets March 31, 2019 Other intangible assets, net Core deposits 5.0 years $ $ (12,674) $ 1,076 Customer relationships 9.8 years 6,629 (2,320) 4,309 Servicing assets 12.3 years 306 (153) 153 Total other intangible assets, net $ 20,685 $ (15,147) $ 5,538 December 31, 2018 Other intangible assets, net Core deposits 5.2 years $ $ (12,561) $ 1,189 Customer relationships 10.0 years 6,629 (2,209) 4,420 Servicing assets 14.4 years 311 (145) 166 Total other intangible assets, net $ 20,690 $ (14,915) $ 5,775 |
Schedule of changes in related servicing assets | Three Months Ended March 31, (Dollars in thousands) 2019 2018 Balance at beginning of year $ 166 $ 209 Increase from loan sales 14 6 Decrease from serviced loans paid off or foreclosed (19) — Amortization (8) (8) Balance at end of period $ 153 $ 207 |
BANK OWNED LIFE INSURANCE (Tabl
BANK OWNED LIFE INSURANCE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
BANK OWNED LIFE INSURANCE | |
Schedule of change in cash surrender value | March 31, December 31, (Dollars in thousands) 2019 2018 Balance at beginning of period $ 71,525 $ 68,010 Purchases — 1,700 Redemptions — — Earnings, net 430 1,815 Balance at end of period $ 71,955 $ 71,525 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DEPOSITS | |
Schedule of deposits | March 31, December 31, (Dollars in thousands) 2019 2018 Interest-bearing demand accounts $ 352,623 $ 387,457 Money market accounts 695,968 737,770 Saving accounts 96,251 96,962 Certificates and other time deposits, $100,000 or greater 181,507 189,007 Certificates and other time deposits, less than $100,000 195,478 172,028 Total interest-bearing deposits 1,521,827 1,583,224 Noninterest-bearing deposits 1,229,172 1,183,058 Total deposits $ 2,750,999 $ 2,766,282 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE DISCLOSURES | |
Summary financial assets and financial liabilities measured at fair value on a recurring basis | March 31, December 31, (Dollars in thousands) 2019 2018 Fair value of financial assets: Level 1 inputs: Debt securities available for sale - other securities $ 1,108 $ 1,088 Level 2 inputs: Debt securities available for sale State and municipal securities 55,471 57,691 U.S. Agency Securities: Debt securities 17,060 16,881 Collateralized mortgage obligations 65,785 65,414 Mortgage-backed securities 89,230 88,859 Interest rate swaps 768 962 Total fair value of financial assets $ 229,422 $ 230,895 Fair value of financial liabilities: Level 2 inputs: Interest rate swaps $ 768 $ 962 Total fair value of financial liabilities $ 768 $ 962 |
Summary of certain assets measured on a non‑recurring basis | March 31, December 31, (Dollars in thousands) 2019 2018 Level 3 inputs Impaired loans: Commercial and industrial $ 118 $ 110 Commercial real estate 552 552 1-4 family residential 1,735 1,735 Other 1,192 1,141 Total impaired loans $ 3,597 $ 3,538 |
Summary of fair value of repossessed real estate and other foreclosed assets | March 31, December 31, (Dollars in thousands) 2019 2018 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ 41 $ 13 Charge-offs recognized in the allowance for loan losses — (1) Fair value $ 41 $ 12 |
Summary of fair market values of all financial instruments | March 31, 2019 December 31, 2018 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 54,110 $ 54,110 $ 54,450 $ 54,450 Interest bearing deposits in banks 222,405 222,405 327,620 327,620 Level 2 inputs: Debt securities held to maturity 32 30 32 31 Bank-owned life insurance 71,955 71,955 71,525 71,525 Accrued interest receivable 8,845 8,845 8,227 8,227 Servicing asset 153 153 166 166 Level 3 inputs: Loans, including held for sale, net 2,582,037 2,520,918 2,432,753 2,423,130 Equity investments 15,065 15,065 13,026 13,026 Total financial assets $ 2,954,602 $ 2,893,481 $ 2,907,799 $ 2,898,175 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,229,172 $ 1,229,172 $ 1,183,058 $ 1,183,058 Level 2 inputs: Interest-bearing deposits 1,478,396 1,521,827 1,522,366 1,583,224 Repurchase agreements 1,600 1,600 2,498 2,498 Junior subordinated debt — — 1,571 1,571 Accrued interest payable 708 708 653 653 Total financial liabilities $ 2,709,876 $ 2,753,307 $ 2,710,146 $ 2,771,004 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of the derivative instruments outstanding | Weighted Notional Fair Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity March 31, 2019 Interest rate swaps with customers Other Assets $ 26,013 $ 422 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.39 years Interest rate swaps with financial institution Other Assets 15,365 346 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 6.92 years Interest rate swaps with customers Other Liabilities 15,365 (346) 4.00% - 5.15% LIBOR 1M + 2.50% - 3.25% 6.92 years Interest rate swaps with financial institution Other Liabilities 26,013 (422) 4.75% - 7.25% LIBOR 1M + 2.50% - 3.20% 7.39 years Total derivatives not designated as hedging instruments $ 82,756 $ — Weighted Notional Fair Average (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate Maturity December 31, 2018 Interest rate swaps with customers Other Assets $ 8,901 $ 169 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 years Interest rate swaps with financial institution Other Assets 32,923 793 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 years Interest rate swaps with customers Other Liabilities 32,923 (793) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 years Interest rate swaps with financial institution Other Liabilities 8,901 (169) 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 years Total derivatives not designated as hedging instruments $ 83,648 $ — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
OPERATING LEASES | |
Summary of lease costs | For the Three Months Ended (Dollars in thousands) March 31, Operating lease cost $ 461 Short-term lease cost 19 Sublease income (6) Total lease cost $ 474 |
Summary of maturity analysis of operating lease liabilities | (Dollars in thousands) March 31, 2019 2020 $ 1,940 2021 2,070 2022 2,165 2023 2,207 2024 2,124 Thereafter 10,347 Total undiscounted lease liability 20,853 Discount (5,719) Total lease liability $ 15,134 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
Summary of the various financial instruments whose contract amounts represent credit risk | March 31, December 31, (Dollars in thousands) 2019 2018 Commitments to extend credit, variable interest rate $ 702,152 $ 726,277 Commitments to extend credit, fixed interest rate 117,747 105,359 $ 819,899 $ 831,636 Standby letters of credit $ 28,072 $ 31,729 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
REVENUE RECOGNITION | |
Revenue Recognition | Three Months Ended March 31, (Dollars in thousands) 2019 2018 Deposit account service charges $ 1,629 $ 1,478 Net gain on sale of assets 88 130 Card interchange fees 864 927 Other noninterest income 482 375 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
STOCK-BASED COMPENSATION | |
Schedule number of shares issued and withheld for the period | The number of shares issued and withheld during the three months ended March 31, 2019 was as follows: Shares Shares Total Issued Withheld Vested 211 89 300 |
Stock option plan | |
STOCK-BASED COMPENSATION | |
Schedule of summary of activity under the stock option plans | Three Months Ended March 31, 2019 2018 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise Options Price Options Price Outstanding at beginning of period 232,322 $ 16.66 260,322 $ 16.00 Granted — — — — Exercised (10,844) 10.68 — — Forfeited — — — — Outstanding at end of period 221,478 16.96 260,322 16.00 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | March 31, 2019 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 136,279 85,199 221,478 Weighted-average exercise price per share $ 15.06 $ 19.99 $ 16.96 Aggregate intrinsic value (in thousands) $ 2,373 $ 1,063 $ 3,436 Weighted-average remaining contractual term (years) 5.3 7.7 6.2 |
Restricted Stock | |
STOCK-BASED COMPENSATION | |
Schedule of summary of activity under the stock option plans | Non-performance Based Performance-based Weighted Weighted Average Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Outstanding at 12/31/2017 212,580 $ 26.71 — $ — Granted 1,500 29.27 — — Vested — — — — Forfeited — — — — Outstanding at 3/31/2018 214,080 $ 27.29 — $ — Outstanding at 12/31/2018 181,773 27.05 24,000 34.46 Granted 19,187 32.25 — — Vested (300) 29.27 — — Forfeited — — — — Outstanding at 3/31/2019 200,660 $ 27.54 24,000 $ 34.46 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | March 31, 2019 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 200,660 24,000 Weighted-average grant date fair value per share $ 27.54 $ 34.46 Aggregate fair value (in thousands) $ 6,515 $ 779 Weighted-average remaining vesting period (years) 3.4 2.9 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
REGULATORY MATTERS | |
Summary of actual and required capital ratios for the Company and Bank under the Basel III Capital Rules | Minimum Minimum Capital Required Capital Required Required to be for Capital Adequacy Basel III Considered Well Actual Purposes Fully Phased-in Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio March 31, 2019 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 413,851 $ 128,186 $ 199,401 N/A N/A Bank Only $ 372,226 $ 128,176 $ 199,385 $ 185,143 Tier I Capital to Risk-Weighted Assets: Consolidated $ 413,851 $ 170,915 $ 242,129 N/A N/A Bank Only $ 372,226 $ 170,901 $ 242,110 $ 227,869 Total Capital to Risk-Weighted Assets: Consolidated $ 438,872 $ 227,886 $ 299,101 N/A N/A Bank Only $ 397,246 $ 227,869 $ 299,077 $ 284,836 Tier 1 Leverage Capital to Average Assets: Consolidated $ 413,851 $ 127,051 $ 127,051 N/A N/A Bank Only $ 372,224 $ 127,051 $ 127,051 $ 158,814 December 31, 2018 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 405,012 $ 123,885 $ 192,710 N/A N/A Bank Only $ 363,140 $ 123,877 $ 192,697 $ 178,933 Tier I Capital to Risk-Weighted Assets: Consolidated $ 406,257 $ 165,180 $ 234,005 N/A N/A Bank Only $ 363,140 $ 165,169 $ 233,989 $ 220,225 Total Capital to Risk-Weighted Assets: Consolidated $ 430,238 $ 220,240 $ 289,065 N/A N/A Bank Only $ 387,211 $ 220,225 $ 289,046 $ 275,282 Tier 1 Leverage Capital to Average Assets: Consolidated $ 406,257 $ 127,350 $ 127,350 N/A N/A Bank Only $ 363,140 $ 127,350 $ 127,350 $ 159,188 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
INCOME TAXES | |
Schedule of provision for income tax expense and effective tax rates | Three Months Ended March 31, (Dollars in thousands) 2019 2018 Provision for income tax expense $ 2,599 $ 2,139 Effective tax rate |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | Three Months Ended March 31, (Dollars in thousands, except per share data) 2019 2018 Net income for common shareholders $ 10,490 $ 9,112 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,910 24,833 Dilutive effect of outstanding stock options and unvested restricted stock awards 144 121 Diluted weighted-average shares outstanding 25,054 24,954 Earnings per share: Basic $ 0.42 $ 0.37 Diluted $ 0.42 $ 0.37 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations (Details) | 3 Months Ended |
Mar. 31, 2019location | |
Operating branches | 35 |
Houston market area | |
Operating branches | 19 |
Beaumont/East Texas market area | |
Operating branches | 15 |
Dallas market area | |
Operating branches | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards Recently Adopted (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 |
Accounting Standards Recently Adopted | ||
Practical Expedients | true | |
Use of hindsight | true | |
Operating lease right-to-use asset | $ 12,879 | |
Operating lease liabilities | $ 15,134 | |
Reversed accrued lease obligations and lease incentive liabilities reported in other liabilities | $ 2,300 | |
ASU 2016-02 | Restatement | ||
Accounting Standards Recently Adopted | ||
Operating lease right-to-use asset | 13,200 | |
Operating lease liabilities | $ 15,500 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Due from Banks (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Reserve required at federal reserve bank | $ 16.2 | $ 18.5 |
Cash collateral used in interest rate swap transactions | $ 1.6 | $ 1.6 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flow Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental disclosures of non-cash flow information: | ||
Dividends accrued | $ 1,268 | $ 10 |
Operating lease right-to-use asset obtained in exchange for lease liabilities | 13,208 | |
Repossessed real estate and other assets | 41 | |
Deposits and repurchase agreements | ||
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 3,536 | 1,960 |
Junior subordinated debt. | ||
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 63 | $ 87 |
DEBT SECURITIES - Amortized cos
DEBT SECURITIES - Amortized cost and estimated fair values of investments in securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Available-for-sale Securities [Abstract] | ||
Amortized cost | $ 229,390 | $ 233,699 |
Fair Value | 228,654 | 229,933 |
Held-to-maturity Securities [Abstract] | ||
Amortized cost | 30 | 31 |
Fair Value | 32 | 32 |
Securities Available for Sale | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 229,390 | 233,699 |
Gross Unrealized Gains | 1,459 | 673 |
Gross Unrealized Losses | (2,195) | (4,439) |
Fair Value | 228,654 | 229,933 |
Securities Available for Sale | State and municipal securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 54,854 | 57,972 |
Gross Unrealized Gains | 811 | 345 |
Gross Unrealized Losses | (194) | (626) |
Fair Value | 55,471 | 57,691 |
Securities Available for Sale | Debt securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 17,315 | 17,315 |
Gross Unrealized Losses | (255) | (434) |
Fair Value | 17,060 | 16,881 |
Securities Available for Sale | Collateralized mortgage obligations | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 66,230 | 66,438 |
Gross Unrealized Gains | 158 | 98 |
Gross Unrealized Losses | (603) | (1,122) |
Fair Value | 65,785 | 65,414 |
Securities Available for Sale | Mortgage-backed securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 89,856 | 90,845 |
Gross Unrealized Gains | 490 | 230 |
Gross Unrealized Losses | (1,116) | (2,216) |
Fair Value | 89,230 | 88,859 |
Securities Available for Sale | Other securities | ||
Available-for-sale Securities [Abstract] | ||
Amortized cost | 1,135 | 1,129 |
Gross Unrealized Losses | (27) | (41) |
Fair Value | 1,108 | 1,088 |
Securities Held to Maturity | Mortgage-backed securities | ||
Held-to-maturity Securities [Abstract] | ||
Amortized cost | 30 | 31 |
Gross Unrealized Gains | 2 | 1 |
Fair Value | $ 32 | $ 32 |
DEBT SECURITIES - Amortized c_2
DEBT SECURITIES - Amortized cost and estimated fair values of securities by contractual maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Available for Sale - Amortized Cost | ||
Amortized cost, 1 year or less | $ 3,338 | $ 3,224 |
Amortized cost, 1 year through 5 years | 20,086 | 22,784 |
Amortized cost, 5 years through 10 years | 13,958 | 13,127 |
Amortized cost, After 10 years | 192,008 | 194,564 |
Available-for-sale Securities, Amortized Cost Basis, Total | 229,390 | 233,699 |
Available for Sale - Estimated Fair Value | ||
Estimated fair value, 1 year or less | 3,326 | 3,188 |
Estimated fair value, 1 year through 5 years | 19,846 | 22,370 |
Estimated fair value, 5 years through 10 years | 14,061 | 13,062 |
Estimated fair value, After 10 years | 191,421 | 191,313 |
Available-for-sale Securities, Total | 228,654 | 229,933 |
Held to Maturity - Amortized Cost | ||
Amortized cost, After 10 years | 30 | 31 |
Held-to-maturity Securities, Total | 30 | 31 |
Held to Maturity - Estimated Fair Value | ||
Estimated fair value, After 10 years | 32 | 32 |
Held-to-maturity Securities, Fair Value, Total | 32 | 32 |
Securities Available for Sale | ||
Available for Sale - Amortized Cost | ||
Available-for-sale Securities, Amortized Cost Basis, Total | 229,390 | 233,699 |
Available for Sale - Estimated Fair Value | ||
Available-for-sale Securities, Total | $ 228,654 | $ 229,933 |
DEBT SECURITIES - Securities ca
DEBT SECURITIES - Securities carrying amount (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)item | |
DEBT SECURITIES. | |||
Securities sold during the year | $ 358,000 | $ 0 | |
Carrying value of securities pledged | $ 57,500,000 | $ 49,900,000 | |
Securities held in a gross unrealized loss position | item | 187 | 167 | |
Impairment loss on securities | $ 0 | $ 0 |
DEBT SECURITIES - Securities wi
DEBT SECURITIES - Securities with gross unrealized losses (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investment securities | ||
Fair value - Less than twelve months | $ 870 | $ 51,491 |
Gross Unrealized losses - Less than twelve months | (3) | (773) |
Fair value - Twelve months or more | 136,415 | 116,894 |
Gross Unrealized losses - Twelve months or more | (2,192) | (3,666) |
State and municipal securities | ||
Investment securities | ||
Fair value - Less than twelve months | 674 | 20,892 |
Gross Unrealized losses - Less than twelve months | (3) | (324) |
Fair value - Twelve months or more | 11,792 | 6,584 |
Gross Unrealized losses - Twelve months or more | (191) | (302) |
Debt securities | ||
Investment securities | ||
Fair value - Twelve months or more | 17,060 | 16,882 |
Gross Unrealized losses - Twelve months or more | (255) | (434) |
Collateralized mortgage obligations | ||
Investment securities | ||
Fair value - Less than twelve months | 8,854 | |
Gross Unrealized losses - Less than twelve months | (81) | |
Fair value - Twelve months or more | 50,194 | 46,157 |
Gross Unrealized losses - Twelve months or more | (603) | (1,041) |
Mortgage-backed securities | ||
Investment securities | ||
Fair value - Less than twelve months | 196 | 21,745 |
Gross Unrealized losses - Less than twelve months | (368) | |
Fair value - Twelve months or more | 56,261 | 46,183 |
Gross Unrealized losses - Twelve months or more | (1,116) | (1,848) |
Other securities | ||
Investment securities | ||
Fair value - Twelve months or more | 1,108 | 1,088 |
Gross Unrealized losses - Twelve months or more | $ (27) | $ (41) |
EQUITY INVESTMENTS - Equity Inv
EQUITY INVESTMENTS - Equity Investments (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)item$ / shares | Dec. 31, 2018USD ($) | |
Equity investments | ||
Equity investments, total | $ 15,065 | $ 13,026 |
Number of private investment funds | item | 2 | |
Unfunded commitments | $ 3,000 | 3,000 |
Federal Reserve stock | ||
Equity investments | ||
Equity investments, total | $ 9,271 | 9,271 |
Par value (in dollars per share) | $ / shares | $ 100 | |
Federal Home Loan Bank stock | ||
Equity investments | ||
Equity investments, total | $ 3,289 | 1,250 |
Par value (in dollars per share) | $ / shares | $ 100 | |
The Independent Bankers Financial Corporation stock | ||
Equity investments | ||
Equity investments, total | $ 141 | 141 |
Community Reinvestment Act investments | ||
Equity investments | ||
Equity investments, total | $ 2,364 | $ 2,364 |
LOANS - By portfolio segment (D
LOANS - By portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Loans | ||||
Total | $ 2,551,771 | $ 2,453,129 | ||
Percentage of loan | 100.00% | 100.00% | ||
Less deferred loan fees and unearned discounts | $ (6,210) | $ (6,306) | ||
Less allowance for loan loss | (24,643) | (23,693) | $ (25,349) | $ (24,778) |
Less loans held for sale | (852) | |||
Loans, net | 2,520,066 | 2,423,130 | ||
Accrued interest receivable | 7,900 | 6,800 | ||
Commercial and industrial | ||||
Loans | ||||
Total | $ 559,882 | $ 519,779 | ||
Percentage of loan | 21.90% | 21.20% | ||
Less allowance for loan loss | $ (8,416) | $ (7,719) | (7,439) | (7,257) |
Commercial real estate | ||||
Loans | ||||
Total | $ 811,742 | $ 795,733 | ||
Percentage of loan | 31.80% | 32.40% | ||
Less allowance for loan loss | $ (6,784) | $ (6,730) | (10,742) | (10,375) |
Construction and development | ||||
Loans | ||||
Total | $ 572,861 | $ 515,533 | ||
Percentage of loan | 22.50% | 21.00% | ||
Less allowance for loan loss | $ (4,700) | $ (4,298) | (3,356) | (3,482) |
1-4 family residential | ||||
Loans | ||||
Total | $ 281,502 | $ 282,011 | ||
Percentage of loan | 11.00% | 11.50% | ||
Less allowance for loan loss | $ (2,249) | $ (2,281) | (1,329) | (1,326) |
Multi‑family residential | ||||
Loans | ||||
Total | $ 213,582 | $ 221,194 | ||
Percentage of loan | 8.40% | 9.00% | ||
Less allowance for loan loss | $ (1,457) | $ (1,511) | (1,520) | (1,419) |
Consumer | ||||
Loans | ||||
Total | $ 39,072 | $ 39,421 | ||
Percentage of loan | 1.50% | 1.60% | ||
Less allowance for loan loss | $ (357) | $ (387) | (517) | (566) |
Agriculture | ||||
Loans | ||||
Total | $ 8,915 | $ 11,076 | ||
Percentage of loan | 0.40% | 0.50% | ||
Less allowance for loan loss | $ (50) | $ (62) | (53) | (68) |
Other | ||||
Loans | ||||
Total | $ 64,215 | $ 68,382 | ||
Percentage of loan | 2.50% | 2.80% | ||
Less allowance for loan loss | $ (630) | $ (705) | $ (393) | $ (285) |
LOANS - Loan participation and
LOANS - Loan participation and Loan Guarantees (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Loans | ||
Participations purchased during the period | $ 1,256,000 | $ 7,000,000 |
Participations sold during the period | 7,500,000 | |
SBA loans that were sold with servicing retained | 818,000 | 237,000 |
Commercial and industrial | ||
Loans | ||
Participations purchased during the period | 7,000,000 | |
Commercial real estate | ||
Loans | ||
Participations purchased during the period | $ 1,256,000 | |
Participations sold during the period | $ 7,500,000 |
LOAN PERFORMANCE - Nonaccrual l
LOAN PERFORMANCE - Nonaccrual loans, segregated by loan class (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Nonaccrual loans | ||
Nonaccrual loans | $ 2,934 | $ 3,490 |
Commercial and industrial | ||
Nonaccrual loans | ||
Nonaccrual loans | 1,390 | 1,317 |
Commercial real estate | ||
Nonaccrual loans | ||
Nonaccrual loans | 862 | 1,517 |
1-4 family residential | ||
Nonaccrual loans | ||
Nonaccrual loans | 635 | $ 656 |
Other | ||
Nonaccrual loans | ||
Nonaccrual loans | $ 47 |
LOAN PERFORMANCE - Aging analys
LOAN PERFORMANCE - Aging analysis of loan past due (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Aging analysis | |||
Total past due | $ 5,850,000 | $ 8,108,000 | |
Total current loans | 2,545,921,000 | 2,445,021,000 | |
Total loans | 2,551,771,000 | 2,453,129,000 | |
Interest income that would have been earned under the original terms of the nonaccrual loans | 48,000 | $ 99,000 | |
30 to 59 days past due | |||
Aging analysis | |||
Total past due | 3,844,000 | 1,028,000 | |
60 to 89 days past due | |||
Aging analysis | |||
Total past due | 156,000 | 6,285,000 | |
90 days or greater past due | |||
Aging analysis | |||
Total past due | 1,850,000 | 795,000 | |
Commercial and industrial | |||
Aging analysis | |||
Total past due | 1,504,000 | 1,213,000 | |
Total current loans | 558,378,000 | 518,566,000 | |
Total loans | 559,882,000 | 519,779,000 | |
Commercial and industrial | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 468,000 | 178,000 | |
Commercial and industrial | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 25,000 | 881,000 | |
Commercial and industrial | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 1,011,000 | 154,000 | |
Commercial real estate | |||
Aging analysis | |||
Total past due | 692,000 | 1,762,000 | |
Total current loans | 811,050,000 | 793,971,000 | |
Total loans | 811,742,000 | 795,733,000 | |
Commercial real estate | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 68,000 | ||
Commercial real estate | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 1,089,000 | ||
Commercial real estate | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 692,000 | 605,000 | |
Construction and development | |||
Aging analysis | |||
Total past due | 1,613,000 | 4,563,000 | |
Total current loans | 571,248,000 | 510,970,000 | |
Total loans | 572,861,000 | 515,533,000 | |
Construction and development | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 1,613,000 | 359,000 | |
Construction and development | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 4,204,000 | ||
1-4 family residential | |||
Aging analysis | |||
Total past due | 464,000 | 542,000 | |
Total current loans | 281,038,000 | 281,469,000 | |
Total loans | 281,502,000 | 282,011,000 | |
1-4 family residential | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 193,000 | 395,000 | |
1-4 family residential | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 124,000 | 111,000 | |
1-4 family residential | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 147,000 | 36,000 | |
Multi‑family residential | |||
Aging analysis | |||
Total past due | 1,570,000 | ||
Total current loans | 212,012,000 | 221,194,000 | |
Total loans | 213,582,000 | 221,194,000 | |
Multi‑family residential | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 1,570,000 | ||
Consumer | |||
Aging analysis | |||
Total past due | 7,000 | 28,000 | |
Total current loans | 39,065,000 | 39,393,000 | |
Total loans | 39,072,000 | 39,421,000 | |
Consumer | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 28,000 | ||
Consumer | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 7,000 | ||
Agriculture | |||
Aging analysis | |||
Total current loans | 8,915,000 | 11,076,000 | |
Total loans | 8,915,000 | 11,076,000 | |
Other | |||
Aging analysis | |||
Total current loans | 64,215,000 | 68,382,000 | |
Total loans | $ 64,215,000 | $ 68,382,000 |
LOAN PERFORMANCE - Restructured
LOAN PERFORMANCE - Restructured loans (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)loan | Mar. 31, 2018USD ($)loan | Dec. 31, 2018USD ($) | |
Restructured loans | |||
Number of loans | loan | 7 | ||
Pre‑modification outstanding Recorded Investment | $ 3,417 | ||
Recorded investment in troubled debt restructurings | $ 11,000 | $ 11,400 | |
Restructured loans that are nonaccrual status | 1,600 | 1,800 | |
Restructured loans accruing interest | $ 9,400 | 9,600 | |
Number of restructured loans for which there was a payment default | loan | 0 | ||
Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 3,417 | ||
Commercial and industrial | |||
Restructured loans | |||
Number of loans | loan | 3 | ||
Pre‑modification outstanding Recorded Investment | $ 983 | ||
Commercial and industrial | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 983 | ||
Commercial real estate | |||
Restructured loans | |||
Number of loans | loan | 4 | ||
Pre‑modification outstanding Recorded Investment | $ 2,434 | ||
Commercial real estate | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 2,434 | ||
Other | |||
Restructured loans | |||
Commitment to loan additional funds | $ 1,500 | $ 2,100 |
ALLOWANCE FOR LOAN LOSSES - Seg
ALLOWANCE FOR LOAN LOSSES - Segregated by loan class (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Loan losses segregated by loan class | ||
Beginning balance | $ 23,693,000 | $ 24,778,000 |
Provision (recapture) for loan loss | 1,147,000 | 865,000 |
Charge-offs | (284,000) | (472,000) |
Recoveries | 87,000 | 178,000 |
Net (charge-offs) recoveries | (197,000) | (294,000) |
Ending balance | 24,643,000 | 25,349,000 |
Specific reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 788,000 | 1,007,000 |
General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 23,855,000 | 24,342,000 |
Commercial and industrial | ||
Loan losses segregated by loan class | ||
Beginning balance | 7,719,000 | 7,257,000 |
Provision (recapture) for loan loss | 903,000 | 479,000 |
Charge-offs | (280,000) | (469,000) |
Recoveries | 74,000 | 172,000 |
Net (charge-offs) recoveries | (206,000) | (297,000) |
Ending balance | 8,416,000 | 7,439,000 |
Commercial and industrial | Specific reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 582,000 | 845,000 |
Commercial and industrial | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 7,834,000 | 6,594,000 |
Commercial real estate | ||
Loan losses segregated by loan class | ||
Beginning balance | 6,730,000 | 10,375,000 |
Provision (recapture) for loan loss | 52,000 | 364,000 |
Recoveries | 2,000 | 3,000 |
Net (charge-offs) recoveries | 2,000 | 3,000 |
Ending balance | 6,784,000 | 10,742,000 |
Commercial real estate | Specific reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 33,000 | 55,000 |
Commercial real estate | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 6,751,000 | 10,687,000 |
Construction and development | ||
Loan losses segregated by loan class | ||
Beginning balance | 4,298,000 | 3,482,000 |
Provision (recapture) for loan loss | 402,000 | (126,000) |
Ending balance | 4,700,000 | 3,356,000 |
Construction and development | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 4,700,000 | 3,356,000 |
1-4 family residential | ||
Loan losses segregated by loan class | ||
Beginning balance | 2,281,000 | 1,326,000 |
Provision (recapture) for loan loss | (33,000) | 5,000 |
Charge-offs | (3,000) | |
Recoveries | 1,000 | 1,000 |
Net (charge-offs) recoveries | 1,000 | (2,000) |
Ending balance | 2,249,000 | 1,329,000 |
1-4 family residential | Specific reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 77,000 | 107,000 |
1-4 family residential | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 2,172,000 | 1,222,000 |
Multi‑family residential | ||
Loan losses segregated by loan class | ||
Beginning balance | 1,511,000 | 1,419,000 |
Provision (recapture) for loan loss | (54,000) | 101,000 |
Ending balance | 1,457,000 | 1,520,000 |
Multi‑family residential | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 1,457,000 | 1,520,000 |
Consumer | ||
Loan losses segregated by loan class | ||
Beginning balance | 387,000 | 566,000 |
Provision (recapture) for loan loss | (36,000) | (51,000) |
Charge-offs | (4,000) | |
Recoveries | 10,000 | 2,000 |
Net (charge-offs) recoveries | 6,000 | 2,000 |
Ending balance | 357,000 | 517,000 |
Consumer | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 357,000 | 517,000 |
Agriculture | ||
Loan losses segregated by loan class | ||
Beginning balance | 62,000 | 68,000 |
Provision (recapture) for loan loss | (12,000) | (15,000) |
Ending balance | 50,000 | 53,000 |
Agriculture | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 50,000 | 53,000 |
Other | ||
Loan losses segregated by loan class | ||
Beginning balance | 705,000 | 285,000 |
Provision (recapture) for loan loss | (75,000) | 108,000 |
Ending balance | 630,000 | 393,000 |
Other | Specific reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 96,000 | |
Other | General reserve | ||
Loan losses segregated by loan class | ||
Ending balance | 534,000 | $ 393,000 |
Unfunded Loan Commitment | ||
Loan losses segregated by loan class | ||
Beginning balance | 378,000 | |
Ending balance | $ 378,000 |
ALLOWANCE FOR LOAN LOSSES - All
ALLOWANCE FOR LOAN LOSSES - Allowance for loan losses by loan category (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Loan Category | ||||
Allowance of loan losses | $ 24,643 | $ 23,693 | $ 25,349 | $ 24,778 |
Allowance for loan losses (as a percent) | 100.00% | 100.00% | ||
Commercial and industrial | ||||
Loan Category | ||||
Allowance of loan losses | $ 8,416 | $ 7,719 | 7,439 | 7,257 |
Allowance for loan losses (as a percent) | 34.10% | 32.60% | ||
Commercial real estate | ||||
Loan Category | ||||
Allowance of loan losses | $ 6,784 | $ 6,730 | 10,742 | 10,375 |
Allowance for loan losses (as a percent) | 27.50% | 28.40% | ||
Construction and development | ||||
Loan Category | ||||
Allowance of loan losses | $ 4,700 | $ 4,298 | 3,356 | 3,482 |
Allowance for loan losses (as a percent) | 19.10% | 18.10% | ||
1-4 family residential | ||||
Loan Category | ||||
Allowance of loan losses | $ 2,249 | $ 2,281 | 1,329 | 1,326 |
Allowance for loan losses (as a percent) | 9.10% | 9.60% | ||
Multi‑family residential | ||||
Loan Category | ||||
Allowance of loan losses | $ 1,457 | $ 1,511 | 1,520 | 1,419 |
Allowance for loan losses (as a percent) | 5.90% | 6.40% | ||
Consumer | ||||
Loan Category | ||||
Allowance of loan losses | $ 357 | $ 387 | 517 | 566 |
Allowance for loan losses (as a percent) | 1.50% | 1.60% | ||
Agriculture | ||||
Loan Category | ||||
Allowance of loan losses | $ 50 | $ 62 | 53 | 68 |
Allowance for loan losses (as a percent) | 0.20% | 0.30% | ||
Other | ||||
Loan Category | ||||
Allowance of loan losses | $ 630 | $ 705 | $ 393 | $ 285 |
Allowance for loan losses (as a percent) | 2.60% | 3.00% |
ALLOWANCE FOR LOAN LOSSES - Ris
ALLOWANCE FOR LOAN LOSSES - Risk Grading (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Risk Grading | ||
Risk rating of loans | $ 2,551,771 | $ 2,453,129 |
Pass | ||
Risk Grading | ||
Risk rating of loans | 2,511,500 | 2,404,521 |
Special Mention | ||
Risk Grading | ||
Risk rating of loans | 15,676 | 22,763 |
Substandard | ||
Risk Grading | ||
Risk rating of loans | 24,595 | 25,845 |
Loss or Doubtful | ||
Risk Grading | ||
Risk rating of loans | 0 | 0 |
Commercial and industrial | ||
Risk Grading | ||
Risk rating of loans | 559,882 | 519,779 |
Commercial and industrial | Pass | ||
Risk Grading | ||
Risk rating of loans | 544,799 | 504,425 |
Commercial and industrial | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 5,816 | 5,768 |
Commercial and industrial | Substandard | ||
Risk Grading | ||
Risk rating of loans | 9,267 | 9,586 |
Commercial real estate | ||
Risk Grading | ||
Risk rating of loans | 811,742 | 795,733 |
Commercial real estate | Pass | ||
Risk Grading | ||
Risk rating of loans | 801,078 | 781,035 |
Commercial real estate | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 8,058 | 10,370 |
Commercial real estate | Substandard | ||
Risk Grading | ||
Risk rating of loans | 2,606 | 4,328 |
Construction and development | ||
Risk Grading | ||
Risk rating of loans | 572,861 | 515,533 |
Construction and development | Pass | ||
Risk Grading | ||
Risk rating of loans | 571,301 | 511,329 |
Construction and development | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 1,560 | 4,204 |
1-4 family residential | ||
Risk Grading | ||
Risk rating of loans | 281,502 | 282,011 |
1-4 family residential | Pass | ||
Risk Grading | ||
Risk rating of loans | 276,203 | 274,781 |
1-4 family residential | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 2,175 | |
1-4 family residential | Substandard | ||
Risk Grading | ||
Risk rating of loans | 5,299 | 5,055 |
Multi‑family residential | ||
Risk Grading | ||
Risk rating of loans | 213,582 | 221,194 |
Multi‑family residential | Pass | ||
Risk Grading | ||
Risk rating of loans | 213,582 | 221,194 |
Consumer | ||
Risk Grading | ||
Risk rating of loans | 39,072 | 39,421 |
Consumer | Pass | ||
Risk Grading | ||
Risk rating of loans | 38,816 | 39,140 |
Consumer | Special Mention | ||
Risk Grading | ||
Risk rating of loans | 242 | 246 |
Consumer | Substandard | ||
Risk Grading | ||
Risk rating of loans | 14 | 35 |
Agriculture | ||
Risk Grading | ||
Risk rating of loans | 8,915 | 11,076 |
Agriculture | Pass | ||
Risk Grading | ||
Risk rating of loans | 8,888 | 11,048 |
Agriculture | Substandard | ||
Risk Grading | ||
Risk rating of loans | 27 | 28 |
Other | ||
Risk Grading | ||
Risk rating of loans | 64,215 | 68,382 |
Other | Pass | ||
Risk Grading | ||
Risk rating of loans | 56,833 | 61,569 |
Other | Substandard | ||
Risk Grading | ||
Risk rating of loans | $ 7,382 | $ 6,813 |
ALLOWANCE FOR LOAN LOSSES - Loa
ALLOWANCE FOR LOAN LOSSES - Loan Impairment Assessment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Loan Impairment Assessment | |||
Unpaid contractual principal balance | $ 18,624,000 | $ 19,871,000 | |
Recorded investment with no allowance | 13,849,000 | 15,200,000 | |
Recorded investment with allowance | 4,385,000 | 4,296,000 | |
Total recorded investment | 18,234,000 | 19,496,000 | |
Related allowance | 788,000 | 758,000 | |
Average recorded investment year‑to‑date | 18,983,000 | 24,490,000 | |
Interest income recognized on impaired loans | 215,000 | $ 254,000 | |
Commercial and industrial | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 4,333,000 | 4,378,000 | |
Recorded investment with no allowance | 3,517,000 | 3,642,000 | |
Recorded investment with allowance | 700,000 | 635,000 | |
Total recorded investment | 4,217,000 | 4,277,000 | |
Related allowance | 582,000 | 525,000 | |
Average recorded investment year‑to‑date | 4,288,000 | 5,771,000 | |
Commercial real estate | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 2,677,000 | 4,128,000 | |
Recorded investment with no allowance | 1,942,000 | 3,374,000 | |
Recorded investment with allowance | 585,000 | 596,000 | |
Total recorded investment | 2,527,000 | 3,970,000 | |
Related allowance | 33,000 | 44,000 | |
Average recorded investment year‑to‑date | 2,984,000 | 6,135,000 | |
Construction and development | |||
Loan Impairment Assessment | |||
Average recorded investment year‑to‑date | 139,000 | ||
1-4 family residential | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 4,232,000 | 4,551,000 | |
Recorded investment with no allowance | 2,297,000 | 2,612,000 | |
Recorded investment with allowance | 1,812,000 | 1,824,000 | |
Total recorded investment | 4,109,000 | 4,436,000 | |
Related allowance | 77,000 | 89,000 | |
Average recorded investment year‑to‑date | 4,219,000 | 4,597,000 | |
Consumer | |||
Loan Impairment Assessment | |||
Average recorded investment year‑to‑date | 7,000 | ||
Other | |||
Loan Impairment Assessment | |||
Unpaid contractual principal balance | 7,382,000 | 6,814,000 | |
Recorded investment with no allowance | 6,093,000 | 5,572,000 | |
Recorded investment with allowance | 1,288,000 | 1,241,000 | |
Total recorded investment | 7,381,000 | 6,813,000 | |
Related allowance | 96,000 | 100,000 | |
Average recorded investment year‑to‑date | $ 7,492,000 | $ 7,841,000 |
ALLOWANCE FOR LOAN LOSSES - L_2
ALLOWANCE FOR LOAN LOSSES - Loan losses on the basis of Company's impairment methodology (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | $ 18,234,000 | $ 19,496,000 |
Loans collectively evaluated for impairment | 2,533,537,000 | 2,433,633,000 |
Total | 2,551,771,000 | 2,453,129,000 |
Allowance allocated to specific reserves for loans individually evaluated for impairment | 788,000 | 758,000 |
Commercial and industrial | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 4,217,000 | 4,277,000 |
Loans collectively evaluated for impairment | 555,665,000 | 515,502,000 |
Total | 559,882,000 | 519,779,000 |
Commercial real estate | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 2,527,000 | 3,970,000 |
Loans collectively evaluated for impairment | 809,215,000 | 791,763,000 |
Total | 811,742,000 | 795,733,000 |
Construction and development | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 572,861,000 | 515,533,000 |
Total | 572,861,000 | 515,533,000 |
1-4 family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 4,109,000 | 4,436,000 |
Loans collectively evaluated for impairment | 277,393,000 | 277,575,000 |
Total | 281,502,000 | 282,011,000 |
Multi‑family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 213,582,000 | 221,194,000 |
Total | 213,582,000 | 221,194,000 |
Consumer | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 39,072,000 | 39,421,000 |
Total | 39,072,000 | 39,421,000 |
Agriculture | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans collectively evaluated for impairment | 8,915,000 | 11,076,000 |
Total | 8,915,000 | 11,076,000 |
Other | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Loans individually evaluated for impairment | 7,381,000 | 6,813,000 |
Loans collectively evaluated for impairment | 56,834,000 | 61,569,000 |
Total | $ 64,215,000 | $ 68,382,000 |
PREMISES AND EQUIPMENT - Compon
PREMISES AND EQUIPMENT - Components of premises and equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 82,127,000 | $ 81,489,000 | |
Less accumulated depreciation | (30,674,000) | (29,867,000) | |
Premises and equipment, net | 51,453,000 | 51,622,000 | |
Depreciation | 824,000 | $ 825,000 | |
Net gains and losses on sale of assets | 1,700 | $ 63,000 | |
Land | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 13,466,000 | 13,466,000 | |
Buildings and leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 52,740,000 | 52,188,000 | |
Furniture and equipment | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 15,685,000 | 15,426,000 | |
Vehicles | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 236,000 | 232,000 | |
Construction in progress | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 177,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill | $ 80,950 | $ 80,950 |
Changes in goodwill | 0 | 0 |
Other Intangible Assets, net | ||
Gross Intangible Assets | 20,685 | 20,690 |
Accumulated Amortization | (15,147) | (14,915) |
Net Intangible Assets | $ 5,538 | $ 5,775 |
Core deposits | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 5 years | 5 years 2 months 12 days |
Gross Intangible Assets | $ 13,750 | $ 13,750 |
Accumulated Amortization | (12,674) | (12,561) |
Net Intangible Assets | $ 1,076 | $ 1,189 |
Customer relationships | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 9 years 9 months 18 days | 10 years |
Gross Intangible Assets | $ 6,629 | $ 6,629 |
Accumulated Amortization | (2,320) | (2,209) |
Net Intangible Assets | $ 4,309 | $ 4,420 |
Servicing assets | ||
Other Intangible Assets, net | ||
Weighted Amortization Period | 12 years 3 months 18 days | 14 years 4 months 24 days |
Gross Intangible Assets | $ 306 | $ 311 |
Accumulated Amortization | (153) | (145) |
Net Intangible Assets | $ 153 | $ 166 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Servicing Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Servicing Assets | ||
Balance at beginning of year | $ 166 | $ 209 |
Increase from loan sales | 14 | 6 |
Decrease from serviced loans paid off or foreclosed | (19) | |
Amortization | (8) | (8) |
Balance at end of period | $ 153 | $ 207 |
BANK OWNED LIFE INSURANCE (Deta
BANK OWNED LIFE INSURANCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
BANK OWNED LIFE INSURANCE | |||
Balance at beginning of year | $ 71,525 | $ 68,010 | $ 68,010 |
Purchases | 1,700 | ||
Earnings, net | 430 | $ 451 | 1,815 |
Balance at end of year | $ 71,955 | $ 71,525 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
DEPOSITS | ||
Interest-bearing demand accounts | $ 352,623 | $ 387,457 |
Money market accounts | 695,968 | 737,770 |
Saving accounts | 96,251 | 96,962 |
Certificates and other time deposits, $100,000 or greater | 181,507 | 189,007 |
Certificates and other time deposits, less than $100,000 | 195,478 | 172,028 |
Total interest-bearing deposits | 1,521,827 | 1,583,224 |
Noninterest-bearing deposits | 1,229,172 | 1,183,058 |
Total deposits | $ 2,750,999 | $ 2,766,282 |
DEPOSITS - Schedule of maturiti
DEPOSITS - Schedule of maturities of time deposits (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Time Deposits, Fiscal Year Maturity [Abstract] | ||
Deposits from public entities | $ 46.7 | $ 51.5 |
Brokered deposits | $ 129.2 | $ 104.5 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) $ in Millions | Dec. 13, 2018USD ($) | Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item |
NOTES PAYABLE AND LINES OF CREDIT | |||
Capital to risk based assets ratio | 15.40% | 15.60% | |
Line of Credit | Frost Bank (Amended Agreement) | |||
NOTES PAYABLE AND LINES OF CREDIT | |||
Revolving line of credit available | $ 30 | ||
Revolving line of credit draw period | 12 months | ||
Debt term | 60 months | ||
Line of credit payment terms | payable quarterly in the first 12 months and thereafter quarterly principal and interest payments are required over a term of 60 months | ||
Outstanding borrowings | $ 0 | ||
Line of Credit | Frost Bank (Amended Agreement) | Minimum | |||
NOTES PAYABLE AND LINES OF CREDIT | |||
Tangible capital | $ 300 | ||
Free cash flow coverage ratio | 1.00% | ||
Capital to risk based assets ratio | 12.00% | ||
Line of Credit | Frost Bank (Amended Agreement) | Maximum | |||
NOTES PAYABLE AND LINES OF CREDIT | |||
Free cash flow coverage ratio | 1.25% | ||
Capital to risk based assets ratio | 15.00% | ||
Line of Credit | Federal Home Loan Bank | |||
NOTES PAYABLE AND LINES OF CREDIT | |||
Outstanding borrowings | 0 | $ 0 | |
Total borrowing capacity available | 935.9 | 919.9 | |
Federal funds line of credit | Federal Home Loan Bank | |||
NOTES PAYABLE AND LINES OF CREDIT | |||
Revolving line of credit available | 75 | ||
Outstanding borrowings | $ 0 | $ 0 | |
Number of federal funds line of credit | item | 4 | 4 |
JUNIOR SUBORDINATED DEBT (Detai
JUNIOR SUBORDINATED DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2015 | Dec. 31, 2006 | Dec. 31, 2018 | |
Junior subordinated notes | |||||
Junior subordinate debt | $ 1,571 | ||||
Purchase of trust preferred securities | $ 1,571 | ||||
County Bancshares Trust I | |||||
Junior subordinated notes | |||||
Proceeds of trust preferred securities | $ 5,500 | ||||
Junior subordinate debt | $ 5,700 | ||||
Aggregate redemption price paid | $ 5,700 | ||||
Purchase of trust preferred securities | $ 4,100 | ||||
Trust preferred securities | $ 1,600 | ||||
Redemption of preferred securities | $ 4,100 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
RELATED PARTY TRANSACTIONS | ||
Loans to related parties | $ 172.8 | $ 169 |
Deemed nonaccrual, past due, restructured or classified as potential problem loans | 0 | 0 |
Unfunded loan commitments to related parties | 51 | 55.7 |
Related party deposits | $ 250.2 | $ 311.2 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Financial Assets | ||
Debt securities available for sale | $ 228,654 | $ 229,933 |
Financial Liabilities | ||
Transfers from level 1 and level 2 | 0 | 0 |
Transfers from level 2 and level 1 | 0 | 0 |
Transfers from level 1 and level 2 | 0 | 0 |
Transfers from level 2 and level 1 | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers from level 3 | 0 | 0 |
Recurring basis | ||
Financial Assets | ||
Total financial assets | 229,422 | 230,895 |
Financial Liabilities | ||
Total financial liabilities | 768 | 962 |
Level 1 Inputs | Recurring basis | Other securities | ||
Financial Assets | ||
Debt securities available for sale | 1,108 | 1,088 |
Level 2 Inputs | Recurring basis | Interest rate swaps with customers | ||
Financial Assets | ||
Interest rate swaps assets | 768 | 962 |
Financial Liabilities | ||
Interest rate swaps liabilities | 768 | 962 |
Level 2 Inputs | Recurring basis | State and municipal securities | ||
Financial Assets | ||
Debt securities available for sale | 55,471 | 57,691 |
Level 2 Inputs | Recurring basis | Debt securities | ||
Financial Assets | ||
Debt securities available for sale | 17,060 | 16,881 |
Level 2 Inputs | Recurring basis | Collateralized mortgage obligations | ||
Financial Assets | ||
Debt securities available for sale | 65,785 | 65,414 |
Level 2 Inputs | Recurring basis | Mortgage-backed securities | ||
Financial Assets | ||
Debt securities available for sale | $ 89,230 | $ 88,859 |
FAIR VALUE DISCLOSURES - Certai
FAIR VALUE DISCLOSURES - Certain assets measured on a non recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Impaired Loans | ||
Total loans | $ 2,520,066 | $ 2,423,130 |
Level 3 Inputs | Non-recurring basis | ||
Impaired Loans | ||
Total loans | 3,597 | 3,538 |
Level 3 Inputs | Non-recurring basis | Commercial and industrial | ||
Impaired Loans | ||
Total loans | 118 | 110 |
Level 3 Inputs | Non-recurring basis | Commercial real estate | ||
Impaired Loans | ||
Total loans | 552 | 552 |
Level 3 Inputs | Non-recurring basis | 1-4 family residential | ||
Impaired Loans | ||
Total loans | 1,735 | 1,735 |
Level 3 Inputs | Non-recurring basis | Other | ||
Impaired Loans | ||
Total loans | $ 1,192 | $ 1,141 |
FAIR VALUE DISCLOSURES - Non Fi
FAIR VALUE DISCLOSURES - Non Financial Assets and Non Financial Liabilities (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Write-downs of foreclosed assets for fair value remeasurement subsequent to initial foreclosure | $ 0 | $ 0 |
Previously reported | ||
Non‑Financial Assets and Non‑Financial Liabilities | ||
Carrying value of foreclosed assets prior to measurement | 41,000 | 13,000 |
Charge-offs recognized in the allowance for loan losses | (1,000) | |
Fair value | $ 41,000 | $ 12,000 |
FAIR VALUE DISCLOSURES - Fair m
FAIR VALUE DISCLOSURES - Fair market values of all financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financial Assets: | ||
Interest bearing deposits in banks | $ 222,405 | $ 327,620 |
Debt securities available for sale | 228,654 | 229,933 |
Debt securities held to maturity | 30 | 31 |
Loans, including held for sale, net | 852 | |
Equity investments | 15,065 | 13,026 |
Accrued interest receivable | 7,900 | 6,800 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,229,172 | 1,183,058 |
Interest-bearing deposits | 1,521,827 | 1,583,224 |
Repurchase agreements | 1,600 | 2,498 |
Junior subordinated debt | 1,571 | |
Fair Value | ||
Financial Assets: | ||
Total financial assets | 2,954,602 | 2,907,799 |
Financial Liabilities: | ||
Total financial liabilities | 2,709,876 | 2,710,146 |
Carrying Amount | ||
Financial Assets: | ||
Total financial assets | 2,893,481 | 2,898,175 |
Financial Liabilities: | ||
Total financial liabilities | 2,753,307 | 2,771,004 |
Level 1 Inputs | Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 54,110 | 54,450 |
Interest bearing deposits in banks | 222,405 | 327,620 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,229,172 | 1,183,058 |
Level 1 Inputs | Carrying Amount | ||
Financial Assets: | ||
Cash and due from banks | 54,110 | 54,450 |
Interest bearing deposits in banks | 222,405 | 327,620 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,229,172 | 1,183,058 |
Level 2 Inputs | Fair Value | ||
Financial Assets: | ||
Debt securities held to maturity | 32 | 32 |
Bank-owned life insurance | 71,955 | 71,525 |
Accrued interest receivable | 8,845 | 8,227 |
Servicing asset | 153 | 166 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,478,396 | 1,522,366 |
Repurchase agreements | 1,600 | 2,498 |
Junior subordinated debt | 1,571 | |
Accrued interest payable | 708 | 653 |
Level 2 Inputs | Carrying Amount | ||
Financial Assets: | ||
Debt securities held to maturity | 30 | 31 |
Bank-owned life insurance | 71,955 | 71,525 |
Accrued interest receivable | 8,845 | 8,227 |
Servicing asset | 153 | 166 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,521,827 | 1,583,224 |
Repurchase agreements | 1,600 | 2,498 |
Junior subordinated debt | 1,571 | |
Accrued interest payable | 708 | 653 |
Level 3 Inputs | Fair Value | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,582,037 | 2,432,753 |
Equity investments | 15,065 | 13,026 |
Level 3 Inputs | Carrying Amount | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,520,918 | 2,423,130 |
Equity investments | $ 15,065 | $ 13,026 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Deterioration in the customer’s credit worthiness | $ 0 | $ 0 |
Number of interest rate swap agreements | item | 13 | |
Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional Amount | $ 82,756 | 83,648 |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | 26,013 | 8,901 |
Fair value asset | $ 422 | $ 169 |
Weighted Average Maturity | 7 years 4 months 21 days | 6 years 2 months 19 days |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | $ 15,365 | $ 32,923 |
Fair value asset | $ 346 | $ 793 |
Weighted Average Maturity | 6 years 11 months 1 day | 7 years 9 months 11 days |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 15,365 | $ 32,923 |
Fair value liability | $ (346) | $ (793) |
Weighted Average Maturity | 6 years 11 months 1 day | 7 years 9 months 11 days |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 26,013 | $ 8,901 |
Fair value liability | $ (422) | $ (169) |
Weighted Average Maturity | 7 years 4 months 21 days | 6 years 2 months 19 days |
Minimum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.75% | 5.45% |
Minimum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.00% | 4.00% |
Minimum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.00% | 4.00% |
Minimum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 4.75% | 5.45% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 7.25% | 7.25% |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.15% | 5.37% |
Maximum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.15% | 5.37% |
Maximum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 7.25% | 7.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.20% | 3.20% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.25% | 3.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.25% | 3.25% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.20% | 3.20% |
OPERATING LEASES (Details)
OPERATING LEASES (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
OPERATING LEASES | |
Variable costs | $ 0 |
Right-of-use assets | 12,879,000 |
Operating lease liabilities | $ 15,134,000 |
Weighted-average discount rate | 3.58% |
Weighted-average remaining lease term | 11 years 9 months 18 days |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 448,000 |
OPERATING LEASES - Lease Costs
OPERATING LEASES - Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease costs | |
Operating lease cost | $ 461 |
Short-term lease cost | 19 |
Sublease income | (6) |
Total lease cost | $ 474 |
OPERATING LEASES - Maturity of
OPERATING LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
2020 | $ 1,940 |
2021 | 2,070 |
2022 | 2,165 |
2023 | 2,207 |
2024 | 2,124 |
Thereafter | 10,347 |
Total undiscounted lease liability | 20,853 |
Discount | (5,719) |
Total lease liability | $ 15,134 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | ||
Commitments to extend credit, variable | $ 702,152 | $ 726,277 |
Commitments to extend credit, fixed | 117,747 | 105,359 |
Total | 819,899 | 831,636 |
Standby letters of credit | $ 28,072 | $ 31,729 |
REVENUE RECOGNITION - Revenue-g
REVENUE RECOGNITION - Revenue-generating activities within scope of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Noninterest income | ||
Deposit account service charges | $ 1,629 | $ 1,478 |
Net gain on sale of assets | 88 | 130 |
Card interchange fees | 864 | 927 |
Other noninterest income | $ 482 | $ 375 |
EMPLOYEE BENEFIT PLANS AND DE_2
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Term of service for 401K participation | 3 months | |||
Company's contributions to the 401K plan | $ 683,000 | $ 659,000 | ||
Aggregate amount paid to employees | $ 13,822,000 | $ 12,695,000 | ||
Executive Deferred Compensation Arrangements | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Employers contribution of incentive bonus (as a percent) | 25.00% | |||
Deferred plan liability | $ 2,500,000 | $ 2,500,000 | ||
2008 Salary Continuation Agreement | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | 399,000 | 421,000 | ||
Annual compensation payment amount | $ 100,000 | |||
Contractual term | 10 years | |||
Commencement age | 65 years | |||
2017 Salary Continuation Agreement 2017 | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | $ 274,000 | 219,000 | ||
Annual compensation payment amount | $ 200,000 | |||
Contractual term | 10 years | |||
Commencement age | 70 years | |||
Change of Control and Non‑Competition Agreements | Executive Officers | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | $ 4,400,000 | |||
Deferred compensation expense | $ 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
Non-performance Based | Minimum | |
STOCK-BASED COMPENSATION | |
Vesting period | 2 years |
Non-performance Based | Maximum | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
2006 Plan | |
STOCK-BASED COMPENSATION | |
Vesting period | 10 years |
Number of options outstanding | 0 |
2014 Plan | |
STOCK-BASED COMPENSATION | |
Number of options authorized | 1,127,200 |
Option expiration term | 10 years |
Options available for future grant | 959,200 |
2014 Plan | Minimum | |
STOCK-BASED COMPENSATION | |
Vesting period | 1 year |
2014 Plan | Maximum | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
2014 Plan | Granted after May 20, 2024 | |
STOCK-BASED COMPENSATION | |
Number of options granted | 0 |
2017 Plan | |
STOCK-BASED COMPENSATION | |
Number of options authorized | 600,000 |
Options available for future grant | 328,940 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock option activity (Details) - Stock option plan - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of Shares Underlying Options | ||
Outstanding, beginning of period | 232,322 | 260,322 |
Granted | ||
Exercised | (10,844) | |
Forfeited | ||
Outstanding, end of period | 221,478 | 260,322 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period | $ 16.66 | $ 16 |
Exercised | 10.68 | |
Outstanding, end of period | $ 16.96 | $ 16 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of stock options (Details) - Stock option plan - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
STOCK-BASED COMPENSATION | ||||
Number of shares underlying options exercisable | 136,279 | |||
Number of shares underlying options unvested | 85,199 | |||
Number of shares underlying options outstanding | 221,478 | |||
Weighted-average exercise price per share exercisable | $ 15.06 | |||
Weighted-average exercise price per share unvested | 19.99 | |||
Weighted-average exercise price per share outstanding | $ 16.96 | $ 16.66 | $ 16 | $ 16 |
Aggregate intrinsic value exercisable | $ 2,373 | |||
Aggregate intrinsic value unvested | 1,063 | |||
Aggregate intrinsic value outstanding | $ 3,436 | |||
Weighted-average remaining contractual term exercisable (years) | 5 years 3 months 18 days | |||
Weighted-average remaining contractual term unvested (years) | 7 years 8 months 12 days | |||
Weighted-average remaining contractual term outstanding (years) | 6 years 2 months 12 days |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of Shares | ||
Vested | (300) | |
Shares Withheld | 89 | |
Performance Based | ||
Number of Shares | ||
Outstanding, beginning of period | 24,000 | |
Outstanding, end of period | 24,000 | |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 34.46 | |
Outstanding, end of period | $ 34.46 | |
Non-performance Based | ||
Number of Shares | ||
Outstanding, beginning of period | 181,773 | 212,580 |
Granted | 19,187 | 1,500 |
Vested | (300) | |
Outstanding, end of period | 200,660 | 214,080 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 27.05 | $ 26.71 |
Granted | 32.25 | 29.27 |
Vested | 29.27 | |
Outstanding, end of period | $ 27.54 | $ 27.29 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted stock vested (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
Number of Shares | |
Shares Issued | 211 |
Shares Withheld | 89 |
Vested | 300 |
Non-performance Based | |
Number of Shares | |
Vested | 300 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of restricted stock (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 545,000 | $ 392,000 | ||
Unrecognized compensation expense | $ 6,000,000 | |||
Weighted average period | 3 years 3 months 18 days | |||
Non-performance Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares underlying restricted stock | 200,660 | 214,080 | 181,773 | 212,580 |
Weighted-average grant date fair value per share | $ 27.54 | $ 27.29 | $ 27.05 | $ 26.71 |
Aggregate fair value (in thousands) | $ 6,515,000 | |||
Weighted-average remaining vesting period (years) | 3 years 4 months 24 days | |||
Performance Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares underlying restricted stock | 24,000 | 24,000 | ||
Weighted-average grant date fair value per share | $ 34.46 | $ 34.46 | ||
Aggregate fair value (in thousands) | $ 779,000 | |||
Weighted-average remaining vesting period (years) | 2 years 10 months 24 days |
REGULATORY MATTERS - Regulatory
REGULATORY MATTERS - Regulatory Capital (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Regulatory matters | ||
Capital conversion buffer (as a percent) | 2.50% | |
Term of implementation of the capital conservation buffer | 4 years | |
Common Equity Tier I to Risk‑Weighted Assets | ||
Dividend restrictions term | 2 years | |
Actual amount | $ 413,851 | $ 405,012 |
Common Equity Tier One Capital Ratio | 14.50% | 14.70% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 128,186 | $ 123,885 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 199,401 | $ 192,710 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 413,851 | $ 406,257 |
Actual ratio | 14.50% | 14.80% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 170,915 | $ 165,180 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 242,129 | $ 234,005 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 438,872 | $ 430,238 |
Actual ratio | 15.40% | 15.60% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 227,886 | $ 220,240 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 299,101 | $ 289,065 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Leverage Ratio | ||
Actual amount | $ 413,851 | $ 406,257 |
Actual ratio | 13.00% | 12.80% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 127,051 | $ 127,350 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 127,051 | $ 127,350 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Bank Only | ||
Common Equity Tier I to Risk‑Weighted Assets | ||
Actual amount | $ 372,226 | $ 363,140 |
Common Equity Tier One Capital Ratio | 13.10% | 13.20% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 128,176 | $ 123,877 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 199,385 | $ 192,697 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Required to be Considered Well Capitalized, amount | $ 185,143 | $ 178,933 |
Required to be Considered Well Capitalized, ratio | 6.50% | 6.50% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 372,226 | $ 363,140 |
Actual ratio | 13.10% | 13.20% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 170,901 | $ 165,169 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 242,110 | $ 233,989 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Required to be Considered Well Capitalized, amount | $ 227,869 | $ 220,225 |
Required to be Considered Well Capitalized, ratio | 8.00% | 8.00% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 397,246 | $ 387,211 |
Actual ratio | 14.00% | 14.10% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 227,869 | $ 220,225 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 299,077 | $ 289,046 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Required to be Considered Well Capitalized, amount | $ 284,836 | $ 275,282 |
Required to be Considered Well Capitalized, ratio | 10.00% | 10.00% |
Leverage Ratio | ||
Actual amount | $ 372,224 | $ 363,140 |
Actual ratio | 11.70% | 11.40% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 127,051 | $ 127,350 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 127,051 | $ 127,350 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Required to be Considered Well Capitalized, amount | $ 158,814 | $ 159,188 |
Required to be Considered Well Capitalized, ratio | 5.00% | 5.00% |
Minimum | ||
Regulatory matters | ||
Capital conversion buffer (as a percent) | 0.625% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INCOME TAXES | ||
Income tax benefit | $ 2,599 | $ 2,139 |
Effective tax rate (as a percent) | 19.90% | 19.00% |
Statutory rate (as a percent) | 21.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
EARNINGS PER SHARE | ||
Net income for common shareholders | $ 10,490 | $ 9,112 |
Weighted-average shares (thousands) | ||
Basic weighted-average shares outstanding | 24,910 | 24,833 |
Dilutive effect of outstanding stock options and unvested restricted stock awards | 144 | 121 |
Diluted weighted-average shares outstanding | 25,054 | 24,954 |
Earnings per share: | ||
Basic | $ 0.42 | $ 0.37 |
Diluted | $ 0.42 | $ 0.37 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ in Millions | Apr. 29, 2019 | Apr. 30, 2019 |
SUBSEQUENT EVENTS | ||
Proceeds from bank-owned life insurance policy | $ 1.6 | |
Gain from bank-owned life insurance | $ 1.2 |